Essential Properties Realty Trust
Annual Report 2020

Plain-text annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ☐ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR For the transition period from to Commission File Number 001-38530 Essential Properties Realty Trust, Inc. (Exact name of Registrant as specified in its Charter) Maryland (State or other jurisdiction of incorporation or organization) 902 Carnegie Center Blvd., Suite 520 Princeton, New Jersey (Address of Principal Executive Offices) 82-4005693 (I.R.S. Employer Identification No.) 8540 (Zip Code) Registrants telephone number, including area code: (609) 436-0619 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Common Stock, $0.01 par value Trading Symbol(s) EPRT Securities registered pursuant to Section 12(g) of the Act: None Name of Each Exchange on Which Registered New York Stock Exchange Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ 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 Non-accelerated filer Emerging growth company ☒ ☐ ☐ Accelerated filer Smaller reporting 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 Act). Yes ☐ No ☒ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ No ☐ As of June 30, 2020 (the last business day of the registrant's most recently completed second fiscal quarter), the aggregate market value of the registrant's shares of common stock, $0.01 par value, held by non-affiliates of the registrant, was $1.4 billion based on the last reported sale price of $14.84 per share on the New York Stock Exchange on June 30, 2020. The number of shares of the registrant's Common Stock outstanding as of February 23, 2021 was 106,934,874. Documents Incorporated by Reference Portions the Definitive Proxy Statement for the registrant's 2021 Annual Meeting of Stockholders are incorporated by reference into Part III of this report. The registrant expects to file such proxy statement within 120 days after the end of its fiscal year. PART I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. PART III Item 10. Item 11. Item 12. Item 13. Item 14. PART IV Item 15. Item 16 Table of Contents Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services Exhibits, Financial Statement Schedules Form 10-K Summary Signatures Schedules 2 Page 4 14 33 34 38 39 40 41 44 65 67 113 113 113 114 114 114 114 114 115 117 118 F-1               In this Annual Report, we refer to Essential Properties Realty Trust, Inc., a Maryland corporation, together with its consolidated subsidiaries, including, Essential Properties, L.P., a Delaware limited partnership and its operating partnership (the "Operating Partnership"), as "we," "us," "our" or "the Company" unless we specifically state otherwise or the context otherwise requires. PART I SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This report 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"). In particular, statements pertaining to our business and growth strategies, investment, financing and leasing activities and trends in our business, including trends in the market for long- term, net leases of freestanding, single-tenant properties, contain forward-looking statements. When used in this report, the words "estimate," "anticipate," "expect," "believe," "intend," "may," "will," "should," "seek," "approximately" and "plan," and variations of such words, and similar words or phrases, that are predictions of future events or trends and that do not relate solely to historical matters, are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans, beliefs or intentions of management. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements; accordingly, you should not rely on forward-looking statements as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise, and may not be realized. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: • • • • • • • • • • • • • • the ongoing adverse impact of the COVID-19 pandemic on the Company and its tenants; general business and economic conditions; risks inherent in the real estate business, including tenant defaults or bankruptcies, illiquidity of real estate investments, fluctuations in real estate values and the general economic climate in local markets, competition for tenants in such markets, potential liability relating to environmental matters and potential damages from natural disasters; the performance and financial condition of our tenants; the availability of suitable properties to acquire and our ability to acquire and lease those properties on favorable terms; our ability to renew leases, lease vacant space or re-lease space as existing leases expire or are terminated; volatility and uncertainty in the credit markets and broader financial markets, including potential fluctuations in the Consumer Price Index ("CPI"); the degree and nature of our competition; our failure to generate sufficient cash flows to service our outstanding indebtedness; our ability to access debt and equity capital on attractive terms; fluctuating interest rates; availability of qualified personnel and our ability to retain our key management personnel; changes in, or the failure or inability to comply with, applicable law or regulation; our failure to continue to qualify for taxation as a real estate investment trust ("REIT"); 3 • • changes in the U.S. tax law and other U.S. laws, whether or not specific to REITs; and additional factors discussed in the sections entitled "Business," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this report. While forward- looking statements reflect our good faith beliefs, they are not guarantees of future events or of our performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by law. Because we operate in a highly competitive and rapidly changing environment, new risks emerge from time to time, and it is not possible for management to predict all such risks, nor can management assess the impact of all such risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual events or results. Summary Risk Factors Our business is subject to a number of risks that could materially and adversely impact our financial condition, results of operations, cash flows and liquidity, prospects, the market price of our common stock and our ability to, among other things, service our debt and to make distributions to our stockholders. The following risks, which, together with other material risks that are discussed more fully herein under “Risk Factors,” are the principal factors that make an investment in our company speculative or risky: • • • • • • • • • • • the ongoing adverse impact of the COVID-19 pandemic on us and our tenants; adverse changes in the U.S., global and local markets and related economic conditions; the failure of our tenants to successfully operate their businesses, or tenant defaults, bankruptcies or insolvencies; defaults by borrowers on our mortgage loans receivable; an inability to identify and complete acquisitions of suitable properties or yield the returns we seek with future acquisitions; an inability to access debt and equity capital on commercially acceptable terms or at all; a decline in the fair value of our real estate assets; geographic, industry and tenant concentrations that reduce the diversity of our portfolio; a reduction in the willingness or ability of consumers to physically patronize or use their discretionary income in the businesses of our tenants and potential tenants; our significant indebtedness, which requires substantial cash flow to service, subjects us to covenants and exposes us to refinancing risk and the risk of default; and failure to continue to qualify for taxation as a REIT. Item 1. Business. We are an internally managed real estate company that acquires, owns and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience-based businesses. We have assembled a diversified portfolio using a disciplined strategy that focuses on properties leased to tenants in businesses such as; • Car washes, 4 • • Restaurants (primarily quick service restaurants), Early childhood education, • Medical and dental services, • • • • • Convenience stores, Automotive services, Equipment rental, Entertainment and Health and fitness. We believe that, in general, properties leased to tenants in these businesses and similar businesses are essential to the generation of the tenants' sales and profits. We also believe that these businesses have favorable growth potential and, because of their nature they are more insulated from e-commerce pressure than many other businesses. We completed our initial public offering in June 2018 (our "IPO"), and we qualified to be taxed as a REIT beginning with our taxable year ended December 31, 2018. As of December 31, 2020, 95.1% of our $184.0 million of annualized base rent was attributable to properties operated by tenants in service-oriented and experience-based businesses. "Annualized base rent" means annualized contractually specified cash base rent in effect on December 31, 2020 for all of our leases (including those accounted for as loans or direct financing leases) commenced as of that date and annualized cash interest on our mortgage loans receivable as of that date. Our primary business objective is to maximize stockholder value by generating attractive risk-adjusted returns through owning, managing and growing a diversified portfolio of commercially desirable properties. We have grown significantly since commencing our operations and investment activities in June 2016. As of December 31, 2020, our portfolio consisted of 1,181 properties, inclusive of two undeveloped land parcels and 115 properties which secure our investments in mortgage loans receivable. Our portfolio was built based on the following core investment attributes: Diversified Portfolio. As of December 31, 2020, our portfolio was 99.7% occupied by 238 tenants operating 336 different concepts (i.e., generally brands), in 17 industries across 43 states, with none of our tenants contributing more than 2.8% of our annualized base rent. Our goal is that, over time, no more than 5.0% of our annualized base rent will be derived from any single tenant or more than 1% from any single property. Long Lease Term. As of December 31, 2020, our leases had a weighted average remaining lease term of 14.5 years (based on annualized base rent), with only 4.8% of our annualized base rent attributable to leases expiring prior to January 1, 2026. Our properties generally are subject to, long-term net leases that we believe provide us a stable base of revenue from which to grow our portfolio. Significant Use of Master Leases. As of December 31, 2020, 61.1% of our annualized base rent was attributable to master leases. A master lease is a single lease pursuant to which multiple properties are leased to a single operator/tenant on a unitary (i.e., “all or none”) basis. The master lease structure spreads our investment risk across multiple properties, and we believe it reduces our exposure to operating and renewal risk at any one property, and promotes efficient asset management. Healthy Rent Coverage Ratio and Tenant Financial Reporting. As of December 31, 2020, our portfolio's weighted average rent coverage ratio was 2.9x, and 98.2% of our leases (based on annualized base rent) obligate the tenant to periodically provide us with specified unit-level financial reporting. "Rent coverage ratio" means, as of a specified date, the ratio of (x) tenant-reported or, when unavailable, management's estimate (based on tenant-reported financial information) of annual earnings before interest, taxes, depreciation, amortization and cash rent attributable to the leased property (or properties, in the case of a master lease) to (y) the annualized base rental obligation. 5 Contractual Base Rent Escalation. As of December 31, 2020, 99.2% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average rate of 1.5% per year. Rent escalation provisions provide contractually-specified incremental yield on our investments and provide a degree of protection from inflation or a rising interest rate environment. Significant Use of Sale-Leaseback Investments. We seek to acquire properties owned and operated by middle-market businesses and lease the properties back to the operators pursuant to our standard lease form. For the year ended December 31, 2020, approximately 90% of our investments were sale-leaseback transactions. Smaller, Low Basis Single-Tenant Properties. We generally invest in freestanding "small-box" single-tenant properties. As of December 31, 2020 our average investment per property was $2.1 million (which equals our aggregate investment in our properties (including transaction costs, lease incentives and amounts funded for construction in progress) divided by the number of properties owned at such date), and we believe investments of similar size should allow us to grow our portfolio without concentrating a large amount of capital in individual properties and should allow us to limit our exposure to events that may adversely affect a particular property. Additionally, we believe that many of our properties are fungible and appropriate for multiple commercial uses, which reduces the risk that a particular property may become obsolete and increases their liquidity. 2020 Financial and Operating Highlights • • • During 2020, we completed $602.8 million of investments, including $541.5 million in 208 property acquisitions and $61.3 million in newly originated loans receivable secured by 25 properties. As of December 31, 2020, our total gross investment in real estate was $2.5 billion, and we had total debt of $821.2 million. During 2020, we made distributions totaling $0.93 per share of common stock. • On January 14, 2020, we completed an underwritten public offering of 7,935,000 shares of our common stock, raising net proceeds of approximately $191.5 million, and on September 22, 2020, we completed an underwritten public offering of 10,120,000 shares of our common stock, raising net proceeds of approximately $184.1 million. The net proceeds from these offerings were used to reduce outstanding indebtedness and for general corporate purposes, including funding investments. • • • • In February 2020, we voluntarily prepaid, in part, $62.0 million of the Series 2017-1 Class A notes previously issued under our private conduit program (the "Master Trust Funding program"). In March 2020, we borrowed the remaining $180.0 million available under the November 2019 Term Loan (as defined herein) and used the proceeds facilitate general corporate purposes, including funding investments. During 2020, we sold 4,499,057 shares of our common stock under the ATM Program (as defined herein), at a weighted average price per share of $19.02, raising gross proceeds of approximately $85.6 million. During the later portion of the first quarter of 2020 through the second quarter of 2020, the COVID-19 pandemic materially and adversely affected our business and the businesses of many of our tenants, and significantly increased general uncertainty in the business environment. In response, we emphasized and focused on engaging with our tenants and, among other things, as of December 31, 2020, we had granted rent deferrals with respect to $18.5 million million of past and future rent, representing 10% of our annualized base rent as of such date. Our deferrals primarily involved tenants focused on industries that have been directly disrupted by the COVID-19 pandemic and restrictions intended to prevent its spread, particularly movie theaters, casual and family dining restaurants, entertainment, and health and fitness. During the earlier portion of the COVID-19 pandemic, we adopted a more defensive business posture and emphasized maintaining our liquidity and financial flexibility. While the COVID-19 pandemic continues to adversely affect us and our tenants, and considerable uncertainty continues to exist, more recently we have seen improvements in our operations, particularly our rent collection experience and the broader resumption of economic activity, allowing us to become less defensive and increase our acquisition activity in targeted industries, such as equipment rental, quick service restaurants and auto services, and resume our capital recycling activity during the second half of 2020. 6 Our Target Market We are an active investor in single-tenant, net leased real estate. Our target properties are generally freestanding commercial real estate facilities where a middle-market tenant conducts activities on property that are essential to the generation of its sales and profits. We believe that this market is underserved from a capital perspective and offers attractive risk-adjusted returns. Within this market, we emphasize investment in properties leased to tenants engaged in targeted set of service-oriented or experience-based businesses noted above, because we believe these businesses are generally more insulated from the competitive pressure of e- commerce businesses than many others. We focus on properties leased to middle-market companies, which we define as regional and national operators with between 10 and 250 locations and $20 million to $500 million in annual revenue, and we opportunistically invest in properties leased to smaller companies, which we define as regional operators with fewer than 10 locations and less than $20 million in annual revenue. Although it is not our primary investment focus, we opportunistically consider investing in properties leased to large companies. While most of our targeted tenants are not rated by a nationally recognized statistical rating organization, we primarily seek to invest in properties leased to companies that we determine have attractive credit characteristics and stable operating histories. Despite the market's size, the market for single-tenant, net leased real estate is highly fragmented. In particular, we believe that there is a limited number of participants addressing the long-term capital needs of unrated middle-market and small companies. We believe that many publicly traded REITs that invest in net leased properties concentrate their investment activity in properties leased to investment grade-rated tenants, which tend to be larger organizations, with the result that unrated, middle-market and small companies are relatively underserved and offer us an opportunity to make investments with attractive risk-adjusted return potential. Furthermore, we believe that there is strong demand for our net-lease capital solutions among middle-market and small owner-operators of commercial real estate, in part, due to the bank regulatory environment, which, since the turmoil in the housing and mortgage industries from 2007- 2009, has generally been characterized by increased scrutiny and regulation. We believe that this environment has made commercial banks less responsive to the long-term capital needs of unrated middle-market and small companies, many of which have historically depended on commercial banks for their financing. Accordingly, we see an attractive opportunity to address the capital needs of these companies by offering them an efficient alternative to financing their real estate with traditional mortgage or bank debt and their own equity. As a result, while we believe our net-lease financing solutions may be attractive to a wide variety of companies, we believe our most attractive opportunity is owning properties net leased to middle-market and small companies that are generally unrated and have less access to efficient sources of long-term capital than larger, rated companies. Our Competitive Strengths We believe the following competitive strengths distinguish us from our competitors and allow us to compete effectively in the single- tenant, net-lease market: • Carefully Constructed Portfolio of Properties Leased to Service-Oriented or Experience-Based Tenants. We have strategically constructed a portfolio that is diversified by tenant, industry, concept and geography and generally avoids exposure to businesses that we believe are subject to pressure from e-commerce businesses. Our properties are generally subject to long-term net leases that we believe provide us with a stable base of revenue from which to grow our portfolio. As of December 31, 2020, our portfolio consisted of 1,181 properties, with annualized base rent of $184.0 million, which was carefully selected by our management team in accordance with our focused and disciplined investment strategy. Our portfolio is diversified with 238 tenants operating 336 different concepts across 43 states and 17 industries. None of our tenants contributed more than 2.8% of our annualized base rent as of December 31, 2020, and our strategy targets a scaled portfolio that, over time, derives no more than 5.0% of its annualized base rent from any single tenant or more than 1.0% from any single property. We focus on investing in properties leased to tenants operating in the service-oriented or experience-based businesses noted above. As of December 31, 2020, 95.1% of our annualized base rent was attributable to tenants operating service-oriented and experience-based businesses. 7 We believe that our portfolio's diversity and rigorous underwriting decrease the impact on us of an adverse event affecting a specific tenant, industry or region, and our focus on leasing to tenants in industries that we believe are well-positioned to withstand competition from e- commerce businesses increases the stability and predictability of our rental revenue. • Experienced and Proven Management Team. Our senior management has significant experience in the net lease industry and a track record of growing net lease businesses to significant scale. Our senior management team has been responsible for our focused and disciplined investment strategy and for developing and implementing our investment sourcing, underwriting, closing and asset management infrastructure, which we believe can support significant investment growth without a proportionate increase in our operating expenses. As of December 31, 2020, 84.5% of our portfolio's annualized base rent was attributable to internally originated sale-leaseback transactions and 85.3% was acquired from parties who had previously engaged in one or more transactions that involved a member of our senior management team (including operators and tenants and other participants in the net lease industry, such as brokers, intermediaries and financing sources). The substantial experience, knowledge and relationships of our senior leadership team provide us with an extensive network of contacts that we believe allows us to originate attractive investment opportunities and effectively grow our business. • Growth-Oriented Balance Sheet Scalable Infrastructure. We believe our financial position and existing infrastructure support our external growth strategy. As of December 31, 2020, we had the ability to borrow up to $382.0 million under our senior unsecured revolving credit facility that matures in April 2023, which allows for up to $400.0 million in principal borrowings and is available for general corporate purposes, including funding future acquisitions. Additionally, through our Master Trust Funding Program, we have the ability to seek additional debt capital in the asset-backed securities market. For more information about our indebtedness, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Description of certain Debt" and Note 5. Long Term Debt to our consolidated financial statements included elsewhere in this report. We also maintain an ATM Program, and as of December 31, 2020, we had the ability to issue additional common stock with an aggregate gross sales price of up to $170.7 million. As of December 31, 2020, we had $821.2 million of gross debt outstanding, with a weighted average maturity of 3.82 years, and net debt of $788.2 million. For the three months ended December 31, 2020, our net income was $5.7 million, our Adjusted EBITDAre was $41.5 million, our Annualized Adjusted EBITDAre was $165.8 million and our ratio of net debt to Annualized Adjusted EBITDAre was 4.8x. Net debt, Adjusted EBITDAre and Annualized Adjusted EBITDAre are non-GAAP financial measures. For definitions of net debt and Annualized Adjusted EBITDAre, reconciliations of these measures to total debt and net income, respectively, the most directly comparable financial measures calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), and a statement of why our management believes the presentation of these non-GAAP financial measures provide useful information to investors and a discussion of how management uses these measures, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations' Non-GAAP Financial Measures." As of December 31, 2020, we also had 923 unencumbered properties that contributed $154.5 million of annualized base rent. We seek to manage our balance sheet so that we have access to multiple sources of debt capital in the future, such as term borrowings from insurance companies, banks and other sources, single-asset mortgage financing and CMBS borrowings, that may offer us the opportunity to lower our cost of funding and further diversify our sources of debt capital. • Differentiated Investment Strategy. We seek to acquire and lease freestanding, single-tenant commercial real estate facilities where a tenant services its customers and conducts activities at the property that are essential to the generation of its sales and profits. We primarily seek to invest in properties leased to middle-market companies that we determine have attractive credit characteristics and stable operating histories. We believe middle-market companies are underserved from a capital perspective and that we can offer them attractive real estate financing solutions while allowing us to enter into leases that provide us with attractive risk-adjusted returns. Furthermore, many net lease transactions with middle-market companies involve properties that are individually relatively small, which allows us to avoid concentrating a large amount of capital in individual properties. We maintain close relationships with our tenants, which we believe allows us 8 to source additional investments and become the capital provider of choice as our tenants' businesses grow and their real estate needs increase. • • Asset Base Allows for Significant Growth. Building on our senior leadership team's experience of more than 20 years in net lease real estate investing, we have developed leading origination, underwriting, financing, and property management capabilities. Our platform is scalable, and we seek to leverage our capabilities to improve our efficiency and processes to continue to seek attractive risk-adjusted growth. While we expect that our general and administrative expenses could increase as our portfolio grows, we expect that such expenses as a percentage of our portfolio and our revenues will decrease over time due to efficiencies and economies of scale. During the years ended December 31, 2020, 2019 and 2018, we invested in properties with aggregate investment values of $602.8 million, $598.1 million and $504.7 million, respectively. With our smaller asset base relative to other peers that focus on acquiring net leased real estate, we believe that we can achieve superior growth through manageable acquisition volume. Disciplined Underwriting Leading to Strong Portfolio Characteristics. We generally seek to execute transactions with an aggregate purchase price of $3 million to $50 million. Our size allows us to focus on investing in a segment of the market that we believe is underserved from a capital perspective and where we can originate or acquire relatively smaller assets on attractive terms that provide meaningful growth to our portfolio. In addition, we seek to invest in commercially desirable properties that are suitable for use by different tenants, offer attractive risk-adjusted returns and possess characteristics that reduce our real estate investment risks. As of December 31, 2020: • Our leases had a weighted average remaining lease term (based on annualized base rent) of 14.5 years, with only 4.8% of our annualized base rent attributable to leases expiring prior to January 1, 2026; • Master leases contributed 61.1% of our annualized base rent; • Our portfolio's weighted average rent coverage ratio was 2.9x, with leases contributing 55.9% of our annualized base rent having rent coverage ratios in excess of 2.0x (excluding leases that do not report unit-level financial information); • Our portfolio was 99.7% occupied; • • Leases contributing 99.2% of our annualized base rent provided for increases in future annual base rent, ranging from 1.0% to 4.0% annually, with a weighted average annual escalation equal to 1.5% of base rent; and Leases contributing 94.1% of annualized base rent were triple-net. • Extensive Tenant Financial Reporting Supports Active Asset Management. We seek to enter into leases that obligate our tenants to periodically provide us with corporate and/or unit-level financial reporting, which we believe enhances our ability to actively monitor our investments, negotiate lease renewals and proactively manage our portfolio to protect stockholder value. As of December 31, 2020, leases contributing 98.2% of our annualized base rent required tenants to provide us with specified unit-level financial information. Our Business and Growth Strategies Our primary business objective is to maximize stockholder value by generating attractive risk-adjusted returns through owning, managing and growing a diversified portfolio of commercially desirable properties. We intend to pursue our objective through the following business and growth strategies. • Structure and Manage Our Diverse Portfolio with Focused and Disciplined Underwriting and Risk Management. We seek to maintain the stability of our rental revenue and maximize the long-term return on our investments while continuing our growth by using our focused and disciplined underwriting and risk management expertise. When underwriting assets, we emphasize commercially desirable properties, with strong operating performance, healthy rent coverage ratios and tenants with attractive credit characteristics. 9 Leasing. In general, we seek to enter into leases with (i) relatively long terms (typically with initial terms of 15 years or more and tenant renewal options); (ii) attractive rent escalation provisions; (iii) healthy rent coverage ratios; and (iv) tenant obligations to periodically provide us with financial information, which provides us with information about the operating performance of the leased property and/or tenant and allows us to actively monitor the security of payments under the lease on an ongoing basis. We strongly prefer to use master lease structures, pursuant to which we lease multiple properties to a single tenant on a unitary (i.e., "all or none") basis. In addition, in the context of our sale- leaseback investments, we generally seek to establish contract rents that are at or below prevailing market rents, which we believe enhances tenant retention and reduces our releasing risk if a lease is rejected in a bankruptcy proceeding or expires. Diversification. We monitor and manage the diversification of our portfolio in order to reduce the risks associated with adverse developments affecting a particular tenant, property, industry or region. Our strategy targets a scaled portfolio that, over time, will (i) derive no more than 5% of its annualized base from any single tenant or more than 1% of its annualized base rent from any single property, (ii) be primarily leased to tenants operating in service-oriented or experience-based businesses and (iii) avoid significant geographic concentration. While we consider these criteria when making investments, we may be opportunistic in managing our business and make investments that do not meet one or more of these criteria if we believe the opportunity presents an attractive risk-adjusted return. Asset Management. We are an active asset manager and regularly review each of our properties to evaluate, various factors, including, but not limited to, changes in the business performance at the property, credit of the tenant and local real estate market conditions. Among other things, we use Moody's Analytics RiskCalc ("RiskCalc") to proactively detect credit deterioration. RiskCalc is a model for predicting private company defaults based on Moody's Analytics Credit Research Database. Additionally, we monitor market rents relative to in-place rents and the amount of tenant capital expenditures in order to refine our tenant retention and alternative use assumptions. Our management team utilizes our internal credit diligence to monitor the credit profile of each of our tenants on an ongoing basis. We believe that this proactive approach enables us to identify and address issues in a timely manner and to determine whether there are properties in our portfolio that are appropriate for disposition. In addition, as part of our active portfolio management, we may selectively dispose of assets that we conclude do not offer a return commensurate with the investment risk, contribute to unwanted geographic, industry or tenant concentrations, or may be sold at a price we determine is attractive. During the year ended December 31, 2020, we sold 50 properties for net sales proceeds of $81.7 million, including 6 properties that were vacant. We believe that our underwriting processes and active asset management enhance the stability of our rental revenue by reducing default losses and increasing the likelihood of lease renewals. Focus on Relationship-Based Sourcing to Grow Our Portfolio by Originating Sale-Leaseback Transactions. We plan to continue our disciplined growth by originating sale-leaseback transactions and opportunistically making acquisitions of properties subject to net leases that contribute to our portfolio’s tenant, industry and geographic diversification. As of December 31, 2020, 84.5% of our portfolio’s annualized base rent was attributable to internally originated sale-leaseback transactions and 85.3% was acquired from parties who had previously engaged in transactions that involved a member of our senior management team (including operators and tenants and other participants in the net lease industry, such as brokers, intermediaries and financing sources). In addition, we seek to enhance our relationships with our tenants to facilitate investment opportunities, including selectively agreeing to reimburse certain of our tenants for development costs at our properties in exchange for contractually specified rent that generally increases proportionally with our funding. We believe our senior management team’s reputation, in-depth market knowledge and extensive network of long-standing relationships in the net lease industry provide us access to an ongoing pipeline of attractive investment opportunities. As of February 19, 2021, we have entered into purchase and sale agreements for 19 properties with an aggregate purchase price of $44.7 million. Focus on Middle-Market Companies in Service-Oriented or Experience-Based Businesses. We primarily focus on investing in properties that we lease on a long-term, triple-net basis to middle-market companies that we determine have attractive credit characteristics and stable operating histories. Properties leased to middle-market companies may offer us the opportunity to achieve superior risk-adjusted returns, as a result of our extensive and disciplined credit and real estate analysis, lease structuring and • • 10 portfolio composition. We believe our capital solutions are attractive to middle-market companies as such companies often have limited financing options, as compared to larger, credit rated organizations. We also believe that, in many cases, smaller transactions with middle- market companies will allow us to maintain and grow our portfolio's diversification. Middle-market companies are often willing to enter into leases with structures and terms that we consider attractive (such as master leases and leases that require ongoing tenant financial reporting) and believe contribute to the stability of our rental revenue. • • In addition, we emphasize investment in properties leased to tenants engaged in service-oriented or experience-based businesses, such as car washes, restaurants (primarily quick service restaurants), early childhood education, medical and dental services, convenience stores, automotive services, equipment rental, entertainment and health and fitness, as we believe these businesses are generally more insulated from e-commerce pressure than many others. Internal Growth Through Long-Term Triple-Net Leases That Provide for Periodic Rent Escalations. We seek to enter into long-term (typically with initial terms of 15 years or more and tenant renewal options), triple-net leases that provide for periodic contractual rent escalations. As of December 31, 2020, our leases had a weighted average remaining lease term of 14.5 years (based on annualized base rent), with only 4.8% of our annualized base rent attributable to leases expiring prior to January 1, 2026, and 99.2% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average of 1.5% per year. Actively Manage Our Balance Sheet to Maximize Capital Efficiency. We seek to maintain a prudent balance between debt and equity financing and to maintain funding sources that lock in long-term investment spreads and limit interest rate sensitivity. As of December 31, 2020, we had $821.2 million of gross debt outstanding and $788.2 million of net debt outstanding. Our net income for the three months ended December 31, 2020 was $5.7 million, our Adjusted EBITDAre was $41.5 million, our Annualized Adjusted EBITDAre was $165.8 million and our ratio of net debt to Annualized Adjusted EBITDAre was 4.8x. We target a level of net debt that, over time, is generally less than six times our Annualized Adjusted EBITDAre. We have access to multiple sources of debt capital, including bank debt, through our revolving credit and term loan facilities, and the investment grade-rated, asset-backed bond market, through our Master Trust Funding Program. Net debt, Adjusted EBITDAre and Annualized Adjusted EBITDAre are non-GAAP financial measures. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations' Non-GAAP Financial Measures." Competition We face competition for acquisitions of real property from other investors, including traded and non-traded public REITs, private equity investors and institutional investment funds, some of which have greater economies of scale, lower costs of capital, access to more sources of capital, a larger base of operating resources and greater name recognition than we do, and the ability to accept more risk. We also believe that competition for real estate financing comes from middle-market business owners themselves, many of whom have had a historic preference to own, rather than lease, the real estate they use in their businesses. This competition may increase the demand for the types of properties in which we typically invest and, therefore, may reduce the number of suitable investment opportunities available to us and increase the prices paid for such acquisition properties. This competition will increase if investments in real estate become more attractive relative to other forms of investment. As a landlord, we compete in the multi-billion dollar commercial real estate market with numerous developers and owners of properties, many of which own properties similar to ours in the same markets in which our properties are located. Some of our competitors have greater economies of scale, lower costs of capital, access to more sources of capital, a larger base of operating resources and greater name recognition than we do, and the ability to accept more risk. If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose our tenants or prospective tenants, and we may be pressured to reduce our rental rates or to offer substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options in order to retain tenants when our leases expire. Employees As of December 31, 2020, we had 33 full-time employees. Our staff is mostly comprised of professionals engaged in originating, underwriting and closing investments; portfolio asset management; portfolio servicing (e.g., 11 collections, property tax compliance, etc.); and accounting, financial reporting, cash management and capital markets activities. Women comprise nearly 40% of our employees and hold approximately 36% of our management positions, providing significant leadership at our company. Our commitment to diversity extends to our board of directors, as three of its seven independent members, or approximately 43%, are women. Additionally, we have a consistent and strong record of hiring veterans of the U.S. military, including our chief executive officer. We seek to provide a dynamic work environment that promotes the retention and development of our employees, and is a differentiating factor in our ability to attract new talent. We strive to offer our employees attractive and equitable compensation, regular opportunities to participate in professional development activities, outlets for civic engagement and reasonable flexibility to allow a healthy work/life balance. We value equal opportunity in the workplace and fair employment practices. We have built an inclusive culture that encourages, supports and celebrates our diverse employee population. We endeavor to maintain a workplace that is free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression, or any other status protected by applicable law. We conduct annual training in an effort to ensure that all employees remain aware of and help prevent harassment and discrimination. Our compensation program is designed to attract and retain talent, and align our employee’s efforts with the interests of all of our stakeholders. Factors we evaluate in connection with hiring, developing, training, compensating and advancing individuals include, but are not limited to, qualification, performance, skill and experience. Our employees are fairly compensated based on merit, without regard to color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression, or any other status protected by applicable law. Insurance Our tenants are generally required to maintain liability and property insurance coverage for the properties they lease from us pursuant to triple-net leases. These leases generally require our tenants to name us (and any of our lenders that have a mortgage on the property leased by the tenant) as additional insureds on their liability policies and additional named insured and/or loss payee (or mortgagee, in the case of our lenders) on their property policies. Depending on the location of the property, losses of a catastrophic nature, such as those caused by earthquakes and floods, may be covered by insurance policies that are held by our tenant with limitations such as large deductibles or co-payments that a tenant may not be able to meet. In addition, losses of a catastrophic nature, such as those caused by wind/hail, hurricanes, terrorism or acts of war, may be uninsurable or not economically insurable. If there is damage to our properties that is not covered by insurance and such properties are subject to recourse indebtedness, we will continue to be liable for the indebtedness, even if these properties are irreparably damaged. See "Item 1A. Risk Factor-"Risks Related to Our Business and Properties-Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us." In addition to being a named insured on our tenants' liability policies, we separately maintain commercial general liability and umbrella coverages. We also maintain full property coverage on all untenanted properties and other property coverage as may be required by our lenders, which are not required to be carried by our tenants under our leases. Regulation and Requirements Our properties are subject to various laws, ordinances and regulations, including those relating to fire and safety requirements, and affirmative and negative covenants and, in some instances, common area obligations. Compliance with applicable requirements may require modifications to our properties, and the failure to comply with applicable requirements could result in the imposition of fines or an award of damages to private litigants, as well as the incurrence of the costs of making modifications to attain compliance. Our tenants have primary responsibility for compliance with these requirements pursuant to our leases. We believe that each of our properties has the necessary permits and approvals. Environmental Matters Federal, state and local environmental laws and regulations regulate, and impose liability for, releases of hazardous or toxic substances into the environment. Under various of these laws and regulations, a current or 12 previous owner, operator or tenant of real estate may be required to investigate and clean up hazardous or toxic substances, hazardous wastes or petroleum product releases or threats of releases at the property, and may be held liable to a government entity or to third parties for property damage and for investigation, clean-up and monitoring costs incurred by those parties in connection with the actual or threatened contamination. These laws may impose clean-up responsibility and liability without regard to fault, or whether or not the owner, operator or tenant knew of or caused the presence of the contamination. The liability under these laws may be joint and several for the full amount of the investigation, clean- up and monitoring costs incurred or to be incurred or actions to be undertaken, although a party held jointly and severally liable may seek to obtain contributions from other identified, solvent, responsible parties of their fair share toward these costs. These costs may be substantial, and can exceed the value of the property. In addition, some environmental laws may create a lien on the contaminated site in favor of the government for damages and costs it incurs in connection with the contamination. As the owner or operator of real estate, we also may be liable under common law to third parties for damages and injuries resulting from environmental contamination emanating from the real estate. The presence of contamination, or the failure to properly remediate contamination, on a property may adversely affect the ability of the owner, operator or tenant to sell or rent that property or to borrow using the property as collateral, and may adversely impact our investment in that property. Some of our properties contain, have contained, or are adjacent to or near other properties that have contained or currently contain storage tanks for the storage of petroleum products or other hazardous or toxic substances. Similarly, some of our properties were used in the past for commercial or industrial purposes, or are currently used for commercial purposes, that involve or involved the use of petroleum products or other hazardous or toxic substances, or are adjacent to or near properties that have been or are used for similar commercial or industrial purposes. These operations create a potential for the release of petroleum products or other hazardous or toxic substances, and we could potentially be required to pay to clean up any contamination. In addition, environmental laws regulate a variety of activities that can occur on a property, including the storage of petroleum products or other hazardous or toxic substances, air emissions, water discharges and exposure to lead-based paint. Such laws may impose fines or penalties for violations, and may require permits or other governmental approvals to be obtained for the operation of a business involving such activities. As a result of the foregoing, we could be materially and adversely affected. Environmental laws also govern the presence, maintenance and removal of asbestos-containing material ("ACM"). Federal regulations require building owners and those exercising control over a building's management to identify and warn, through signs and labels, of potential hazards posed by workplace exposure to installed ACM in their building. The regulations also have employee training, record keeping and due diligence requirements pertaining to ACM. Significant fines can be assessed for violation of these regulations. As a result of these regulations, building owners and those exercising control over a building's management may be subject to an increased risk of personal injury lawsuits by workers and others exposed to ACM. The regulations may affect the value of a building containing ACM in which we have invested. Federal, state and local laws and regulations also govern the removal, encapsulation, disturbance, handling and/or disposal of ACM when those materials are in poor condition or in the event of construction, remodeling, renovation or demolition of a building. These laws may impose liability for improper handling or a release into the environment of ACM and may provide for fines to, and for third parties to seek recovery from, owners or operators of real properties for personal injury or improper work exposure associated with ACM. When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues can also stem from inadequate ventilation, chemical contamination from indoor or outdoor sources, and other biological contaminants such as pollen, viruses and bacteria. Indoor exposure to airborne toxins or irritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants, employees of our tenants or others if property damage or personal injury occurs. Before completing any property acquisition, we obtain environmental assessments in order to identify potential environmental concerns at the property. These assessments are carried out in accordance with the Standard Practice for Environmental Site Assessments (ASTM Practice E 1527-13) as set by ASTM International, formerly known as the American Society for Testing and Materials, and generally include a physical site inspection, 13 a review of relevant federal, state and local environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of the property's chain of title and review of historical aerial photographs and other information on past uses of the property. These assessments are limited in scope. If, however, recommended in the initial assessments, we may undertake additional assessments such as soil and/or groundwater samplings or other limited subsurface investigations and ACM or mold surveys to test for substances of concern. A prior owner or operator of a property or historic operations at our properties may have created a material environmental condition that is not known to us or the independent consultants preparing the site assessments. Material environmental conditions may have arisen after the review was completed or may arise in the future, and future laws, ordinances or regulations may impose material additional environmental liability. If environmental concerns are not satisfactorily resolved in any initial or additional assessments, we may obtain environmental insurance policies to insure against potential environmental risk or loss depending on the type of property, the availability and cost of the insurance and various other factors we deem relevant (i.e., an environmental occurrence affects one of our properties where our lessee may not have the financial capability to honor its indemnification obligations to us). Our ultimate liability for environmental conditions may exceed the policy limits on any environmental insurance policies we obtain, if any. Generally, our leases require the lessee to comply with environmental law and provide that the lessee will indemnify us for any loss or expense we incur as a result of lessee's violation of environmental law or the presence, use or release of hazardous materials on our property attributable to the lessee. If our lessees do not comply with environmental law, or we are unable to enforce the indemnification obligations of our lessees, our results of operations would be adversely affected. We cannot predict what other environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted or what environmental conditions may be found to exist on the properties in the future. Compliance with existing and new laws and regulations may require us or our tenants to spend funds to remedy environmental problems. If we or our tenants were to become subject to significant environmental liabilities, we could be materially and adversely affected. About Us and Available Information We were incorporated under the laws of Maryland on January 12, 2018. Since our June 2018 IPO, shares of our common stock have been listed on the New York Stock Exchange ("NYSE") under the ticker symbol "EPRT". Our offices are located at 902 Carnegie Center Blvd., Suite 520, Princeton, New Jersey, 08540. We lease approximately 13,453 square feet of office space from an unaffiliated third party. Our telephone number is (609) 436-0619 and our website is www.essentialproperties.com. Information contained on or hyperlinked from our website is not incorporated by reference into and should not be considered part of this Annual Report or our other filings with the Securities and Exchange Commission (the “SEC”). We electronically file with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, pursuant to Section 13(a) of the Exchange Act. You may obtain a free copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to those reports, on the day of filing with the SEC on our website, or by sending an email message to info@essentialproperties.com. Item 1A. Risk Factors. There are many factors that affect our business and results of operation, some of which are beyond our control. The occurrence of any of the following risks could materially and adversely impact our financial condition, results of operations, cash flows and liquidity, prospects, the market price of our common stock, and our ability to, among other things, service our debt and to make distributions to our stockholders. Some statements in this report including statements in the following risk factors constitute forward-looking statements. See "Special Note Regarding Forward-Looking Statements." The COVID-19 pandemic is materially and adversely impacting our business and could further affect our financial condition, results of operations, cash flows and liquidity, prospects, access to and costs of Risks Related to Our Business and Properties 14 capital, the trading price of our common stock and our ability to service our debt and make distributions to our stockholders. The impact of the COVID-19 pandemic continues to rapidly evolve, and many states and cities, including many of those where we own properties, have instituted or may reinstitute lockdowns, quarantines, restrictions on travel, “shelter in place” rules, school closures and/or restrictions on the types of businesses that may continue to operate or limitations on certain business operations. These actions and the resulting decline in economic activity and consumer confidence have severely impaired the ability of many of our tenants to operate their businesses and meet their obligations to us, including rental payment obligations. It is unclear how long these restrictions will remain in place, whether they will be lifted partially over time or if they will be reinstituted in whole or in part in response to future surges or waves of the pandemic. Many of our tenants have requested rent deferrals or other concessions due to the pandemic. During the year ended December 31, 2020, we have granted deferrals with respect to $18.5 million of past and future rent, representing 10% of our annualized base rent as of that date. These rent deferrals were negotiated on a tenant-by-tenant basis and, in general, allow a tenant to defer all or a portion of its rent for 2020, with all of the deferred rent to be paid to us pursuant to a schedule that generally extends up to 24 months from the original due date of the deferred rent. It is possible that the existing deterioration, or further deterioration, in our tenants’ ability to operate their businesses, caused by the COVID-19 pandemic or otherwise, will cause our tenants to be unable or unwilling to meet their contractual obligations to us, including the payment of rent (including deferred rent) or to request further rent deferrals or other concessions. This possibility would increase if the COVID-19 pandemic intensifies or persists for a prolonged period or if there is an economic shut down; if the United States enters into a recessionary period or if reduced consumer confidence further weakens economic activity; or if ongoing vaccination efforts are unsuccessful or delayed. To the extent the pandemic causes a secular change in consumer behavior that reduces patronage of service-based and/or experience-based businesses, many of our tenants would be adversely affected and their ability to meet their obligations to us could be further impaired. The rent deferrals reduce our cash flow from operations, reduce our cash available for distribution and adversely affect our ability to service our debt and make cash distributions to common stockholders. Furthermore, if tenants are unable to pay their deferred rent, we will not receive cash in the future in accordance with our expectations. In addition to COVID-19’s impact on our rental revenues, it has resulted, and may continue to result, in an increase in our general and administrative expenses, as we have incurred and may continue to incur costs to negotiate rent deferrals, restructure or terminate leases and/or enforce our contractual rights (including through litigation), as we deem appropriate on a case-by-case basis. Similarly, to the extent the pandemic leads to decreased occupancy, it would further increase our property-level costs, as we would be responsible for costs that would otherwise be borne by our tenants under triple-net leases. These factors could also cause the value of our properties to be impaired. The COVID-19 pandemic has significantly and adversely impacted global, national, regional and local economic activity and has contributed to significant volatility and negative pressure in the financial markets. The market price of our common stock on the NYSE has experienced significant volatility since the outbreak of the COVID-19 pandemic. Similarly, the availability and pricing of debt capital has become increasingly volatile. Accordingly, we could experience difficulty accessing debt and equity capital on attractive terms, or at all, which would adversely affect our ability to grow our business, conduct our operations or address maturing liabilities. Similarly, the deterioration in access to capital is likely adversely affecting our tenants’ abilities to finance their businesses and reducing their liquidity, which reduces their ability to meet their obligations to us. The financial impact of the COVID-19 pandemic could negatively impact our future compliance with some of the financial covenants relating to our credit facility and term loans, some of which depend, in part, on the net operating income generated by certain of our properties or our EBITDA. Non-compliance would preclude us from borrowing further under our credit facility and, under certain circumstances, could result in an event of default and an acceleration of such indebtedness and, possibly, other indebtedness through cross-default provisions. Additionally, to the extent the COVID-19 pandemic intensifies or persists for a prolonged period of time, it is possible that we will be required to record significant further impairment charges to the value of our real estate assets. The ultimate extent to which the COVID-19 pandemic adversely impacts us (and our tenants) will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment and mitigation measures, among others. 15 We are subject to risks related to the ownership of commercial real estate that could adversely impact the value of our properties. Factors beyond our control can affect the performance and value of our properties. Our performance is subject to risks incident to the ownership of commercial real estate, including: the possible inability to collect rents from tenants due to financial hardship, including bankruptcy; changes in local real estate conditions and tenant demand for our properties; changes in consumer trends and preferences that reduce the demand for products and services offered by our tenants; adverse changes in national, regional and local economic conditions; inability to re-lease or sell properties upon expiration or termination of leases; environmental risks; the subjectivity and volatility of real estate valuations and the relative illiquidity of real estate investments compared to most other financial assets, which may limit our ability to modify our portfolio promptly in response to changes in economic or other conditions; changes in laws and governmental regulations, including those governing real estate usage and zoning; acts of God, including natural disasters, which may result in uninsured losses; and acts of war or terrorism, including terrorist attacks. Adverse changes in the U.S., global and local markets and related economic conditions may materially and adversely affect us and the ability of our tenants to make rental payments to us. Our results of operations, as well as the results of operations of our tenants, are sensitive to changes in U.S., global and local regions or markets that impact our tenants’ businesses. Adverse changes or developments in U.S., global or regional economic conditions may impact our tenants’ financial condition, which may adversely impact their ability to make rental payments to us and may also impact their current or future leasing practices. During periods of economic slowdown and declining demand for real estate, we may experience a general decline in rents or increased rates of default under our leases. A lack of demand for rental space could adversely affect our ability to maintain our current tenants and attract new tenants, which may affect our growth, profitability and ability to pay dividends. Our business is dependent upon our tenants successfully operating their businesses, and their failure to do so could materially and adversely affect us. The success of our investments is materially dependent on the financial stability and operating performance of our tenants. The success of any one of our tenants is dependent on its individual business and its industry, which could be adversely affected by poor management, economic conditions in general, changes in consumer trends and preferences that decrease demand for a tenant's products or services or other factors over which neither they nor we have control. At any given time, any tenant may experience a downturn in its business that may weaken its operating results or the overall financial condition of individual properties or its business as whole. As a result, a tenant may delay lease commencement, fail to make rental payments when due, decline to extend a lease upon its expiration, become insolvent or declare bankruptcy. We depend on our tenants to operate the properties leased from us in a manner which generates revenues sufficient to allow them to meet their obligations to us, including their obligations to pay rent, maintain certain insurance coverage, pay real estate taxes and maintain the properties in a manner so as not to jeopardize their operating licenses or regulatory status. The ability of our tenants to fulfill their obligations under our leases generally depends, to a significant degree, upon the overall profitability of their operations. Cash flow generated by certain tenant businesses may not be sufficient for a tenant to meet its obligations to us. We could be materially and adversely affected if a number of our tenants were unable to meet their obligations to us. Our assessment that certain businesses are more insulated from e-commerce pressure than many others may prove to be incorrect, and changes in macroeconomic trends may adversely affect our tenants, either of which could impair our tenants' ability to make rental payments to us and materially and adversely affect us. Technology and business conditions, particularly in the retail industry, are rapidly changing, and our tenants may be adversely affected by technological innovation, changing consumer preferences and competition from non-traditional sources. Businesses previously thought to be internet resistant, such as the retail grocery industry, have proven to be susceptible to competition from e-commerce. To the extent our tenants face increased competition from non-traditional competitors, such as internet vendors, some of which may have different business models and larger profit margins, their businesses could suffer. There can be no assurance that our tenants will be successful in 16 meeting any new competition, and a deterioration in our tenants’ businesses could impair their ability to meet their lease obligations to us and materially and adversely affect us. Properties occupied by a single tenant pursuant to a single-tenant lease subject us to significant risk of tenant default. Our strategy focuses primarily on investing in single-tenant triple-net leased properties throughout the United States. The financial failure of, or default in payment by, a single tenant under its lease is likely to cause a significant or complete reduction in our rental revenue from that property and a reduction in the value of the property. This risk is magnified in situations where we lease multiple properties to a single tenant under a master lease. The default of a tenant that leases multiple properties from us or its decision not to renew its master lease upon expiration could materially and adversely affect us. We may experience a decline in the fair value of our real estate assets which could result in impairments and would impact our financial condition and results of operations. A decline in the fair market value of our long-lived assets may require us to recognize an impairment against such assets (as defined by the Financial Accounting Standards Board (“FASB”)) if certain conditions or circumstances related to an asset were to change and we were to determine that, with respect to any such asset, the cash flows no longer support the carrying value of the asset. The fair value of our long-lived assets depends on market conditions, including estimates of future demand for these assets, and the revenues that can be generated from such assets. If such a determination were to be made, we would recognize the estimated unrealized losses through earnings and write down the depreciated cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be impaired. Such impairment charges reflect non-cash losses at the time of recognition, and subsequent dispositions or sales of such assets could further affect our future losses or gains, as they are based on the difference between the sales price received and the adjusted depreciated cost of such assets at the time of sale. Geographic, industry and tenant concentrations reduce the diversity of our portfolio and make us more susceptible to adverse economic or regulatory developments in those areas or industries. Geographic, industry and tenant concentrations expose us to greater economic or regulatory risks than if we owned a more diverse portfolio. Our business includes substantial holdings in the following states as of December 31, 2020 (based on annualized base rent): Texas (14.9%), Georgia (9.6%), Florida (6.1%), Arkansas (4.8%) and Ohio (4.1%). We are susceptible to adverse developments in the economic or regulatory environments of the geographic areas in which we concentrate (or in which we may develop a substantial concentration of assets in the future), such as COVID-19 pandemic surges and measures intended to mitigate its spread, business layoffs or downsizing, industry slowdowns, relocations of businesses, increases in real estate and other taxes or costs of complying with governmental regulations. As of December 31, 2020, leases representing approximately 20.0% of our annualized base rent were with tenants in industries that have been particularly adversely affected by the COVID-19 pandemic, including casual and family dining (7.8% of annualized base rent), health and fitness (5.2% of annualized base rent), entertainment (3.4% of annualized base rent), movie theaters (2.3% of annualized base rent) and home furnishings (1.3% of annualized base rent). Accordingly, to the extent the pandemic or measures intended to mitigate its spread continue to adversely affect these industries, our tenants in these industries could fail to meet their obligations to us, and we could be required to provide further tenant concessions. As of December 31, 2020, our five largest tenants contributed 12.3% of our annualized base rent, and our ten largest tenants contributed 21.2% of our annualized base rent. If one of these tenants, or another tenant that occupies a significant portion of our properties or whose lease payments represent a significant portion of our rental revenue, were to experience financial weakness or file for bankruptcy, it could have a material adverse effect on our business, financial condition, results of operations, cash flows and liquidity, and prospects. As we continue to acquire properties, our portfolio may become more concentrated by geographic area, industry or tenant. If our portfolio becomes less diverse, our business will be more sensitive to the general economic downturn in a particular geographic area, to changes in trends affecting a particular industry and to the financial weakness, bankruptcy or insolvency of fewer tenants. 17 The vast majority of our properties are leased to unrated tenants whose credit is evaluated through our internal underwriting and credit analysis procedures. However, the tools we use to measure credit quality, such as property-level rent coverage ratio, may not be accurate. The vast majority of our properties are leased to unrated tenants whose credit is evaluated through our internal underwriting and credit analysis. Substantially all of our tenants are required to provide corporate-level financial information to us periodically or, in some instances, at our request. As of December 31, 2020, leases contributing 98.2% of our annualized base rent required tenants to provide us with specified unit-level financial information and leases contributing 98.3% of our annualized base rent required tenants to provide us with corporate-financial information. We analyze the creditworthiness of our tenants using Moody’s Analytics RiskCalc, which provides an estimated default frequency (“EDF”) and a “shadow rating”, and a lease's property-level rent coverage ratio. Our methods may not adequately assess the risk of an investment. An EDF score and a shadow rating are not the same as, and may not be as indicative of creditworthiness as, a rating published by a nationally recognized statistical rating organization. Our calculations of EDFs, shadow ratings and rent coverage ratios are unaudited and are based on financial information provided to us by our tenants and prospective tenants without independent verification on our part, and we assume the appropriateness of estimates and judgments that were made by the party preparing the financial information. If our assessment of credit quality proves to be inaccurate, we may be subject to defaults, and our cash flows may be less stable. The ability of an unrated tenant to meet its obligations to us may be more speculative than that of a rated tenant. We may be unable to renew expiring leases with the existing tenants or re-lease the spaces to new tenants on favorable terms or at all. Our results of operations depend on our ability to continue to lease our properties, including renewing expiring leases, leasing vacant space and re-leasing space in properties where leases are expiring. As of December 31, 2020, our occupancy was 99.7% (excluding two undeveloped land parcels), and leases representing approximately 0.1% of our annualized base rent as of such date will expire during 2021. Current tenants may decline to renew leases and we may not be able to find replacement tenants. We cannot guarantee that leases that are renewed or new leases will have terms that are as economically favorable to us as the expiring leases, or that substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options will not be offered to retain tenants or attract new tenants or that we will be able to lease a property at all. We may experience significant costs in connection with re-leasing a significant number of our properties, which could materially and adversely affect us. The tenants that occupy our properties compete in industries that depend upon discretionary spending by consumers. A reduction in the willingness or ability of consumers to physically patronize and use their discretionary income in the businesses of our tenants and potential tenants could adversely impact our tenants’ business and thereby adversely impact our ability to collect rents and reduce the demand for our properties. Most of our portfolio is leased to tenants operating service-oriented or experience-based businesses at our properties. The largest industries in our portfolio are car washes, restaurants (including quick service and casual and family dining), early childhood education, medical services, convenience stores, automotive services, entertainment (including movie theaters) and health and fitness]. As of December 31, 2020, tenants operating in those industries represented approximately 87.5% of our annualized base rent. Captain D's, EquipmentShare, Mister Car Wash, Circle K, AMC, Mavis Discount Tire, Zaxby's, The Malvern School, Vasa Fitness and R-Store represent the largest concepts in our portfolio.These types of businesses have been severely affected by the COVID-19 pandemic, principally due to store closures or limitations on operations (which may be government-mandated or voluntary) and reduced economic activity. The success of most of these businesses depends on the willingness of consumers to physically patronize their businesses and use discretionary income to purchase their products or services. To the extent the COVID- 19 pandemic causes a secular change in consumer behavior that reduces patronage of service-based and/or experience-based businesses, many of our tenants would be adversely affected and their ability to meet their obligations to us could be further impaired. Additional adverse economic conditions and other developments that discourage consumer spending, such as high unemployment levels, wage stagnation, interest rates, inflation, tax rates and fuel and energy costs, may have an impact on the results of operations and financial conditions of our tenants and their ability to pay rent to us. 18 Our ability to realize future rent increases on some of our leases may vary depending on changes in the CPI. Our leases often provide for periodic contractual rent escalations. As of December 31, 2020, leases contributing 99.2% of our annualized base rent provided for increases in future annual base rent, generally ranging from 1.0% to 4.0% annually, with a weighted average annual escalation equal to 1.5% of base rent. Although many of our rent escalators increase rent at a fixed amount on fixed dates, approximately 3.0% of our rent escalators relate to an increase in the CPI over a specified period. During periods of low inflation or deflation, small increases or decreases in the CPI will subject us to the risk of receiving lower rental revenue than we otherwise would have been entitled to receive if our rent escalators were based on higher fixed percentages or amounts. Inflation may materially and adversely affect us and our tenants. While our tenants are generally obligated to pay property-level expenses relating to the properties they lease from us (e.g., maintenance, insurance and property taxes), we incur other expenses, such as general and administrative expense, interest expense relating to our debt (some of which bears interest at floating rates) and carrying costs for vacant properties. These expenses would increase in an inflationary environment, and such increases may exceed any increase in revenue we receive under our leases. Additionally, increased inflation may have an adverse impact on our tenants if increases in their operating expenses exceed increases in their revenue, which may adversely affect the tenants' ability to pay rent owed to us. Some of our tenants operate under franchise or license agreements, and, if they are terminated or not renewed prior to the expiration of their leases with us, that would likely impair their ability to pay us rent. As of December 31, 2020, tenants contributing 16.1% of our annualized base rent operated under franchise or license agreements. Often, our tenants’ franchise or license agreements have terms that end prior to the expiration dates of the properties they lease from us. In addition, a tenant's rights as a franchisee or licensee typically may be terminated and the tenant may be precluded from competing with the franchisor or licensor upon termination. Usually, we have no notice or cure rights with respect to such a termination and have no rights to assignment of any such franchise agreement. This may have an adverse effect on our ability to mitigate losses arising from a default on any of our leases. A franchisor's or licensor's termination or refusal to renew a franchise or license agreement would likely have a material adverse effect on the ability of the tenant to make payments under its lease, which could materially and adversely affect us. Certain provisions of our leases may be unenforceable. Our rights and obligations with respect to our leases are governed by written agreements. A court could determine that one or more provisions of such an agreement are unenforceable. We could be adversely impacted if this were to happen with respect to a property or group of properties. The bankruptcy or insolvency of a tenant could result in the termination or modification of such tenant's lease and material losses to us. The occurrence of a tenant bankruptcy or insolvency could diminish the income we receive from that tenant's lease or leases or force us to “take back” a property as a result of a default or a rejection of a lease by a tenant in bankruptcy. Bankruptcy risk is more acute in situations where we lease multiple properties to a tenant pursuant to a master lease. If a tenant becomes bankrupt, the automatic stay created by the bankruptcy will prohibit us from collecting pre-bankruptcy debts from that tenant, or from its property, or evicting such tenant based solely upon such bankruptcy or insolvency, unless we obtain an order permitting us to do so from the bankruptcy court. In addition, a bankrupt or insolvent tenant may be authorized to reject and terminate its lease or leases with us. Any claims against such bankrupt tenant for unpaid future rent would be subject to statutory limitations that would likely result in our receipt of rental revenues that are substantially less than the contractually specified rent we are owed under the lease or leases. In addition, any claim we have for unpaid past rent, if any, may not be paid in full. We may also be unable to re-lease a terminated or rejected space or to re-lease it on comparable or more favorable terms. As a result, a significant number of tenant bankruptcies may materially and adversely affect us. Tenants who are considering filing for bankruptcy protection may request that we agree to amendments of their master leases to remove certain of the properties they lease from us under such master leases. We cannot guarantee that we will be able to sell or re-lease properties that we agree to release from tenants' leases in the 19 future or that lease termination fees, if any, will be sufficient to make up for the rental revenues lost as a result of lease amendments. Property vacancies could result in us having to incur significant capital expenditures to re-tenant the properties. Many of our leases relate to properties that have been designed or physically modified for a particular tenant. If such a lease is terminated or not renewed, we may be required to renovate the property at substantial costs, decrease the rent we charge or provide other concessions in order to lease the property to another tenant. In addition, if we determine to sell the property, we may have difficulty selling it to a party other than the tenant due to the special purpose for which the property may have been designed or modified. This potential illiquidity may limit our ability to quickly modify our portfolio in response to changes in economic or other conditions, including tenant demand. Defaults by borrowers on mortgages we hold could lead to losses. We make mortgage and other loans, which are often unsecured, to extend financing to tenants at our properties. A default by a borrower on its loan payments to us that would prevent us from earning interest or receiving a return of the principal of our loan could materially and adversely affect us. In the event of a default, we may also experience delays in enforcing our rights as lender and may incur substantial costs in collecting the amounts owed to us and in liquidating any collateral. Where collateral is available, foreclosure and other similar proceedings used to enforce payment of real estate loans are generally subject to principles of equity, which are designed to relieve the indebted party from the legal effect of that party's default. In the event we have to foreclose on a property, the amount we receive from the foreclosure sale of the property may be inadequate to fully pay the amounts owed to us by the borrower and our costs incurred to foreclose, repossess and sell the property. We may be unable to identify and complete acquisitions of suitable properties, which may impede our growth, and our future acquisitions may not yield the returns we seek. Our ability to expand through acquisitions requires us to identify, finance and complete acquisitions or investment opportunities that are compatible with our growth strategy and to successfully integrate newly acquired properties into our portfolio, which may be constrained by the following significant risks: we face competition from other real estate investors, some of which have greater economies of scale, lowers costs of capital, access to more financial resources and greater name recognition than we do, a greater ability to borrow funds and the ability to accept more risk than we can prudently manage, which may significantly reduce our acquisition volume or increase the purchase price for property we acquire, which could reduce our growth prospects; we may be unable to locate properties that will produce a sufficient spread between our cost of capital and the lease rate we can obtain from a tenant, in which case our ability to profitably grow our company will decrease; we may fail to have sufficient capital resources to complete acquisitions or our cost of capital could increase; we may incur significant costs and divert management attention in connection with evaluating and negotiating potential acquisitions, including ones that we are subsequently unable to complete; we may acquire properties that are not accretive to our results upon acquisition; our cash flow from an acquired property may be insufficient to meet our required principal and interest payments with respect to debt used to finance the acquisition of such property; we may discover unexpected items, such as unknown liabilities, during our due diligence investigation of a potential acquisition or other customary closing conditions may not be satisfied, causing us to abandon an investment opportunity after incurring expenses related thereto; we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties; we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities, such as liabilities for clean-up of undisclosed environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of the properties, liabilities incurred in the ordinary course of business and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties; we may obtain only limited warranties when we acquire a property, including properties purchased in “as is” condition on a “where is” basis and “with all faults,” without warranties of merchantability or fitness for a particular purpose and pursuant to purchase agreements that contain only limited warranties, representations and indemnifications that survive for only a limited period after the closing. If any of these risks are realized, we may be materially and adversely affected. 20 Our real estate investments are generally illiquid which could significantly impede our ability to respond to market conditions or adverse changes in the performance of our tenants or our properties and which would harm our financial condition. Our investments are relatively difficult to sell quickly. As a result of this illiquidity, our ability to promptly sell one or more properties in our portfolio in response to changing economic, financial or investment conditions is limited. Return of capital and realization of gains, if any, from an investment generally will occur upon disposition or refinancing of the underlying property. We may be unable to realize our investment objective by sale, other disposition or refinancing at attractive prices within any given period of time or may otherwise be unable to complete any exit strategy. In particular, these risks could arise from weakness in or even the lack of an established market for a property, changes adversely affecting the tenant of a property, changes adversely affecting the area in which a particular property is located, adverse changes in the financial condition or prospects of prospective purchasers and changes in local, national or international economic conditions. In addition, the Internal Revenue Code of 1986, as amended (the “Code”), imposes restrictions on a REIT's ability to dispose of properties that are not applicable to other types of real estate companies. In particular, the tax laws applicable to REITs effectively require that we hold our properties for investment, rather than primarily for sale in the ordinary course of business, which may cause us to forgo or defer sales of properties that otherwise would be in our best interest. Therefore, we may not be able to vary our portfolio in response to economic or other conditions promptly or on favorable terms. Our growth depends on third-party sources of capital that are outside of our control and may not be available to us on commercially reasonable terms or at all. In order to qualify as a REIT, we are required under the Code, among other things, to distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. In addition, we will be subject to income tax at the corporate rate to the extent that we distribute less than 100% of our REIT taxable income, determined without regard to the dividends paid deduction and including any net capital gain. Accordingly, we will not be able to fund all of our future capital needs, including any necessary acquisition financing, from operating cash flow. Consequently, we rely on third-party sources to fund a portion of our capital needs. Our access to debt and equity capital, and the cost thereof, depends, in part, on general market conditions, the market's perception of our growth potential, our current debt levels, our current and expected future earnings, our cash flow and cash distributions, and the market price of our common stock. The COVID-19 pandemic has significantly and adversely impacted global, national, regional and local economic activity and has contributed to significant volatility and negative pressure in the financial markets. If we cannot obtain capital from third-party sources, or if our cost of capital increases materially, we may not be able to acquire properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our stockholders necessary to qualify as a REIT. Loss of senior executives with long-standing business relationships could materially impair our ability to operate successfully. Our continued success and our ability to grow our portfolio and business depend, in large part, upon the efforts of certain of our senior executives, in particular our President and Chief Executive Officer, Peter M. Mavoides, and Gregg A. Seibert, our Executive Vice President and Chief Operating Officer, who have extensive market knowledge and relationships and exercise substantial influence over our operational, financing, acquisition and disposition activity. Many of our executive personnel have extensive experience and strong reputations in the real estate industry and have been important in setting our strategic direction, operating our business, assembling and growing our portfolio, identifying, recruiting and training key personnel, and arranging necessary financing. In particular, the extent and nature of the relationships that these individuals have developed with financial institutions and existing and prospective tenants is important to our growth and the success of our business. The loss of services of one or more members of our management team, including due to the adverse health effects of the COVID-19 pandemic, or our inability to attract and retain highly qualified personnel, could adversely affect our business, diminish our investment opportunities and weaken our relationships with lenders, business partners, existing and prospective tenants and industry personnel, which could materially and adversely affect us. 21 The costs of compliance with or liabilities related to environmental laws may materially and adversely affect us. Risks Related to Environmental and Compliance Matters and Climate Change The properties we own or have owned in the past may subject us to known and unknown environmental liabilities. We obtain Phase I environmental site assessments on all properties we finance or acquire. However, the Phase I environmental site assessments are limited in scope and therefore may not reveal all environmental conditions affecting a property. Under various federal, state and local laws and regulations relating to the environment, as a current or former owner or operator of real property, we may be liable for costs and damages resulting from environmental matters, including the presence or discharge of hazardous or toxic substances, waste or petroleum products at, on, in, under or migrating from such property, including costs to investigate or clean up such contamination and liability for personal injury, property damage or harm to natural resources. If environmental contamination exists on our properties, we could be subject to strict, joint and/or several liability for the contamination by virtue of our ownership interest; we may face liability regardless of our knowledge of the contamination, the timing of the contamination, the cause of the contamination, or the party responsible for the contamination of the property. If our environmental liability insurance is inadequate, we may become subject to material losses for environmental liabilities. Although our leases generally require our tenants to operate in compliance with all applicable laws and to indemnify us against any environmental liabilities arising from a tenant's activities on the property, we could be subject to strict liability by virtue of our ownership interest. We cannot be sure that our tenants will, or will be able to, satisfy their indemnification obligations, if any, under our leases. Furthermore, the discovery of environmental liabilities on any of our properties could lead to significant remediation costs or to other liabilities or obligations attributable to the tenant of that property or could result in material interference with the ability of our tenants to operate their businesses as currently operated. Noncompliance with environmental laws or discovery of environmental liabilities could each individually or collectively affect such tenant's ability to make payments to us, including rental payments and, where applicable, indemnification payments. Additionally the known or potential presence of hazardous substances on a property may adversely affect our ability to sell, lease or improve the property or to borrow using the property as collateral. Environmental laws may also create liens on contaminated properties in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which they may be used or businesses may be operated, and these restrictions may require substantial expenditures. Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us. Our tenants are required to maintain liability and property insurance coverage for the properties they lease from us pursuant to triple-net leases. Pursuant to such leases, our tenants are required to name us (and any of our lenders that have a mortgage on the property leased by the tenant) as additional insureds on their liability policies and additional named insured and/or loss payee (or mortgagee, in the case of our lenders) on their property policies. All tenants are required to maintain casualty coverage. Depending on the location of the property, losses of a catastrophic nature, such as those caused by earthquakes and floods, may be covered by insurance policies that are held by our tenant with limitations such as large deductibles or co-payments that a tenant may not be able to meet. In addition, losses of a catastrophic nature, such as those caused by wind/hail, hurricanes, terrorism or acts of war, may be uninsurable or not economically insurable. If there is damage to our properties that is not covered by insurance and such properties are subject to recourse indebtedness, we will continue to be liable for the indebtedness, even if these properties are irreparably damaged. Inflation, changes in building codes and ordinances, environmental considerations and other factors, including terrorism or acts of war, may make any insurance proceeds we receive insufficient to repair or replace a property if it is damaged or destroyed. In that situation, the insurance proceeds received may not be adequate to restore our economic position with respect to the affected real property. Furthermore, if we experience a substantial or comprehensive loss of one of our properties, we may not be able to rebuild such property to its existing specifications without significant capital expenditures which may exceed any amounts received pursuant to insurance policies, as reconstruction or improvement of such a property would likely require significant upgrades to meet zoning and building code requirements. The loss of our capital investment in or anticipated future returns from our properties due to material uninsured losses could materially and adversely affect us. 22 Compliance with the ADA and fire, safety and other regulations may require us to make unanticipated expenditures. Our properties are subject to the ADA, fire and safety regulations, building codes and other regulations. Failure to comply with these laws and regulations could result in imposition of fines by the government or an award of damages to private litigants, or both. While our tenants are obligated by law to comply with the ADA and typically obligated under our leases to cover costs associated with compliance with the ADA and other property regulations, if required changes involve greater expenditures than anticipated or if the changes must be made on a more accelerated basis than anticipated, the ability of our tenants to cover costs could be adversely affected, and we could be required to expend our own funds to comply with applicable law and regulation. Our operations and financial condition may be adversely affected by climate change, including possible changes in weather patterns, weather-related events, government policy, laws, regulations and economic conditions. In recent years, the assessment of the potential impact of climate change has begun to impact the activities of government authorities, the pattern of consumer behavior and other areas that impact the business environment in the U.S., including, but not limited to, energy-efficiency measures, water use measures and land-use practices. The promulgation of policies, laws or regulations relating to climate change by governmental authorities in the U.S. and the markets in which we own properties may require us to invest additional capital in our properties. In addition, the impact of climate change on businesses operated by our tenants is not reasonably determinable at this time. While not generally known at this time, climate change may impact weather patterns or the occurrence of significant weather events which could impact economic activity or the value of our properties in specific markets. The occurrence of any of these events or conditions may adversely impact our ability to lease our properties, including our or our tenants’ ability to obtain property insurance on acceptable terms, which would materially and adversely affect us. Risks Related to Our Indebtedness As of December 31, 2020, we had $821.2 million of indebtedness outstanding, which requires substantial cash flow to service, subjects us to covenants and refinancing risk and the risk of default. As of December 31, 2020, we had $821.2 million of indebtedness outstanding. This indebtedness consisted of $173.2 million aggregate principal amount of Class A Notes and Class B Notes issued under our Master Trust Funding Program, $18.0 million of borrowings under our Revolving Credit Facility and $630.0 million of combined borrowings under the April 2019 Term Loan and the November 2019 Term Loan. Payments of principal and interest on indebtedness may leave us with insufficient cash resources to meet our cash needs, including funding our investment program, or to make the distributions to our common stockholders currently contemplated or necessary to continue to qualify as a REIT. Our indebtedness and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following: our cash flow may be insufficient to make our required principal and interest payments; cash interest expense and financial covenants relating to our indebtedness may limit or eliminate our ability to make distributions to our common stockholders; we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to consummate investment opportunities or meet operational needs; we may be unable to refinance our indebtedness at maturity, or the refinancing terms may be less favorable than the terms of the debt being refinanced; because a portion of our debt bears interest at variable rates, increases in interest rates could increase our interest expense; we may be unable to hedge floating rate debt, counterparties may fail to honor their obligations under our hedge agreements, such agreements may not effectively hedge interest rate fluctuation risk, and, upon the expiration of our hedge agreements, we will be exposed to then-existing market rates of interest and future interest rate volatility; we may be forced to dispose of properties, possibly on unfavorable terms or in violation of certain covenants to which we may be subject; we may default on our obligations, and, with respect to our secured indebtedness, the lenders or mortgagees may foreclose on our properties or our interests in the entities that own the properties that secure their loans and receive an assignment of rents and leases; foreclosure on collateral securing indebtedness could create taxable income without accompanying cash proceeds, which could adversely affect our ability to meet the distribution requirement necessary to maintain our qualification for taxation as a REIT under the Code; we may be restricted from accessing some of our excess cash flow after debt service if certain of our tenants fail to meet certain financial performance metric thresholds; we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations; and our default under any loan with cross-default provisions could result in a default on other indebtedness. The occurrence of any of these events could materially and adversely affect us. 23 Our business plan depends on external sources of capital, including debt financings, and market conditions could adversely affect our ability to refinance existing indebtedness or obtain additional financing for growth on commercially acceptable terms or at all. Credit markets may experience significant price volatility, displacement and liquidity disruptions, including the bankruptcy, insolvency or restructuring of certain financial institutions. Such circumstances could materially impact liquidity in the financial markets, making financing terms for borrowers less attractive, and potentially result in the unavailability of various types of debt financing. As a result, we may be unable to obtain debt financing on favorable terms or at all or fully refinance maturing indebtedness with new indebtedness. Reductions in our available borrowing capacity or inability to obtain credit when required or when business conditions warrant could materially and adversely affect us. If prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to that refinanced indebtedness would increase. Higher interest rates on newly incurred debt may negatively impact us as well. If interest rates increase, our interest costs and overall costs of capital will increase, which could materially and adversely affect us and our ability to make distributions to our stockholders. We have engaged in hedging transactions and may engage in additional hedging transactions in the future; such transactions may materially and adversely affect our results of operations and cash flows. We use hedging strategies, in a manner consistent with the REIT qualification requirements, in an effort to reduce our exposure to changes in interest rates. As of December 31, 2020, we were party to eight interest rate swap agreements with third-party financial institutions having an aggregate notional amount of $630.0 million that are designated as cash flow hedges and designed to effectively fix the LIBOR component of the interest rate on the debt outstanding under our term loans. Unanticipated changes in interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions and may materially and adversely affect our business by increasing our cost of capital and reducing the net returns we earn on our portfolio. A significant portion of our assets have been pledged to secure the borrowings of our subsidiaries. A significant portion of our investment portfolio consists of assets owned by our consolidated, bankruptcy remote, special purpose entity subsidiaries that have been pledged to secure the long-term borrowings of those subsidiaries. As of December 31, 2020, we had 258 properties comprising $399.7 million of net investments pledged as collateral under our Master Trust Funding Program. We or our other consolidated subsidiaries are the equity owners of these special purpose entities, meaning we are entitled to the excess cash flows after debt service and all other required payments are made on the debt of these entities. If our subsidiaries fail to make the required payments on this indebtedness, distributions of excess cash flow to us may be reduced or eliminated and the indebtedness may become immediately due and payable. If the subsidiaries are unable to pay the accelerated indebtedness, the pledged assets could be foreclosed upon and distributions of excess cash flow to us may be suspended or terminated. In that case, our ability to make distributions to our stockholders could be materially and adversely affected. Under certain circumstances, the subsidiaries included in our Master Trust Funding Program would be prohibited from distributing excess cash flow to us, and the assets of such subsidiaries could be foreclosed upon. Through our Master Trust Funding Program, certain of our Operating Partnership's indirect wholly owned subsidiaries have issued net-lease mortgage notes payable with an aggregate outstanding principal balance of $173.2 million as of December 31, 2020. As of December 31, 2020, we had pledged 258 properties, with a net investment amount of $399.7 million, as collateral under this program. As the equity owner of the subsidiaries included in our Master Trust Funding Program, we are only entitled to the excess cash flows from such subsidiaries after debt service and all other required payments are made on the notes. If, at any time, the monthly debt service coverage ratio (as defined) generated by the collateral pool is less than or equal to 1.25x, excess cash flow (as defined) from the subsidiaries included in our Master Trust Funding Program will be deposited into a reserve account to be used for payments on the net-lease mortgage notes in the event there is a shortfall in cash at such subsidiaries to make required payments on the notes. Additionally, if at any time the three month average debt service coverage ratio generated by the collateral pool is less than or equal to 1.15x, excess cash flow from the subsidiaries included in our Master Trust Funding Program will be applied to an early amortization of the notes. For 24 the year ended December 31, 2020, the debt service coverage ratio was approximately 2.27x. If we fail to maintain the required debt service coverage ratios, the excess cash flows we receive from these subsidiaries would be reduced or eliminated. This could materially and adversely affect us, including by reducing our ability to pay cash distributions on our common stock and possibly prevent us from maintaining our qualification for taxation as a REIT. In addition, if the subsidiaries included in our Master Trust Funding Program are unable to repay the notes, including in connection with any acceleration of maturity, the pledged assets could be foreclosed upon and our equity in such assets eliminated. Changes to, or the elimination of, LIBOR may adversely affect interest expense related to borrowings under our Revolving Credit Facility, the April 2019 Term Loan and the November 2019 Term Loan. The interest rate under our Revolving Credit Facility, our April 2019 Term Loan and our November 2019 Term Loan is calculated using LIBOR. In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to USD-LIBOR in derivatives and other financial contracts. On November 30, 2020, ICE Benchmark Administration, the administrator of LIBOR, announced plans to consult on ceasing publication of LIBOR on December 31, 2021 for only the one week and two month LIBOR tenors, and on June 30, 2023 for all other LIBOR tenors. The Federal Reserve Board concurrently issued a statement advising banks to stop new LIBOR issuances by the end of 2021. The future of LIBOR at this time is uncertain , and weather or not SOFR, or another alternative reference rate, attains market traction as a LIBOR replacement tool remains in question. The effect of the establishment of alternative reference rates or any other reforms to LIBOR or other reference rates (including whether LIBOR will continue to be an acceptable market benchmark) cannot be predicted at this time. Factors such as the pace of the transition to replacement or reformed rates, the specific terms and parameters for and market acceptance of any alternative reference rate, prices of and the liquidity of trading markets for products based on alternative reference rates, and our ability to transition and develop appropriate systems and analytics for one or more alternative reference rates could materially and adversely affect us. Our debt financing agreements contain restrictions and covenants which may limit our ability to enter into, or obtain funding for, certain transactions, operate our business or make distributions to our common stockholders. Our debt financing agreements contain financial and other covenants with which we are required to comply and that limit our ability to operate our business. These covenants, as well as any additional covenants to which we may be subject in the future because of additional or replacement debt financing, could cause us to have to forego investment opportunities, reduce or eliminate distributions to our common stockholders or obtain financing that is more expensive than financing we could obtain if we were not subject to the covenants. The covenants impose limitations on, among other things, our ability to pay distributions to our stockholders under certain circumstances, subject to certain exceptions relating to our qualification as a REIT under the Code. In addition, these agreements have cross-default provisions that generally result in an event of default if we default under other material indebtedness. The covenants and other restrictions under our debt agreements may affect, among other things, our ability to: incur indebtedness; create liens on assets; cause our subsidiaries to distribute cash to us to fund distributions to stockholders or to otherwise use in our business; (see “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Description of Certain Debt”); sell or substitute assets; modify certain terms of our leases; manage our cash flows; and make distributions to equity holders, including our common stockholders. Additionally, these restrictions may adversely affect our operating and financial flexibility and may limit our ability to respond to changes in our business or competitive environment, all of which may materially and adversely affect us. Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in any property subject to mortgage debt. Future borrowings may be secured by mortgages on our properties. Incurring mortgage and other secured debt obligations increases our risk of losses because defaults on secured indebtedness may result in foreclosure actions initiated by lenders and ultimately our loss of the properties securing any loans for which we are in default. If 25 we are in default under a cross-defaulted mortgage loan, we could lose multiple properties to foreclosure. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could hinder our ability to meet the REIT distribution requirements. As we execute our business plan, we may assume or incur new mortgage indebtedness on our properties. Any default under any mortgage debt obligation we incur may increase the risk of our default on our other indebtedness. Risks Related to Our Organizational Structure Our charter and bylaws and Maryland law contain provisions that may delay, defer or prevent a change of control transaction, even if such a change in control may be in your interest, and as a result may depress the market price of our common stock. Our charter contains certain restrictions on ownership and transfer of our stock. Our charter contains various provisions that are intended to, among other things, assist us in maintaining our qualification for taxation as a REIT and, subject to certain exceptions, authorizes our directors to take such actions as are necessary or appropriate to cause us to continue to qualify as a REIT. For example, our charter prohibits the actual, beneficial or constructive ownership by any person of more than 9.8% in value or in number of shares, whichever is more restrictive, of the outstanding shares of our common stock or more than 9.8% in value of the aggregate of the outstanding shares of all classes and series of our stock. Our board of directors, in its sole and absolute discretion, may exempt a person, prospectively or retroactively, from these ownership limits if certain conditions are satisfied. The restrictions on ownership and transfer of our stock may, among other things: discourage a tender offer or other transactions or a change in management or of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interests; or result in the transfer of shares acquired in excess of the restrictions to a trust for the benefit of one or more charitable beneficiaries and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares. We could increase or decrease the number of authorized shares of stock, classify and reclassify unissued stock and issue stock without stockholder approval. Our board of directors, without stockholder approval, has the power under our charter to amend our charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue, to authorize us to issue authorized but unissued shares of our common stock or preferred stock and to classify or reclassify any unissued shares of our common stock or preferred stock into one or more classes or series of stock and to set the terms of such newly classified or reclassified shares. As a result, we may issue one or more classes or series of common stock or preferred stock with preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption that are senior to, or otherwise conflict with, the rights of our common stockholders. Our board of directors could establish a class or series of common stock or preferred stock that could, depending on the terms of such class or series, delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders. Termination of the employment agreements with certain members of our senior management team could be costly and could prevent a change in control of our company. The employment agreements with certain members of our senior management team provide that if their employment with us terminates under certain circumstances (including in connection with a change in control of our company), we may be required to pay them significant amounts of severance compensation, thereby making it costly to terminate their employment. Furthermore, these provisions could delay or prevent a transaction or a change in control of our company that might involve a premium paid for shares of our common stock or otherwise be in the best interests of our stockholders. 26 Our board of directors may change our investment and financing policies without stockholder approval, including those with respect to borrowing, and we may become more highly leveraged, which may increase our risk of default under our debt obligations. Our investment and financing policies are exclusively determined by our board of directors. Accordingly, our stockholders do not control these policies. Further, our organizational documents do not limit the amount or percentage of indebtedness, funded or otherwise, that we may incur. Although we are not required by our organizational documents to maintain a particular leverage ratio and may not be able to do so, we generally intend to target a level of net debt (which includes recourse and non-recourse borrowings and any outstanding preferred stock issuance less unrestricted cash and cash equivalents) that, over time, is less than six times our Annualized Adjusted EBITDAre. However, from time to time, our ratio of net debt to our Annualized Adjusted EBITDAre may equal or exceed six times. Our board of directors may alter or eliminate our current policy on borrowing at any time without stockholder approval. If this policy changed, we could become more highly leveraged, which could result in an increase in our debt service and the risk of default on our obligations. In addition, a change in our investment policies, including the manner in which we allocate our resources across our portfolio or the types of assets in which we seek to invest, may increase our exposure to interest rate risk, real estate market fluctuations and liquidity risk. Changes to our policies with regard to the foregoing could materially and adversely affect us. Our rights and the rights of our stockholders to take action against our directors and officers are limited. As permitted by Maryland law, our charter limits the liability of our directors and officers to us and our stockholders for money damages to the maximum extent permitted by Maryland law. Therefore, our directors and officers are subject to monetary liability resulting only from: actual receipt of an improper benefit or profit in money, property or services; or active and deliberate dishonesty by the director or officer that was established by a final judgment as being material to the cause of action adjudicated. As a result, we and our stockholders have rights against our directors and officers that are more limited than might otherwise exist. Accordingly, if actions taken by any of our directors or officers impede the performance of our company, your and our ability to recover damages from such director or officer will be limited. In addition, our charter and our bylaws require us to indemnify our directors and officers for actions taken by them in those and certain other capacities to the maximum extent permitted by Maryland law. We are a holding company with no direct operations and rely on funds received from our Operating Partnership to make any distributions to stockholders and to pay liabilities. We are a holding company and conduct substantially all of our operations through our Operating Partnership. We do not have any independent operations, and our only material asset is our interest in our Operating Partnership. As a result, we rely on distributions from our Operating Partnership to pay any distributions we might declare on shares of our common stock. We also rely on distributions from our Operating Partnership to meet any of our obligations, including any tax liability on taxable income allocated to us from our Operating Partnership. In addition, because we are a holding company, claims by our stockholders will be structurally subordinated to all existing and future liabilities and obligations (whether or not for borrowed money) of our Operating Partnership and its subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our Operating Partnership and its subsidiaries will be able to satisfy the claims of our stockholders only after all of our and our Operating Partnership's and its subsidiaries' liabilities and obligations have been paid in full. In connection with our future acquisition of properties or otherwise, we may issue units of our Operating Partnership to third parties. Such issuances would reduce our ownership in our Operating Partnership. If you do not directly own units of our Operating Partnership, you will not have any voting rights with respect to any such issuances or other partnership level activities of our Operating Partnership. Conflicts of interest could arise in the future between the interests of our stockholders and the interests of holders of units in our Operating Partnership, which may impede business decisions that could benefit our stockholders. Conflicts of interest could arise in the future as a result of the relationships between us and our stockholders, on the one hand, and our Operating Partnership and its limited partners, on the other. Under the terms of the partnership agreement of our Operating Partnership, if there is a conflict between the interests of our stockholders, on one hand, and any limited partners, on the other, we will endeavor in good faith to resolve the conflict in a 27 manner not adverse to either our stockholders or any limited partners; provided, however, that so long as we own a controlling economic interest in our Operating Partnership, any conflict that cannot be resolved in a manner not adverse to either our stockholders or any limited partners shall be resolved in favor of our stockholders. Certain mergers, consolidations and other transactions require the approval of a majority in interest of the outside limited partners in our Operating Partnership (which excludes us and our subsidiaries), which could prevent certain transactions that may result in our stockholders receiving a premium for their shares or otherwise be in their best interest. The partnership agreement requires the general partner or us, as the parent of the general partner, to obtain the approval of a majority in interest of the outside limited partners in our Operating Partnership (which excludes us and our subsidiaries) in connection with certain mergers, consolidations or other combinations of us, or a sale of all or substantially all of our assets. This approval right could prevent a transaction that might be in the best interests of our stockholders. Risks Related to Our Status as a REIT Failure to continue to qualify as a REIT would materially and adversely affect us and the value of our common stock, and even if we continue to qualify as a REIT, we may be subject to certain additional taxes. We elected to be taxed as a REIT for federal income tax purposes beginning with our taxable year ended December 31, 2018, and we believe that our current organization and operations have allowed and will continue to allow us to qualify as a REIT. We have not requested and do not plan to request a ruling from the Internal Revenue Service, or IRS, that we qualify as a REIT, and the statements in this Annual Report are not binding on the IRS or any court. Therefore, we cannot assure you that we will remain qualified as a REIT in the future. If we lose our REIT status, we will face significant tax consequences that would substantially reduce our cash available for distribution to you for each of the years involved because: we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to federal income tax at the corporate rate; we also could be subject to increased state and local taxes; and unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified. Any such corporate tax liability could be substantial and would reduce our cash available for, among other things, our operations and distributions to stockholders. In addition, if we fail to remain qualified as a REIT, we will not be required to make distributions to our stockholders. As a result of all these factors, our failure to remain qualified as a REIT also could impair our ability to expand our business and raise capital and could materially and adversely affect the trading price of our common stock. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to continue to qualify as a REIT. In order to continue to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the ownership of our stock, requirements regarding the composition of our assets and a requirement that at least 95% of our gross income in any year must be derived from qualifying sources, such as “rents from real property.” Also, we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains. In addition, legislation, new regulations, administrative interpretations or court decisions may materially and adversely affect our investors, our ability to continue to qualify as a REIT for federal income tax purposes or the desirability of an investment in a REIT relative to other investments. Even if we continue to qualify as a REIT for federal income tax purposes, we may be subject to some federal, state and local income, property and excise taxes on our income or property and, in certain cases, a 100% penalty tax, in the event we sell property as a dealer. In addition, any taxable REIT subsidiaries will be subject to tax as regular corporations in the jurisdictions in which they operate. If our Operating Partnership fails to qualify as a partnership for federal income tax purposes, we will cease to qualify as a REIT and suffer other adverse consequences. We believe that our Operating Partnership will be treated as a partnership for federal income tax purposes and, as a result, will generally not be subject to federal income tax on its income. Instead, for federal income tax 28 purposes each of the partners of the Operating Partnership, including us, will be allocated, and may be required to pay tax with respect to, such partner's share of its income. Our Operating Partnership will generally be required to determine and pay an imputed underpayment of tax (plus interest and penalties) resulting from an adjustment of the Operating Partnership's items of income, gain, loss, deduction or credit at the partnership level. We cannot assure you that the IRS will not challenge the tax classification of our Operating Partnership or any other subsidiary partnership in which we own an interest, or that a court will not sustain such a challenge. If the IRS were successful in treating our Operating Partnership or any such other subsidiary partnership as an entity taxable as a corporation for federal income tax purposes, we will fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we will likely cease to qualify as a REIT. Also, the failure of our Operating Partnership or any subsidiary partnerships to qualify as a disregarded entity or partnership could cause it to become subject to federal and state corporate income tax, which will reduce significantly the amount of cash available for debt service and for distribution to its partners, including us. To maintain our REIT status, we may be forced to borrow funds during unfavorable market conditions, and the unavailability of such capital on favorable terms at the desired times, or at all, may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, which could materially and adversely affect us and the per share trading price of our common stock. To continue to qualify as a REIT, we generally must distribute to our stockholders at least 90% of our REIT taxable income each year, determined without regard to the dividends-paid deduction and excluding any net capital gains, and we will be subject to corporate income tax on our undistributed taxable income to the extent that we distribute less than 100% of our REIT taxable income, determined without regard to the dividends-paid deduction and including any net capital gains, each year. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. In order to maintain our REIT status and avoid the payment of income and excise taxes, we may need to borrow funds to meet the REIT distribution requirements even if market conditions are not favorable for these borrowings. We cannot assure you that we will have access to such capital on favorable terms at the desired times, or at all, which may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, and could materially and adversely affect us and the per share trading price of our common stock. Our ability to provide certain services to our tenants may be limited by the REIT rules or may have to be provided through a Taxable REIT Subsidiary. As a REIT, we generally cannot provide services to our tenants other than those that are customarily provided by landlords, nor can we derive income from a third party that provides such services. If we forego providing such services to our tenants, we may be at a disadvantage to competitors that are not subject to the same restrictions. However, we can provide such non-customary services to our tenants and receive our share in the revenue from such services if we do so through a taxable REIT subsidiary (“TRS”), though income earned by such TRS will be subject to U.S. federal corporate income taxation. The IRS may treat sale-leaseback transactions as loans, which could jeopardize our REIT status or require us to make an unexpected distribution. A significant portion of our investments were obtained through sale-leaseback transactions, where we purchase owner-occupied real estate and lease it back to the seller. We expect that a majority of our future investments will be obtained this way. The IRS may take the position that specific sale-leaseback transactions that we treat as leases are not true leases for federal income tax purposes but, instead, should be re- characterized as financing arrangements or loans. If a sale-leaseback transaction were so re-characterized, we might fail to satisfy the REIT asset tests, the income tests or distribution requirements and consequently lose our REIT status effective with the year of re-characterization unless we elect to make an additional distribution to maintain our REIT status. The primary risk relates to our loss of previously incurred depreciation expenses, which could affect the calculation of our REIT taxable income and could cause us to fail the REIT distribution test that requires a REIT to distribute at least 90% of its REIT taxable income, determined without regard to the dividends-paid deduction and excluding any net capital gain. In this circumstance, we may elect to distribute an additional dividend of the increased taxable income so as 29 not to fail the REIT distribution test. This distribution would be paid to all stockholders at the time of declaration rather than the stockholders existing in the taxable year affected by the re-characterization. Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends. The maximum tax rate applicable to income from "qualified dividends" payable to U.S. stockholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, generally are not eligible for the 20% rate except to the extent the REIT dividends are attributable to "qualified dividends" received by the REIT itself. However, for non-corporate U.S. stockholders, dividends payable by REITs that are not designated as capital gain dividends or otherwise treated as "qualified dividends" generally are eligible for a deduction of 20% of the amount of such dividends, for taxable years beginning before January 1, 2026. More favorable rates will nevertheless continue to apply for regular corporate "qualified dividends." Although these rules do not adversely affect the taxation of REITs or dividends payable by REITs, if the 20% rate continues to apply to regular corporate qualified dividends, investors who are individuals, trusts and estates may regard investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations. The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes. A REIT's net income from “prohibited transactions” is subject to a 100% penalty tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. Although we do not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of our business, unless a sale or disposition qualifies under certain statutory safe harbors, no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to make use of the available safe harbors. Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities. The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities. Any income from a hedging transaction that we enter into to manage the risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets, or from certain terminations of such hedging positions, does not constitute “gross income” for purposes of the 75% or 95% gross income tests that apply to REITs, provided that certain identification requirements are met. To the extent that we enter into other types of hedging transactions or fail to properly identify such transaction as a hedge, the income is likely to be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may be required to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because any TRS in which we own an interest may be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in any TRS in which we own an interest will generally not provide any tax benefit, except that such losses could theoretically be carried forward against future taxable income in such TRS. Complying with REIT requirements may affect our profitability and may force us to liquidate or forgo otherwise attractive investments. To qualify as a REIT, we must continually satisfy tests concerning, among other things, the nature and diversification of our assets, the sources of our income and the amounts we distribute to our stockholders. We may be required to liquidate or forgo otherwise attractive investments in order to satisfy the asset and income tests or to qualify under certain statutory relief provisions. We also may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. As a result, having to comply with the distribution requirement could cause us to: (i) sell assets in adverse market conditions; (ii) borrow on unfavorable terms; or (iii) distribute amounts that would otherwise be invested in future acquisitions, capital expenditures or repayment of debt. Accordingly, satisfying the REIT requirements could materially and adversely affect us. Moreover, if we are compelled to liquidate our investments to meet any of these asset, income or distribution tests, or to repay obligations to our lenders, we may be unable to comply with one or more of the requirements applicable to REITs or may be subject to a 100% tax on any resulting gain if such sales are prohibited transactions. 30 There is a risk of changes in the tax law applicable to REITs. Because the IRS, the United States Treasury Department and Congress frequently review federal income tax legislation, we cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Any of such legislative actions may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us and/or our investors. For example, the Tax Cuts and Jobs Act of 2017 (the “TCJA”) has significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their stockholders. You are urged to consult with your tax advisor with respect to the status of legislative, regulatory, judicial or administrative developments and proposals and their potential effect on an investment in our securities. Risks Related to the Ownership of Our Common Stock Changes in market conditions and volatility of stock prices could adversely affect the market price of our common stock. The market price of our common stock on the NYSE has experienced significant volatility, particularly since the outbreak of the COVID-19 pandemic. The market price of our common stock will fluctuate, and such fluctuations could be significant and frequent; accordingly, our common stockholders may experience a significant decrease in the value of their shares, including decreases that may be related to technical market factors and may be unrelated to our operating performance or prospects. Similarly, the trading volume of our common stock may decline, and our common stockholders could experience a decrease in liquidity. A number of factors could negatively affect the price per share of our common stock, including: actual or anticipated variations in our quarterly operating results or distributions; changes in our funds from operations (“FFO”), core FFO (“Core FFO”), adjusted FFO (“AFFO”) or guidance; changes in our net investment activity; difficulties or inability to access equity or debt capital on attractive terms or extend or refinance existing debt; increases in our leverage; changes in our management or business strategy; failure to comply with the NYSE listing requirements or other regulatory requirements; and the other factors described in this Risk Factors section. Many of these factors are beyond our control. These factors may cause the market price of shares of our common stock to decline significantly, regardless of our financial condition, results of operations, business or our prospects. Increases in market interest rates may result in a decrease in the value of shares of our common stock. One of the factors that may influence the price of shares of our common stock is the distribution yield on shares of our common stock (as a percentage of the price of shares of our common stock) relative to market interest rates. An increase in market interest rates, which are currently at low levels relative to historical rates, may lead prospective purchasers of shares of our common stock to expect a higher distribution yield. Additionally, higher interest rates would likely increase our borrowing costs and potentially decrease funds available for distribution. Thus, higher market interest rates could cause the per share trading price of our common stock to decrease. Higher borrowing costs and a reduced trading price of our common stock would increase our overall cost of capital and adversely affect our ability to make accretive acquisitions. We may be unable to continue to make distributions at our current distribution level, and our board may change our distribution policy in the future. While we expect to continue to make regular quarterly distributions to the holders of our common stock, if sufficient cash is not available for distribution from our operations, we may have to fund distributions from working capital or net proceeds from asset sales, borrow to provide funds for such distributions, or reduce the amount of such distributions. To the extent we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been. If cash available for distribution generated by our assets is less than expected, or if such cash available for distribution decreases in future periods from expected levels, our inability to make distributions could result in a decrease in the market price of our common stock. The decision to declare and pay distributions on our common stock, as well as the form, timing and amount of any such future distributions, is at the sole discretion of our board of directors and depends on upon a number of factors, including our actual and projected results of operations, FFO, Core FFO, AFFO, liquidity, cash flows and financial condition, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements, applicable law and such other factors as our board 31 of directors deems relevant. We may not be able to make distributions in the future, and our inability to make distributions, or to make distributions at expected levels, could have a material adverse effect on the market price of our common stock. The incurrence of additional debt, which would be senior to shares of our common stock upon liquidation, and/or preferred equity securities that may be senior to shares of our common stock for purposes of distributions or upon liquidation, may materially and adversely affect the market price of shares of our common stock. In the future, we may attempt to increase our capital resources by making additional offerings of debt or preferred equity securities, including by causing our Operating Partnership or its subsidiaries to issue additional debt securities, or by otherwise incurring additional indebtedness. Upon liquidation, holders of our debt securities, other lenders and creditors, and any holders of preferred stock with a liquidation preference will receive distributions of our available assets prior to our stockholders. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common stock and may result in dilution to owners of our common stock. Our stockholders are not entitled to preemptive rights or other protections against dilution. Our preferred stock, if issued, could have a preference on liquidating distributions or a preference on distribution payments that could limit our right to make distributions to our stockholders. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Our stockholders bear the risk of our future offerings reducing per share trading price of our common stock. Sales of substantial amounts of our common stock or securities convertible into or exercisable or exchangeable therefor, or the perception that such sales might occur, could reduce the price of our common stock and may dilute your voting power and your ownership interest in us. Sales of substantial amounts of our common stock or securities convertible into or exercisable or exchangeable therefor (such as OP Units), or the perception that such sales might occur, could adversely affect the market price of our common stock. Additionally, such sales would dilute the voting power and ownership interest of existing common stockholders. Our charter provides that we may issue up to 500,000,000 shares of common stock, and a majority of our entire board of directors has the power to amend our charter to increase the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue without stockholder approval. As of December 31, 2020, we had 106,361,524 shares of common stock outstanding and 553,847 OP Units outstanding (excluding OP Units held directly or indirectly by us). The currently outstanding OP Units are primarily held by members of our management team. OP Units are generally redeemable for cash or, at our election, shares of common stock on a one-for-one basis, which may result in stockholder dilution. In the future we may acquire properties through tax deferred contribution transactions in exchange for OP Units. This acquisition structure may have the effect of, among other things, reducing the amount of tax depreciation we could deduct over the tax life of the acquired properties, and may require that we agree to protect the contributors' ability to defer recognition of taxable gain through restrictions on our ability to dispose of the acquired properties and/or the allocation of partnership debt to the contributors to maintain their tax bases. These restrictions could limit our ability to sell an asset at a time, or on terms, that would be favorable absent such restrictions. As of December 31, 2020, 2119352 shares remain available for issuance under our 2018 Incentive Plan. General Risk Factors Any material failure, weakness, interruption or breach in security of our information systems could prevent us from effectively operating our business. We rely on information systems across our operations and corporate functions, including finance and accounting, and depend on such systems to ensure payment of obligations, collection of cash, data warehousing to support analytics, and other various processes and procedures. Due to the COVID-19 pandemic, many of our business processes are being conducted remotely, which places increased reliance on our information technology systems. Our ability to efficiently manage our business depends significantly on the reliability and capacity of these systems. The failure of these systems to operate effectively, maintenance problems, upgrading or transitioning to new platforms or a breach in security of these systems, such as in the event of cyber-attacks, could adversely affect us. There can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. A security breach or other significant disruption involving our information systems could disrupt the proper functioning of our networks and systems; result in 32 misstated financial reports, violations of loan covenants and/or missed reporting deadlines; result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT; result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes; require significant management attention and resources to remedy any damages that result; subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; or damage our reputation among our tenants and investors generally. We are subject to litigation, which could materially and adversely affect us. From time to time, we are party to various lawsuits, claims and other legal proceedings. These matters may involve significant expense and may result in judgments or settlements, which may be significant. There can be no assurance that insurance will be available to cover losses related to legal proceedings or that our tenants will meet any indemnification obligations that they have to us. Litigation may result in significant defense costs and potentially significant judgments against us, some of which are not, or cannot be, insured against. Resolution of these types of matters against us may result in our having to pay significant fines, judgments or settlements, which, if uninsured, or if the fines, judgments, and settlements exceed insured levels, could materially and adversely affect us. Material weaknesses in or a failure to maintain an effective system of internal control over financial reporting or disclosure controls could prevent us from accurately and timely reporting our financial results, which could materially and adversely affect us. Effective internal controls over financial reporting are necessary for us to provide reliable financial reports, effectively prevent fraud and operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on, and our independent registered public accounting firm to attest to, the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002. Designing and implementing an effective system of internal control over financial reporting and disclosure controls and procedures is a continuous effort that requires significant resources, including the expenditure of a significant amount of time by senior members of our management team. In connection with our ongoing monitoring of our internal control over financial reporting or audits of our financial statements, we or our auditors may identify deficiencies in our internal control over financial reporting that may be significant or rise to the level of material weaknesses. Any failure to maintain effective internal control over financial reporting or disclosure controls and procedures or to timely effect any necessary improvements to such controls, including as a result of remote work arrangements due to the COVID-19 pandemic, could harm our operating results or cause us to fail to meet our reporting obligations (which could affect the listing of our common stock on the NYSE). Additionally, ineffective internal control over financial reporting or disclosure controls and procedures could also adversely affect our ability to prevent or detect fraud, harm our reputation and cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common stock. Changes in accounting standards may materially and adversely affect us. From time to time FASB and the SEC, who create and interpret accounting standards, may change the financial accounting and reporting standards or their interpretation and application of these standards that will govern the preparation of our financial statements. These changes could materially and adversely affect our reported financial condition and results of operations, and, under certain circumstances, may cause us to fail to comply with financial covenants contained in agreements relating to our indebtedness. In some cases, we could be required to apply a new or revised standard retroactively, resulting in restating prior period financial statements. Similarly, these changes could materially and adversely affect our tenants’ reported financial condition or results of operations and affect their preferences regarding leasing real estate. Item 1B. Unresolved Staff Comments. None. 33 Item 2. Properties. Our Real Estate Investment Portfolio As of December 31, 2020, we had a portfolio of 1,181 properties, inclusive of two undeveloped land parcels and 115 properties that secure our investments in mortgage loans receivable, that was diversified by tenant, industry and geography and had annualized base rent of $184.0 million. Our 238 tenants operate 336 different concepts in 16 industries across 43 states. None of our tenants represented more than 3.2% of our annualized base rent at December 31, 2020 and our top ten largest tenants represented 21.2% of our annualized base rent as of that date. Diversification by Tenant As of December 31, 2020, our top ten tenants included ten different concepts: Captain D's, Cadence Academy, EquipmentShare, Mister Car Wash, Circle K, AMC, Mavis Discount Tire, The Malvern School, Zaxby's, and Driver's Edge. Our 1,181 properties are operated by our 238 tenants. The following table details information about our tenants and the related concepts they operate as of December 31, 2020 (dollars in thousands): (1) Tenant Captain D's, LLC Cadence Education, LLC EQUIPMENTSHARE.COM INC CAR WASH PARTNERS, INC. Mac's Convenience Stores, LLC American Multi-Cinema, Inc Mavis Tire Express Services Corp. Malvern School Properties, LP 1788 Chicken, LLC GB Auto Service, Inc. Top 10 Subtotal Other (4) (3) Concept Captain D's Cadence Academy EquipmentShare Mister Car Wash Circle K AMC Mavis Discount Tire The Malvern School Zaxby's Driver's Edge Total  __________________________________________ (1) (2) (3) (4) Represents tenant or guarantor. Excludes two undeveloped land parcels and three vacant properties. Includes properties leased to a subsidiary of Alimentation Couche Tard Inc. Includes four properties leased to a subsidiary of AMC Entertainment Holdings, Inc. Number of Properties (2) Annualized Base Rent % of Annualized Base Rent 74 $ 23 16 13 34 5 19 13 20 14 231 945 1,176 5,094 4,749 4,730 4,310 3,797 3,535 3,395 3,208 3,141 3,111 39,070 144,907 183,977 2.8 % 2.6 % 2.6 % 2.3 % 2.1 % 1.9 % 1.8 % 1.7 % 1.7 % 1.7 % 21.2 % 78.8 % 100.0 % As of December 31, 2020, our five largest tenants, who contributed 12.3% of our annualized base rent, had a rent coverage ratio of 4.2x, and our ten largest tenants, who contributed 21.2% of our annualized base rent, had a rent coverage ratio of 3.3x. As of December 31, 2020, 94.1% of our leases (based on annualized base rent) were triple-net, and the tenant is typically responsible for all improvements and is contractually obligated to pay all operating expenses, such as maintenance, insurance, utility and tax expense, related to the leased property. Due to the triple-net structure of our leases, we do not expect to incur significant capital expenditures relating to our triple- net leased properties, and the potential impact of inflation on our operating expenses is reduced. 34 Diversification by Concept Our tenants operate their businesses through 336 concepts (i.e., generally brands). The following table provides information about the top ten concepts in our portfolio as of December 31, 2020 (dollars in thousands):  Concept Captain D's EquipmentShare Mister Car Wash Circle K AMC Mavis Discount Tire Zaxby's The Malvern School Vasa Fitness R-Store Top 10 Subtotal Other Total  ______________________________________ (1) Excludes two undeveloped land parcels. Type of Business Annualized Base Rent % of Annualized Base Rent Number of Properties (1) Building (Sq. Ft.) Service Service Service Service Experience Service Service Service Experience Service 5,939 4,730 4,310 4,184 3,535 3,395 3,353 3,208 2,948 2,854 38,456 145,521 183,977 $ $ 35 3.2 % 2.6 % 2.3 % 2.3 % 1.9 % 1.8 % 1.8 % 1.7 % 1.6 % 1.6 % 20.9 % 79.1 % 100.0 % 83 16 13 36 5 19 21 13 5 25 236 940 1,176 215,022 330,911 54,621 139,799 240,672 165,713 72,986 149,781 258,085 105,703 1,733,293 8,416,250 10,149,543 Diversification by Industry Our tenants' business concepts are diversified across various industries. The following table summarizes those industries as of December 31, 2020 (dollars in thousands except per sq. ft amounts): Tenant Industry Car Washes Quick Service Early Childhood Education Medical / Dental Convenience Stores Automotive Service Casual Dining Equipment Rental and Sales Family Dining Pet Care Services Other Services Service Subtotal Health and Fitness Entertainment Movie Theatres Experience Subtotal Grocery Home Furnishings Retail Subtotal Building Materials Total Type of Business Annualized Base Rent % of Annualized Base Rent Number of Properties (1) Building (Sq. Ft.) Rent Per Sq. Ft. (2) Service Service Service Service Service Service Service Service Service Service Service Experience Experience Experience Retail Retail Other $ $ 28,494 25,536 22,571 19,593 16,615 13,782 8,301 6,136 5,960 4,781 3,114 154,883 9,593 6,280 4,166 20,039 2,833 2,476 5,309 3,746 183,977 15.5 % 13.9 % 12.3 % 10.6 % 9.0 % 7.5 % 4.5 % 3.3 % 3.2 % 2.6 % 1.7 % 84.2 % 5.2 % 3.4 % 2.3 % 10.9 % 1.5 % 1.3 % 2.9 % 2.0 % 100.0 % 118 330 99 118 142 100 55 26 40 35 19 1,082 25 18 6 49 16 6 22 23 1,176 549,914 $ 878,649 1,042,979 752,604 576,687 678,715 337,769 500,710 232,723 281,475 198,144 6,030,369 1,004,189 647,483 293,206 1,944,878 609,908 307,371 917,279 1,257,017 10,149,543 $ 50.60 29.02 21.25 25.29 28.81 20.31 24.95 12.25 27.34 16.98 15.71 25.49 9.55 10.30 14.21 10.51 4.64 15.79 6.92 2.98 18.33  ____________________________________________________ (1) (2) Excludes two undeveloped land parcels. Excludes properties with no annualized base rent and properties under construction. As of December 31, 2020, our tenants operating service-oriented businesses had a weighted average rent coverage ratio of 2.94x, our tenants operating experience-based businesses had a weighted average rent coverage ratio of 1.45x, our tenants operating retail businesses had a weighted average rent coverage ratio of 2.53x and our tenants operating other types of businesses had a weighted average rent coverage ratio of 8.63x. 36 Diversification by Geography Our 1,181 property locations are spread across 43 states. The following table details the geographical locations of our properties as of December 31, 2020 (dollars in thousands): State Texas Georgia Florida Arkansas Ohio Alabama Michigan Arizona Tennessee Wisconsin Minnesota North Carolina Pennsylvania New York Oklahoma Colorado Missouri Illinois South Carolina Mississippi Massachusetts New Mexico New Jersey Indiana Kentucky Iowa Maryland Louisiana South Dakota Kansas Washington Connecticut Virginia Oregon Utah West Virginia Nebraska Wyoming California Idaho New Hampshire Nevada Alaska Total % of Annualized Base Rent Number of Properties Building (Sq. Ft.) 14.9 % 9.6 % 6.1 % 4.8 % 4.1 % 4.0 % 3.8 % 3.6 % 3.4 % 3.4 % 3.0 % 2.7 % 2.6 % 2.3 % 2.3 % 2.3 % 2.2 % 2.1 % 2.0 % 1.8 % 1.8 % 1.6 % 1.6 % 1.6 % 1.6 % 1.5 % 1.0 % 1.0 % 0.9 % 0.9 % 0.8 % 0.7 % 0.6 % 0.6 % 0.5 % 0.5 % 0.3 % 0.2 % 0.2 % 0.2 % 0.2 % 0.1 % 0.1 % 100.0 % 161 116 56 67 59 51 48 33 49 38 33 24 30 37 22 19 30 23 27 30 19 19 17 25 25 19 8 11 7 7 10 7 7 6 2 18 7 2 3 1 5 1 2 1,181 1,252,505 662,580 561,235 359,008 577,622 461,183 806,114 274,159 242,029 258,723 447,526 308,950 249,775 185,923 308,650 208,822 508,585 177,055 253,137 121,250 334,931 113,697 118,613 195,594 148,000 113,101 68,324 80,537 41,472 102,545 77,293 75,988 54,130 124,931 67,659 44,915 17,776 14,001 30,870 35,433 37,786 34,777 6,630 10,163,834 Annualized Base Rent 27,354 $ 17,706 11,183 8,822 7,606 7,427 7,079 6,660 6,242 6,341 5,542 4,971 4,811 4,302 4,223 4,147 3,999 3,890 3,763 3,309 3,320 3,027 2,993 2,917 2,885 2,812 1,923 1,903 1,702 1,677 1,530 1,315 1,187 1,093 922 915 596 428 391 383 307 226 150 183,977 $ 37 Lease Expirations As of December 31, 2020, the weighted average remaining term of our leases was 14.5 years (based on annualized base rent), with only 4.8% of our annualized base rent attributable to leases expiring prior to January 1, 2026. The following table sets forth our lease expirations for leases in place as of December 31, 2020 (dollars in thousands):  Lease Expiration Year (1) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Thereafter Total/Weighted Average Annualized Base Rent % of Annualized Base Rent Number of Properties (2) Weighted Average Rent Coverage Ratio (3) $ $ 133 490 798 4,759 2,710 2,425 4,466 3,967 5,083 4,154 9,165 10,966 7,149 29,722 19,455 2,341 5,943 13,056 26,154 29,215 1,826 183,977 0.1 % 0.3 % 0.4 % 2.6 % 1.5 % 1.3 % 2.4 % 2.2 % 2.8 % 2.3 % 5.0 % 6.0 % 3.9 % 16.2 % 10.6 % 1.3 % 3.2 % 7.1 % 14.2 % 15.9 % 1.0 % 100.0 % 2 5 9 46 19 15 28 14 71 50 59 55 27 212 129 19 35 83 151 141 6 1,176 2.3x 3.0x 3.4x 4.3x 3.0x 2.2x 3.0x 1.8x 3.9x 3.8x 2.5x 3.6x 1.8x 3.4x 3.1x 1.7x 5.0x 2.4x 2.6x 2.2x 1.4x 2.9x  _______________________________________________________________ (1) (2) (3) Weighted by annualized base rent. Expiration year of contracts in place as of December 31, 2020, excluding any tenant option renewal periods that have not been exercised. Excludes two undeveloped land parcels. Item 3. Legal Proceedings. We are subject to various lawsuits, claims and other legal proceedings. Management does not believe that the resolution of any of these matters either individually or in the aggregate will have a material adverse effect on our business, financial condition, results of operations or liquidity. Further, from time to time, we are party to various lawsuits, claims and other legal proceedings for which third parties, such as our tenants, are contractually obligated to indemnify, defend and hold us harmless. In some of these matters, the indemnitors have insurance for the potential damages. In other matters, we are being defended by tenants who may not have sufficient insurance, assets, income or resources to satisfy their defense and indemnification obligations to us. The unfavorable resolution of such legal proceedings could, individually or in the aggregate, materially adversely affect the indemnitors' ability to satisfy their respective obligations to us, which, in turn, could have a material adverse effect on our business, financial condition, results of operations or liquidity. It is management's opinion that there are currently no such legal proceedings pending that will, individually or in the aggregate, have such a material adverse effect. Despite management's view of the ultimate resolution of these legal proceedings, we may have significant legal expenses and costs associated with the defense of such matters. Further, management cannot predict the outcome of these legal proceedings and if management's expectation regarding such matters is not correct, such proceedings could have a material adverse effect on our business, financial condition, results of operations or liquidity. 38 Item 4. Mine Safety Disclosures. Not applicable. 39 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the NYSE under the symbol "EPRT". As of February 19, 2021, there were 157 holders of record of the 106,934,874 outstanding shares of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. PART II Distributions We have made and intend to continue to make quarterly cash distributions to our common stockholders. In particular, in order to maintain our qualification for taxation as a REIT, we intend to make annual distributions to our stockholders of at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gain. However, any future distributions will be at the sole discretion of our board of directors, and their form, timing and amount, if any, will depend upon a number of factors, including our actual and projected results of operations, FFO, Core FFO, AFFO, liquidity, cash flows and financial condition, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements, applicable law and such other factors as our board of directors deems relevant. To the extent that our cash available for distribution is less than 90% of our REIT taxable income, we may consider various means to cover any such shortfall, including borrowing under the Revolving Credit Facility or other loans, selling certain of our assets, or using a portion of the net proceeds we receive from offerings of equity, equity-related or debt securities or declaring taxable share dividends. Agreements relating to our indebtedness, including our Master Trust Funding Program and our revolving and term loan credit facilities, limit and, under certain circumstances, could eliminate our ability to make distributions. See "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations-Description of Certain Debt." We have determined that, for federal income tax purposes, approximately 59.0% of the distributions paid for the 2020 tax year represented taxable income and 41.0% represented a return of capital. Issuer Purchases of Equity Securities During the year ended December 31, 2020, the Company did not repurchase any of its equity securities. Stock Performance Graph The following performance graph and related table compare, for the period from June 21, 2018 (the first day our common stock was traded on the NYSE) through December 31, 2020, the cumulative total stockholder return on our common stock with that of the Standard & Poor's 500 Composite Stock Index ("S&P 500") and the FTSE NAREIT All Equity REITs index ("FNER"). The graph and related table assume $100.00 was invested on June 21, 2018 and assumes the reinvestment of all dividends. The historical stock price performance reflected in the graph and related table is not necessarily indicative of future stock price performance. 40 Essential Properties Realty Trust, Inc. Ticker / Index EPRT S&P 500 FNER 6/21/2018 100.00 100.00 100.00 6/30/2018 99.27 98.86 101.35 12/31/2018 103.16 92.65 94.04 6/30/2019 153.26 112.12 110.07 12/31/2019 193.63 126.83 116.57 6/30/2020 119.31 121.72 97.92 12/31/2020 175.07 147.49 105.02  The performance graph and the related table are being furnished solely to accompany this Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any filing of ours, whether made before or after the date hereof, regardless of any general incorporation language in such filing. Equity Compensation Plan Information The information concerning our Equity Compensation Plan will be included in the Proxy Statement to be filed relating to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference. Unregistered Sales of Equity Securities and Use of Proceeds Not applicable. Item 6. Selected Financial Data. The following tables set forth selected consolidated financial and other information of the Company as of and for the years ended December 31, 2020, 2019, 2018 and 2017 and for the period from March 30, 2016 (Commencement of Operations) to December 31, 2016. The tables should be read in conjunction with our consolidated financial statements and the notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in this Annual Report on Form 10-K.   41      Operating Data: (In thousands, except per share data) Revenues: Rental revenue Interest on loans and direct financing lease receivables Other revenue Total revenues Expenses: General and administrative Property expenses Depreciation and amortization Provision for impairment of real estate Provision for loan losses Total expenses Other operating income: Gain on dispositions of real estate, net Income from operations Other (loss)/income: Loss on repayment and repurchase of secured borrowings Interest expense Interest income Income before income tax expense Income tax expense Net income Net income attributable to non-controlling interests Net income attributable to stockholders and members Basic net income per share Diluted net income per share Cash dividends declared per share Period from March 30, 2016 (Commencement of Operations) to December 31, 2016 15,271 161 88 15,520 4,321 533 5,428 1,298 — 11,580 871 4,811 — (987) 3 3,827 77 3,750 — 3,750 2020 Year ended December 31, 2018 2019 2017 $ 155,792 $ 135,670 $ 94,944 $ 53,373 $ 8,136 81 164,009 24,444 3,881 59,446 8,399 830 97,000 5,821 72,830 (924) (29,651) 485 42,740 212 42,528 (255) 3,024 663 139,357 21,745 3,070 42,745 2,918 — 70,478 10,932 79,811 (5,240) (27,037) 794 48,328 303 48,025 (6,181) 656 623 96,223 13,762 1,980 31,352 4,503 — 51,597 5,445 50,071 — (30,192) 930 20,809 195 20,614 (5,001) 293 783 54,449 8,775 1,547 19,516 2,377 — 32,215 6,748 28,982 — (22,574) 49 6,457 161 6,296 — 42,273 $ 41,844 $ 15,613 $ 6,296 $ Year ended December 31, 2019 2020 0.44 $ 0.44 0.93 Period from June 25, 2018 to December 31, 2018 0.26 0.26 0.43 0.65 $ 0.63 0.88 42 $ $ Consolidated Balance Sheet Data: (In thousands) Total real estate investments, at cost Total real estate investments, net Net investments Cash and cash equivalents Restricted cash Total assets Secured borrowings, net of deferred financing costs Unsecured term loans, net of deferred financing costs Notes payable to related party Revolving credit facility Intangible lease liabilities, net Total liabilities Total stockholders'/members' equity Non-controlling interests Other Data: (1) (1) (In thousands) FFO Core FFO AFFO EBITDA EBITDAre (1) (1) (1) $ 2020 2,359,395 $ 2,223,298 2,392,576 26,602 6,388 2,488,802 171,007 626,272 — 18,000 10,168 906,854 1,574,758 7,190 2019 1,908,919 $ 1,818,848 1,912,243 8,304 13,015 1,975,447 235,336 445,586 — 46,000 9,564 773,334 1,194,450 7,663 December 31, 2018 1,377,044 $ 1,325,189 1,342,694 4,236 12,003 1,380,900 506,116 — — 34,000 11,616 569,859 562,179 248,862 2017 2016 932,174 $ 907,349 914,247 7,250 12,180 942,220 511,646 — 230,000 — 12,321 760,818 181,402 — 455,008 448,887 452,546 1,825 10,097 466,288 272,823 — — — 16,385 291,638 174,650 — $ 2020 104,415 $ 106,688 106,995 131,352 133,931 Year ended December 31, 2018 2019 2017 Period from March 30, 2016 (Commencement of Operations) to December 31, 2016 82,660 $ 90,648 86,251 117,316 109,302 51,007 $ 51,007 48,442 81,423 80,481 21,438 $ 21,438 20,337 48,498 44,127 9,605 9,605 8,579 10,239 10,666 (2) (Dollar amounts in thousands) Net debt Number of investment property locations Occupancy 2020 2019 December 31, 2018 $ 821,193 1,181 $ 99.7 % $ 713,784 1,000 100.0 % $ 532,881 677 100.0 % 2017 2016 $ 733,511 508 98.8 % 278,609 344 96.8 %  __________________________________________________________ (1) FFO, Core FFO, AFFO, EBITDA and EBITDAre are non-GAAP financial measures. For definitions of these measures and reconciliations of these measures to net income, the most directly comparable GAAP financial measure, and a statement of why our management believes the presentation of these measures provides useful information to investors and any additional purposes for which management uses these measures, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures." Net debt is a non-GAAP financial measure. For a definition of this measure and a reconciliation of this measure to total debt, the most directly comparable GAAP financial measure, and a statement of why our management believes the presentation of this measure provides useful information to investors and any additional purposes for which management uses this measure, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures." (2) 43     Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes included elsewhere in this report, as well as the "Selected Financial Data" and "Business" sections of this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategies for our business, includes forward‑looking statements that involve risks and uncertainties. You should read "Item 1A. Risk Factors" and the "Special Note Regarding Forward‑Looking Statements" sections of this report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by these forward‑looking statements. Overview We are an internally managed real estate company that acquires, owns and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience-based businesses. We generally acquire and lease freestanding, single-tenant commercial real estate facilities where a tenant services its customers and conducts activities that are essential to the generation of the tenant's sales and profits. As of December 31, 2020, 95.1% of our $184.0 million of annualized base rent was attributable to properties operated by tenants in service-oriented and experience-based businesses. "Annualized base rent" means annualized contractually specified cash base rent in effect on December 31, 2020 for all of our leases (including those accounted for as loans or direct financing leases) commenced as of that date and annualized cash interest on our mortgage loans receivable as of that date. We have assembled a diversified portfolio using a disciplined strategy that focuses on properties leased to tenants in businesses such as: • • • Car washes, Restaurants (primarily quick service restaurants), Early childhood education • Medical and dental services, • • • • • Convenience stores, Automotive services, Equipment rental, Entertainment and Health and fitness We believe that, in general, properties leased to tenants in these businesses and similar businesses are essential to the generation of the tenants' sales and profits. We also believe that these business have favorable growth potential and, because of their nature they are more insulated from e-commerce pressure than many other businesses. We were organized on January 12, 2018 as a Maryland corporation. We have elected to be taxed as a real estate investment trust ("REIT") for federal income tax purposes beginning with the year ended December 31, 2018, and we believe that our current organization, operations and intended distributions will allow us to continue to so qualify. We completed our IPO in June 2018. Our common stock is listed on the New York Stock Exchange under the symbol "EPRT". Our primary business objective is to maximize stockholder value by generating attractive risk-adjusted returns through owning, managing and growing a diversified portfolio of commercially desirable properties. We have grown 44 significantly since commencing our operations and investment activities in June 2016. As of December 31, 2020, we had a portfolio of 1,181 properties (inclusive of two undeveloped land parcels and 115 properties which secure our investments in mortgage loans receivable) that was diversified by tenant, industry, concept and geography, had annualized base rent of $184.0 million and was 99.7% occupied. Our portfolio was built based on the following core investment attributes: • • • • • • • Diversified Portfolio Long Lease Term Significant use of Master Leases Healthy Rent Coverage Ratio and Tenant Financial Reporting Contractual Base Rent Escalations Significant use of Sale-Leaseback Investments Smaller, Low Basis Single-Tenant Properties We generally lease each of our properties to a single tenant on a triple-net, long-term basis, and we generate our cash from operations primarily through the monthly lease payments, or base rent we receive from the tenants that occupy our properties. Substantially all our leases provide for periodic contractual rent escalations. As of December 31, 2020, leases contributing 99.2% of our annualized base rent provided for increases in future annual base rent, generally ranging from 1% to 4%, with a weighted average annual escalation equal to 1.5% of base rent. As of December 31, 2020, leases contributing 94.1% of annualized base rent were triple-net, which means that our tenant is responsible for all operating expenses, such as maintenance, insurance, utility and tax, related to the leased property (including any increases in those costs that may occur as a result of inflation). Our remaining leases were "double net," where the tenant is responsible for certain expenses, such as taxes and insurance, but we retain responsibility for other expenses, generally related to maintenance and structural component replacement that may be required at such leased properties. Also, we incur property-level expenses associated with our vacant properties and we occasionally incur nominal property-level expenses that are not paid by our tenants, such as the costs of periodically making site inspections of our properties. We do not currently anticipate incurring significant capital expenditures or property costs. Since our properties are predominantly single- tenant properties, which are generally subject to long-term leases, it is not necessary for us to perform significant ongoing leasing activities with respect to our properties. As of December 31, 2020, the weighted average remaining term of our leases was 14.5 years (based on annualized base rent), excluding renewal options that have not been exercised, with 4.8% of our annualized base rent attributable to leases expiring prior to January 1, 2026. Renewal options are exercisable at the option of our tenants upon expiration of their base lease term. Our leases providing for tenant renewal options generally provide for periodic contractual rent escalations during any renewed term that are similar to those applicable during the initial term of the lease. As of December 31, 2020, 61.1% of our annualized base rent was attributable to master leases, where we have leased multiple properties to a tenant under a master lease. Since properties are generally leased under a master lease on an "all or none" basis, the structure prevents a tenant from "cherry picking" locations, where it unilaterally gives up underperforming properties while maintaining its leasehold interest in well-performing properties. COVID-19 Pandemic Update COVID-19 has created significant uncertainty and economic disruption, which is likely to persist, or increase, for a period of unknown duration. The pandemic has adversely affected us and our tenants, and the full extent to which it will adversely affect our financial condition, liquidity, and results of operations is difficult to predict and depends on evolving factors, including the duration and scope of the pandemic, and governmental and social responses thereto. We continue to closely monitor the impact of COVID-19 on all aspects of our business, including our portfolio and the creditworthiness of our tenants. As the pandemic intensified at the end of the first quarter of 2020, we adopted a more cautious investment strategy, as we placed an increased emphasis on liquidity, prudent 45 balance sheet management and financial flexibility. In March 2020, we initiated steps to safeguard the health and safety of our employees, and transitioned all of our employees to a remote work environment. We successfully executed our business continuity plan, with all of our core financial, operational and telecommunication systems operating from a cloud-based environment with no disruption. More recently, our employees have been able to work in our headquarters, located in Princeton, New Jersey, on a schedule designed to promote appropriate social distancing and health and safety. The impact of the pandemic is rapidly evolving. It continues to adversely impact commercial activity and cause uncertainty and volatility in financial markets. The pandemic has adversely affected our tenants’ ability to meet their financial obligations to us (including the payment of rent and deferred rent), exposed us to increased risk of tenant default or bankruptcy, and impaired the value of certain of our properties. The pandemic has caused a large number of our tenants, to suspend or reduce their operations, which has adversely affected their ability to pay rent to us. As of December 31, 2020, we granted tenant-requested rent deferrals relating to approximately $18.5 million of rent, representing 10% of our annualized base rent as of December 31, 2020. During the year ended December 31, 2020, we collected substantially all of the $2.6 million in deferred rent we were owed from tenants where repayment was anticipated. The adverse impacts of the pandemic and the responses designed to mitigate its effects (such as local, state, regional or national lockdowns or other limitations on business activities) have varied, and likely will continue to vary, by geography. It is possible that our properties and tenants located in certain areas will be more adversely affected than our properties and tenants located in other areas. While our properties are diversified by geography, our business includes substantial holdings in the following states as of December 31, 2020 (based on annualized base rent): Texas (14.9%), Georgia (9.6%), Florida (6.1%), Arkansas (4.8%) and Ohio (4.1%). If the pandemic surges in these states or other areas from which we derive significant revenue, the adverse impact of the pandemic on us and our tenants would likely increase. Similarly, as of December 31, 2020, leases representing approximately 20.0% of our annualized base rent were with tenants in industries that have been particularly adversely affected by the COVID-19 pandemic, including casual and family dining (7.8% of annualized base rent), health and fitness (5.2% of annualized base rent), entertainment (3.4% of annualized base rent), movie theaters (2.3% of annualized base rent) and home furnishings (1.3% of annualized base rent).See “Our Real Estate Investment Portfolio—Diversification by Industry” and “—Diversification by Geography,” below for additional information about our exposure to various states and industries. The pandemic could cause our occupancy to decrease, which would lead to increased property-level expenses, as we would be obligated to pay costs (e.g., real estate taxes, maintenance costs and insurance) that would otherwise be paid by a tenant at a property subject to a triple-net lease. Additionally, while we recently have begun to accelerate our investment program, the pandemic has caused us to adopt a more cautious investment strategy, as we emphasize liquidity and financial flexibility, that has slowed our pace of external growth. Conditions in the bank lending and capital markets have been volatile and may deteriorate as a result of the pandemic, and our ability, and that of our tenants, to access capital may become constrained or eliminated, or the terms on which capital may be accessed may deteriorate significantly. One of our main operating functions is our proactive asset management approach. Accordingly, we continue to actively engage in discussions with our tenants regarding the impact of COVID-19 on their business operations, liquidity, and financial position, and, where appropriate, negotiate rent deferrals or other concessions. As noted above, as of December 31, 2020, we granted tenant-requested rent deferrals relating to approximately $18.5 million of rent, which represents 10% of our annualized base rent as of December 31, 2020. These rent deferrals were negotiated on a tenant- by-tenant basis and, in general, allow a tenant to defer all or a portion of its rent for 2020, with all of the deferred rent to be paid to us pursuant to a schedule that generally extends up to 24 months from the original due date of the deferred rent. It is possible that the existing deterioration, or further deterioration, in our tenants’ ability to operate their businesses caused by COVID-19 or otherwise, will cause our tenants to be unable or unwilling to meet their contractual obligations to us, including the payment of rent (including deferred rent) or to request further rent deferrals or other forms of rent relief, such as rent reductions. Given the significant uncertainty around the duration and severity of the impact of COVID-19, we are unable to predict the impact it will have on our tenants’ continued ability to pay rent (including deferred rent). Therefore, information provided regarding October rent collections should not serve as an indication of expected future rent collections. 46 The extent to which COVID-19 impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, geographic and industry variations in COVID-19’s impact and actions taken to contain COVID-19. The impact of COVID-19 on our tenants and properties will likely have a continuing adverse impact on us, particularly if tenants are unable to meet their rental payment obligations to us (including the payment of deferred rent), our vacancy rate increases or if we choose to grant further rent deferrals or other concessions. Liquidity and Capital Resources As of December 31, 2020, we had $2.4 billion of net investments in our investment portfolio, consisting of investments in 1,181 properties (inclusive of two undeveloped land parcels and 115 properties which secure our investments in mortgage loans receivable), with annualized base rent of $184.0 million. Substantially all of our cash from operations is generated by our investment portfolio. Our liquidity requirements for operating our Company consist primarily of the funds necessary to pay principal and interest payments on our outstanding indebtedness, and the general and administrative expenses of operating our business and managing our portfolio. The occupancy level of our portfolio is high, just below 100% and because of substantially all of our leases are triple-net, our tenants are generally responsible for the maintenance, insurance and property taxes associated with our properties. When a property becomes vacant because the existing tenant has vacated the property due to default or at the expiration of the lease term the existing tenant did not renew their lease and we had not re-leased the property, we incur the property costs not paid by the tenant, as well as those property costs accruing during the time it takes to locate a substitute tenant or to sell the property. As of December 31, 2020, only three properties were vacant, less than 1% of our portfolio, and all remaining properties were subject to a lease (excluding two undeveloped land parcels), which represents a 99.7% occupancy rate. We expect to incur some property costs from time to time in periods during which properties that become vacant are being marketed for lease or sale. In addition, we may recognize an expense for certain property costs, such as real estate taxes billed in arrears, if we believe the tenant is likely to vacate the property before making payment on those obligations. The amount of such property costs can vary quarter-to-quarter based on the timing of property vacancies and the level of underperforming properties; however, we do not expect that such costs will be significant to our operations. We intend to continue to grow through additional investments in stand-alone single tenant properties. To accomplish this objective, we seek to acquire real estate with a combination of debt and equity capital and with cash from operations that we do not distribute to our stockholders. When we sell properties, we generally reinvest the cash proceeds from our sales in new property acquisitions. Our short-term liquidity requirements also include the funding needs associated with nine properties where we have agreed to provide construction financing or reimburse the tenant for certain development, construction and renovation costs in exchange for specified contractually payments of interest or increased rent that generally increases in proportion with our level of funding. As of December 31, 2020, we had agreed to provide construction financing or reimburse the tenant for certain development, construction and renovation costs in an aggregate amount of $61.9 million, and, as of such date, we had funded $45.6 million of this commitment. We expect to fund the balance of such commitment by December 31, 2021. Additionally, as of February 19, 2021, we were under contract to acquire 21 properties with an aggregate purchase price of $51.9 million, subject to completion of our due diligence procedures and satisfaction of customary closing conditions. We expect to meet our short-term liquidity requirements, including our investment in potential future single tenant properties, primarily with our cash and cash equivalents, net cash from operating activities and borrowings under the Revolving Credit Facility, and potentially through proceeds generated from our ATM program which has approximately $170.7 million remaining. Our long-term liquidity requirements consist primarily of funds necessary to acquire additional properties and repay indebtedness. We expect to meet our long-term liquidity requirements through various sources of capital, including net cash from operating activities, borrowings under our revolving credit and term loan facilities, future financings, sale of common stock under our ATM Program, proceeds from the sale of the properties in our portfolio and other secured and unsecured borrowings (including potential issuances under the Master Trust Funding Program). However, at any point in time, there may be a number of factors that could have a material and adverse effect on our ability to access these capital sources, including unfavorable conditions in the overall equity and credit markets, our level of leverage, the portion of our portfolio that is unencumbered, borrowing restrictions imposed by our existing debt agreements, general market conditions for real estate and potentially REITs specifically, our 47 operating performance, our liquidity and general market perceptions about us. The success of our business strategy will depend, to a significant degree, on our ability to access these various capital sources to fund our investment in single tenant properties and thereby grow our cash flows. An additional liquidity need is funding the required level of distributions that are among the requirements for us to continue to qualify for taxation as a REIT. During the year ended December 31, 2020, our board of directors declared total cash distributions of $0.93 per share of common stock. Holders of OP Units are entitled to distributions per unit equivalent to those paid by us per share of common stock. During the year ended December 31, 2020, we paid $86.5 million of distributions to common stockholders and OP Unit holders, and as of December 31, 2020, we recorded $25.7 million of distributions payable to common stockholders and OP Unit holders. To continue to qualify for taxation as a REIT, we must make distributions to our stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. As a result of this requirement, we cannot rely on retained earnings to fund our business needs to the same extent as other entities that are not REITs. If we do not have sufficient funds available to us from our operations to fund our business needs, we will need to find alternative ways to fund those needs. Such alternatives may include, among other things, selling properties (whether or not the sales price is optimal or otherwise meets our strategic long-term objectives), incurring additional indebtedness or issuing equity securities in public or private transactions. The availability and attractiveness of the terms of these potential sources of financing cannot be assured. Generally, our short-term debt capital is provided through our use of our Revolving Credit Facility. We manage our long-term leverage position through the issuance of long-term fixed-rate debt on a secured or unsecured basis. Generally, we will seek to issue long-term debt on an unsecured basis as we believe this facilitates greater flexibility in our management of our existing portfolio and our ability to retain optionality in our overall financing and growth strategy. By seeking to match the expected cash inflows from our long-term leases with the expected cash outflows necessary to service for our long-term debt, we seek to "lock in," for as long as is economically feasible, the expected positive difference between our scheduled cash inflows on our leases and the cash outflows on our debt obligations. In this way, we seek to reduce the risk that increases in interest rates would adversely impact our results of operations. Our ability to execute leases that contain annual rent escalations also contributes to our ability to manage the risk of a rising interest rate environment. We use various financial instruments designed to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies such as interest rate swaps and caps, depending on our analysis of the interest rate environment and the costs and risks of such strategies. Although we are not required to maintain a particular leverage ratio and may not be able to do so, we generally consider that, over time, a level of net debt (which includes recourse and non-recourse borrowings and any outstanding preferred stock less unrestricted cash and cash held for the benefit of lenders) that is less than six times our annualized adjusted EBITDAre is prudent for the real estate company like ours. As of December 31, 2020, all of our long-term debt was fixed-rate debt or was effectively converted to a fixed-rate for the term of the debt though hedging strategies and our weighted average debt maturity was 4.7 years. As we continue to invest in real estate properties and grow our real estate portfolio, we intend to manage our long-term debt maturities to reduce the risk that a significant amount of our debt will mature in any single year in the future. Over time, we may access additional long-term debt capital with future debt issuances through our Master Trust Funding Program, although we have no plans to currently do so. Future sources of debt capital may also include term borrowings from insurance companies, banks and other sources, mortgage financing of a single-asset or portfolio of assets and CMBS borrowings. These sources of debt capital may offer us the opportunity to lower our cost of funding and further diversify our sources of debt capital. Over time, we may choose to issue preferred equity as a part of our overall strategy for funding our investment objectives and growth goals. As our outstanding debt matures, we may refinance it as it comes due or choose to repay it using cash and cash equivalents or borrowings under the Revolving Credit Facility. Management believes that the cash generated by our operations, together with our cash and cash equivalents at December 31, 2020, our borrowing availability under the Revolving Credit Facility and our potential access to additional sources of capital, will be sufficient to fund our operations for the foreseeable future and allow us to acquire the real estate for which we currently have made commitments.      48 Description of Certain Debt The following table summarizes our outstanding indebtedness as of December 31, 2020 and 2019: (in thousands) Unsecured term loans: April 2019 Term Loan November 2019 Term Loan Revolving Credit Facility Secured borrowings: Series 2017-1 Notes Total principal outstanding Maturity Date December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Principal Outstanding Weighted Average Interest Rate (1) April 2024 November 2026 April 2023 June 2047 $ $ 200,000 $ 430,000 18,000 173,193 821,193 $ 200,000 250,000 46,000 239,102 735,102 3.3% 3.0% 1.4% 4.2% 3.3% 3.3% 3.1% 3.1% 4.2% 3.5%  _______________________________________________________________ (1) Interest rates are presented after giving effect to our interest rate swap agreements, where applicable. Unsecured Revolving Credit Facility and April 2019 Term Loan Through our Operating Partnership, we are party to an Amended Credit Agreement with a group of lenders, which provides for revolving loans of up to $400.0 million (the "Revolving Credit Facility") and up to an additional $200.0 million in term loans (the "April 2019 Term Loan"). The Revolving Credit Facility matures on April 12, 2023, with an extension option of up to one year exercisable by the Operating Partnership, subject to certain conditions, and the April 2019 Term Loan matures on April 12, 2024. The loans under each of the Revolving Credit Facility and the April 2019 Term Loan initially bear interest at an annual rate of applicable LIBOR plus the applicable margin (which applicable margin varies between the Revolving Credit Facility and the April 2019 Term Loan). The applicable LIBOR is the rate with a term equivalent to the interest period applicable to the relevant borrowing. The applicable margin initially is a spread set according to a leverage-based pricing grid. At the Operating Partnership's election, on and after receipt of an investment grade corporate credit rating from S&P or Moody's, the applicable margin will be a spread set according to the credit ratings provided by S&P and/or Moody's. Each of the Revolving Credit Facility and the April 2019 Term Loan is freely pre-payable at any time and is mandatorily payable if borrowings exceed the borrowing base or the revolving facility limit. The Operating Partnership may re-borrow amounts paid down on the Revolving Credit Facility but not on the April 2019 Term Loan. The Operating Partnership is required to pay revolving credit fees throughout the term of the Revolving Credit Agreement based upon its usage of the Revolving Credit Facility, at a rate which depends on its usage of such facility during the period before we receive an investment grade corporate credit rating from S&P or Moody's, and which rate shall be based on the corporate credit rating from S&P and/or Moody's after the time, if applicable, we receive such a rating. The Amended Credit Agreement has an accordion feature to increase, subject to certain conditions, the maximum availability of credit (either through increased revolving commitments or additional term loans) by up to $200.0 million. The Operating Partnership is the borrower under the Amended Credit Agreement, and we and each of the subsidiaries of the Operating Partnership that owns a direct or indirect interest in an eligible real property asset are guarantors under the Amended Credit Agreement. Under the terms of the Amended Credit Agreement, we are subject to various restrictive financial and nonfinancial covenants which, among other things, require us to maintain certain leverage ratios, cash flow and debt service coverage ratios, secured borrowing ratios and a minimum level of tangible net worth. The Amended Credit Agreement restricts our ability to pay distributions to our stockholders under certain circumstances. However, we may make distributions to the extent necessary to maintain our qualification as a REIT under the Code. The Amended Credit Agreement contains certain additional covenants that, subject to exceptions, limit or restrict our incurrence of indebtedness and liens, disposition of assets, transactions with affiliates, mergers and fundamental changes, modification of organizational documents, changes to fiscal periods, making of investments, negative pledge clauses and lines of business and REIT qualification. 49 November 2019 Term Loan On November 26, 2019, we, through our Operating Partnership, entered into a $430.0 million term loan credit facility (the "November 2019 Term Loan") with a group of lenders. The November 2019 Term Loan provides for term loans to be drawn up to an aggregate amount of $430.0 million with a maturity of November 26, 2026. The loans under the November 2019 Term Loan are available to be drawn in up to three draws during the six-month period beginning on November 26, 2019. In December 2019, we made an initial borrowing of $250.0 million available under the November 2019 Term Loan and in March 2020 we borrowed the remaining $180.0 million available under the November 2019 Term Loan. Borrowings under the November 2019 Term Loan bear interest at an annual rate of applicable LIBOR plus the applicable margin. The applicable LIBOR will be the rate with a term equivalent to the interest period applicable to the relevant borrowing. The applicable margin will initially be a spread set according to a leverage-based pricing grid. At the Operating Partnership's irrevocable election, on and after receipt of an investment grade corporate credit rating from S&P or Moody's, the applicable margin will be a spread set according to our corporate credit ratings provided by S&P and/or Moody's. The November 2019 Term Loan is pre-payable at any time by the Operating Partnership, provided, that if the loans under the November 2019 Term Loan are repaid on or before November 26, 2021, they are subject to a one percent prepayment premium. After November 26, 2021 the loans may be repaid without penalty. The November 2019 Term Loan has an accordion feature to increase, subject to certain conditions, the maximum availability of the facility up to an aggregate of $500 million. The Operating Partnership is the borrower under the November 2019 Term Loan, and our Company and each of its subsidiaries that owns a direct or indirect interest in an eligible real property asset are guarantors under the facility. Under the terms of the November 2019 Term Loan, we are subject to various restrictive financial and nonfinancial covenants which, among other things, require us to maintain certain leverage ratios, cash flow and debt service coverage ratios, secured borrowing ratios and a minimum level of tangible net worth. The November 2019 Term Loan restricts our ability to pay distributions to our stockholders under certain circumstances. However, we may make distributions to the extent necessary to maintain our qualification as a REIT under the Code. The November 2019 Term Loan contains certain additional covenants that, subject to exceptions, limit or restrict our incurrence of indebtedness and liens, disposition of assets, transactions with affiliates, mergers and fundamental changes, modification of organizational documents, changes to fiscal periods, making of investments, negative pledge clauses and lines of business and REIT qualification. Master Trust Funding Program SCF RC Funding I LLC, SCF RC Funding II LLC and SCF RC Funding III LLC (collectively, the "Master Trust Issuers"), all of which are indirect wholly-owned subsidiaries of the Operating Partnership, have issued net-lease mortgage notes payable (the "Notes") with an aggregate outstanding gross principal balance of $173.2 million as of December 31, 2020. The Notes are secured by all assets owned by the Master Trust Issuers. We provide property management services with respect to the mortgaged properties owned by the Master Trust Issuers and service the related leases pursuant to an amended and restated property management and servicing agreement, dated as of July 11, 2017, among the Master Trust Issuers, the Operating Partnership (as property manager and as special servicer), Midland Loan Services, a division of PNC Bank, National Association, (as back-up manager) and Citibank, N.A. (as indenture trustee). Beginning in 2016, two series of Notes, each comprised of two classes, were issued under the program: (i) Notes originally issued by SCF RC Funding I LLC and SCF RC Funding II LLC (the "Series 2016-1 Notes"), which were repaid in full in November 2019 and (ii) Notes originally issued by SCF RC Funding I LLC, SCF RC Funding II LLC and SCF RC Funding III LLC (the "Series 2017-1 Notes"), with an aggregate outstanding principal balance of $173.2 million as of December 31, 2020. The Notes are the joint obligations of all Master Trust Issuers. Notes issued under our Master Trust Funding Program are secured by a lien on all of the property owned by the Master Trust Issuers and the related leases. A substantial portion of our real estate investment portfolio serves as collateral for borrowings outstanding under our Master Trust Funding Program. As of December 31, 2020, we had pledged 258 properties, with a net investment amount of $399.7 million, under the Master Trust Funding Program. The agreement governing our Master Trust Funding Program permits substitution of real estate collateral from time to time, subject to certain conditions. 50 Absent a plan to issue additional long-term debt through the Master Trust Funding Program, we are not required to add assets to, or substitute collateral in, the existing collateral pool. We can voluntarily elect to substitute assets in the collateral pool, subject to meeting prescribed conditions that are designed to protect the collateral pool by requiring the substitute assets to be of equal or greater measure in attributes such as: the asset's fair value, monthly rent payments, remaining lease term and weighted average coverage ratios. In addition, we can sell underperforming assets and reinvest the proceeds in new properties. Any substitutions and sales are subject to an overall limitation of 35% of the collateral pool which is typically reset at each new issuance unless the substitution or sale is credit- or risk-based, in which case there are no limitations. A significant portion of our cash flows are generated by the special purpose entities comprising our Master Trust Funding Program. For the three months ended December 31, 2020, excess cash flow from the Master Trust Funding Program, after payment of debt service and servicing and trustee expenses, totaled $5.1 million on cash collections of $8.5 million, which represents a debt service coverage ratio (as defined in the program documents) of 2.27x. If at any time the monthly debt service coverage ratio (as defined in the program documents) generated by the collateral pool is less than or equal to 1.25x, excess cash flow from the Master Trust Funding Program entities will be deposited into a reserve account to be used for payments to be made on the Notes, to the extent there is a shortfall; if at any time the three month average debt service coverage ratio generated by the collateral pool is less than or equal to 1.15x, excess cash flow from the Master Trust Funding Program entities will be applied to an early amortization of the Notes. If cash generated by our properties held in the Master Trust Funding Program is required to be held in a reserve account or applied to an early amortization of the Notes, it would reduce the amount of cash available to us and could limit or eliminate our ability to make distributions to our common stockholders. The Notes require monthly payments of principal and interest. The payment of principal and interest on any Class B Notes is subordinate to the payment of principal and interest on any Class A Notes. The Series 2017-1 Notes mature in June 2047 and have a weighted average interest rate of 4.19% as of December 31, 2020. However, the anticipated repayment date for the Series 2017-1 Notes is June 2024, and if the notes are not repaid in full on or before such anticipated repayment date, additional interest will begin to accrue on the notes. The Series 2017-1 Notes may be voluntarily prepaid, in whole or in part, at any time on or after the date that is 31 months prior to the anticipated repayment date in June 2024 without the payment of a make whole amount. Voluntary prepayments may be made before 31 months prior to the anticipated repayment date but will be subject to the payment of a make whole amount. An event of default will occur under the Master Trust Funding Program if, among other things, the Master Trust Issuers fail to pay interest or principal on the Notes when due, materially default in complying with the material covenants contained in the documents evidencing the Notes or the mortgages on the mortgaged property collateral or if a bankruptcy or other insolvency event occurs. Under the master trust indenture, we have a number of Master Trust Issuer covenants including requirements to pay any taxes and other charges levied or imposed upon the Master Trust Issuers and to comply with specified insurance requirements. We are also required to ensure that all uses and operations on or of our properties comply in all material respects with all applicable environmental laws. As of December 31, 2020, we were in material compliance with all such covenants. As of December 31, 2020, scheduled principal repayments on the Notes issued under the Master Trust Funding Program during 2021 were $4.1 million. We expect to meet these repayment requirements primarily through our net cash from operating activities. Cash Flows Comparison of the years ended December 31, 2020 and 2019 As of December 31, 2020, we had $26.6 million of cash and cash equivalents and $6.4 million of restricted cash as compared to $8.3 million and $13.0 million, respectively, as of December 31, 2019. Cash Flows for the year ended December 31, 2020 During the year ended December 31, 2020, net cash provided by operating activities was $99.4 million as compared $88.6 million during the same period in 2019, an increase of approximately $10.8 million. Our cash flows from operating activities primarily depend on the occupancy of our portfolio, the rental rates specified in our leases, and the collectability of such rent and our operating expenses and other general and administrative costs. Cash 51 inflows during 2020 related to net income adjusted for non-cash items of $107.2 million (net income of $42.5 million adjusted for non-cash items, including adding back depreciation and amortization of tangible, intangible and right-of-use real estate assets, amortization of deferred financing costs and other assets, loss on repayment of secured borrowings, provision for impairment of real estate, and subtracting gains on dispositions of real estate, net, straight-line rent receivable, equity-based compensation expense and adjustment to rental revenue for tenant credit, which in aggregate net to an addition of $64.7 million) and an increase in accrued liabilities and other payables of $4.2 million. These net cash inflows were offset by an outflow related to the increase in rent receivables, prepaid expenses and other assets of $12.1 million. The increase in net cash provided by operating activities was primarily by the increased size of our investment portfolio. Net cash used in investing activities during the year ended December 31, 2020 was $545.5 million as compared to $607.8 million in the same period in 2019, a decrease of approximately $62.3 million. Our net cash used in investing activities is generally used to fund our investments in real estate, including capital expenditures, the development of our construction in progress and investments in loans receivable, offset by cash provided from the disposition of real estate and principal collections on our loans and direct financing lease receivables. The cash used in investing activities during 2020 included $541.3 million to fund investments in real estate, including capital expenditures, $14.4 million to fund construction in progress, $60.5 million of investments in loans receivable and $12.9 million paid to tenants as lease incentives. These cash outflows were partially offset by $82.9 million of proceeds from sales of investments, net of disposition costs and $0.3 million of principal collections on our loans and direct financing lease receivables. The increase in net cash used in investing was primarily due to our increased level of investments in real estate and loans receivables offset by increased asset sales. Net cash provided by financing activities was $457.8 million during the year ended December 31, 2020 as compared to $524.4 million in the same period in 2019, a decrease of approximately $66.6 million. Our net cash provided by financing activities in 2020 related to cash inflows of $461.0 million from the issuance of common stock in follow-on equity offerings and through our ATM Program, $87.0 million of borrowings under the Revolving Credit Facility and $180.0 million of borrowings under the November 2019 Term Loan. These cash inflows were partially offset by a $65.9 million outflow related to principal payments on our Master Trust Funding notes, $115.0 million of repayments on the Revolving Credit Facility, the payment of $86.5 million in dividends, $2.8 million of offering costs paid related to our follow-on offerings and the ATM Program and the payment of deferred financing costs of approximately $25,000. The decrease in net cash provided by financing activities was due to our net borrowings being reduced during the year by nearly $100 million and increased dividends of approximately $22.6 million, offset by our increase proceeds from the issuance of stock of approximately $50 million. Cash Flows for the year ended December 31, 2019 During the year ended December 31, 2019, net cash provided by operating activities was $88.6 million. Our cash flows from operating activities primarily depend on the occupancy of our portfolio, the rental rates specified in our leases, and the collectability of such rent and our operating expenses and other general and administrative costs. Cash inflows related to net income adjusted for non-cash items of $86.1 million (net income of $48.0 million adjusted for non-cash items, including depreciation and amortization of tangible, intangible and right-of-use real estate assets, amortization of deferred financing costs and other assets, loss on repurchase of secured borrowings, provision for impairment of real estate, gains on dispositions of real estate, net, straight-line rent receivable, equity-based compensation expense and adjustment to rental revenue for tenant credit, of $38.1 million), an increase in accrued liabilities and other payables of $1.2 million and a decrease in rent receivables, prepaid expenses and other assets of $1.2 million. Net cash used in investing activities during the year ended December 31, 2019 was $607.8 million. Our net cash used in investing activities is generally used to fund our investments in real estate, including capital expenditures, the development of our construction in progress and investments in loans receivable, offset by cash provided from the disposition of real estate and principal collections on our loans and direct financing lease receivables. The cash used in investing activities included $570.0 million to fund investments in real estate, including capital expenditures, $17.9 million to fund construction in progress, $94.6 million of investments in loans receivable and $2.1 million paid to tenants as lease incentives. These cash outflows were partially offset by $66.8 million of proceeds from sales of investments, net of disposition costs and $9.5 million of principal collections on our direct financing lease receivables. Net cash provided by financing activities of $524.4 million million during the year ended December 31, 2019 related to cash inflows of $411.6 million from the issuance of common stock in our follow-on offering and through 52 our ATM program, $459.0 million of borrowings under the Revolving Credit Facility, $450.0 million of combined borrowings under the April 2019 Term Loan and November 2019 Term Loan and $1.7 million of principal collected on repurchased Master Trust Funding Notes. These cash inflows were partially offset by a net $277.4 million outflow related to principal payments and the repurchase and subsequent repayment of Master Trust Funding notes, payment of deferred financing costs of $6.1 million related to the Amended Credit Agreement, $447.0 million of repayments on the Revolving Credit Facility, the payment of $63.9 million in dividends and $1.8 million of offering costs related to our follow-on offering and the ATM Program. Off-Balance Sheet Arrangements We had no off-balance sheet arrangements as of December 31, 2020. Contractual Obligations The following table provides information with respect to our commitments as of December 31, 2020:  (1) (in thousands) Secured Borrowings—Principal Secured Borrowings—Fixed Interest Unsecured Term Loans Revolving Credit Facility Tenant Construction Financing and Reimbursement Obligations Operating Lease Obligations Total (2) (3) Total 2021 Payment due by period 2022-2023 2024-2025 Thereafter $ $ 173,193 $ 24,372 630,000 18,000 16,264 20,539 882,368 $ 4,083 $ 7,183 — — 16,264 1,471 29,002 $ 8,804 $ 13,844 — 18,000 — 2,621 43,269 $ 160,305 $ 3,345 200,000 — — 1,885 365,535 $ — — 430,000 — — 14,562 444,562 _________________________________________________________  (1) Includes interest payments on outstanding indebtedness issued under our Master Trust Funding Program through the anticipated repayment dates. Includes obligations to reimburse certain of our tenants for construction costs that they incur in connection with construction at our properties in exchange for contractually-specified rent that generally increases proportionally with our funding. Includes of $17.5 million rental payments due under ground lease arrangements where our tenants are directly responsible for payment. (2) (3) Additionally, we may enter into commitments to purchase goods and services in connection with the operation of our business. These commitments generally have terms of one-year or less and reflect expenditure levels comparable to our historical expenditures, as adjusted for our growth. We have made an election to be taxed as a REIT for federal income tax purposes beginning with our taxable year ended December 31, 2018; accordingly, we generally will not be subject to federal income tax for the year ended December 31, 2020, if we distribute all of our REIT taxable income, determined without regard to the dividends paid deduction, to our stockholders. Critical Accounting Policies and Estimates Our accounting policies are determined in accordance with GAAP. The preparation of our financial statements requires us to make estimates and assumptions that are subjective in nature and, as a result, our actual results could differ materially from our estimates. Estimates and assumptions include, among other things, subjective judgments regarding the fair values and useful lives of our properties for depreciation and lease classification purposes, the collectability of receivables and asset impairment analysis. Set forth below are the more critical accounting policies that require management judgment and estimates in the preparation of our consolidated financial statements. Real Estate Investments Investments in real estate are carried at cost less accumulated depreciation and impairment losses, if any. The cost of investments in real estate reflects their purchase price or development cost. We evaluate each 53 acquisition transaction to determine whether the acquired asset meets the definition of a business. Under Accounting Standards Update ("ASU") 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, an acquisition does not qualify as a business when there is no substantive process acquired or substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets or the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. Transaction costs related to acquisitions that are asset acquisitions are capitalized as part of the cost basis of the acquired assets, while transaction costs for acquisitions that are deemed to be acquisitions of a business are expensed as incurred. Improvements and replacements are capitalized when they extend the useful life or improve the productive capacity of the asset. Costs of repairs and maintenance are expensed as incurred. We allocate the purchase price of acquired properties accounted for as asset acquisitions to tangible and identifiable intangible assets or liabilities based on their relative fair values. Tangible assets may include land, site improvements and buildings. Intangible assets may include the value of in-place leases and above- and below-market leases and other identifiable intangible assets or liabilities based on lease or property specific characteristics. We incur various costs in the leasing and development of our properties. Amounts paid to tenants that incentivize them to extend or otherwise amend an existing lease or to sign a new lease agreement are capitalized to lease incentive on our consolidated balance sheets. Tenant improvements are capitalized to building and improvements within our consolidated balance sheets. Costs incurred which are directly related to properties under development, which include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs and real estate taxes and insurance, are capitalized during the period of development as construction in progress. After the determination is made to capitalize a cost, it is allocated to the specific component of a project that benefited. Determination of when a development project commences and capitalization begins, and when a development project has reached substantial completion and is available for occupancy and capitalization must cease, involves a degree of judgment. We do not engage in speculative real estate development. We do, however, opportunistically agree to reimburse certain of our tenants for development costs at our properties in exchange for contractually specified rent that generally increases proportionally with our funding. The fair value of the tangible assets of an acquired property with an in-place operating lease is determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then allocated to the tangible assets based on the fair value of the tangible assets. The fair value of in-place leases is determined by considering estimates of carrying costs during the expected lease-up periods, current market conditions, as well as costs to execute similar leases based on the specific characteristics of each tenant's lease. We estimate the cost to execute leases with terms similar to the remaining lease terms of the in-place leases, including leasing commissions, legal and other related expenses. Factors we consider in this analysis include an estimate of the carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, we include real estate taxes, insurance and other operating expenses, and estimates of lost rentals at market rates during the expected lease-up periods, which primarily range from six to 12 months. The fair value of above- or below-market leases is recorded based on the net present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between the contractual amount to be paid pursuant to the in-place lease and our estimate of the fair market lease rate for the corresponding in-place lease, measured over the remaining non-cancelable term of the lease including any below-market fixed rate renewal options for below-market leases. In making estimates of fair values for purposes of allocating purchase price, we use a number of sources, including real estate valuations prepared by independent valuation firms. We also consider information and other factors including market conditions, the industry that the tenant operates in, characteristics of the real estate, e.g., location, size, demographics, value and comparative rental rates, tenant credit profile and the importance of the location of the real estate to the operations of the tenant's business. Additionally, we consider information obtained about each property as a result of our pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. We use the information obtained as a result of our pre-acquisition due diligence as part of our consideration of the accounting standard governing asset retirement obligations and, when necessary, will record an asset retirement obligation as part of the purchase price allocation. Real estate investments that are intended to be sold are designated as "held for sale" on the consolidated balance sheets at the lesser of carrying amount and fair value less estimated selling costs. Real estate investments 54 are no longer depreciated when they are classified as held for sale. If the disposal, or intended disposal, of certain real estate investments represents a strategic shift that has had or will have a major effect on our operations and financial results, the operations of such real estate investments would be presented as discontinued operations in the consolidated statements of operations for all applicable periods. Allowance for Loan Losses Prior to the adoption of ASC Topic 326, Financial Instruments - Credit Losses (“ASC 326”), we periodically evaluated the collectability of our loans receivable, including accrued interest, by analyzing the underlying property level economics and trends, collateral value and quality and other relevant factors in determining the adequacy of its allowance for loan losses. A loan was determined to be impaired when, in management’s judgment based on current information and events, it was probable that we would be unable to collect all amounts due according to the contractual terms of the loan agreement. Specific allowances for loan losses were provided for impaired loans on an individual loan basis in the amount by which the carrying value exceeded the estimated fair value of the underlying collateral less disposition costs. As of December 31, 2019, we had no allowance for loan losses recorded in our consolidated financial statements. On January 1, 2020, we adopted ASC 326 on a prospective basis. ASC 326 changed how we account for credit losses for all of our loans receivable and direct financing lease receivables. ASC 326 replaces the current “incurred loss” model with an “expected loss” model that requires consideration of a broader range of information than used under the incurred losses model. Upon adoption of ASC 326, we recorded an initial allowance for loan losses of $0.2 million as of January 1, 2020, netted against loans and direct financing receivables on our consolidated balance sheet. Under ASC 326, we are required to re-evaluate the expected loss of our loans and direct financing lease receivable portfolio at each balance sheet date. As of December 31, 2020, we recorded an allowance for loan losses of $1.0 million. Changes in our allowance for loan losses are presented within provision for loan losses in our consolidated statements of operations. In connection with our adoption of ASC 326 on January 1, 2020, we implemented a new process including the use of loan loss forecasting models. We have used the loan loss forecasting model for estimating expected lifetime credit losses, at the individual asset level, for our loans and direct financing lease receivable portfolio. The forecasting model used is the probability weighted expected cash flow method, depending on the type of loan and global assumptions. We use a real estate loss estimate model (“RELEM”) which estimates losses on our loans and direct financing lease receivable portfolio, for purposes of calculating allowances for loan losses. The RELEM allows us to refine (on an ongoing basis) the expected loss estimate by incorporating loan specific assumptions as necessary, such as anticipated funding, interest payments, estimated extensions and estimated loan repayment/refinancing at maturity to estimate cash flows over the life of the loan. The model also incorporates assumptions related to underlying collateral values, various loss scenarios, and predicted losses to estimate expected losses. Our specific loan-level inputs include loan-to-stabilized- value “LTV” and debt service coverage ratio metrics, as well as principal balances, property type, location, coupon, origination year, term, subordination, expected repayment dates and future funding’s. We categorize the results by LTV range, which we consider the most significant indicator of credit quality for our loans and direct financing lease receivables. A lower LTV ratio typically indicates a lower credit loss risk. Real estate lending has several risks that need to be considered. There is the potential for changes in local real estate conditions and subjectivity of real estate valuations. In addition, overall economic conditions may impact the borrowers’ financial condition. Adverse economic conditions such as high unemployment levels, interest rates, tax rates and fuel and energy costs may have an impact on the results of operations and financial conditions of borrowers. We also evaluate each loan and direct financing lease receivable measured at amortized cost for credit deterioration at least quarterly. Credit deterioration occurs when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan or direct financing lease receivables. Our allowance for loan losses is adjusted to reflect our estimation of the current and future economic conditions that impact the performance of the real estate assets securing our loans. These estimations include various macroeconomic factors impacting the likelihood and magnitude of potential credit losses for our loans and direct financing leases during their anticipated term. 55 Impairment of Long-Lived Assets If circumstances indicate that the carrying value of a property may not be recoverable, we review the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property's use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. Impairment assessments have a direct impact on the consolidated statements of operations, because recording an impairment loss results in an immediate negative adjustment to the consolidated statements of operations. Adjustment to Rental Revenue for Tenant Credit/Allowance for Doubtful Accounts We continually review receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant's payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Prior to January 1, 2019, if the collectability of a receivable was in doubt, the accounts receivable and straight-line rent receivable balances were reduced by an allowance for doubtful accounts on the consolidated balance sheets or a direct write-off of the receivable was recorded in the consolidated statements of operations. The provision for doubtful accounts was included in property expenses in our consolidated statements of operations. If the accounts receivable balance or straight-line rent receivable balance was subsequently deemed to be uncollectible, such receivable amounts were written-off to the allowance for doubtful accounts. As of January 1, 2019, if the assessment of the collectability of substantially all payments due under a lease changes from probable to not probable, any difference between the rental revenue recognized to date and the lease payments that have been collected is recognized as a current period adjustment to rental revenue in the consolidated statements of operations. Derivative Instruments In the normal course of business, we use derivative financial instruments, which may include interest rate swaps, caps, options, floors and other interest rate derivative contracts, to protect us against adverse fluctuations in interest rates by reducing our exposure to variability in cash flows on a portion of our floating-rate debt. Instruments that meet these hedging criteria are formally designated as hedges at the inception of the derivative contract. We record all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. 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. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may also enter into derivative contracts that are intended to economically hedge certain risk, even though hedge accounting does not apply or we elect not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If a derivative is designated and qualifies for cash flow hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income to the extent that it is effective. Any ineffective portion of a change in derivative fair value is immediately recorded in earnings. If we elect not to apply hedge accounting treatment (or for derivatives that do not qualify as hedges), any change in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statements of operations. We do not intend to use derivative instruments for trading or speculative purposes. 56 Revenue Recognition Our rental revenue is primarily related to rent received from tenants. Rent from tenants is recorded in accordance with the terms of each lease on a straight-line basis over the non-cancellable initial term of the lease from the later of the date of the commencement of the lease and the date of acquisition of the property subject to the lease. Rental revenue recognition begins when the tenant controls the space and continues through the term of the related lease. Because substantially all of the leases provide for rental increases at specified intervals, we record a straight-line rent receivable and recognize revenue on a straight-line basis through the expiration of the non-cancellable term of the lease. We take into account whether the collectability of rents is reasonably assured in determining the amount of straight-line rent to record. We defer rental revenue related to lease payments received from tenants in advance of their due dates. These amounts are presented within accrued liabilities and other payables on our consolidated balance sheets. Certain of our properties are subject to leases that provide for contingent rent based on a percentage of the tenant's gross sales. For these leases, we recognize contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. Equity-Based Compensation From time to time, we grant shares of restricted common stock and restricted share units ("RSUs") to our directors, executive officers and other employees that vest over multiple periods, subject to the recipient's continued service. Additionally, we also granted performance-based RSUs to our executive officers, the final number of which is determined based on market and subjective performance conditions and which vest over a multi-year period, subject to the recipient's continued service. We account for the restricted common stock and RSUs in accordance with ASC 718, Compensation - Stock Compensation, which requires that such compensation be recognized in the financial statements based on their estimated grant-date fair value. The value of such awards is recognized as compensation expense in general and administrative expenses in the accompanying consolidated statements of operations over the requisite service periods. We recognize compensation expense for equity-based compensation using the straight-line method based on the terms of the individual grant. Forfeitures of equity-based compensation awards, if any, are recognized as they occur. Variable Interest Entities The FASB provides guidance for determining whether an entity is a variable interest entity (a "VIE"). VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A VIE is required to be consolidated by its primary beneficiary, which is the party that (i) has the power to control the activities that most significantly impact the VIE's economic performance and (ii) has the obligation to absorb losses, or the right to receive benefits, of the VIE that could potentially be significant to the VIE. Following the completion of the Formation Transactions, we concluded that the Operating Partnership is a VIE of which we are the primary beneficiary, as we have the power to direct the activities that most significantly impact the economic performance of the Operating Partnership. Substantially all of our assets and liabilities are held by the Operating Partnership. The assets and liabilities of the Operating Partnership are consolidated and reported as assets and liabilities on our consolidated balance sheet as of December 31, 2020. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) establishing ASC 326, as amended by subsequent ASUs on the topic. ASU 2016-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2019. We adopted this guidance on January 1, 2020 and recorded estimates of expected loss on its loans receivable portfolio beginning on that date. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. We adopted ASU 2017-12 while accounting for our interest rate swaps. As we did not have other derivatives outstanding at time of adoption, no prior period adjustments were required. Pursuant to the provisions of 57 ASU 2017-12, we are no longer required to separately measure and recognize hedge ineffectiveness. Instead, we recognize the entire change in the fair value of cash flow hedges included in the assessment of hedge effectiveness in other comprehensive (loss) income. The amounts recorded in other comprehensive (loss) income will subsequently be reclassified to earnings when the hedged item affects earnings. The adoption of ASU 2017-12 did not have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which changes the disclosure requirements for fair value measurements by removing, adding and modifying certain disclosures. ASU 2018-13 is effective for annual periods beginning after December 15, 2019, with early adoption permitted. We adopted this guidance on January 1, 2020 and the adoption of ASU 2018-13 did not have a material impact on our related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. In April 2020, the Financial Accounting Standards Board ("FASB”) staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, the entity would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant, which would be accounted for under the lease modification framework, or if a lease concession was under the enforceable rights and obligations that existed in the original lease, which would be accounted for outside the lease modification framework. The Lease Modification Q&A provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease. This election is only available when total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease. We made this election and account for rent deferrals by increasing our rent receivables as receivables accrue and continuing to recognize income during the deferral period, resulting in $12.4 million of deferrals being recognized in rental revenues for the year ended December 31, 2020 . Lease concessions or amendments other than rent deferrals are evaluated to determine if a substantive change to the consideration in the original lease contract has occurred and should be accounted for as a lease modification. We continue to evaluate any amounts recognized for collectability, regardless of whether accounted for as a lease modification or not, and record an adjustment to rental income for tenant credit for amounts that are not probable of collection. For lease concessions granted in conjunction with the COVID-19 pandemic, we reviewed all amounts recognized on a tenant-by-tenant basis for collectability. In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The guidance in ASU 2020-06 simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU 2020-06 also simplify the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets. The amendments in ASU 2020-06 are effective for the Company for fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The guidance must be adopted as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this new guidance. 58 Results of Operations The following discusses our results of operations for the year ended December 31, 2020, as compared to our results of operations for the year ended December 31, 2019. A discussion of the changes in our results of operations for the year ended December 31, 2019, as compared to our results of operations for the year ended December 31, 2018 has been omitted from this Annual Report but may be found in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Comparison of the years ended December 31, 2019 and 2018 in our annual report for the year ended December 31, 2019. Comparison of the years ended December 31, 2020 and 2019  (dollar amounts in thousands) Revenues: Rental revenue Interest income on loans and direct financing lease receivables Other revenue, net $ Total revenues Expenses: General and administrative Property expenses Depreciation and amortization Provision for impairment of real estate Provision for loan losses Total expenses Other operating income: Gain on dispositions of real estate, net Income from operations Other (expense)/income: Loss on repayment and repurchase of secured borrowings Interest expense Interest income Income before income tax expense Income tax expense Net income Net income attributable to non-controlling interests Net income attributable to stockholders and members $ Revenues: Year ended December 31, 2019 2020 Change % 155,792 $ 8,136 81 164,009 135,670 $ 3,024 663 139,357 24,444 3,881 59,446 8,399 830 97,000 5,821 72,830 (924) (29,651) 485 42,740 212 42,528 (255) 42,273 $ 21,745 3,070 42,745 2,918 — 70,478 10,932 79,811 (5,240) (27,037) 794 48,328 303 48,025 (6,181) 41,844 $ 20,122 5,112 (582) 24,652 2,699 811 16,701 5,481 830 25,692 (5,111) (6,981) 4,316 (2,614) (309) (5,588) (91) (5,497) 5,926 429 14.8 % 169.0 % (87.8)% 17.7 % 12.4 % 26.4 % 39.1 % 187.8 % 100.0 % 36.5 % (46.8)% (8.7)% (82.4)% 9.7 % (38.9)% (11.6)% (30.0)% (11.4)% (95.9)% 1.0 % Rental revenue. Rental revenue increased by $20.1 million for the year ended December 31, 2020, as compared to the year ended December 31, 2019. The increase in revenues was driven primarily by the growth in the size of our real estate investment portfolio, which generated additional rental revenues. Our real estate investment portfolio grew from 1,000 properties, representing $1.9 billion in net investments in real estate, as of December 31, 2019 to 1,181 properties, representing $2.4 billion in net investments in real estate, as of December 31, 2020. Our real estate investments were acquired throughout the periods presented and were not all owned by us for the entirety of the periods; accordingly, a significant portion of the increase in rental revenue between periods is related to recognizing revenue in 2020 on acquisitions that were made during 2019 and 2020. A smaller component of the increase in revenues between periods is related to rent escalations recognized on our leases. 59 Interest on loans and direct financing lease receivables. Interest on loans and direct financing lease receivables increased by $5.1 million during the year ended December 31, 2020, as compared to the year ended December 31, 2019, primarily due to our investments in loans receivable beginning in 2019 and additional investments in loans receivable during 2020, which led to a higher average daily balance of loans receivable outstanding during year ended December 31, 2020. Other revenue. Other revenue for the year ended December 31, 2020, decreased by approximately $0.6 million, as compared to the year ended December 31, 2019, primarily due to the receipt of lease termination fees from former tenants during the year ended December 31, 2019. No lease termination income was recorded during the year ended December 31, 2020. Expenses: General and administrative expenses. General and administrative expenses increased $2.7 million for the year ended December 31, 2020, as compared to the year ended December 31, 2019. This increase in general and administrative expenses was primarily due to the increase of personnel due to operating our larger real estate portfolio, including increased equity-based compensation expense, legal fees and directors' fees. Property expenses. Property expenses increased by $0.8 million for the year ended December 31, 2020, as compared to the year ended December 31, 2019. The increase in property expenses was primarily due to increased reimbursable costs, insurance expenses and operational costs during the year ended December 31, 2020. Depreciation and amortization expense. Depreciation and amortization expense increased by $16.7 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. Depreciation and amortization expense increased in proportion to the general increase in the size of our real estate portfolio.     Provision for impairment of real estate. Impairment charges on real estate investments were $8.4 million and $2.9 million, for the years ended December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, we recorded a provision for impairment of real estate at 17 and 8 of our real estate investments, respectively. We strategically seek to identify non-performing properties that we may re-lease or dispose of in an effort to improve our returns and manage risk exposure. An increase in vacancy associated with our disposition or re-leasing strategies may trigger impairment charges when the expected future cash flows from the properties from sale or re-lease are less than their net book value. Other operating income: Gain on dispositions of real estate, net. Gain on dispositions of real estate, net, decreased by $5.1 million for the year ended December 31, 2020, as compared to the year ended December 31, 2019. We disposed of 49 real estate properties during the year ended December 31, 2020, compared to 37 real estate properties during the year ended December 31, 2019. Other (expense)/income: Loss on repayment and repurchase of secured borrowings. Loss on repayment and repurchase of secured borrowings of $0.9 million during the year ended December 31, 2020 relates to the write-off of deferred financing costs upon our repayment of Class A Series 2017-1 Notes at par value. During the year ended December 31, 2019, we recorded a loss on repurchase Series 2016-1 Notes of $5.2 million, which includes the premium paid on the repurchase, the write-off of deferred financing costs and other associated legal expenses. Furthermore, the repurchased notes were subsequently canceled and the Series 2016-1 Notes that remained outstanding were fully repaid in November 2019. This repayment and repurchase were accounted for as debt extinguishments. Interest expense. Interest expense increased by $2.6 million for the year ended December 31, 2020, as compared to the year ended December 31, 2019. This increase in interest expense was primarily due to an increase to debt held during the year ended December 31, 2020 compared to the year ended December 31, 2019. In March 2020, the Company borrowed the remaining amount of $180.0 million available under its November 2019 Term Loan and used the proceeds to acquire new investments and general corporate purposes. 60 Interest income. Interest income decreased by $0.3 million for the year ended December 31, 2020, as compared to the year ended December 31, 2019. The decrease in interest income was primarily due lower daily cash balances and interest rates compared to the year ended December 31, 2019. Income tax expense. Income tax expense decreased by $0.1 million for the year ended December 31, 2020, as compared to the year ended December 31, 2019. We are organized and operate as a REIT and are generally not subject to U.S. federal taxation. However, the Operating Partnership is subject to taxation in certain state and local jurisdictions that impose income taxes on a partnership. The changes in income tax expense are primarily due to changes in the proportion of our real estate portfolio located in jurisdictions where we are subject to taxation. Non-GAAP Financial Measures Our reported results are presented in accordance with GAAP. We also disclose the following non-GAAP financial measures: funds from operations ("FFO"), core funds from operations ("Core FFO"), adjusted funds from operations ("AFFO"), earnings before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA further adjusted to exclude gains (or losses) on sales of depreciable property and real estate impairment losses ("EBITDAre"), adjusted EBITDAre, annualized adjusted EBITDAre, net debt, net operating income ("NOI") and cash NOI ("Cash NOI"). We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO is used by management, and may be useful to investors and analysts, to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains and losses on sales (which are dependent on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions). We compute Core FFO by adjusting FFO, as defined by NAREIT, to exclude certain GAAP income and expense amounts that we believe are infrequent and unusual in nature and/or not related to our core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Core FFO provides investors with a metric to assist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of our peers, because it removes the effect of unusual items that are not expected to impact our operating performance on an ongoing basis. Core FFO is used by management in evaluating the performance of our core business operations. Items included in calculating FFO that may be excluded in calculating Core FFO include certain transaction related gains, losses, income or expense or other non-core amounts as they occur. To derive AFFO, we modify our computation of Core FFO to include other adjustments to GAAP net income related to certain items that we believe are not indicative of our operating performance, including straight-line rental revenue, non-cash interest expense, non-cash compensation expense, other amortization and non-cash charges, capitalized interest expense and transaction costs. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We believe that AFFO is an additional useful supplemental measure for investors to consider when assessing our operating performance without the distortions created by non-cash items and certain other revenues and expenses. FFO, Core FFO and AFFO do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, our computation of FFO, Core FFO and AFFO may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. 61 The following table reconciles net income (which is the most comparable GAAP measure) to FFO, Core FFO and AFFO attributable to stockholders and members and non-controlling interests: (in thousands) Net income Depreciation and amortization of real estate Provision for impairment of real estate Gain on dispositions of real estate, net FFO attributable to stockholders and members and non-controlling interests Other non-recurring expenses (1)(2) Core FFO attributable to stockholders and members and non-controlling interests Adjustments: Straight-line rental revenue, net Non-cash interest Non-cash compensation expense Other amortization expense Other non-cash charges Capitalized interest expense Transaction costs 2020 Year ended December 31, 2019 2018 $ 42,528 $ 59,309 8,399 (5,821) 104,415 2,273 48,025 $ 42,649 2,918 (10,932) 82,660 7,988 106,688 90,648 (11,905) 2,040 5,427 3,854 829 (228) 291 (12,215) 2,738 4,546 815 9 (290) — 20,614 31,335 4,503 (5,445) 51,007 — 51,007 (8,214) 2,798 2,440 495 84 (225) 57 AFFO attributable to stockholders and members and non-controlling interests $ 106,995 $ 86,251 $ 48,442 _____________________________________ (1) Includes non-recurring expenses of approximately $39,000 related to reimbursement of executive relocation costs, $1.1 million for severance payments and acceleration of non-cash compensation expense in connection with the termination of one of our executive officers, $0.2 million of non-recurring recruiting costs, and our $0.9 million loss on repayment of secured borrowings during the year ended December 31, 2020. Includes non-recurring expenses of $2.4 million for costs and charges incurred in connection with the Eldridge secondary offering, $5.2 million loss on repayment and repurchase of secured borrowings and $0.3 million for a provision for settlement of litigation during the year ended December 31, 2019. (2) We compute EBITDA as earnings before interest, income taxes and depreciation and amortization. In 2017, NAREIT issued a white paper recommending that companies that report EBITDA also report EBITDAre. We compute EBITDAre in accordance with the definition adopted by NAREIT. NAREIT defines EBITDAre as EBITDA (as defined above) excluding gains (or losses) from the sales of depreciable property and real estate impairment losses. We present EBITDA and EBITDAre as they are measures commonly used in our industry. We believe that these measures are useful to investors and analysts because they provide supplemental information concerning our operating performance, exclusive of certain non-cash items and other costs. We use EBITDA and EBITDAre as measures of our operating performance and not as measures of liquidity. EBITDA and EBITDAre do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, our computation of EBITDA and EBITDAre may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. 62 The following table reconciles net income (which is the most comparable GAAP measure) to EBITDA and EBITDAre attributable to stockholders and members and non-controlling interests: (in thousands) Net income Depreciation and amortization Interest expense Interest income Income tax expense EBITDA attributable to stockholders and members and non-controlling interests Provision for impairment of real estate Gain on dispositions of real estate, net 2020 Year ended December 31, 2019 2018 $ 42,528 $ 59,446 29,651 (485) 212 131,352 8,399 (5,821) 48,025 $ 42,745 27,037 (794) 303 117,316 2,918 (10,932) 20,614 31,352 30,192 (930) 195 81,423 4,503 (5,445) 80,481 EBITDAre attributable to stockholders and members and non-controlling interests $ 133,931 $ 109,302 $ We further adjust EBITDAre for the most recently completed quarter i) based on an estimate calculated as if all re-leasing, investment and disposition activity that took place during the quarter had been made on the first day of the quarter, ii) to exclude certain GAAP income and expense amounts that we believe are infrequent and unusual in nature and iii) to eliminate the impact of lease termination fees and contingent rental revenue from certain of our tenants, which is subject to sales thresholds specified in the applicable leases ("Adjusted EBITDAre"). We then annualize quarterly Adjusted EBITDAre by multiplying it by four ("Annualized Adjusted EBITDAre"), which we believe provides a meaningful estimate of our current run rate for all of our investments as of the end of the most recently completed quarter. You should not unduly rely on this measure, as it is based on assumptions and estimates that may prove to be inaccurate. Our actual reported EBITDAre for future periods may be significantly less than our current Annualized Adjusted EBITDAre. The following table reconciles net income (which is the most comparable GAAP measure) to Annualized Adjusted EBITDAre attributable to stockholders and non-controlling interests for the three months ended December 31, 2020: (in thousands) Net income Depreciation and amortization Interest expense Interest income Income tax expense EBITDA attributable to stockholders and members and non-controlling interests Provision for impairment of real estate Gain on dispositions of real estate, net EBITDAre attributable to stockholders and members and non-controlling interests Adjustment for current quarter re-leasing, acquisition and disposition activity (1) Adjustment to exclude other non-recurring expenses Adjustment to exclude lease termination fees and certain percentage rent (2) Adjusted EBITDAre attributable to stockholders and members and non-controlling interests Annualized Adjusted EBITDAre attributable to stockholders and members and non-controlling interests Three months ended December 31, 2020 5,705 19,004 7,764 (52) 56 32,475 3,319 (1,850) 33,944 4,681 2,826 — 41,451 165,805 $ $ $ _____________________________________ (1) Adjustment assumes all re-leasing activity, investments and dispositions of real estate investments made during the three months ended December 31, 2020 had occurred on October 1, 2020. Adjustment is made to exclude non-core expenses added back to compute Core FFO, our provision for loan losses and the write-off of receivables. (2) 63 We calculate our net debt as our gross debt (defined as total debt plus net deferred financing costs on our secured borrowings) less cash and cash equivalents and restricted cash deposits held for the benefit of lenders. We believe excluding cash and cash equivalents and restricted cash deposits held for the benefit of lenders from gross debt, all of which could be used to repay debt, provides an estimate of the net contractual amount of borrowed capital to be repaid, which we believe is a beneficial disclosure to investors and analysts. The following table reconciles total debt (which is the most comparable GAAP measure) to net debt:  (in thousands) Secured borrowings, net of deferred financing costs Unsecured term loan, net of deferred financing costs Revolving credit facility Total debt Deferred financing costs, net Gross debt Cash and cash equivalents Restricted cash deposits held for the benefit of lenders Net debt December 31, 2020 2019 171,007 $ 626,272 18,000 815,279 5,914 821,193 (26,602) (6,388) 788,203 $ 235,336 445,586 46,000 726,922 8,181 735,103 (8,304) (13,015) 713,784 $ $ We compute NOI as total revenues less property expenses. NOI excludes all other items of expense and income included in the financial statements in calculating net income or loss in accordance with GAAP. Cash NOI further excludes non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash charges. We believe NOI and Cash NOI provide useful and relevant information because they reflect only those revenue and expense items that are incurred at the property level and present such items on an unlevered basis. NOI and Cash NOI are not measures of financial performance under GAAP. You should not consider our NOI and Cash NOI as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. Additionally, our computation of NOI and Cash NOI may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. The following table reconciles net income (which is the most comparable GAAP measure) to NOI and Cash NOI attributable to stockholders and members and non-controlling interests:  2020 Year ended December 31, 2019 2018 (in thousands) Net income General and administrative expense Depreciation and amortization Provision for impairment of real estate Provision for loan losses Gain on dispositions of real estate, net Loss on repayment and repurchase of secured borrowings Interest expense Interest income Income tax expense NOI attributable to stockholders and members and non-controlling interests Straight-line rental revenue, net Other amortization and non-cash charges $ 42,528 $ 24,444 59,446 8,399 830 (5,821) 924 29,651 (485) 212 160,128 (11,905) 3,854 48,025 $ 21,745 42,745 2,918 — (10,932) 5,240 27,037 (794) 303 136,287 (12,215) 815 Cash NOI attributable to stockholders and members and non-controlling interests $ 152,077 $ 124,887 $ 64 20,614 13,762 31,352 4,503 — (5,445) — 30,192 (930) 195 94,243 (8,214) 495 86,524 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Over time, we generally seek to match the expected cash inflows from our long-term leases with the expected cash outflows for our long-term debt. To achieve this objective, we borrow on a fixed-rate basis through longer-term debt issuances under our Master Trust Funding Program. Additionally, we incur debt that bears interest at floating rates under the Revolving Credit Facility, which we use in connection with our operations, including for funding investments, the April 2019 Term Loan and the November 2019 Term Loan. We have fixed the floating rates on borrowings under our term loan facilities by entering into interest rate swap agreements where we pay a fixed interest rate and receive a floating interest rate equal to the rate we pay on the respective term loan. (in thousands) Unsecured term loans: April 2019 Term Loan November 2019 Term Loan Revolving Credit Facility Secured borrowings: Series 2017-1 Notes Total principal outstanding Maturity Date December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Principal Outstanding Weighted Average Interest Rate (1) April 2024 November 2026 April 2023 June 2047 $ $ 200,000 $ 430,000 18,000 173,193 821,193 $ 200,000 250,000 46,000 239,102 735,102 3.3% 3.0% 1.4% 4.2% 3.3% 3.3% 3.1% 3.1% 4.2% 3.5%  _______________________________________________________________ (1) Interest rates are presented after giving effect to our interest rate swap agreements, where applicable. We have fixed the interest rates on the term loan facilities' variable-rates through the use of interest rate swap agreements. At December 31, 2020, our aggregate liability in the event of the early termination of our swaps was $40.2 million. At December 31, 2020, a 100-basis point increase of the interest rate on this facility would increase our related interest costs by approximately $4.0 million per year and a 100-basis point decrease of the interest rate would decrease our related interest costs by approximately $4.0 million per year. Additionally, our borrowings under the Revolving Credit Facility bear interest at an annual rate equal to LIBOR plus a leverage-based credit spread. Therefore, an increase or decrease in interest rates would result in an increase or decrease to our interest expense related to the Revolving Credit Facility. We monitor our market interest rate risk exposures using a sensitivity analysis. Our sensitivity analysis estimates the exposure to market risk sensitive instruments assuming a hypothetical adverse change in interest rates. Based on the results of a sensitivity analysis, which assumes a 100-basis point adverse change in interest rates, the estimated market risk exposure for our variable‑rate borrowings under the Revolving Credit Facility was $0.2 million as of December 31, 2020. We are exposed to interest rate risk between the time we enter into a sale-leaseback transaction or acquire a leased property and the time we finance the related real estate with long-term fixed-rate debt. In addition, when our long-term debt matures, we may have to refinance the debt at a higher interest rate. Market interest rates are sensitive to many factors that are beyond our control. Our interest rate risk management objective is to limit the impact of future interest rate changes on our earnings and cash flows. Additionally, our long-term debt under our Master Trust Funding Program generally provides for some amortization of the principal balance over the term of the debt, which serves to reduce the amount of refinancing risk at debt maturity. In addition to amounts that we borrow under the Revolving Credit Facility, we may incur variable-rate debt in the future that we do not choose to hedge. Additionally, decreases in interest rates may lead to increased competition for the acquisition of real estate due to a reduction in desirable alternative income-producing investments. Increased competition for the acquisition of real estate may lead to a decrease in the yields on real estate we have targeted for acquisition. In such circumstances, if we are not able to offset the decrease in yields by obtaining lower interest costs on our borrowings, our results of operations will be adversely affected. Significant increases in interest rates may also have an adverse impact on our earnings if we are unable to acquire real estate with rental rates high enough to offset the increase in interest rates on our borrowings. Fair Value of Fixed-Rate Indebtedness The estimated fair value of our fixed-rate indebtedness under the Master Trust Funding Program is calculated based primarily on unobservable market inputs such as interest rates and discounted cash flow analyses using 65 estimates of the amount and timing of future cash flows, market rates and credit spreads. The following table discloses fair value information related to our fixed-rate indebtedness as of December 31, 2020:  (in thousands) Secured borrowings under Master Trust Funding Program  _______________________________________________________________ (1) Excludes net deferred financing costs of $2.2 million. 66 Carrying Value (1) Estimated Fair Value $ 173,193 $ 176,382 Item 8. Financial Statements and Supplementary Data. Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Essential Properties Realty Trust, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Essential Properties Realty Trust, Inc. as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, stockholders’/members’ equity and cash flows, for each of the three years in the period ended December 31, 2020 of Essential Properties Realty Trust, Inc. and Essential Properties Realty Trust, Inc. Predecessor (the “Company”), and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 23, 2021, expressed an unqualified opinion thereon. Adoption of ASU No. 2016-02 As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases in 2020 and 2019 due to the adoption of ASU No. 2016-02, Leases. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 67 Description of the Matter How We Addressed the Matter in Our Audit Impairment of Long-Lived Assets At December 31, 2020, the Company’s real estate investments totaled approximately $2.2 billion. As described in Note 2 to the consolidated financial statements, investments in real estate are reviewed for impairment when circumstances indicate that the carrying value of a property may not be recoverable. For the year ended December 31, 2020, the Company recognized a $8.4 million provision for impairment of real estate. Auditing the Company’s accounting for impairment of real estate investments was especially challenging and involved a high degree of subjectivity as a result of the assumptions and estimates inherent in the determination of estimated future cash flows expected to result from the property’s use and eventual disposition and the estimated fair value of the property. In particular, management’s assumptions and estimates included projected rental rates during the holding period, property capitalization rates, and if applicable, discount rates, which were sensitive to expectations about future operations, market or economic conditions, demand and competition. We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s real estate investment impairment process. This included testing of controls over management's review of the significant assumptions and data inputs utilized in the estimation of expected future cash flows and the determination of fair value. To test the Company’s accounting for impairment of real estate investments, we performed audit procedures that included, among others, evaluating the methodologies applied and testing the significant assumptions discussed above and the underlying data used by the Company in its impairment analyses. In certain cases, we involved our valuation specialists to assist in performing these procedures. We compared the significant assumptions used by management to historical data and observable market- specific data. We assessed the precision of management’s process to develop certain assumptions by comparing current assumptions to historical trends. We also performed sensitivity analyses of significant assumptions to evaluate the changes in estimated future cash flows that would result from changes in the assumptions. In addition, we assessed information and events subsequent to the balance sheet date to corroborate certain of the key assumptions utilized by management. 68 Description of the Matter How We Addressed the Matter in Our Audit Purchase Price Allocation for Acquired Real Estate Investments During 2020, the Company acquired 208 properties for an aggregate purchase price of $526.3 million. As described in Notes 2 and 3 to the consolidated financial statements, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets and liabilities based on their relative fair values. Auditing the Company’s accounting for these acquisitions was especially challenging and involved a high degree of subjectivity as a result of the assumptions and estimates inherent in determining the fair values of the acquired tangible and identifiable intangible assets and liabilities. In particular, management’s significant assumptions and estimates included land prices per square foot, building and site improvements per square foot, terminal capitalization rates, market-based rents and discount rates, which were sensitive to individual market and economic conditions at the date of acquisition. We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over management’s processes to determine the fair value of the assets and liabilities acquired for purposes of allocating the purchase price. This included testing of controls over management’s review of the significant assumptions and data inputs utilized in the underlying fair value determinations. To test the Company’s allocation of purchase price for real estate investments, we involved our real estate valuation specialists and performed audit procedures that included, among others, evaluating the valuation methodologies employed and the significant assumptions utilized to determine the fair value of the acquired tangible and identified intangible assets and liabilities. We compared significant assumptions to third party evidence or other support. In addition, with the support of our valuation specialist, we independently calculated the fair values of certain acquired tangible and identified intangible assets and liabilities and compared the independently calculated values to the fair values developed by the Company. We also tested the completeness and accuracy of the underlying data utilized in the purchase price allocations. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2017. New York, New York February 23, 2021 69 To the Stockholders and the Board of Directors of Essential Properties Realty Trust, Inc. Opinion on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm We have audited Essential Properties Realty Trust, Inc.’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Essential Properties Realty Trust, Inc. (the “Company”) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, stockholders’/members’ equity and cash flows for each of the three years in the period ended December 31, 2020 of the Company and Essential Properties Realty Trust, Inc. Predecessor, and the related notes and financial statement schedules listed in the Index at Item 15(a) and our report dated February 23, 2021 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP New York, New York February 23, 2021 70 ESSENTIAL PROPERTIES REALTY TRUST, INC. CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheets (In thousands, except share and per share data) ASSETS Investments: Real estate investments, at cost: Land and improvements Building and improvements Lease incentives Construction in progress Intangible lease assets Total real estate investments, at cost Less: accumulated depreciation and amortization Total real estate investments, net Loans and direct financing lease receivables, net Real estate investments held for sale, net Net investments Cash and cash equivalents Restricted cash Straight-line rent receivable, net Rent receivables, prepaid expenses and other assets, net (1) Total assets LIABILITIES AND EQUITY Secured borrowings, net of deferred financing costs Unsecured term loans, net of deferred financing costs Revolving credit facility Intangible lease liabilities, net Dividend payable Derivative liabilities Accrued liabilities and other payables Total liabilities (1) Commitments and contingencies (see Note 11) Stockholders' equity: Preferred stock, $0.01 par value; 150,000,000 authorized; none issued and outstanding as of December 31, 2020 and 2019 Common stock, $0.01 par value; 500,000,000 authorized; 106,361,524 and 83,761,151 issued and outstanding as of December 31, 2020 and 2019, respectively Additional paid-in capital Distributions in excess of cumulative earnings Accumulated other comprehensive loss Total stockholders' equity Non-controlling interests Total equity Total liabilities and equity December 31, 2020 2019 741,254 $ 1,519,665 14,297 3,908 80,271 2,359,395 (136,097) 2,223,298 152,220 17,058 2,392,576 26,602 6,388 37,830 25,406 2,488,802 $ 171,007 $ 626,272 18,000 10,168 25,703 38,912 16,792 906,854 — 588,279 1,224,682 4,908 12,128 78,922 1,908,919 (90,071) 1,818,848 92,184 1,211 1,912,243 8,304 13,015 25,926 15,959 1,975,447 235,336 445,586 46,000 9,564 19,395 4,082 13,371 773,334 — — — 1,064 1,688,540 (77,665) (37,181) 1,574,758 7,190 1,581,948 2,488,802 $ 838 1,223,043 (27,482) (1,949) 1,194,450 7,663 1,202,113 1,975,447 $ $ $ $ _____________________________________ (1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2—Summary of Significant Accounting Policies. As of December 31, 2020 and 2019, all of the assets and liabilities of the Company were held by its operating partnership, a consolidated VIE, with the exception of $25.6 million and $19.3 million, respectively, of dividends payable. The accompanying notes are an integral part of these consolidated financial statements. 71   ESSENTIAL PROPERTIES REALTY TRUST, INC. AND ESSENTIAL PROPERTIES REALTY TRUST, INC. PREDECESSOR CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Operations (In thousands, except share and per share data) Revenues: Rental revenue Interest on loans and direct financing lease receivables Other revenue, net Total revenues Expenses: General and administrative Property expenses Depreciation and amortization Provision for impairment of real estate Provision for loan losses Total expenses Other operating income: Gain on dispositions of real estate, net Income from operations Other (expense)/income: Loss on repayment and repurchase of secured borrowings Interest expense (including $4,603 to related parties during the year ended December 31, 2018 ) Interest income Income before income tax expense Income tax expense Net income Net income attributable to non-controlling interests Net income attributable to stockholders and members $ $ 2020 Year ended December 31, 2019 2018 155,792 $ 8,136 81 164,009 24,444 3,881 59,446 8,399 830 97,000 5,821 72,830 (924) (29,651) 485 42,740 212 42,528 (255) 42,273 $ 135,670 $ 3,024 663 139,357 21,745 3,070 42,745 2,918 — 70,478 10,932 79,811 (5,240) (27,037) 794 48,328 303 48,025 (6,181) 41,844 $ 94,944 656 623 96,223 13,762 1,980 31,352 4,503 — 51,597 5,445 50,071 — (30,192) 930 20,809 195 20,614 (5,001) 15,613 Basic weighted average shares outstanding Basic net income per share Diluted weighted average shares outstanding Diluted net income per share Year ended December 31, 2020 2019 Period from June 25, 2018 to December 31, 2018 $ $ 95,311,035 64,104,058 0.44 $ 0.65 $ 96,197,705 75,309,896 0.44 $ 0.63 $ 42,634,678 0.26 61,765,957 0.26 The accompanying notes are an integral part of these consolidated financial statements. 72   ESSENTIAL PROPERTIES REALTY TRUST, INC. AND ESSENTIAL PROPERTIES REALTY TRUST, INC. PREDECESSOR CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Comprehensive Income (In thousands) Net income Other comprehensive loss: Unrealized loss on cash flow hedges Cash flow hedge losses (gains) reclassified to interest expense Total other comprehensive loss Comprehensive income Net income attributable to non-controlling interests Adjustment for cash flow hedge losses (gains) attributable to non-controlling interests Comprehensive income attributable to stockholders and members 2020 Year ended December 31, 2019 42,528 $ 48,025 $ 2018 (42,121) 6,676 (35,445) 7,083 (255) 213 7,041 $ (2,799) (106) (2,905) 45,120 (6,181) 956 39,895 $ 20,614 — — — 20,614 (5,001) — 15,613 $ $ The accompanying notes are an integral part of these consolidated financial statements. 73   ESSENTIAL PROPERTIES REALTY TRUST, INC. AND ESSENTIAL PROPERTIES REALTY TRUST, INC. PREDECESSOR CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Stockholders'/Members' Equity (In thousands, except share data) Balance at December 31, 2017 Contributions Unit compensation expense Net income Balance at June 24, 2018 Contribution of Predecessor equity in exchange for OP Units Initial public offering Concurrent private placement of common stock Concurrent private placement of OP Units Costs related to initial public offering Share-based compensation expense Unit-based compensation expense Dividends declared on common stock and OP Units Net income Balance at December 31, 2018 Common stock issuance Costs related to issuance of common stock Conversion of equity in Secondary Offering Unrealized losses on cash flow hedges Cash flow hedge gains reclassified to interest expense Share-based compensation expense Unit-based compensation expense Dividends declared on common stock and OP Units Net income Balance at December 31, 2019 Cumulative adjustment upon adoption of ASC 326 Common stock issuance Costs related to issuance of common stock Unrealized losses on cash flow hedges Cash flow hedge losses reclassified to interest expense Share-based compensation expense Dividends declared on common stock and OP Units Net income Balance at December 31, 2020 Common Stock Number of Shares Par Value Additional Paid-In Capital Distributions in Excess of Cumulative Earnings Accumulated Other Comprehensive Income (Loss) Class A Units Class B Units Class C Units Class D Units Total Stockholders' /Members' Equity Non- Controlling Interests Total Equity — $ — $ — — — — — — — — 35,272,191 7,785,611 — — 691,290 — — — 43,749,092 21,462,986 — — — 353 78 — — — — — — 431 215 — — $ — — — — — 493,458 108,921 — (35,107) 1,692 443 — — 569,407 423,472 (13,901) 18,502,705 185 237,795 — — 46,368 — — — 83,761,151 — 22,554,057 — — — 46,316 — — — — 7 — — — 838 — 225 — — — 1 — — — — 4,108 2,162 — — 1,223,043 — 477,574 (18,154) — — 6,077 — — — $ — — — — — — — — — — — (18,987) 11,328 (7,659) — — — — — — — (61,667) 41,844 (27,482) (187) — — — — — (92,269) 42,273 — — — — — — — — — — — — — — — — — — (1,868) (81) — — — — (1,949) — — — (41,868) 6,636 — — — $ 86,668 $ 50,000 — 2,414 139,082 (139,082) 574 — 373 — 947 (947) $ 94,064 $ — — 1,871 $ 96 — 70 — 95,935 (95,935) 166 (166) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 181,402 50,000 443 4,285 236,130 (236,130) 493,811 108,999 $ — $ 181,402 50,000 — 443 — 4,285 — — 236,130 — — 236,130 — 493,811 108,999 — 16,001 16,001 (35,107) 1,692 443 (18,987) 11,328 562,179 423,687 (13,901) — — — (8,270) 5,001 248,862 — — (35,107) 1,692 443 (27,257) 16,329 811,041 423,687 (13,901) 237,980 (237,980) — (1,868) (81) 4,115 2,162 (61,667) 41,844 1,194,450 (187) 477,799 (18,154) (41,868) 6,636 (931) (25) — — (8,444) 6,181 7,663 (1) — — (253) 40 (2,799) (106) 4,115 2,162 (70,111) 48,025 1,202,113 (188) 477,799 (18,154) (42,121) 6,676 6,078 — 6,078 (92,269) 42,273 (514) 255 (92,783) 42,528 106,361,524 $ 1,064 $ 1,688,540 $ (77,665) $ (37,181) $ — $ — $ — $ — $ 1,574,758 $ 7,190 $ 1,581,948  The accompanying notes are an integral part of these consolidated financial statements. 74   ESSENTIAL PROPERTIES REALTY TRUST, INC. AND ESSENTIAL PROPERTIES REALTY TRUST, INC. PREDECESSOR CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Cash Flows (In thousands) Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Amortization of lease incentive Amortization of above/below market leases and right of use assets, net Amortization of deferred financing costs and other assets Loss on repurchase and retirement of secured borrowings Provision for impairment of real estate Provision for loan losses Gain on dispositions of investments, net Straight-line rent receivable Equity-based compensation expense Adjustment to rental revenue for tenant credit/allowance for doubtful accounts Changes in other assets and liabilities: Rent receivables, prepaid expenses and other assets Accrued liabilities and other payables Net cash provided by operating activities Cash flows from investing activities: Proceeds from sales of investments, net Principal collections on loans and direct financing lease receivables Investments in loans receivable Deposits for prospective real estate investments Investment in real estate, including capital expenditures Investment in construction in progress Lease incentives paid Net cash used in investing activities Cash flows from financing activities: Proceeds from issuance of notes payable to related parties Payments of principal on notes payable to related parties Repurchase and repayment of secured borrowings Principal received on repurchased secured borrowings Borrowings under term loan facilities Borrowings under revolving credit facility Repayments under revolving credit facility Deferred financing costs Capital contributions by members in Predecessor Proceeds from issuance of common stock, net Offering costs Proceeds from concurrent private placement of OP Units Proceeds from concurrent private placement of common stock Dividends paid Net cash provided by financing activities Net increase (decrease) in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash, beginning of period Cash and cash equivalents and restricted cash, end of period Reconciliation of cash and cash equivalents and restricted cash: Cash and cash equivalents Restricted cash Cash and cash equivalents and restricted cash, end of period 2020 Year ended December 31, 2019 2018 $ 42,528 $ 48,025 $ 20,614 59,406 3,847 9 2,532 924 8,399 830 (5,821) (15,137) 6,085 3,601 (12,058) 4,243 99,388 82,889 286 (60,480) 475 (541,307) (14,423) (12,949) (545,509) — — (65,909) — 180,000 87,000 (115,000) (25) — 461,006 (2,805) — — (86,475) 457,792 11,671 21,319 32,990 $ 26,602 $ 6,388 32,990 $ 42,745 282 534 2,815 5,240 2,918 — (10,932) (12,322) 6,238 593 1,242 1,190 88,568 66,765 9,519 (94,637) 530 (570,025) (17,858) (2,133) (607,839) — — (279,123) 1,707 450,000 459,000 (447,000) (6,128) — 411,635 (1,837) — — (63,903) 524,351 5,080 16,239 21,319 $ 8,304 $ 13,015 21,319 $ 31,352 159 336 2,798 — 4,503 — (5,445) (8,812) 2,440 385 (767) (1,646) 45,917 60,446 74 (14,854) (1,712) (490,040) (15,258) (519) (461,863) 154,000 (384,000) (7,816) — — 34,000 — (3,065) 50,000 464,182 (5,478) 16,001 108,999 (14,068) 412,755 (3,191) 19,430 16,239 4,236 12,003 16,239 $ $ $ The accompanying notes are an integral part of these consolidated financial statements. 75 ESSENTIAL PROPERTIES REALTY TRUST, INC. AND ESSENTIAL PROPERTIES REALTY TRUST, INC. PREDECESSOR CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Cash Flows (continued) (In thousands) Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized Cash paid for income taxes Non-cash investing and financing activities: Adjustment upon adoption of ASC 326 Reclassification from construction in progress upon project completion Net settlement of proceeds on the sale of investments Non-cash investments in loan receivable activity Lease liabilities arising from the recognition of right of use assets Unrealized losses on cash flow hedges Contribution of Predecessor equity in exchange for OP Units Conversion of equity in Secondary Offering Payable and accrued offering costs Discounts and fees on capital raised through issuance of common stock Payable and accrued deferred financing costs Dividends declared 2020 Year ended December 31, 2019 2018 $ $ 27,071 $ 546 29,485 $ 60 188 $ — $ 22,643 860 (860) — 44,920 — — — 16,674 — 25,703 7,055 4,960 10,439 8,355 2,905 — 237,795 66 12,048 126 19,395 27,901 55 — 18,009 — — — — 236,130 — — 29,629 — 13,189 The accompanying notes are an integral part of these consolidated financial statements. 76     Notes to Consolidated Financial Statements December 31, 2020 1. Organization Description of Business Essential Properties Realty Trust, Inc. (the “Company”) is an internally managed real estate company that acquires, owns and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience- based businesses. The Company generally invests in and leases freestanding, single-tenant commercial real estate facilities where a tenant services its customers and conducts activities that are essential to the generation of the tenant’s sales and profits. The Company was organized on January 12, 2018 as a Maryland corporation. It elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes beginning with the year ended December 31, 2018, and it believes that its current organizational and operational status and intended distributions will allow it to continue to so qualify. Substantially all of the Company’s business is conducted directly and indirectly through its operating partnership, Essential Properties, L.P. (the “Operating Partnership”). On June 25, 2018, the Company completed the initial public offering (“IPO”) of its common stock. The common stock of the Company is listed on the New York Stock Exchange under the ticker symbol “EPRT”. See Note 7—Equity for additional information. COVID-19 Pandemic On March 11, 2020, the World Health Organization declared the outbreak of the novel coronavirus (“COVID-19”) a pandemic. The global spread of COVID-19 has created significant uncertainty and economic disruption, which is likely to persist, or increase, for a period of unknown duration. The pandemic has adversely affected the Company and its tenants, and the full extent to which it will adversely affect the Company’s financial condition, liquidity, and results of operations is impossible to predict and depends on evolving factors, including the duration and scope of the pandemic, and governmental and social responses thereto. The Company is closely monitoring the impact of COVID-19 on all aspects of its business, including its portfolio and the creditworthiness of its tenants. As the pandemic intensified at the end of the first quarter of 2020, the Company adopted a more cautious investment strategy, as it placed an increased emphasis on liquidity, prudent balance sheet management and financial flexibility. The Company has entered into deferral agreements with certain of its tenants, and during the year ended December 31, 2020, recognized $12.4 million of contractual base rent related to these agreements as a component of rental revenue in its consolidated statement of operations. These rent deferrals were negotiated on a tenant-by-tenant basis, and, in general, allow a tenant to defer all or a portion of its rent for a portion of 2020, with all of the deferred rent to be paid to the Company pursuant to a schedule that generally extends up to 24 months from the original due date of the deferred rent. It is possible that the existing deterioration, or further deterioration, in the Company's tenants’ ability to operate their businesses, or delays in the supply of products or services to the Company's tenants from vendors that they need to operate their businesses, caused by COVID-19 or otherwise, will cause the Company's tenants to be unable or unwilling to meet their contractual obligations to the Company, including the payment of rent (including deferred rent), or to request further rent deferrals or other concessions. The likelihood of this would increase if COVID-19 intensifies or persists for a prolonged period. To the extent COVID-19 causes a secular change in consumer behavior that reduces patronage of service-based and/or experience-based businesses, many of the Company's tenants would be adversely affected and their ability to meet their obligations to us could be further impaired. These deferrals reduce the Company's cash flow from operations, reduce its cash available for distribution and adversely affect its ability to make cash distributions to common stockholders. Furthermore, if tenants are unable to pay their deferred rent, the Company will not receive cash in the future in accordance with its expectations. 77 2. Summary of Significant Accounting Policies Basis of Accounting The accompanying consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the rules and regulations of the SEC. Reclassification Certain amounts previously reported in the consolidated balance sheets and statements of operations have been reclassified to conform with the current period by presenting derivative liabilities separate from accrued liabilities and other payables and by presenting interest expense as a component of other expense/income. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and subsidiaries in which the Company has a controlling financial interest. All intercompany accounts and transactions have been eliminated in consolidation. As of December 31, 2020 and 2019, the Company, directly or indirectly, held a 99.5% and 99.3% ownership interest in the Operating Partnership and the consolidated financial statements include the financial statements of the Operating Partnership as of these dates. See Note 7—Equity for changes in the ownership interest in the Operating Partnership. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Real Estate Investments Investments in real estate are carried at cost less accumulated depreciation and impairment losses. The cost of investments in real estate reflects their purchase price or development cost. The Company evaluates each acquisition transaction to determine whether the acquired asset meets the definition of a business. Under Accounting Standards Update ("ASU") 2017-1, Business Combinations (Topic 805): Clarifying the Definition of a Business, an acquisition does not qualify as a business when there is no substantive process acquired or substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets or the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. Transaction costs related to acquisitions that are asset acquisitions are capitalized as part of the cost basis of the acquired assets, while transaction costs for acquisitions that are deemed to be acquisitions of a business are expensed as incurred. Improvements and replacements are capitalized when they extend the useful life or improve the productive capacity of the asset. Costs of repairs and maintenance are expensed as incurred. The Company allocates the purchase price of acquired properties accounted for as asset acquisitions to tangible and identifiable intangible assets or liabilities based on their relative fair values. Tangible assets may include land, site improvements and buildings. Intangible assets may include the value of in-place leases and above- and below-market leases and other identifiable intangible assets or liabilities based on lease or property specific characteristics. The Company incurs various costs in the leasing and development of its properties. Amounts paid to tenants that incentivize them to extend or otherwise amend an existing lease or to sign a new lease agreement are capitalized to lease incentives on the Company's consolidated balance sheets. Tenant improvements are capitalized to building and improvements within the Company's consolidated balance sheets. Costs incurred which are directly related to properties under development, which include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs and real estate taxes and insurance, are capitalized during the period of development as construction in progress. After the determination is made to capitalize a cost, it is allocated to the specific component of a project that benefited. Determination of when a development project 78 commences, and capitalization begins, and when a development project has reached substantial completion, and is available for occupancy and capitalization must cease, involves a degree of judgment. The Company does not engage in speculative real estate development. The Company does, however, opportunistically agree to reimburse certain of its tenants for development costs at its properties in exchange for contractually- specified rent that generally increases proportionally with its funding. The fair value of the tangible assets of an acquired property with an in-place operating lease is determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then allocated to the tangible assets based on the fair value of the tangible assets. The fair value of in-place leases is determined by considering estimates of carrying costs during the expected lease-up periods, current market conditions, as well as costs to execute similar leases based on the specific characteristics of each tenant's lease. The Company estimates the cost to execute leases with terms similar to the remaining lease terms of the in-place leases, including leasing commissions, legal and other related expenses. Factors the Company considers in this analysis include an estimate of the carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses, and estimates of lost rentals at market rates during the expected lease-up periods, which primarily range from six to 12 months. The fair value of above- or below-market leases is recorded based on the net present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between the contractual amount to be paid pursuant to the in-place lease and the Company's estimate of the fair market lease rate for the corresponding in-place lease, measured over the remaining non-cancelable term of the lease including any below-market fixed rate renewal options for below-market leases. In making estimates of fair values for purposes of allocating purchase price, the Company uses a number of sources, including real estate valuations prepared by independent valuation firms. The Company also considers information and other factors including market conditions, the industry that the tenant operates in, characteristics of the real estate (e.g., location, size, demographics, value and comparative rental rates), tenant credit profile and the importance of the location of the real estate to the operations of the tenant's business. Additionally, the Company considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. The Company uses the information obtained as a result of its pre-acquisition due diligence as part of its consideration of the accounting standard governing asset retirement obligations and, when necessary, will record an asset retirement obligation as part of the purchase price allocation. Real estate investments that are intended to be sold are designated as "held for sale" on the consolidated balance sheets at the lesser of carrying amount and fair value less estimated selling costs. Real estate investments are no longer depreciated when they are classified as held for sale. If the disposal, or intended disposal, of certain real estate investments represents a strategic shift that has had or will have a major effect on the Company's operations and financial results, the operations of such real estate investments would be presented as discontinued operations in the consolidated statements of operations for all applicable periods. Depreciation and Amortization Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings and 15 years for site improvements. The Company recorded the following amounts of depreciation expense on its real estate investments during the periods presented: (in thousands) Depreciation on real estate investments 2020 Year ended December 31, 2019 2018 $ 51,736 $ 36,354 $ 24,849 Lease incentives are amortized on a straight-line basis as a reduction of rental income over the remaining non-cancellable terms of the respective leases. If a tenant terminates its lease, the unamortized portion of the lease incentive is charged to rental revenue. Construction in progress is not depreciated until the development has reached substantial completion. Tenant improvements are depreciated over the non- cancellable term of the related lease or their estimated useful life, whichever is shorter. Capitalized above-market lease values are amortized on a straight-line basis as a reduction of rental revenue over the remaining non- cancellable terms of the respective leases. Capitalized below-market lease values are 79 accreted on a straight-line basis as an increase to rental revenue over the remaining non-cancellable terms of the respective leases including any below-market fixed rate renewal option periods. Capitalized above-market ground lease values are accreted as a reduction of property expenses over the remaining terms of the respective leases. Capitalized below-market ground lease values are amortized as an increase to property expenses over the remaining terms of the respective leases and any expected below-market renewal option periods where renewal is considered probable. The value of in-place leases, exclusive of the value of above-market and below-market lease intangibles, is amortized to depreciation and amortization expense on a straight-line basis over the remaining periods of the respective leases. If a tenant terminates its lease, the unamortized portion of each intangible, including in-place lease values, is charged to depreciation and amortization expense, while above- and below-market lease adjustments are recorded within rental revenue in the consolidated statements of operations. Loans Receivable The Company holds its loans receivable for long-term investment. Loans receivable are carried at amortized cost, including related unamortized discounts or premiums, if any, less the Company's estimated allowance for loan losses. The Company recognizes interest income on loans receivable using the effective-interest method applied on a loan-by-loan basis. Direct costs associated with originating loans are offset against any related fees received and the balance, along with any premium or discount, is deferred and amortized as an adjustment to interest income over the term of the related loan receivable using the effective-interest method. As of December 31, 2020, the Company had five leases which were accounted for as loans receivable and eight mortgage loans held for long-term investment. As of December 31, 2019, the Company had two leases which were accounted for as loans receivable and five loans receivable for long-term investment. Direct Financing Lease Receivables Certain of the Company's real estate investment transactions are accounted for as direct financing leases. The Company records the direct financing lease receivables at their net investment, determined as the aggregate minimum lease payments and the estimated non-guaranteed residual value of the leased property less unearned income. The unearned income is recognized over the term of the related lease so as to produce a constant rate of return on the net investment in the asset. The Company's investment in direct financing lease receivables is reduced over the applicable lease term to its non-guaranteed residual value by the portion of rent allocated to the direct financing lease receivables. Subsequent to the adoption of ASC 842, Leases ("ASC 842"), existing direct financing lease receivables will continue to be accounted for in the same manner, unless the underlying contracts are modified. If and when an investment in direct financing lease receivables is identified for impairment evaluation, the Company will apply the guidance in both ASC 310, Receivables ("ASC 310") and ASC 840, Leases ("ASC 840") (prior to January 1, 2019) and ASC 842. Under ASC 310, the lease receivable portion of the net investment in a direct financing lease receivable is evaluated for impairment when it becomes probable the Company, as the lessor, will be unable to collect all rental payments associated with the Company's investment in the direct financing lease receivable. Under ASC 840 and ASC 842, the Company reviews the estimated non-guaranteed residual value of a leased property at least annually. If the review results in a lower estimate than had been previously established, the Company determines whether the decline in estimated non-guaranteed residual value is other than temporary. If a decline is judged to be other than temporary, the accounting for the transaction is revised using the changed estimate and the resulting reduction in the net investment in direct financing lease receivables is recognized by the Company as a loss in the period in which the estimate is changed. As of December 31, 2020 and 2019, the Company determined that none of its direct financing lease receivables were impaired. Impairment of Long-Lived Assets If circumstances indicate that the carrying value of a property may not be recoverable, the Company reviews the property for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as 80 the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. Impairment assessments have a direct impact on the consolidated statements of operations because recording an impairment loss results in an immediate negative adjustment to the consolidated statement of operations. The Company recorded the following provisions for impairment of long lived assets during the periods presented: (in thousands) Provision for impairment of real estate Cash and Cash Equivalents 2020 Year ended December 31, 2019 2018 $ 8,399 $ 2,918 $ 4,503 Cash and cash equivalents includes cash in the Company’s bank accounts. The Company considers all cash balances and highly liquid investments with original maturities of three months or less to be cash and cash equivalents. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to an insurance limit. As of December 31, 2020 and 2019, the Company had deposits of $26.6 million and $8.3 million, respectively, of which $26.4 million and $8.1 million, respectively, were in excess of the amount insured by the FDIC. Although the Company bears risk with respect to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result. Restricted Cash Restricted cash primarily consists of cash held with the trustee for the Company’s Master Trust Funding Program (as defined in Note 5—Long Term Debt). This restricted cash is used to make principal and interest payments on the Company’s secured borrowings, to pay trust expenses and to invest in future real estate investments which will be pledged as collateral under the Master Trust Funding Program. See Note 5—Long Term Debt for further discussion. Adjustment to Rental Revenue/Allowance for Doubtful Accounts The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Prior to January 1, 2019, if the collectability of a receivable was in doubt, the accounts receivable and straight-line rent receivable balances were reduced by an allowance for doubtful accounts on the consolidated balance sheets or a direct write-off of the receivable was recorded in the consolidated statements of operations. The provision for doubtful accounts was included in property expenses in the Company’s consolidated statements of operations. If the accounts receivable balance or straight-line rent receivable balance was subsequently deemed to be uncollectible, such receivable amounts were written-off to the allowance for doubtful accounts. Subsequent to January 1, 2019, if the assessment of the collectability of substantially all payments due under a lease changes from probable to not probable, any difference between the rental revenue recognized to date and the lease payments that have been collected is recognized as a current period reduction of rental revenue in the consolidated statements of operations. The Company recorded the following amounts as adjustments to rental revenue or allowance for doubtful accounts during the periods presented: (in thousands) Adjustment to rental revenue/allowance for doubtful accounts 2020 Year ended December 31, 2019 2018 $ 7,149 $ 593 $ 235 81 Deferred Financing Costs Financing costs related to establishing the Company’s 2018 Credit Facility and Revolving Credit Facility (as defined below) were deferred and are being amortized as an increase to interest expense in the consolidated statements of operations over the term of the facility and are reported as a component of rent receivables, prepaid expenses and other assets, net on the consolidated balance sheets. Financing costs related to the issuance of the Company’s secured borrowings under the Master Trust Funding Program, the April 2019 Term Loan and the November 2019 Term Loan (each as defined below) were deferred and are being amortized as an increase to interest expense in the consolidated statements of operations over the term of the related debt instrument and are reported as a reduction of the related debt balance on the consolidated balance sheets. Derivative Instruments In the normal course of business, the Company uses derivative financial instruments, which may include interest rate swaps, caps, options, floors and other interest rate derivative contracts, to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability in cash flows on a portion of the Company’s floating-rate debt. Instruments that meet these hedging criteria are formally designated as hedges at the inception of the derivative contract. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. 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. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may also enter into derivative contracts that are intended to economically hedge certain risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If a derivative is designated and qualifies for cash flow hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income to the extent that it is effective. Any ineffective portion of a change in derivative fair value is immediately recorded in earnings. If the Company elects not to apply hedge accounting treatment (or for derivatives that do not qualify as hedges), any change in the fair value of such derivative instruments would be recognized immediately as a gain or loss on derivative instruments in the consolidated statements of operations. Fair Value Measurement The Company estimates fair value of financial and non-financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1—Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. 82 Level 3—Unobservable inputs that reflect the Company's own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. Revenue Recognition The Company’s rental revenue is primarily rent received from tenants. Rent from tenants is recorded in accordance with the terms of each lease on a straight-line basis over the non-cancellable initial term of the lease from the later of the date of the commencement of the lease and the date of acquisition of the property subject to the lease. Rental revenue recognition begins when the tenant controls the space and continues through the term of the related lease. Because substantially all of the leases provide for rental increases at specified intervals, the Company records a straight-line rent receivable and recognizes revenue on a straight-line basis through the expiration of the non-cancelable term of the lease. The Company considers whether the collectability of rents is reasonably assured in determining the amount of straight-line rent to record. Generally, the Company’s leases provide the tenant with one or more multi-year renewal options, subject to generally the same terms and conditions provided under the initial lease term, including rent increases. If economic incentives make it reasonably certain that an option period to extend the lease will be exercised, the Company will include these options in determining the non-cancelable term of the lease. The Company defers rental revenue related to lease payments received from tenants in advance of their due dates. These amounts are presented within accrued liabilities and other payables on the Company’s consolidated balance sheets. Certain properties in the Company’s investment portfolio are subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales. For these leases, the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. The Company recorded the following amounts as contingent rent, which are included as a component of rental revenue in the Company's consolidated statements of operations, during the periods presented: (in thousands) Contingent rent Offering Costs 2020 Year ended December 31, 2019 2018 $ 444 $ 855 $ 1,083 In connection with the completion of equity offerings, the Company incurs legal, accounting and other offering-related costs. Such costs are deducted from the gross proceeds of each equity offering when the offering is completed. As of December 31, 2020 and 2019, the Company had capitalized a total of $67.2 million and $49.0 million, respectively, of such costs in the Company’s consolidated balance sheets. These costs are presented as a reduction of additional paid-in capital as of December 31, 2020 and 2019. Legal, accounting and other offering-related costs incurred in connection with the Secondary Offering (as defined below) were expensed when incurred and were recorded within general and administrative expense in the Company’s consolidated statements of operations. Income Taxes The Company elected and qualified to be taxed as a REIT under sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ended December 31, 2018. REITs are subject to a number of organizational and operational requirements, including a requirement that 90% of ordinary “REIT taxable income” (as determined without regard to the dividends paid deduction or net capital gains) be distributed. As a REIT, the Company will generally not be subject to U.S. federal income tax to the extent that it meets the organizational and operational requirements and its distributions equal or exceed REIT taxable income. For the period subsequent to the effective date of its REIT election, the Company continues to meet the organizational and operational requirements and expects distributions to exceed REIT taxable income. Accordingly, no provision has been made for U.S. federal income taxes. Even though the Company has elected and qualifies for taxation as a REIT, it may be subject to state and local income and franchise taxes, and to federal income and 83 excise tax on its undistributed income. Franchise taxes and federal excise taxes on the Company’s undistributed income, if any, are included in general and administrative expenses on the accompanying consolidated statements of operations. Additionally, taxable income from non-REIT activities managed through the Company's taxable REIT subsidiary is subject to federal, state, and local taxes. The Company analyzes its tax filing positions in all of the U.S. federal, state and local tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in such jurisdictions. The Company follows a two-step process to evaluate uncertain tax positions. Step one, recognition, occurs when an entity concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Step two, measurement, determines the amount of benefit that is more-likely-than-not to be realized upon settlement. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. The use of a valuation allowance as a substitute for derecognition of tax positions is prohibited. As of December 31, 2020 and 2019, the Company had no accruals recorded for uncertain tax positions. The Company’s policy is to classify interest expense and penalties relating to taxes in general and administrative expense in the consolidated statements of operations. During the years ended December 31, 2020, 2019 and 2018, the Company recorded de minimis interest or penalties relating to taxes, and there were no interest or penalties with respect to taxes accrued as of December 31, 2020 or 2019. The 2019, 2018, 2017 and 2016 taxable years remain open to examination by federal and/or state taxing jurisdictions to which the Company is subject. Equity-Based Compensation The Company grants shares of restricted common stock and restricted share units (“RSUs”) to its directors, executive officers and other employees that vest over specified time periods, subject to the recipient’s continued service. The Company also grants performance-based RSUs to its executive officers, the final number of which is determined based on objective and subjective performance conditions and which vest over a multi- year period, subject to the recipient’s continued service. The Company accounts for the restricted common stock and RSUs in accordance with ASC 718, Compensation – Stock Compensation, which requires that such compensation be recognized in the financial statements based on its estimated grant-date fair value. The value of such awards is recognized as compensation expense in general and administrative expenses in the accompanying consolidated statements of operations over the applicable service periods. The Company recognizes compensation expense for equity-based compensation using the straight-line method based on the terms of the individual grant. Forfeitures of equity-based compensation awards, if any, are recognized as they occur. Variable Interest Entities The Financial Accounting Standards Board (“FASB”) provides guidance for determining whether an entity is a variable interest entity (a “VIE”). VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A VIE is required to be consolidated by its primary beneficiary, which is the party that (i) has the power to control the activities that most significantly impact the VIE’s economic performance and (ii) has the obligation to absorb losses, or the right to receive benefits, of the VIE that could potentially be significant to the VIE. The Company has concluded that the Operating Partnership is a VIE of which the Company is the primary beneficiary, as the Company has the power to direct the activities that most significantly impact the economic performance of the Operating Partnership. Substantially all of the Company’s assets and liabilities are held by the Operating Partnership. The assets and liabilities of the Operating Partnership are consolidated and reported as assets and liabilities on the Company’s consolidated balance sheets as of December 31, 2020 and 2019. Additionally, the Company has concluded that certain entities to which it has provided mortgage loans are VIEs because the entities' equity was not sufficient to finance their activities without additional subordinated financial 84 support. The following table presents information about the Company’s mortgage loan-related VIEs as of the dates presented: (Dollars in thousands) Number of VIEs Aggregate carrying value 2020 11 December 31, 2019 7 2018 9 $ 117,578 $ 60,500 $ 5,700 The Company was not the primary beneficiary of any of these entities, because the Company did not have the power to direct the activities that most significantly impact the entities’ economic performance as of December 31, 2020. and 2019. The Company’s maximum exposure to loss in these entities is limited to the carrying amount of its investment. The Company had no liabilities associated with these VIEs as of December 31, 2020 and 2019. Reportable Segments ASC Topic 280, Segment Reporting, establishes standards for the manner in which enterprises report information about operating segments. Substantially all of the Company's investments, at acquisition, are comprised of real estate owned that is leased to tenants on a long-term basis. Therefore, the Company aggregates these investments for reporting purposes and operates in one reportable segment. Recent Accounting Developments In February 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) establishing ASC 326, as amended by subsequent ASUs on the topic. ASU 2016-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 and recorded estimates of expected loss on its loans and direct financing lease receivable portfolio beginning on that date, as discussed above. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. The Company adopted ASU 2017-12 while accounting for its initial interest rate swaps in 2019 (see Note 6—Derivative and Hedging Activities). As the Company did not have other derivatives outstanding at time of adoption, no prior period adjustments were required. Pursuant to the provisions of ASU 2017-12, the Company is no longer required to separately measure and recognize hedge ineffectiveness. Instead, the Company recognizes the entire change in the fair value of cash flow hedges included in the assessment of hedge effectiveness in other comprehensive (loss) income. The amounts recorded in other comprehensive (loss) income will subsequently be reclassified to earnings when the hedged item affects earnings. The adoption of ASU 2017-12 did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which changes the disclosure requirements for fair value measurements by removing, adding and modifying certain disclosures. ASU 2018-13 is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance on January 1, 2020 and the adoption of ASU 2018-13 did not have a material impact on the Company’s related disclosures. In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform (Topic 848) (“ASU 2020-4”). ASU 2020-4 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-4 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. 85 In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, the entity would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant, which would be accounted for under the lease modification framework, or if a lease concession was under the enforceable rights and obligations that existed in the original lease, which would be accounted for outside the lease modification framework. The Lease Modification Q&A provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease. This election is only available when total cash flows resulting from the modified lease are substantially similar to or less than the cash flows in the original lease. The Company made this election and accounts for rent deferrals by increasing its rent receivables as receivables accrue and continuing to recognize income during the deferral period, resulting in $12.4 million of deferrals being recognized in rental revenues for the year ended December 31, 2020. Lease concessions or amendments other than rent deferrals are evaluated to determine if a substantive change to the consideration in the original lease contract has occurred and should be accounted for as a lease modification. The Company continues to evaluate any amounts recognized for collectability, regardless of whether accounted for as a lease modification or not, and records an adjustment to rental income for tenant credit for amounts that are not probable of collection. For lease concessions granted in conjunction with the COVID-19 pandemic, the Company reviewed all amounts recognized on a tenant-by-tenant basis for collectability. In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The guidance in ASU 2020-06 simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU 2020-06 also simplify the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets. The amendments in ASU 2020-06 are effective for the Company for fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The guidance must be adopted as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this new guidance. 3. Investments The following table presents information about the Company’s real estate investment portfolio as of each date presented: (1) Owned properties Properties securing investments in mortgage loans Ground lease interests (3) (2) Total number of investments December 31, 2020 1,056 115 10 1,181 2019 897 91 12 1,000 _____________________________________ (1) Includes 11 and 8 properties which are subject to leases accounted for as direct financing leases or loans as of December 31, 2020 and 2019, respectively. Properties secure 8 and 6 mortgage loans receivable as of December 31, 2020 and 2019, respectively. Includes one building which is subject to a lease accounted for as a direct financing lease as of December 31, 2020 and 2019. (2) (3) 86 The following table presents information about the Company’s gross investment portfolio as of each date presented: (in thousands) Gross investment portfolio: Real estate investments, at cost Loans and direct financing lease receivables, net Real estate investments held for sale, net Total gross investments December 31, 2020 2019 2,359,395 152,220 17,058 2,528,673 $ 1,908,919 92,184 1,211 2,002,314 $ As of December 31, 2020 and 2019, 258 and 355 of these investments, comprising $399.7 million and $601.3 million, respectively, of gross investments, were assets of consolidated special purpose entity subsidiaries and were pledged as collateral under the non-recourse obligations of the Company’s Master Trust Funding Program. (See Note 5—Long Term Debt.) Acquisitions in 2020 and 2019 The following table presents information about the Company’s acquisition activity during the years ended December 31, 2020 and 2019: (Dollars in thousands) Ownership type Number of properties Purchase price allocation: Land and improvements Building and improvements (3) Construction in progress Intangible lease assets Total purchase price Intangible lease liabilities Purchase price (including acquisition costs) Year ended December 31, 2020 (1) 208 2019 (2) 281 $ $ 181,297 $ 323,542 15,825 7,737 528,401 (2,125) 526,276 $ 191,311 370,312 17,858 18,802 598,283 (188) 598,095 _____________________________________ (1) During the year ended December 31, 2020, the Company acquired the fee interest in 206 properties and acquired two properties subject to ground lease arrangements. During the year ended December 31, 2019, the Company acquired the fee interest in 279 properties and acquired two properties subject to ground lease arrangements. Represents amounts incurred at and subsequent to acquisition and includes $0.2 million and $0.3 million, respectively, of capitalized interest expense as of December 31, 2020 and 2019. (2) (3) During the years ended December 31, 2020 and 2019, the Company did not have any investments that individually represented more than 5% of the Company’s total investment activity. 87 Gross Investment Activity During the years ended December 31, 2020, 2019 and 2018, the Company had the following gross investment activity:  (Dollar amounts in thousands) Gross investments, December 31, 2017 Acquisitions of and additions to real estate investments Sales of investments in real estate Relinquishment of properties at end of ground lease term Provisions for impairment of real estate Investments in loans receivable Principal collections on and settlements of loans and direct financing lease receivables Other (2)(3) (1) Gross investments, December 31, 2018 Acquisitions of and additions to real estate investments Sales of investments in real estate Relinquishment of properties at end of ground lease term Provisions for impairment of real estate Investments in loans receivable Principal collections on and settlements of loans and direct financing lease receivables Other (4) Gross investments, December 31, 2019 Acquisitions of and additions to real estate investments Sales of investments in real estate Relinquishment of properties at end of ground lease term Provisions for impairment of real estate Investments in loans receivable Principal collections on and settlements of loans and direct financing lease receivables Other (6) (5) Gross investments, December 31, 2020 Less: Accumulated depreciation and amortization (7) Net investments, December 31, 2020 Number of Investment Locations Dollar Amount of Investments 508 $ 204 (45) (2) — 12 — — 677 281 (37) (3) — 95 (13) — 1,000 208 (49) (3) — 25 — — 1,181 — 1,181 $ 939,072 506,949 (58,084) (853) (4,543) 14,854 (74) (2,772) 1,394,549 603,677 (65,571) (700) (2,918) 94,637 (19,958) (1,402) 2,002,314 568,204 (81,312) (1,931) (8,399) 61,339 (286) (11,256) 2,528,673 (136,097) 2,392,576 _____________________________________________  (1) During the year ended December 31, 2018, the Company identified and recorded provisions for impairment at 7 vacant and 14 tenanted properties. The amount in the table above excludes $40,000 related to intangible lease liabilities for these assets. Includes a $3.5 million of loan receivable made to the purchaser of one real estate property as of December 31, 2018. Excludes improvements at one property securing a $3.2 million development construction loan as the land at this location is included in acquisitions of and additions to real estate investments for 2018. During the year ended December 31, 2019, the Company identified and recorded provisions for impairment at 1 vacant and 7 tenanted properties. During the year ended December 31, 2020, the Company identified and recorded provisions for impairment at 7 vacant and 10 tenanted properties. During the year ended December 31, 2020, the Company invested in 25 properties that secured five of its loans receivable for an aggregate investment of $57.0 million. Includes $112.1 million of accumulated depreciation as of December 31, 2020. (2) (3) (4) (5) (6) (7) 88 Real Estate Investments The Company's investment properties are leased to tenants under long-term operating leases that typically include one or more renewal options. See Note 4—Leases for more information about the Company's leases. Loans and Direct Financing Lease Receivables As of December 31, 2020 and 2019, the Company had 13 and seven loans receivable outstanding, with an aggregate carrying amount of $150.8 million and $89.6 million, respectively. The maximum amount of loss due to credit risk is the Company's current principal balance of $150.8 million as of December 31, 2020. The Company's loans receivable principal portfolio as of December 31, 2020 and 2019 are summarized below (dollars in thousands):  Loan Type (2)(3) (2) (2) (2) (2) (3) (2) Mortgage Mortgage Mortgage Mortgage Mortgage Mortgage Mortgage Mortgage Mortgage Leasehold interest Leasehold interest Leasehold interest Leasehold interest Net investment (2) (2) Monthly Payment I/O P+I I/O I/O I/O I/O I/O I/O I/O P+I P+I P+I P+I Number of Secured Properties 2 2 2 69 18 1 1 3 19 2 1 1 1 Effective Interest Rate 8.80% 8.10% 8.53% 8.16% 8.05% 8.42% 7.00% 8.30% 7.30% 10.69% 2.25% 2.41% 4.97% Stated Interest Rate 8.10% 8.10% 7.80% 7.70% 7.50% 7.70% 7.00% 8.25% 6.80% (4) (5) (5) (5) Maturity Date 2039 2059 2039 2034 2034 2040 2021 2022 2035 2039 2034 2034 2038 December 31, 2020 2019 $ $ 12,000 $ 6,114 7,300 28,000 37,105 5,300 860 2,324 46,000 1,435 1,109 1,645 1,605 150,797 $ 12,000 5,125 7,300 28,000 34,604 — — — — 1,435 1,164 — — 89,628 ________________________________________________ (1) (2) (3) (4) I/O: Interest Only; P+I: Principal and Interest Loan requires monthly payments of interest only with a balloon payment due at maturity. Loan allows for prepayments in whole or in part without penalty. This leasehold interest is accounted for as a loan receivable, as the lease for two land parcels contains an option for the lessee to repurchase the leased parcels in 2024 or 2025. These leasehold interests are accounted for as loans receivable, as the leases for each property contain an option for the relevant lessee to repurchase the leased property in the future. (5) 89 Scheduled principal payments due to be received under the Company's loans receivable as of December 31, 2020 are as follows: (in thousands) 2021 2022 2023 2024 2025 Thereafter Total Loans Receivable 1,068 2,545 236 252 268 146,428 150,797 $ $ As of December 31, 2020 and 2019, the Company had $2.4 million and $2.6 million of net investments accounted for as direct financing lease receivables, respectively. The components of the investments accounted for as direct financing lease receivables were as follows: (in thousands) Minimum lease payments receivable Estimated unguaranteed residual value of leased assets Unearned income from leased assets Net investment December 31, 2020 2019 3,529 $ 270 (1,357) 2,442 $ 3,866 270 (1,581) 2,555 $ $  Scheduled future minimum non-cancelable base rental payments due to be received under the direct financing lease receivables as of December 31, 2020 were as follows: (in thousands) 2021 2022 2023 2024 2025 Thereafter Total Future Minimum Base Rental Payments 340 345 347 289 254 1,954 3,529 $ $ Allowance for Loan Losses As discussed in Note 2—Summary of Significant Accounting Policies, the Company utilizes a RELEM model which estimates losses on loans and direct financing lease receivables for purposes of calculating an allowance for loan losses. As of December 31, 2020, the Company recorded an allowance for loan losses of $1.0 million. Changes in the Company’s allowance for loan losses are presented within provision for loan losses in the Company’s consolidated statements of operations. 90   For the year ended December 31, 2020, the changes to allowance for loan losses were as follows: (in thousands) Balance at December 31, 2019 Cumulative-effect adjustment upon adoption of ASC 326 Current period provision for expected credit losses Write-offs charged Recoveries Balance at December 31, 2020 (1) Loans and Direct Financing Lease Receivables — 188 830 — — 1,018 $ $ _____________________________________ (1) The increase in expected credit losses is due to the changes in assumptions regarding current macroeconomic factors related to COVID and our investment in new loans receivable during the period. The significant credit quality indicators for the Company’s loans and direct financing lease receivables measured at amortized cost, were as follows as of December 31, 2020: (in thousands) Credit Quality Indicator: LTV <60% LTV 60%-70% LTV >70% Amortized Cost Basis by Origination Year 2020 2019 2018 2017 2016 Total Amortized Costs Basis $ $ 860 $ — 56,874 57,734 $ 28,000 — 65,063 93,063 $ $ — $ — — — $ — $ — — — $ 747 988 706 2,441 $ $ 29,607 988 122,643 153,238 Real Estate Investments Held for Sale The Company continually evaluates its portfolio of real estate investments and may elect to dispose of investments considering criteria including, but not limited to, tenant concentration, tenant credit quality, tenant operation type (e.g., industry, sector or concept), unit-level financial performance, local market conditions and lease rates, associated indebtedness and asset location. Real estate investments held for sale are expected to be sold within twelve months. The following table shows the activity in real estate investments held for sale and intangible lease liabilities held for sale during the years ended December 31, 2020 and 2019:  (Dollar amounts in thousands) Held for sale balance, December 31, 2018 Transfers to held for sale classification Sales Transfers to held and used classification Held for sale balance, December 31, 2019 Transfers to held for sale classification Sales Transfers to held and used classification Held for sale balance, December 31, 2020 Significant Concentrations Number of Properties Real Estate Investments Intangible Lease Liabilities Net Carrying Value — 5 (4) — 1 8 (1) — 8 $ $ — $ 7,450 (6,239) — 1,211 17,058 (1,211) — 17,058 $ — — — — — — — — — $ $ — 7,450 (6,239) — 1,211 17,058 (1,211) — 17,058 The Company did not have any tenants (including for this purpose, all affiliates of such tenants) whose rental revenue for the years ended December 31, 2020, 2019 or 2018 represented 10% or more of total rental revenue in the Company's consolidated statements of operations. 91 The following table lists the states where the rental revenue from the properties in that state during the periods presented represented 10% or more of total rental revenue in the Company's consolidated statements of operations: State Texas Georgia 2020 14.9% 9.6% Year ended December 31, 2019 12.4% 10.8% 2018 12.5% 11.5% Intangible Assets and Liabilities Intangible assets and liabilities consisted of the following as of the dates presented:  (in thousands) Intangible assets: In-place leases Intangible market lease assets Total intangible assets Intangible market lease liabilities December 31, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount $ $ $ 67,986 $ 12,285 80,271 $ 18,767 $ 4,059 22,826 $ 49,219 $ 8,226 57,445 $ 64,828 $ 14,094 78,922 $ 14,195 $ 4,228 18,423 $ 50,633 9,866 60,499 12,772 $ 2,604 $ 10,168 $ 12,054 $ 2,490 $ 9,564  The remaining weighted average amortization period for the Company's intangible assets and liabilities as of December 31, 2020, by category and in total, were as follows: In-place leases Intangible market lease assets Total intangible assets Intangible market lease liabilities Years Remaining 9.8 17.6 10.4 6.4  The following table discloses amounts recognized within the consolidated statements of operations related to amortization of in-place leases, amortization and accretion of above- and below-market lease assets and liabilities, net and the amortization and accretion of above- and below- market ground leases for the periods presented:  (in thousands) Amortization of in-place leases Amortization (accretion) of market lease intangibles, net Amortization (accretion) of above- and below-market ground lease intangibles, net (1) (2) 2020 Year ended December 31, 2019 2018 $ (3) 7,067 $ 9 (395) 6,272 $ 866 (333) 6,465 780 (443)  ______________________________________________________ (1) (2) (3) Reflected within depreciation and amortization expense. Reflected within rental revenue. Reflected within property expenses. 92 The following table provides the estimated amortization of in-place lease assets to be recognized as a component of depreciation and amortization expense for the next five years and thereafter: (in thousands) 2021 2022 2023 2024 2025 Thereafter Total In-Place Lease Assets 5,998 5,839 5,418 4,739 3,685 23,540 49,219 $ $ The following table provides the estimated net amortization of above- and below-market lease intangibles to be recognized as a component of rental revenue for the next five years and thereafter: (in thousands) 2021 2022 2023 2024 2025 Thereafter Total 4. Leases As Lessor Above Market Lease Asset Below Market Lease Liabilities Net Adjustment to Rental Revenue $ $ (732) $ (731) (700) (669) (662) (4,732) (8,226) $ 528 $ 587 502 570 608 7,373 10,168 $ (204) (144) (198) (99) (54) 2,641 1,942 The Company’s investment properties are leased to tenants under long-term operating leases that typically include one or more tenant renewal options. The Company’s leases provide for annual base rental payments (generally payable in monthly installments), and generally provide for increases in rent based on fixed contractual terms or as a result of increases in the Consumer Price Index. Substantially all of the leases are triple-net, which means that the lessees are responsible for paying all property operating expenses, including maintenance, insurance, utilities, property taxes and, if applicable, ground rent expense; therefore, the Company is generally not responsible for repairs or other capital expenditures related to the properties while the triple-net leases are in effect and, at the end of the lease term, the lessees are responsible for returning the property to the Company in a substantially similar condition as when they took possession. Some of the Company’s leases provide that in the event the Company wishes to sell the property subject to that lease, it first must offer the lessee the right to purchase the property on the same terms and conditions as any offer which it intends to accept for the sale of the property. 93 Scheduled future minimum base rental payments due to be received under the remaining non-cancelable term of the operating leases in place as of December 31, 2020 were as follows: (in thousands) 2021 2022 2023 2024 2025 Thereafter Total Future Minimum Base Rental Receipts 186,271 189,346 192,210 193,275 191,848 2,092,267 3,045,217 $ $ Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum base rental payments to be received during the initial non-cancelable lease term only. In addition, the future minimum lease payments exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to performance thresholds and exclude increases in annual rent based on future changes in the Consumer Price Index, among other items. The fixed and variable components of lease revenues for the years ended December 31, 2020, 2019, and 2018 were as follows: 2020 Year ended December 31, 2019 2018 $ $ 165,171 $ 1,341 166,512 $ 134,879 $ 2,282 137,161 $ 94,770 1,671 96,441 (in thousands) Fixed lease revenues Variable lease revenues (1) Total lease revenues _____________________________________ (1) (2) Includes contingent rent based on a percentage of the tenant’s gross sales and costs paid by the Company for which it is reimbursed by its tenants. Excludes the amortization and accretion of above- and below-market lease intangible assets and liabilities and lease incentives and the adjustment to rental revenue for tenant credit. (2) As Lessee The Company has a number of ground leases, an office lease and other equipment leases which are classified as operating leases. On January 1, 2019, the Company recorded $4.8 million of right of use ("ROU") assets and lease liabilities related to these operating leases. The Company's ROU assets were reduced by $0.1 million of accrued rent expense reclassified from accrued liabilities and other payables and $1.2 million of acquired above-market lease liabilities, net, reclassified from intangible lease liabilities, net and increased by $0.1 million of acquired below-market lease assets, net, reclassified from intangible lease assets, net of accumulated depreciation and amortization and $0.2 million of prepaid lease payments. As of December 31, 2020, the Company's ROU assets and lease liabilities were $6.4 million and $8.8 million, respectively. As of December 31, 2019, the Company's ROU assets and lease liabilities were $4.8 million and $7.5 million, respectively. The discount rate applied to measure each ROU asset and lease liability is based on the Company's incremental borrowing rate ("IBR"). The Company considers the general economic environment and its historical borrowing activity and factors in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. As the Company did not elect to apply hindsight, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842. Certain of the Company's ground leases offer renewal options which it assesses against relevant economic factors to determine whether it is reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that the Company is reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and ROU asset. 94 The following table sets forth information related to the measurement of the Company's lease liabilities as of the dates presented: Weighted average remaining lease term (in years) Weighted average discount rate December 31, 2020 22.4 6.41% December 31, 2019 21.9 7.00% The Company recognizes rent expense on its ground leases as a component of property expenses and rent expense on its office lease and other equipment leases as a component of general and administrative expense on its consolidated statements of operations. At certain of these ground leased properties, the Company’s lease as lessor of the building directly obligates the building lessee to pay rents due under the ground lease to the ground lessor; under ASC 840, such ground lease rents are presented on a net basis in the Company’s consolidated statements of operations for the years ended December 31, 2018. Upon adoption of ASC 842 on January 1, 2019 (see Note 2—Summary of Significant Accounting Policies), ground lease rents are no longer presented on a net basis and instead are reflected on a gross basis in the Company’s consolidated statements of operations for the years ended December 31, 2020 and 2019. The following table sets forth the details of rent expense for the years ended December 31, 2020, 2019 and 2018: (in thousands) Fixed rent expense - Ground Rent Fixed rent expense - Office Rent Variable rent expense Total rent expense 2020 Year ended December 31, 2019 2018 $ $ 905 $ 512 — 1,418 $ 911 $ 514 — 1,425 $ 1,010 273 — 1,284 As of December 31, 2020, under ASC 842, future lease payments due from the Company under the ground, office and equipment operating leases where the Company is directly responsible for payment and the future lease payments due under the ground operating leases where the Company's tenants are directly responsible for payment over the next five years and thereafter were as follows: (in thousands) 2021 2022 2023 2024 2025 Thereafter Total Present value discount Lease liabilities Office and Equipment Leases Ground Leases to be Paid by the Company Ground Leases to be Paid Directly by the Company’s Tenants Total Future Minimum Base Rental Payments $ $ 511 $ 518 525 531 538 — 2,623 $ 151 $ 151 131 24 — — 457 $ 809 $ 811 485 436 356 14,562 17,459 $ 1,471 1,480 1,141 991 894 14,562 20,539 (11,703) 8,836 The Company has adopted the short-term lease policy election and accordingly, the table above excludes future minimum base cash rental payments by the Company or its tenants on leases that have a term of less than 12 months at lease inception. The total of such future obligations is not material. 95 5. Long Term Debt The following table summarizes the Company's outstanding indebtedness as of December 31, 2020 and 2019: (in thousands) Unsecured term loans: April 2019 Term Loan November 2019 Term Loan Revolving Credit Facility Secured borrowings: Series 2017-1 Notes Total principal outstanding Maturity Date December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Principal Outstanding Weighted Average Interest Rate April 2024 November 2026 April 2023 June 2047 $ $ 200,000 $ 430,000 18,000 173,193 821,193 $ 200,000 250,000 46,000 239,102 735,102 1.4% 1.7% 1.4% 4.2% 2.1% 3.0% 3.2% 3.1% 4.2% 3.5% The following table summarizes the scheduled principal payments on the Company’s outstanding indebtedness as of December 31, 2020: (in thousands) 2021 2022 2023 2024 2025 Thereafter Total April 2019 Term Loan November 2019 Term Loan Revolving Credit Facility Secured Borrowings Total $ $ — $ — — 200,000 — — 200,000 $ — $ — — — — 430,000 430,000 $ — $ — 18,000 — — — 18,000 $ 4,084 $ 4,292 4,512 160,305 — — 173,193 $ 4,084 4,292 22,512 360,305 — 430,000 821,193 The Company was not in default of any provisions under any of its outstanding indebtedness as of December 31, 2020 or 2019. Revolving Credit Facility and April 2019 Term Loan On April 12, 2019, the Company, through the Operating Partnership, entered into an amended and restated credit agreement (the “Amended Credit Agreement”) with its group of lenders, amending and restating the terms of the Company’s previous $300.0 million revolving credit facility (the “2018 Credit Facility”) to increase the maximum aggregate initial original principal amount of the revolving loans available thereunder up to $400.0 million (the “Revolving Credit Facility”) and to permit the incurrence of an additional $200.0 million in term loans thereunder (the “April 2019 Term Loan”). The Revolving Credit Facility has a term of four years from April 12, 2019, with an extension option of up to one year exercisable by the Operating Partnership, subject to certain conditions, and the April 2019 Term Loan has a term of five years from the effective date of the amended agreement. The loans under each of the Revolving Credit Facility and the April 2019 Term Loan initially bear interest at an annual rate of applicable LIBOR plus the applicable margin (which applicable margin varies between the Revolving Credit Facility and the April 2019 Term Loan). The applicable LIBOR is the rate with a term equivalent to the interest period applicable to the relevant borrowing. The applicable margin initially is a spread set according to a leverage-based pricing grid. At the Operating Partnership’s election, on and after receipt of an investment grade corporate credit rating from Standard & Poor’s (“S&P”) or Moody’s Investors Services, Inc. (“Moody’s”), the applicable margin will be a spread set according to the Company’s corporate credit ratings provided by S&P and/or Moody’s. The Revolving Credit Facility and the April 2019 Term Loan are freely pre-payable at any time and the Revolving Credit Facility is mandatorily payable if borrowings exceed the borrowing base or the facility limit. The Operating Partnership may re-borrow amounts paid down on the Revolving Credit Facility but not on the April 2019 Term Loan. 96 The Operating Partnership is required to pay revolving credit fees throughout the term of the Revolving Credit Agreement based upon its usage of the Revolving Credit Facility, at a rate which depends on its usage of such facility during the period before the Company receives an investment grade corporate credit rating from S&P or Moody’s, and which rate shall be based on the corporate credit rating from S&P and/or Moody’s after the time, if applicable, the Company receives such a rating. The Operating Partnership was required to pay a ticking fee on the April 2019 Term Loan for the period from April 12, 2019 through May 14, 2019, the date the term loan was fully drawn. The Amended Credit Agreement has an accordion feature to increase, subject to certain conditions, the maximum availability of credit (either through increased revolving commitments or additional term loans) by up to $200 million. Additionally, on November 22, 2019, the Company further amended the Amended Credit Agreement to update certain terms to be consistent with those as described under, and to acknowledge, where applicable, the November 2019 Term Loan (as defined below) and to make certain other changes to the Amended Credit Agreement consistent with market practice on future replacement of the LIBOR rate and qualified financial contracts. The Operating Partnership is the borrower under the Amended Credit Agreement, and the Company and each of its subsidiaries that owns a direct or indirect interest in an eligible real property asset are guarantors under the Amended Credit Agreement. Under the terms of the Amended Credit Agreement, the Company is subject to various restrictive financial and nonfinancial covenants which, among other things, require the Company to maintain certain leverage ratios, cash flow and debt service coverage ratios, secured borrowing ratios and a minimum level of tangible net worth. The Amended Credit Agreement restricts the Company’s ability to pay distributions to its stockholders under certain circumstances. However, the Company may make distributions to the extent necessary to maintain its qualification as a REIT under the Internal Revenue Code of 1986, as amended. The Amended Credit Agreement contains certain additional covenants that, subject to exceptions, limit or restrict the Company’s incurrence of indebtedness and liens, disposition of assets, transactions with affiliates, mergers and fundamental changes, modification of organizational documents, changes to fiscal periods, making of investments, negative pledge clauses and lines of business and REIT qualification. In May 2019, the Company borrowed the entire $200.0 million available under the April 2019 Term Loan and used the proceeds to repurchase, in part, notes previously issued under its Master Trust Funding Program. The Company borrowed the entire $430.0 million available under the November 2019 Term Loan in separate draws in December 2019 and March 2020 and used the proceeds to voluntarily prepay notes previously issued under its Master Trust Funding Program at par, to repay amounts outstanding under the Revolving Credit Facility and for general working capital purposes. The Company was in compliance with all financial covenants and was not in default of any other provisions under the Amended Credit Facility as of December 31, 2020 and 2019. The following table presents information about the Revolving Credit Facility and the 2018 Credit Facility in effect for the years ended December 31, 2020, 2019 and 2018: (in thousands) Balance on Balance on January 1, Borrowings Repayments Balance on December 31, 2020 2019 2018 $ $ 46,000 $ 87,000 (115,000) 18,000 $ 34,000 $ 459,000 (447,000) 46,000 $ The following table presents information about interest expense related to the Revolving Credit Facility and the 2018 Credit Facility: (in thousands) Interest expense Amortization of deferred financing costs Total 2020 Year ended December 31, 2019 2018 1,367 $ 1,165 2,532 $ 3,416 $ 1,094 4,510 $ $ $ 97 — 34,000 — 34,000 442 494 936 Total deferred financing costs, net, of $2.5 million and $3.5 million related to the Revolving Credit Facility were included within rent receivables, prepaid expenses and other assets, net on the Company’s consolidated balance sheets as of December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, the Company had $382.0 million and $354.0 million, respectively, of unused borrowing capacity related to the Revolving Credit Facility. November 2019 Term Loan On November 26, 2019, the Company, through the Operating Partnership, entered into a new $430 million term loan credit facility (the “November 2019 Term Loan”) with a group of lenders. The November 2019 Term Loan provides for term loans to be drawn up to an aggregate amount of $430 million with a maturity of November 26, 2026. Borrowings under the November 2019 Term Loan bear interest at an annual rate of applicable LIBOR plus the applicable margin. The applicable LIBOR will be the rate with a term equivalent to the interest period applicable to the relevant borrowing. The applicable margin will initially be a spread set according to a leverage-based pricing grid. At the Operating Partnership’s irrevocable election, on and after receipt of an investment grade corporate credit rating from S&P or Moody’s, the applicable margin will be a spread set according to the Company’s corporate credit ratings provided by S&P and/or Moody’s. The November 2019 Term Loan is pre-payable at any time by the Operating Partnership (as borrower), provided, that if the loans under the November 2019 Term Loan are repaid on or before November 26, 2020, they are subject to a two percent prepayment premium, and if repaid thereafter but on or before November 26, 2021, they are subject to a one percent prepayment premium. After November 26, 2021, the loans may be repaid without penalty. The Operating Partnership may not re-borrow amounts paid down on the November 2019 Term Loan. The Operating Partnership was required to pay a ticking fee on any undrawn portion of the November 2019 Term Loan for the period from November 26, 2019 through March 26, 2020, the date that the November 2019 Term Loan was fully drawn. The November 2019 Term Loan has an accordion feature to increase, subject to certain conditions, the maximum availability of the facility up to an aggregate of $500 million. The Operating Partnership is the borrower under the November 2019 Term Loan, and the Company and each of its subsidiaries that owns a direct or indirect interest in an eligible real property asset are guarantors under the facility. Under the terms of the November 2019 Term Loan, the Company is subject to various restrictive financial and nonfinancial covenants which, among other things, require the Company to maintain certain leverage ratios, cash flow and debt service coverage ratios, secured borrowing ratios and a minimum level of tangible net worth. Additionally, the November 2019 Term Loan restricts the Company’s ability to pay distributions to its stockholders under certain circumstances. However, the Company may make distributions to the extent necessary to maintain its qualification as a REIT under the Internal Revenue Code of 1986, as amended. The facility contains certain covenants that, subject to exceptions, limit or restrict the Company’s incurrence of indebtedness and liens, disposition of assets, transactions with affiliates, mergers and fundamental changes, modification of organizational documents, changes to fiscal periods, making of investments, negative pledge clauses and lines of business and REIT qualification. The Company was in compliance with all financial covenants and was not in default of any other provisions under the November 2019 Term Loan as of December 31, 2020 and 2019. The following table presents information about aggregate interest expense related to the April 2019 and November 2019 Term Loan Facilities: (in thousands) Interest expense Amortization of deferred financing costs Total Year ended December 31, 2020 2019 $ $ 11,685 $ 711 12,396 $ 4,868 187 5,055 98 Total deferred financing costs, net, of $3.7 million and $4.4 million as of December 31, 2020 and 2019, respectively, related to the Term Loan Facilities are included as a component of unsecured term loans, net of deferred financing costs on the Company’s consolidated balance sheets. The Company fixed the interest rates on its term loan facilities’ variable-rate debt through the use of interest rate swap agreements. See Note 6—Derivative and Hedging Activities for additional information. Secured Borrowings In the normal course of business, the Company transfers financial assets in various transactions with Special Purpose Entities (“SPE”) determined to be VIEs, which primarily consist of securitization trusts established for a limited purpose (the “Master Trust Funding Program”). These SPEs are formed for the purpose of securitization transactions in which the Company transfers assets to an SPE, which then issues to investors various forms of debt obligations supported by those assets. In these securitization transactions, the Company typically receives cash from the SPE as proceeds for the transferred assets and retains the rights and obligations to service the transferred assets in accordance with servicing guidelines. All debt obligations issued from the SPEs are non-recourse to the Company. In accordance with the accounting guidance for asset transfers, the Company considers any ongoing involvement with transferred assets in determining whether the assets can be derecognized from the balance sheets. For transactions that do not meet the requirements for derecognition and remain on the consolidated balance sheets, the transferred assets may not be pledged or exchanged by the Company. The Company evaluates its interest in certain entities to determine if these entities meet the definition of a VIE and whether the Company is the primary beneficiary and, therefore, should consolidate the entity based on the variable interests it held both at inception and when there was a change in circumstances that required a reconsideration. The Company has determined that the SPEs created in connection with its Master Trust Funding Program should be consolidated as the Company is the primary beneficiary of each of these entities. Tenant rentals received on assets transferred to SPEs under the Master Trust Funding Program are sent to the trustee and used to pay monthly principal and interest payments. Series 2016-1 Notes In December 2016, the Company issued its first series of notes under the Master Trust Funding Program, consisting of $263.5 million of Class A Notes and $17.3 million of Class B Notes (together, the “Series 2016-1 Notes”). These notes were issued to an affiliate of Eldridge Industries, LLC (“Eldridge”) through underwriting agents. The Series 2016-1 Notes were issued by two SPEs formed to hold assets and issue the secured borrowings associated with the securitization. The Series 2016-1 Notes were scheduled to mature in November 2046, but the terms of the Class A Notes required principal to be paid monthly through November 2021, with a balloon repayment at that time, and the terms of the Class B Notes required no monthly principal payments but required the full principal balance to be paid in November 2021. In May 2019, the Company repurchased a portion of its Class A Series 2016-1 Notes with a face value of $200 million for $201.4 million from an affiliate of Eldridge. On November 12, 2019, the Company cancelled all $200 million of these repurchased Class A Series 2016-1 Notes. In November 2019, the Company prepaid all $70.4 million of the then outstanding Series 2016-1 Notes (consisting of the remaining $53.2 million Class A Series 2016-1 Notes and $17.2 million Class B Series 2016-1 Notes) at par plus accrued interest pursuant to the terms of the agreements related to such securities. Series 2017-1 Notes In July 2017, the Company issued its second series of notes under the Master Trust Funding Program, consisting of $232.4 million of Class A Notes and $15.7 million of Class B Notes (together, the “Series 2017-1 Notes”). The Series 2017-1 Notes were issued by three SPEs formed to hold assets and issue the secured borrowings associated with the securitization. 99 The Series 2017-1 Notes mature in June 2047 and have a weighted average interest rate of 4.19% as of December 31, 2020. If the notes are not repaid in full on or before such anticipated repayment date, additional interest will begin to accrue on the notes. The anticipated repayment date for the Series 2017-1 Notes is June 2024. The Series 2017-1 Notes may be voluntarily prepaid, in whole or in part, beginning in November 2021 without the payment of a make whole amount. Voluntary prepayments may be made before 31 months prior to the anticipated repayment date. In February 2020, the Company voluntarily prepaid $62.3 million of the Class A Series 2017-1 Notes at par plus accrued interest pursuant to the terms of the agreements related to such securities. The Company was not subject to the payment of a make whole amount in connection with this prepayment. The Company accounted for this prepayment as a debt extinguishment. The following table presents information about interest expense related to the Master Trust Funding Program: (in thousands) Interest expense Amortization of deferred financing costs Total 2020 Year ended December 31, 2019 2018 $ $ 7,619 $ 656 8,275 $ 16,328 $ 1,538 17,866 $ 22,574 2,304 24,878 Total deferred financing costs, net, of $2.2 million and $3.8 million related to the Master Trust Funding Program were included within secured borrowings, net of deferred financing costs on the Company’s consolidated balance sheets as of December 31, 2020 and 2019, respectively. The Company recorded a $0.9 million loss on repurchase and repayment of secured borrowings related to the amortization of deferred financing costs on the $62.3 million voluntary prepayment of the Class A Series 2017-1 Notes during the year ended December 31, 2020. The Company recorded a $5.2 million loss on the repurchase of a portion of the Class A Series 2016-1 during the year end December 31, 2019, which includes the write-off of unamortized deferred financing charges and the amount paid above par to repurchase these notes. Notes Payable to Related Parties Until the completion of the IPO, the Company had a secured warehouse line of credit with an affiliate of Eldridge through which it issued short- term notes (the “Warehouse Notes”) and used the proceeds to acquire investments in real estate. During the year ended December 31, 2018, the Company issued 20 Warehouse Notes for a combined $154.0 million. On January 31, 2018, the Company made principal payments on the Warehouse Notes of $50.0 million, repaying three of the Warehouse Notes in full and one of the Warehouse Notes in part, prior to maturity. On June 25, 2018, the Company used a portion of the net proceeds from the IPO and the Concurrent Private Placement (as defined in Note 7—Equity below) to repay all 36 of the then outstanding Warehouse Notes, with an aggregate outstanding principal amount of $334.0 million, in full, prior to maturity, and had no amounts outstanding related to the Warehouse Notes as of December 31, 2020, 2019 and 2018. The following table presents the activity related to the Company’s notes payable to related parties for the year ended December 31, 2018: (in thousands) Outstanding, January 1, 2018 Borrowings Repayments Outstanding, December 31, 2018 Warehouse Notes 230,000 154,000 (384,000) — $ $ During the year ended December 31, 2018, the Company incurred $4.6 million of interest expense related to these notes payable to related parties. No interest expense from notes payable related parties was incurred during the years ended December 31, 2020 and 2019. 100 6. Derivative and Hedging Activities The Company does not enter into derivative financial instruments for speculative or trading purposes. The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. These derivatives are considered cash flow hedges and are recorded on a gross basis at fair value. Subsequent to the adoption of ASU 2017- 12, assessments of hedge effectiveness are performed quarterly using either a qualitative or quantitative approach. The Company recognizes the entire change in the fair value in accumulated other comprehensive income (loss) and the change is reflected as derivative changes in fair value in the supplemental disclosures of non-cash financing activities in the consolidated statements of cash flows. The amounts recorded in accumulated other comprehensive income (loss) will subsequently be reclassified to interest expense as interest payments are made on the Company's borrowings under its variable-rate term loan facilities. During the next twelve months, the Company estimates that $9.8 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense. The Company does not have netting arrangements related to its derivatives. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. As of December 31, 2020 and 2019, there were no events of default related to the interest rate swaps. The following table summarizes the notional amount at inception and fair value of these instruments on the Company's balance sheet as of December 31, 2020 and 2019 (dollar amounts in thousands):  Fair Value of Asset/(Liability) Derivatives Designated as Hedging Instruments (1) Interest Rate Swap Interest Rate Swap Interest Rate Swap Interest Rate Swap Interest Rate Swap Interest Rate Swap Interest Rate Swap Interest Rate Swap Fixed Rate Paid by Company 2.06% 2.06% 2.07% 1.61% 1.61% 1.60% 1.36% 1.36% Effective Date 5/14/2019 5/14/2019 5/14/2019 12/9/2019 12/9/2019 12/9/2019 7/9/2020 7/9/2020 Maturity Date 4/12/2024 4/12/2024 4/12/2024 11/26/2026 11/26/2026 11/26/2026 11/26/2026 11/26/2026 Notional Value December 31, 2020 (3) (2) $ $ 100,000 $ 50,000 50,000 175,000 50,000 25,000 100,000 80,000 630,000 $ (6,176) $ (3,089) (3,094) (11,838) (3,396) (1,675) (5,353) (4,291) (38,912) $ December 31, 2019 (3)(4) (1,996) (999) (1,005) 758 210 127 — — (2,905)  _____________________________________ (1) (2) All interest rate swaps have a 1 month LIBOR variable rate paid by the bank. Notional value indicates the extent of the Company’s involvement in these instruments, but does not represent exposure to credit, interest rate or market risks. Derivatives in a liability position are included within derivative liabilities in the Company’s consolidated balance sheets totaling to $38.9 million and $4.0 million at December 31, 2020 and December 31, 2019, respectively. Derivatives in a net asset position are included within rent receivables, prepaid expenses and other assets, net in the Company’s consolidated balance sheets totaling to $1.1 million at December 31, 2019. (3) (4) The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. 101 The following table presents amounts recorded to accumulated other comprehensive loss related to derivative and hedging activities for the periods presented: (in thousands) Accumulated other comprehensive loss Year ended December 31, 2019 2020 $ (35,445) $ (2,905) As of December 31, 2020, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $38.9 million. As of December 31, 2019, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $4.1 million. As of December 31, 2020, there were no derivatives in a net asset position. As of December 31, 2019, the fair value of derivatives in a net asset position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $1.0 million. During the year ended December 31, 2020 and 2019, the Company recorded a loss on the change in fair value of its interest rate swaps of $6.7 million and $0.1 million, respectively, which included in interest expense in the Company's consolidated statements of operations. As of December 31, 2020 and December 31, 2019, the Company had not posted any collateral related to these agreements and was not in breach of any provisions of such agreements. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $40.2 million and $3.1 million as of December 31, 2020 and December 31, 2019, respectively. 7. Equity Stockholders' Equity On June 25, 2018, the Company completed its IPO and issued 32,500,000 shares of its common stock at an initial public offering price of $14.00 per share, pursuant to a registration statement on Form S-11 (File No. 333-225215), filed with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”). Prior to the completion of the IPO, a number of formation transactions (the “Formation Transactions”) took place that were designed to facilitate the completion of the IPO. Among other things, on June 20, 2018, Essential Properties Realty Trust LLC (“EPRT LLC”) converted from a Delaware limited liability company into a Delaware limited partnership, changed its name to Essential Properties, L.P. and became the subsidiary through which the Company holds substantially all of its assets and conducts its operations. Prior to the completion of the Formation Transactions, EPRT LLC was a wholly owned subsidiary of EPRT Holdings LLC (“EPRT Holdings” and, together with EPRT LLC, the “Predecessor”), and EPRT Holdings received 17,913,592 units of limited partnership interest in the Operating Partnership (“OP Units”) in connection with EPRT LLC’s conversion into a Delaware limited partnership. Essential Properties OP G.P., LLC, a wholly owned subsidiary of the Company, became the sole general partner of the Operating Partnership. The Formation Transactions were accounted for as a reorganization of entities under common control in the consolidated financial statements and the assets and liabilities of the Predecessor were recorded by the Company at their historical carrying amounts. Concurrently with the completion of the IPO, the Company received an additional $125.0 million investment from an affiliate of Eldridge Industries, LLC (“Eldridge”) in private placements (the “Concurrent Private Placement”) of 7,785,611 shares of its common stock and 1,142,960 OP Units at a price per share/unit of $14.00. The issuance and sale of the shares and OP Units in the Concurrent Private Placement were made pursuant to private placement purchase agreements and there were no underwriting discounts or commissions associated with the sales. As part of the IPO, the underwriters of the IPO were granted an option to purchase up to an additional 4,875,000 shares of the Company’s common stock at the IPO price of $14.00 per share, less underwriting discounts and commissions. On July 20, 2018, the underwriters of the IPO exercised this option in part, and on July 24, 2018, the Company issued an additional 2,772,191 shares of common stock. The net proceeds to the Company from the IPO (including the purchase of additional shares pursuant to the underwriters’ option) and the Concurrent Private Placement, after deducting underwriting discounts and commissions and other expenses, were $583.7 million. 102 On June 25, 2018, the Company issued 691,290 shares of restricted common stock to certain of its directors, executive officers and other employees under the Equity Incentive Plan. See Note 9—Equity Based Compensation for additional information. On March 18, 2019, the Company completed a follow-on offering of 14,030,000 shares of its common stock, including 1,830,000 shares of common stock purchased by the underwriters pursuant to an option to purchase additional shares, at an offering price of $17.50 per share, pursuant to a registration statement on Form S-11 (File Nos. 333-230188 and 333-230252) filed with the SEC under the Securities Act of 1933, as amended (the “Securities Act”). Net proceeds from this follow-on offering, after deducting underwriting discounts and commissions and other expenses, were $234.6 million. On July 22, 2019, EPRT Holdings and Security Benefit Life Insurance Company (together, the “Selling Stockholders”), affiliates of Eldridge, completed a secondary public offering (the “Secondary Offering”) of 26,288,316 shares of the Company’s common stock, including 3,428,910 shares of common stock purchased by underwriters pursuant to an option to purchase additional shares. Prior to completion of the Secondary Offering, the Selling Stockholders exchanged 18,502,705 OP Units of the Operating Partnership for a like number of shares of the Company’s common stock. The Company did not receive any proceeds from this transaction. On January 14, 2020, the Company completed a follow-on offering of 7,935,000 shares its common stock, including 1,035,000 shares of common stock purchased by the underwriters pursuant to an option to purchase additional shares, at an offering price of $25.20 per share. Net proceeds from this follow-on offering, after deducting underwriting discounts and commissions and other expenses, were $191.5 million. On September 22, 2020, the Company completed a follow-on offering of 10,120,000 shares its common stock, including 1,320,000 shares of common stock purchased by the underwriters pursuant to an option to purchase additional shares, at an offering price of $19.00 per share. Net proceeds from this follow-on offering, after deducting underwriting discounts and commissions and other expenses, were $184.1 million. At the Market Program In June 2020, the Company established a new at the market common equity offering program, pursuant to which it can publicly offer and sell, from time to time, shares of its common stock with an aggregate gross sales price of up to $250 million (the “2020 ATM Program”). In connection with establishing the 2020 ATM Program, the Company terminated its prior at the market program, which it established in August 2019 (the “2019 ATM Program”). and no additional stock can be issued thereunder. Pursuant to the 2019 ATM Program, the Company could publicly offer and sell shares of its common stock with an aggregate gross sales price of up to $200 million and, prior to its termination, the Company issued common stock with an aggregate gross sales price of $184.4 million thereunder. As of December 31, 2020, the Company issued common stock with an aggregate gross sales price of $79.3 million under the 2020 ATM Program and could issue additional common stock with an aggregate gross sales price of up to $170.7 million under the 2020 ATM Program. As the context requires, the 2020 ATM Program and the 2019 ATM Program are referred to herein as the “ATM Program." 103 The following table details information related to activity under the ATM Program for each period presented: (in thousands, except share and per share data) Shares of common stock sold Weighted average sale price per share Gross proceeds Net proceeds Dividends on Common Stock Year ended December 31, 2020 4,499,057 19.02 $ 85,559 $ 84,104 $ 2019 7,432,986 23.97 178,161 175,147 $ $ $ During the years ended December 31, 2020 and 2019 and the period from June 25, 2018 to December 31, 2018, the Company's board of directors declared the following quarterly cash dividends on common stock:  Date Declared Record Date Date Paid December 3, 2020 September 4, 2020 June 11, 2020 March 18, 2020 December 6, 2019 September 6, 2019 June 5, 2019 March 7, 2019 December 7, 2018 August 29, 2018 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 28, 2019 March 29, 2019 December 31, 2018 September 28, 2018 January 15, 2021 October 15, 2020 July 15, 2020 April 15, 2020 January 15, 2020 October 15, 2019 July 15, 2019 April 16, 2019 January 14, 2019 October 12, 2018 Dividend per Share of Common Stock Total Dividend (dollars in thousands) $ $ $ $ $ $ $ $ $ $ 0.24 $ 0.23 $ 0.23 $ 0.23 $ 0.23 $ 0.22 $ 0.22 $ 0.21 $ 0.21 $ 0.224 $ 25,570 24,115 21,419 21,168 19,268 17,531 12,725 12,143 9,187 9,800 The Company has determined that, during the years ended December 31, 2020 and 2019 and the period from June 25, 2018 to December 31, 2018, approximately 59.0%, 58.8%, and 58.9%, respectively, of the distributions it paid represented taxable income and 41.0%, 41.2% and 41.1%, respectively, of the distributions it paid represented return of capital for federal income tax purposes. Members' Equity EPRT LLC was initially capitalized in 2017 by SCF Funding LLC, Stonebriar Holdings LLC and certain members of EPRT LLC's management and board of managers through direct and indirect capital contributions. On December 31, 2017, EPRT LLC reorganized (the "EPRT LLC Reorganization") and the holders of interests in EPRT LLC contributed all of their interests in EPRT Holdings, in exchange for interests in EPRT Holdings with the same rights as the interests they held in EPRT LLC. As of such date, EPRT LLC became a wholly owned subsidiary of EPRT Holdings. On January 31, 2018, Stonebriar Holdings LLC made a $50.0 million direct equity contribution to EPRT Holdings. EPRT Holdings used these proceeds to repay $50.0 million of outstanding principal on the Warehouse Notes. 8. Non-controlling Interests Essential Properties OP G.P., LLC, a wholly owned subsidiary of the Company, is the sole general partner of the Operating Partnership and holds a 1.0% general partner interest in the Operating Partnership. The Company contributes the net proceeds from issuing shares of common stock to the Operating Partnership in exchange for a number of OP Units equal to the number of shares of common stock issued. Prior to completion of the Secondary Offering, the Selling Stockholders exchanged 18,502,705 OP Units of the Operating Partnership for a like number of shares of the Company's common stock. Concurrently, EPRT Holdings, one of the Selling Stockholders, distributed the remaining 553,847 OP Units it held to former members of EPRT Holdings (the "Non-controlling OP Unit Holders"). The Selling Stockholders thereafter sold all of the shares of 104 common stock that they owned through the Secondary Offering and accordingly no longer owned shares of the Company's common stock or held OP Units following the completion of the Secondary Offering. As of December 31, 2020, the Company held 106,361,524 OP Units, representing a 99.5% limited partner interest in the Operating Partnership. As of the same date, the Non-controlling OP Unit Holders held 553,847 OP Units in the aggregate, representing a 0.5% limited partner interest in the Operating Partnership. As of December 31, 2019, the Company held 83,761,151 OP Units, representing a 98.3% limited partner interest in the Operating Partnership. As of the same date, the Non-controlling OP Unit Holders held 553,847 OP Units in the aggregate, representing a 0.7% limited partner interest in the Operating Partnership. The OP Units held by EPRT Holdings and Eldridge prior to the completion of the Secondary Offering and the OP Units held by the Non-controlling OP Unit Holders are presented as non-controlling interests in the Company's consolidated financial statements. A holder of OP Units has the right to distributions per unit equal to dividends per share paid on the Company's common stock and has the right to redeem OP Units for cash or, at the Company's election, shares of the Company's common stock on a one-for-one basis, provided, however, that such OP Units must have been outstanding for at least one year. Distributions to OP Unit holders are declared and paid concurrently with the Company's cash dividends to common stockholders. See Note 7—Equity for details. 9. Equity Based Compensation Equity Incentive Plan In 2018, the Company adopted an equity incentive plan (the “Equity Incentive Plan”), which provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards, performance awards and LTIP units. Officers, employees, non-employee directors, consultants, independent contractors and agents who provide services to the Company or to any subsidiary of the Company are eligible to receive such awards. A maximum of 3,550,000 shares may be issued under the Equity Incentive Plan, subject to certain conditions. The following table presents information about the Company's restricted stock awards ("RSAs"), restricted stock units ("RSUs"), Class B Units and Class D Units during the years ended December 31, 2020, 2019 and 2018: Restricted Stock Awards Restricted Stock Units Unvested, January 1, 2018 Granted Vested Forfeited Unvested, December 31, 2018 Unvested, January 1, 2019 Granted Vested Forfeited Unvested, December 31, 2019 Unvested, January 1, 2020 Granted Vested Forfeited Unvested, December 31, 2020 Units Wtd. Avg. Grant Date Fair Value — — — — — — $ — — — — $ Class B Units 6,940 — (1,710) — 5,230 Class D Units 2,400 — (600) — 1,800 — $ 100,814 — — 100,814 $ 100,814 $ 269,017 (42,658) (5,571) 321,602 $ — 22.80 — — 22.80 22.80 24.99 21.00 — 25.27 5,230 — (5,230) — — — — — — — 1,800 — (1,800) — — — — — — — Shares Wtd. Avg. Grant Date Fair Value — 13.68 — — 13.68 — $ 691,290 — — 691,290 $ 691,290 $ 46,368 (244,957) — 492,701 $ 492,701 $ 3,658 (255,761) — 240,598 $ 13.68 14.12 13.69 — 13.72 13.72 15.68 13.73 — 13.73 105 Restricted Stock Awards On June 25, 2018, an aggregate of 691,290 shares of unvested restricted common stock awards ("RSAs") were issued to the Company's directors, executive officers and other employees under the Equity Incentive Plan. These RSAs vest over periods ranging from one year to three years from the date of grant, subject to the individual recipient's continued provision of service to the Company through the applicable vesting dates. In January 2019, an aggregate of 46,368 shares of unvested RSAs were issued to the Company's executive officers, other employees and an external consultant under the Equity Incentive Plan. These RSAs vest over periods ranging from one year to four years from the date of grant, subject to the individual recipient's continued provision of service to the Company through the applicable vesting dates. In June 2020, an additional 3,658 RSAs were issued to certain members of the Company's board of directors which vested immediately upon grant. The Company estimates the grant date fair value of RSAs granted under the Equity Incentive Plan using the average market price of the Company's common stock on the date of grant. The following table presents information about the Company's RSAs for the periods presented:  (in thousands) Compensation cost recognized in general and administrative expense Dividends declared on unvested RSAs and charged directly to distributions in excess of cumulative earnings Fair value of shares vested during the period 2020 Year ended December 31, 2019 2018 $ 3,405 $ 3,394 $ 1,692 279 3,512 486 3,354 300 — The following table presents information about the Company's RSAs as of the dates presented:  (Dollars in thousands) Total unrecognized compensation cost Weighted average period over which compensation cost will be recognized (in years) December 31, 2020 2019 $ 1,678 $ 0.7 5,026 1.6 Restricted Stock Units In January 2019 and 2020, the Company issued target grants of 119,085 and 84,684 performance-based RSUs, respectively, to the Company's executive officers under the Equity Incentive Plan. Of these awards, 75% are non-vested RSUs for which vesting percentages and the ultimate number of units vesting will be calculated based on the total shareholder return ("TSR") of the Company's common stock as compared to the TSR of peer companies identified in the grant agreements. The payout schedule can produce vesting percentages ranging from 0% to 250%. TSR will be calculated based upon the average closing price for the 20-trading day period ending December 31, 2021 (for the 2019 grants) or December 31, 2022 (for the 2020 grants), divided by the average closing price for the 20-trading day period ended January 1, 2019 (for the 2019 grants) or January 1, 2020 (for the 2020 grants). The target number of units is based on achieving a TSR equal to the 50th percentile of the peer group. The Company recorded expense on these TSR RSUs based on achieving the target. The grant date fair value of the TSR RSUs was measured using a Monte Carlo simulation model based on the following assumptions: Volatility Risk free rate January 2020 2019 20 % 1.61 % 18 % 2.57 % The remaining 25% of these performance-based RSUs vest based on the Compensation Committee's subjective evaluation of the individual recipient's achievement of certain strategic objectives. In May 2020, the Compensation Committee evaluated and subjectively awarded 7,596 of these RSUs to a former executive officer of the Company, which vested immediately. During the year ended December 31, 2020, the Company recorded $0.1 million of compensation expense related to the subjective RSUs awarded to this former executive. As of December 31, 2020, the Compensation Committee had not identified specific performance targets relating to the 106 individual recipients' achievement of strategic objectives for the remainder of the subjective awards. As such, these awards do not have either a service inception or a grant date for GAAP accounting purposes and the Company recorded no compensation cost with respect to this portion of the performance-based RSUs during the years ended December 31, 2020 and 2019. In June 2019 and 2020, the Company issued 11,500 and 26,817 RSUs, respectively, to the Company's independent directors. These awards vest in full on the earlier of one year from the grant date or the first annual meeting of stockholders that occurs after the grant date, subject to the individual recipient's continued provision of service to the Company through the applicable vesting date. The Company estimated the grant date fair value of these RSUs using the average market price of the Company's common stock on the date of grant. Additionally, during the year ended December 31, 2020, the Company issued an aggregate 157,943 RSUs to the Company’s executive officers, other employees and directors under the Equity Incentive Plan. These awards vest over a period of up to four years from the date of grant, subject to the individual recipient’s continued provision of service to the Company through the applicable vesting dates. The following table presents information about the Company's RSUs for the periods presented: (in thousands) Compensation cost recognized in general and administrative expense Dividend equivalents declared and charged directly to distributions in excess of cumulative earnings Fair value of units vested during the period The following table presents information about the Company's RSUs as of the date presented: (Dollars in thousands) Total unrecognized compensation cost Weighted average period over which compensation cost will be recognized (in years) Unit-Based Compensation $ $ Year ended December 31, 2020 2019 2,672 $ 125 896 714 8 — December 31, 2020 2019 5,261 $ 2.4 1,584 2.4 In 2017, the Company's predecessor approved and issued unvested Class B and Class D units equity interests to members of EPRT Management, the predecessor's board of managers and external unitholders. Following the completion of the Formation Transactions, the Class B and Class D unit holders continued to hold vested and unvested interests in EPRT Holdings and, indirectly, the OP Units held by EPRT Holdings. On July 22, 2019, in conjunction with the completion of the Secondary Offering, 3,520 previously unvested Class B units and 1,200 previously unvested Class D units in EPRT Holdings automatically vested in accordance with the terms of the grant agreements, which represented all of the remaining outstanding unvested Class B and Class D units. Due to this accelerated vesting, the Company recorded all remaining unrecognized compensation cost on the Class B and Class D units to general and administrative expenses in its consolidated statements of operations during the year ended December 31, 2019. The following table presents information about the Class B and Class D units for the periods presented:  (in thousands) Compensation cost recognized in general and administrative expense Fair value of units vested during the period 2020 $ Year ended December 31, 2019 2018 — $ — 2,162 $ 2,283 747 718 10. Net Income Per Share The Company computes net income per share pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share. The guidance requires the classification of the Company’s unvested restricted 107   common stock and units, which contain rights to receive non-forfeitable dividends or dividend equivalents, as participating securities requiring the two-class method of computing net income per share. Diluted net income per share of common stock further considers the effect of potentially dilutive shares of common stock outstanding during the period, including the assumed vesting of restricted share units with a market-based or service-based vesting condition, where dilutive. The OP Units held by non-controlling interests represent potentially dilutive securities as the OP Units may be redeemed for cash or, at the Company’s election, exchanged for shares of the Company’s common stock on a one-for-one basis. The following is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per share (dollars in thousands): (dollar amounts in thousands) Numerator for basic and diluted earnings per share: Net income Less: net income attributable to non-controlling interests Less: net income allocated to unvested restricted common stock and RSUs Net income available for common stockholders: basic Net income attributable to non-controlling interests Net income available for common stockholders: diluted Denominator for basic and diluted earnings per share: Weighted average common shares outstanding Less: weighted average number of shares of unvested restricted common stock Weighted average shares outstanding used in basic net income per share Effects of dilutive securities: (1) OP Units Unvested restricted common stock and RSUs Weighted average shares outstanding used in diluted net income per share Year ended December 31, 2020 2019 Period from June 25, 2018 to December 31, 2018 $ $ 42,528 $ (255) (404) 41,869 255 42,124 $ 48,025 $ (6,181) (493) 41,351 6,181 47,532 $ 16,329 (5,001) (300) 11,028 5,001 16,029 95,664,071 64,714,087 43,325,968 (353,036) 95,311,035 553,847 332,823 96,197,705 (610,029) 64,104,058 10,793,700 412,138 75,309,896 (691,290) 42,634,678 19,056,552 74,727 61,765,957 _____________________________________ (1) For the year ended December 31, 2020, excludes the impact of 124,295 unvested restricted stock units as the effect would have been antidilutive. 11. Commitments and Contingencies As of December 31, 2020, the Company had remaining future commitments, under mortgage notes, reimbursement obligations or similar arrangements, to fund $16.3 million to its tenants for development, construction and renovation costs related to properties leased from the Company. Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties. Environmental Matters In connection with the ownership of real estate, the Company may be liable for costs and damages related to environmental matters. As of December 31, 2020, the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the Company's business, financial condition, results of operations or liquidity. 108 Defined Contribution Retirement Plan The Company has a defined contribution retirement savings plan qualified under Section 401(a) of the Code (the "401(k) Plan"). The 401(k) Plan is available to all of the Company's full-time employees. The Company provides a matching contribution in cash equal to 100% of the first 5% of eligible compensation contributed by participants which vests immediately. During the years ended December 31, 2020, 2019 and 2018, the Company made matching contributions of $0.2 million, $0.2 million and $0.1 million, respectively. Employment Agreements The Company has employment agreements with its executive officers. These employment agreements have an initial term of four years, with automatic one-year extensions unless notice of non-renewal is provided by either party. These agreements provide for initial annual base salaries and an annual performance bonus. If an executive officer's employment terminates under certain circumstances, the Company would be liable for any annual performance bonus awarded for the year prior to termination, to the extent unpaid, continued payments equal to 12 months of base salary, monthly reimbursement for 12 months of COBRA premiums, and under certain situations, a pro rata bonus for the year of termination. 12. Fair Value Measurements GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair value. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures regularly and, depending on various factors, it is possible that an asset or liability may be classified differently from period to period. However, the Company expects that changes in classifications between levels will be rare. In addition to the disclosures for assets and liabilities required to be measured at fair value at the balance sheet date, companies are required to disclose the estimated fair values of all financial instruments, even if they are not presented at their fair value on the consolidated balance sheet. The fair values of financial instruments are estimates based upon market conditions and perceived risks at December 31, 2020 and 2019. These estimates require management's judgment and may not be indicative of the future fair values of the assets and liabilities. Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash, accounts receivable included within prepaid expenses and other assets, dividends payable and accrued liabilities and other payables. Generally, these assets and liabilities are short term in duration and their carrying value approximates fair value on the consolidated balance sheets. The estimated fair values of the Company's fixed‑rate loans receivable have been derived based on primarily unobservable market inputs such as interest rates and discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 3 within the fair value hierarchy. The Company believes the carrying value of its fixed-rate loans receivable approximates fair value as of December 31, 2020 and 2019. The estimated fair values of the Company's borrowings under the Revolving Credit Facility, the April 2019 Term Loan and the November 2019 Term Loan have been derived based on primarily unobservable market inputs such as interest rates and discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 3 within the fair value hierarchy. The Company believes the carrying value of its borrowings under the Revolving Credit Facility, the April 2019 Term Loan and the November 2019 Term Loan as of December 31, 2020 and 2019 approximate fair value. The estimated fair values of the Company's secured borrowings have been derived based on primarily unobservable market inputs such as interest rates and discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as 109 Level 3 within the fair value hierarchy. As of December 31, 2020, the Company's secured borrowings had an aggregate carrying value of $173.2 million (excluding net deferred financing costs of $2.2 million) and an estimated fair value of $176.4 million. As of December 31, 2019, the Company's secured borrowings had an aggregate carrying value of $239.1 million (excluding net deferred financing costs of $3.8 million) and an estimated fair value of 247.1 million. The Company measures its derivative financial instruments at fair value on a recurring basis. The fair values of the Company's derivative financial instruments were determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of the derivative financial instrument. This analysis reflected the contractual terms of the derivative, including the period to maturity, and used observable market-based inputs, including interest rate market data and implied volatilities in such interest rates. While it was determined that the majority of the inputs used to value the derivatives fall within Level 2 of the fair value hierarchy under authoritative accounting guidance, the credit valuation adjustments associated with the derivatives also utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. However, as of December 31, 2020, the significance of the impact of the credit valuation adjustments on the overall valuation of the derivative financial instruments was assessed and it was determined that these adjustments were not significant to the overall valuation of the derivative financial instruments. As a result, it was determined that the derivative financial instruments in their entirety should be classified in Level 2 of the fair value hierarchy. As of December 31, 2020 and 2019, the Company estimated the fair value of its interest rate swap contracts to be a $38.9 million and $2.9 million, respectively. The Company measures its real estate investments at fair value on a nonrecurring basis. The fair values of these real estate investments were determined using the following input levels as of the dates presented:  (in thousands) December 31, 2020 Non-financial assets: Long-lived assets December 31, 2019 Non-financial assets: Long-lived assets Long-Lived Assets $ $ Net Carrying Value Fair Value Fair Value Measurements Using Fair Value Hierarchy Level 2 Level 3 Level 1 4,754 $ 4,754 $ — $ — $ 4,754 3,864 $ 3,864 $ — $ — $ 3,864 The Company reviews its investments in real estate when events or circumstances change indicating that the carrying amount of an asset may not be recoverable. In the evaluation of an investment in real estate for impairment, many factors are considered, including estimated current and expected operating cash flows from the asset during the projected holding period, costs necessary to extend the life or improve the asset, expected capitalization rates, projected stabilized net operating income, selling costs, and the ability to hold and dispose of the asset in the ordinary course of business. Quantitative information about Level 3 fair value measurements as of December 31, 2020 is as follows:  (dollar amounts in thousands) Non-financial assets: Long-lived assets: Fair Value Valuation Techniques Significant Unobservable Inputs Restaurant - Family Dining - Inverness, FL $ 598 Restaurant - Family Dining - Nashville, GA Restaurant - Family Dining - Barnesville, GA Vacant - Augusta, GA Pet Care Services - Arvada, CO 598 300 25 3,233 Sales comparison approach Sales comparison approach Sales comparison approach Sales comparison approach Sales comparison approach 110 Binding sales contract $ 598 Binding sales contract Non-binding sales contract Non-binding sales contract 598 300 25 Comparable sales prices 3,233   The fair values of impaired real estate were determined by using the following information, depending on availability, in order of preference: i) signed purchase and sale agreements or letters of intent; ii) recently quoted bid or ask prices; iii) estimates of future cash flows, which consider, among other things, contractual and forecasted rental revenues, leasing assumptions, terminal capitalization rates, discount rates and expenses based upon market conditions; or iv) expectations for the use of the real estate. Based on these inputs, the Company determined that its valuation of the impaired real estate falls within Level 3 of the fair value hierarchy. 13. Related-Party Transactions During the years ended December 31, 2019 and 2018, an affiliate of Eldridge provided certain treasury and information technology services to the Company. The Company incurred a de minimis amount of expense for these services during the years ended December 31, 2019 and 2018, which is included in general and administrative expense in the Company’s consolidated statements of operations. No services were provided to the Company by Eldridge during the year ended December 31, 2020. During the year ended December 31, 2018, the Company issued and repaid short-term notes to affiliates of Eldridge. See Note 5—Long Term Debt for additional information. In May 2019, the Company repurchased a portion of its Class A Series 2016-1 Notes with a face value of $200 million for $201.4 million from an affiliate of Eldridge. See Note 5—Long Term Debt for additional information. 14. Quarterly Results (Unaudited) Presented below is a summary of unaudited quarterly financial information for the years ended December 31, 2020 and 2019. All adjustments (consisting of only normal recurring accruals) necessary for a fair presentation of the interim periods presented are included. The calculation of basic and diluted per share amounts for each quarter is based on the weighted average shares outstanding for that period; consequently, the sum of the quarters may not necessarily be equal to the full year basic and diluted net income per share. (in thousands, except per share data) 2020: Total revenues Net income Net income attributable to non-controlling interests Net income per share of common stock—basic and diluted Dividends declared per common share 2019: Total revenues Net income Net income attributable to non-controlling interests Net income per share of common stock—basic and diluted Dividends declared per common share 15. Subsequent Events March 31 June 30 September 30 December 31 Three months ended $ $ $ $ 41,487 14,043 84 0.15 0.23 31,107 8,722 2,595 0.13 0.21 $ $ 38,503 10,444 63 0.11 0.23 32,755 10,571 2,620 0.14 0.22 $ $ 42,908 12,334 74 0.13 0.23 36,291 14,106 861 0.18 0.22 41,111 5,707 34 0.05 0.24 39,204 14,626 105 0.18 0.23 The Company has evaluated all events and transactions that occurred after December 31, 2020 through the filing of this Annual Report on Form 10-K and determined that there have been no events that have occurred that would require adjustment to disclosures in the consolidated financial statements except as disclosed below. In January and February 2021, the Company issued an aggregate of 102,156 shares of unvested RSUs to the Company’s executive officers and other employees under the Equity Incentive Plan. These awards vest over a period of up to four years from the date of grant, subject to the individual recipient’s continued provision of service to the Company through the applicable vesting dates. 111 In February 2021, the Company issued an aggregate of 126,353 performance-based RSUs to the Company's executive officers under the Equity Incentive Plan. These are non-vested share awards and 75% of the award shall vest based on the Company's TSR as compared to the TSR of 10 peer companies and 25% of the award shall vest based on the compensation committee's subjective evaluation of the achievement of strategic objectives deemed relevant by the committee. The performance schedule can produce vesting percentages ranging from 0% to 250%. TSR will be calculated based upon the average closing price for the 20-trading day period ending January 1, 2021, divided by the average closing price for the 20-trading day period ending December 31, 2023. Subsequent to December 31, 2020, the Company acquired 21 real estate properties with an aggregate investment (including acquisition costs) of $51.9 million and invested $1.4 million in new and ongoing construction in progress and reimbursements to tenants for development, construction and renovation costs. Subsequent to December 31, 2020, the Company sold or transferred its investment in 11 real estate properties for an aggregate gross sales price of $14.1 million and incurred $0.7 million of disposition costs related to these transactions. 112 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. Item 9A. Controls and Procedures. Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures that are designed to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period covered by this Annual Report on Form 10-K, our management evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as such term is 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, as of the end of the period covered by this Annual Report on Form 10-K, our disclosure controls and procedures were effective in providing reasonable assurance of compliance. Management's Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control system was designed 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 in the United States. Due to inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness of the internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate. Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of the end of the period covered by this Annual Report on Form 10-K based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations (2013 Framework) (COSO). Based on such evaluation, our management concluded that our internal control over financial reporting was effective as of the end of the period covered by this Annual Report on Form 10-K. The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is presented in this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None. 113 Item 10. Directors, Executive Officers and Corporate Governance PART III The information concerning our directors and executive officers required by Item 10 will be included in the Proxy Statement to be filed relating to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference. Item 11. Executive Compensation. The information concerning our executive compensation required by Item 11 will be included in the Proxy Statement to be filed relating to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information concerning our security ownership of certain beneficial owners and management and related stockholder matters (including equity compensation plan information) required by Item 12 will be included in the Proxy Statement to be filed relating to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information concerning certain relationships, related transactions and director independence required by Item 13 will be included in the Proxy Statement to be filed relating to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information concerning our principal accounting fees and services required by Item 14 will be included in the Proxy Statement to be filed relating to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference. 114 PART IV Item 15. Exhibits, Financial Statement Schedules. (a) (1) and (2) The following financial statements and financial statement schedules are filed as part of this Annual Report on Form 10-K. Financial Statements. (see Item 8) Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2020 and 2019 Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018 Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018 Consolidated Statements of Stockholders'/Members' Equity for the years ended December 31, 2020, 2019 and 2018 Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 Notes to Consolidated Financial Statements Financial Statement Schedules. (see schedules beginning on page F-1) Schedule III - Real Estate and Accumulated Depreciation Schedule IV - Mortgage Loans on Real Estate All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto. (b) Exhibits. The following exhibits are included or incorporated by reference in this Annual Report on Form 10-K (and are numbered in accordance with Item 601 of Regulation S-K). 115 Exhibit Number Description 3.1 3.2 3.3 3.4 3.5 4.1 4.2 4.3 4.4* 10.1 10.2 10.3 10.4 10.5 10.6† 10.7† 10.8† 10.9† Articles of Amendment and Restatement of Essential Properties Realty Trust, Inc., dated as of June 19, 2018 (Incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K filed on February 28, 2019) Certificate of Correction to the Articles of Amendment and Restatement of Essential Properties Realty Trust, Inc., dated as of February 27, 2019 (Incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K filed on February 28, 2019) Certificate of Notice, dated August 8, 2019 (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8- K filed on August 8, 2019) Certificate of Notice, dated February 28, 2020 (Incorporated by reference to Exhibit 3.4 to the Company's Annual Report on Form 10-K filed on March 2, 2020 Amended and Restated Bylaws of Essential Properties Realty Trust, Inc. (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on November 16, 2020) Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S- 11 filed on May 25, 2018) Amended and Restated Master Indenture dated as of July 11, 2017, among SCF RC Funding I LLC, SCF RC Funding II LLC and SCF RC Funding III LLC, each a Delaware limited liability company, collectively as issuers, and Citibank, N.A., as indenture trustee, relating to Net-Lease Mortgage Notes (Incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-11 filed on May 25, 2018) Series 2017-1 Indenture Supplement dated as of July 11, 2017, among SCF RC Funding I LLC, SCF RC Funding II LLC, SCF RC Funding III LLC and Citibank, N.A., as indenture trustee (Incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-11 filed on May 25, 2018) Description of the Company's Common Stock, $0.01 par value Agreement of Limited Partnership of Essential Properties, L.P. (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 26, 2018) Amended and Restated Credit Agreement, dated as of April 12, 2019, among the Company, the Operating Partnership, the several lenders from time to time parties thereto, Barclays Bank PLC, as administrative agent, and Citigroup Global Markets Inc. and Bank of America, N.A., as co-syndication agents (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 18, 2019) First Amendment to Amended and Restated Credit Agreement, dated November 22, 2019, among the Company, the Operating Partnership, Barclays Bank PLC, as administrative agent, and the lenders party thereto (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on November 27, 2019) Credit Agreement, dated as of November 26, 2019, among the Company, the Operating Partnership, the several lenders from time to time parties thereto, Capital One, National Association, as administrative agent, Suntrust Robinson Humphrey, Inc. and Mizuho Bank Ltd., as co-syndication agents, and Chemical Bank, a division of TCF National Bank, as documentation agent (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on November 27, 2019) Amended and Restated Property Management and Servicing Agreement dated as of July 11, 2017, among SCF RC Funding I LLC, SCF RC Funding II LLC and SCF RC Funding III LLC, each a Delaware limited liability company, collectively as issuers, SCF Realty Capital LLC, a Delaware limited liability company, as property manager and special servicer, and Midland Loan Services, a division of PNC Bank, National Association, as back-up manager and Citibank, N.A., as indenture trustee (Incorporated by reference to Exhibit 10.14 to the Company's Registration Statement on Form S-11 filed on May 25, 2018) Employment Agreement between Essential Properties Realty Trust, Inc. and Peter M. Mavoides, effective as of June 25, 2018 (Incorporated by reference to Exhibit 10.15 to the Company's Current Report on Form 8-K filed on June 26, 2018) Employment Agreement between Essential Properties Realty Trust, Inc. and Gregg A. Seibert, effective as of June 25, 2018 (Incorporated by reference to Exhibit 10.16 to the Company's Current Report on Form 8-K filed on June 26, 2018) Essential Properties Realty Trust, Inc. 2018 Incentive Award Plan, effective as of June 19, 2018 (Incorporated by reference to Exhibit 10.18 to the Company’s Current Report on Form 8-K filed on June 26, 2018) Employment Agreement between Essential Properties Realty Trust, Inc. and Mark E. Patten, effective as of August 10, 2020 (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 7, 2020) 116 Exhibit Number 10.10 21.1* 23.1* 24.1* 31.1* 31.2* 32.1** 32.2** 101.INS* 101.SCH* 101.CAL* 101.DEF* 101.LAB* 101.PRE* 104* Description Form of Indemnification Agreement between Essential Properties Realty Trust, Inc. and each of its directors and executive officers (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 7, 2020) Subsidiaries of the Company Consent of Independent Registered Public Accounting Firm. Power of Attorney (set forth on the signature page to this Annual Report on Form 10-K) Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 XBRL Instance Document XBRL Taxonomy Extension Schema Document XBRL Taxonomy Extension Calculation Linkbase Document XBRL Taxonomy Extension Definition Linkbase Document XBRL Taxonomy Extension Label Linkbase Document XBRL Taxonomy Extension Presentation Linkbase Document Cover Page Interactive Data File (embedded within the Inline XBRL document) * ** † Filed herewith. Furnished herewith. Indicates management contract or compensatory plan. Item 16. Form 10-K Summary None 117   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SIGNATURES ESSENTIAL PROPERTIES REALTY TRUST, INC. Date: February 23, 2021 By: /s/ Peter M. Mavoides Peter M. Mavoides President and Chief Executive Officer (Principal Executive Officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint Peter M. Mavoides and Mark E. Patten, and each of them singly, his or her true and lawful attorneys with full power to them, and each of them singly, to sign for each of the undersigned and in his or her name in the capacities indicated below, any and all amendments to this Annual Report on Form 10-K, and generally to do all such things in our names and in our capacities as officers and directors to enable Essential Properties Realty Trust, Inc. to comply with the provisions of the Securities Exchange Act of 1934, as amended, and all requirements of the Securities and Exchange Commission in connection therewith. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 118             Name /s/ Peter M. Mavoides Peter M. Mavoides /s/ Mark E. Patten Mark E. Patten /s/ Timothy J. Earnshaw Timothy J. Earnshaw /s/ Paul T. Bossidy Paul T. Bossidy /s/ Joyce DeLucca Joyce DeLucca /s/ Scott A. Estes Scott A. Estes /s/ Lawrence J. Minich Lawrence J. Minich /s/ Heather Leed Neary Heather Leed Neary /s/ Stephen D. Sautel Stephen D. Sautel /s/ Janaki Sivanesan Janaki Sivanesan Title Date Director, President and Chief Executive Officer February 23, 2021 (Principal Executive Officer) Chief Financial Officer, Treasurer and Executive Vice President   February 23, 2021 (Principal Financial Officer) Chief Accounting Officer and Senior Vice President   February 23, 2021 (Principal Accounting Officer) Director Director Director Director Director Director Director 119   February 23, 2021   February 23, 2021   February 23, 2021   February 23, 2021   February 23, 2021   February 23, 2021   February 23, 2021                                                                       ESSENTIAL PROPERTIES REALTY TRUST, INC. AND ESSENTIAL PROPERTIES REALTY TRUST, INC. PREDECESSOR Schedule III - Real Estate and Accumulated Depreciation As of December 31, 2020 (Dollar amounts in thousands) Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) $ 184 $ 242 $ 426 $ Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Other Services Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Family Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Quick Service Other Services Restaurants - Family Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Casual Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Alexander City AL Zanesville Belleville Grand Rapids Petaluma Clarkesville Philadelphia Nashville Ruskin Brownsville Waco Palantine LaGrange OH IL MI CA GA PA TN FL TX TX IL IL Jacksonville FL Corpus Christi TX Centennial Redford Landrum Virginia Beach Thomasville Grapevine Plano CO MI SC VA GA TX TX Coon Rapids MN Mankato Omaha Merrillville Green Bay Appleton St. Joseph Gladstone Brainerd MN NE IN WI WI MO MO MN Cedar Rapids IA Brooklyn Park MN Pontiac Troy Clay Buna Carthage MI MI NY TX TX {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} $ 184 $ 242 $ 397 314 177 467 178 485 332 641 561 633 926 446 1,086 1,160 277 369 346 533 — 626 106 — 474 382 354 851 957 — 1,593 3,400 567 87 192 233 977 424 856 585 $ — — — — — — — — — — — — — — — — — — — — (39) (g) (21) (g) — — — 682 (620) (g) (536) (g) — — — — — — — — — — — — — — — 600 — — — — 1,184 (203) (g) (498) (g) — — — — — — — — — — — — — 322 373 590 371 783 547 563 693 423 — 413 138 239 — — — — — — — — — — 1,654 — — F-1 468 214 90 903 1,385 207 635 700 465 797 549 441 559 479 761 804 725 316 674 129 152 111 626 1,111 109 1980 6/16/2016 397 314 177 467 178 485 332 641 561 594 926 446 466 277 674 369 683 346 523 533 1,000 — 178 106 — 438 641 474 1,035 361 955 354 1,280 1,533 1,979 421 887 1,160 — 1,160 1,593 3,400 4,993 468 214 90 903 567 1,035 87 192 301 282 833 1,736 1,385 977 2,362 207 635 700 262 797 549 441 559 479 761 804 725 316 674 424 631 856 1,491 585 1,285 686 948 322 1,119 373 922 590 1,031 371 930 783 1,262 547 1,308 563 1,367 693 1,418 423 739 — 674 Year Constructed Date Acquired 1987 6/16/2016 1988 6/16/2016 1988 6/16/2016 1989 6/16/2016 1992 6/16/2016 6/16/2016 44 43 61 59 90 — 35 — 85 63 81 125 210 — 428 94 24 150 109 168 320 145 125 146 53 89 113 81 127 104 103 131 79 — 1992 1993 6/16/2016 6/16/2016 1995 6/16/2016 1991 6/16/2016 1990 6/16/2016 1990 6/16/2016 1997 6/16/2016 2015 6/16/2016 1993 6/16/2016 1998 6/16/2016 1992 1997 6/16/2016 6/16/2016 1999 6/16/2016 1999 6/16/2016 1998 6/16/2016 1991 6/16/2016 1992 6/16/2016 1979 6/16/2016 1977 6/16/2016 1977 6/16/2016 1977 6/16/2016 1978 6/16/2016 1979 6/16/2016 1990 6/16/2016 1994 6/16/2016 1997 6/16/2016 2003 6/16/2016 6/16/2016 1,783 413 2,196 504 1991 6/16/2016 152 111 138 290 239 350 27 41 1976 6/16/2016 1975 6/16/2016 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired $ 195 $ 174 $ — $ — $ 195 $ 174 $ 369 $ Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Automotive Service Restaurants - Family Dining Restaurants - Family Dining Restaurants - Casual Dining Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Dayton Diboll Huntington Huntsville Jasper Kountze Rusk Sour Lake Vernon Battle Creek Mt Clemens Clio Charlotte St. Johns Burnsville Albert Lea Crystal West Monroe Greenfield Redford Bridgeport Birmingham Oneonta Union City Marietta Vicksburg Riverdale Snellville Trussville Forest Park Decatur Monroe Decatur Columbia Decatur Conyers Stockbridge Lawrenceville Lithonia Tucker Covington Columbus Tupelo New Albany Parkersburg TX TX TX TX TX TX TX TX CT MI MI MI MI MI MN MN MN LA WI MI MI AL AL GA GA MS GA GA AL GA GA GA GA SC GA GA GA GA GA GA GA GA MS MS WV {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} 92 120 120 111 120 129 204 155 114 — 350 190 218 734 337 821 343 556 479 309 261 220 416 214 203 309 242 243 233 239 302 292 241 302 330 396 306 290 339 379 174 731 295 185 177 180 290 209 290 142 114 208 690 — 889 722 403 309 463 178 94 789 — 619 780 485 746 618 627 584 484 480 341 714 733 463 461 721 767 771 550 606 586 722 442 329 346 570 — — — — — — — — — — — — — 180 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 92 120 120 111 120 129 204 155 114 — 350 190 218 914 337 821 343 556 479 309 261 220 416 214 203 309 242 243 233 239 302 292 241 302 330 396 306 290 339 379 174 731 295 185 — — — — — — — — — — — — 25 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 177 269 180 300 290 410 209 320 290 410 142 271 114 318 208 363 690 804 — — 889 1,239 722 912 403 621 334 1,248 463 800 178 999 94 437 789 1,345 — 479 619 928 780 1,041 485 705 746 1,162 618 832 627 830 584 893 484 726 480 723 341 574 714 953 733 1,035 463 755 461 702 721 1,023 767 1,097 771 1,167 550 856 606 896 586 925 31 31 40 44 35 44 30 27 70 98 135 101 77 80 95 56 25 126 — 113 111 72 110 87 88 86 75 72 50 101 106 64 75 105 113 107 88 86 87 1969 6/16/2016 1990 6/16/2016 1980 6/16/2016 1985 6/16/2016 1992 6/16/2016 1995 6/16/2016 1989 6/16/2016 1978 6/16/2016 1983 6/16/2016 1969 6/16/2016 1989 6/16/2016 1991 6/16/2016 1991 6/16/2016 1991 6/16/2016 1973 6/16/2016 1975 6/16/2016 1975 6/16/2016 1988 6/16/2016 1983 6/16/2016 6/16/2016 1989 6/16/2016 2000 6/16/2016 1993 6/16/2016 1976 6/16/2016 1979 6/16/2016 1979 6/16/2016 1978 6/16/2016 1981 6/16/2016 1996 6/16/2016 1988 6/16/2016 1982 6/16/2016 1985 6/16/2016 1983 6/16/2016 1981 6/16/2016 1986 6/16/2016 1982 6/16/2016 1975 6/16/2016 1988 6/16/2016 1979 6/16/2016 1976 6/16/2016 722 1,101 108 1979 6/16/2016 442 616 329 1,060 346 641 570 755 65 60 54 85 1987 6/16/2016 2000 6/16/2016 1993 6/16/2016 1976 6/16/2016 Restaurants - Quick Service Restaurants - Quick Service Ashland Huntington KY WV {f} {f} 279 223 858 539 — — 279 223 858 1,137 539 762 129 81 1979 6/16/2016 1979 6/16/2016 — — F-2 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service North Little Rock AR Jackson Madison Little Rock Hurricane Parkersburg Chattanooga Knoxville Jacksonville Knoxville Forestdale Louisville Festus Jacksonville Jacksonville Winter Garden Sanford Lebanon Prattville Calhoun Mableton Brunswick Summerville Thomaston Smyrna Smyrna Tullahoma Shelbyville Dallas MS TN AR WV WV TN TN NC TN AL KY MO FL FL FL FL TN AL GA GA GA SC GA GA TN TN TN GA North Charleston SC LaGrange Cullman Batesville Phenix City Montgomery Starke Madisonville Marietta Hueytown Gallipolis Valdosta Douglas Fayetteville Troy Wetumpka GA AL MS AL AL FL KY OH AL OH GA GA GA AL AL {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} $ 190 $ 450 $ — $ — $ 190 $ 450 $ 640 400 281 169 238 261 407 352 284 394 241 319 195 330 220 326 350 311 551 346 152 532 215 193 392 221 226 323 260 121 207 260 125 273 333 240 302 175 133 247 236 243 300 183 273 348 458 48 485 513 465 347 152 271 613 238 802 542 701 383 375 736 524 673 366 137 720 364 311 556 701 456 832 459 562 723 551 665 349 468 426 506 711 722 545 557 506 520 416 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 15 — — — — 932 — — 815 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 400 281 169 238 261 407 352 284 394 241 319 195 330 220 326 350 311 551 346 152 532 215 193 392 221 226 323 260 121 207 260 125 273 333 240 302 175 133 247 236 243 300 183 273 348 748 458 739 63 232 485 723 513 774 465 872 347 699 1,084 1,368 271 665 613 854 1,053 1,372 802 997 542 872 701 921 383 709 375 725 736 1,047 524 1,075 673 1,019 366 518 137 669 720 935 364 557 311 703 556 777 701 927 456 779 832 1,092 459 580 562 769 723 983 551 676 665 938 349 682 468 708 426 728 506 681 711 844 722 969 545 781 557 800 506 806 520 703 416 689 74 56 66 21 72 81 72 54 32 45 90 44 114 85 108 63 69 127 82 102 59 30 109 62 53 82 110 72 132 69 86 114 83 110 59 78 69 75 106 113 81 83 78 79 68 1978 6/16/2016 1981 6/16/2016 1988 6/16/2016 1979 6/16/2016 1981 6/16/2016 1982 6/16/2016 1983 6/16/2016 1981 6/16/2016 1986 6/16/2016 1982 6/16/2016 1975 6/16/2016 1988 6/16/2016 1979 6/16/2016 1976 6/16/2016 1979 6/16/2016 1987 6/16/2016 1986 6/16/2016 1974 6/16/2016 1978 6/16/2016 1979 6/16/2016 1977 6/16/2016 1995 6/16/2016 1978 6/16/2016 1987 6/16/2016 1981 6/16/2016 1982 6/16/2016 1975 6/16/2016 1976 6/16/2016 1985 6/16/2016 1990 6/16/2016 1985 6/16/2016 1999 6/16/2016 1992 6/16/2016 1979 6/16/2016 1986 6/16/2016 1980 6/16/2016 1976 6/16/2016 1979 6/16/2016 1979 6/16/2016 1979 6/16/2016 1980 6/16/2016 1979 6/16/2016 1984 6/16/2016 1985 6/16/2016 1986 6/16/2016 Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service St. Albans Huntington Newburgh Erie Dickson South Daytona Milford WV WV NY PA TN FL NH {f} {f} {f} {f} {f} {f} {f} 154 233 913 444 292 416 409 491 540 738 562 79 668 355 — — — — 29 — — 154 233 913 444 292 416 409 491 645 540 773 738 1,651 562 1,006 108 400 668 1,084 355 764 73 81 155 114 23 110 69 1975 6/16/2016 1992 6/16/2016 1975 6/16/2016 1977 6/16/2016 1977 6/16/2016 1984 6/16/2016 1993 6/16/2016 — — — — — — — F-3 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired — $ 252 $ 131 $ 383 $ Restaurants - Quick Service Restaurants - Quick Service Restaurants - Casual Dining Restaurants - Casual Dining Medical / Dental Restaurants - Quick Service Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Family Dining N/A Restaurants - Quick Service Restaurants - Quick Service Automotive Service Home Furnishings Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Restaurants - Family Dining Other Services Early Childhood Education Portland Superior Fond du Lac Alexandria Hurst Jacksonville Fleming Island Port St. Lucie Waycross Kingsland Jacksonville North Fort Myers Cape Coral Panama City Beach Dothan Albany Panama City Valdosta Gainesville Panama City Leesburg San Antonio Augusta OR CO WI LA TX FL FL FL GA GA FL FL FL FL AL GA FL GA FL FL FL TX GA Warner Robins GA Spring Frisco Binghamton Windsor Greene Afton Lansing Freeville Marathon New Hartford Chadwicks Liberty Earlville Vestal Delhi Franklin Endicott Davenport Salem Anniston Cumming TX TX NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NY NH AL GA {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} $ 252 $ 370 521 837 1,462 872 586 930 861 602 821 131 434 1,197 889 1,493 354 355 1,510 1,700 1,256 1,215 1,060 1,817 741 750 577 731 539 626 193 673 808 105 272 130 805 2,224 273 272 557 348 861 524 520 301 213 219 258 324 275 423 188 324 131 312 876 1,692 959 1,144 1,249 1,389 957 1,930 1,044 720 — 26 174 1,577 4,779 1,008 1,101 1,974 1,303 3,034 1,457 2,127 863 784 811 985 1,285 1,066 774 576 1,194 232 176 2,357 — — (222) (g) (459) (g) — — — — — — — — — — — — — — — — 50 — — — 300 — — — — — 30 — — — — — — — — — — — (221) (g) (26) (g) — — — — — — — — — — — — — — — — — — — — — 443 — — — — — — — — — — — — — — — — — — — — —  —  370 299 837 1,462 872 586 930 861 602 821 434 804 739 1,037 889 1,793 1,726 3,255 354 1,226 355 941 1,510 2,440 1,700 2,561 1,256 1,858 1,245 2,066 1,060 1,817 2,877 741 750 577 731 539 626 193 723 808 105 51 130 1,692 2,433 959 1,709 1,144 1,721 1,249 1,980 1,389 1,928 957 1,583 1,930 2,123 1,044 1,767 720 — 1,528 105 — 51 617 747 805 2,224 1,577 4,779 2,382 7,003 273 272 557 348 861 524 520 301 213 219 258 324 275 423 188 324 131 312 876 1,008 1,281 1,101 1,373 1,974 2,531 1,303 1,651 3,034 3,895 1,457 1,981 2,127 2,647 863 1,164 784 997 811 1,030 985 1,243 1,285 1,609 1,066 1,341 774 1,197 576 764 1,194 1,518 232 176 363 488 2,357 3,233 29 72 135 189 267 57 54 243 253 199 212 262 251 157 175 184 191 157 241 211 168 — 27 37 234 568 174 190 340 224 523 251 366 149 135 140 170 222 184 133 99 206 196 44 316 2015 6/16/2016 2002 6/16/2016 1996 6/16/2016 1994 1997 6/16/2016 6/16/2016 2006 6/16/2016 2006 6/16/2016 1988 6/16/2016 1994 6/16/2016 1995 6/16/2016 1995 6/16/2016 1994 6/16/2016 1996 6/16/2016 1999 6/16/2016 1993 6/16/2016 1991 6/16/2016 1991 6/16/2016 1994 6/16/2016 1994 6/16/2016 1999 6/16/2016 2007 6/16/2016 6/16/2016 6/16/2016 1975 6/16/2016 2013 2006 8/4/2016 8/19/2016 1970 8/22/2016 1980 8/22/2016 1989 8/22/2016 1994 8/22/2016 2010 8/22/2016 1994 8/22/2016 1995 8/22/2016 1995 8/22/2016 1987 8/22/2016 2004 8/22/2016 1997 8/22/2016 1996 8/22/2016 1992 8/22/2016 1998 8/22/2016 1995 8/22/2016 1993 8/22/2016 1998 1992 9/16/2016 9/16/2016 2001 9/30/2016 F-4 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Nebraska City Dunkirk Amherst Red Oak Waterloo Suwanee Plattsmouth Williamsville Lackawanna Fort Madison Niagara Falls Cedar Rapids Cheektowaga Tucson Burlington Fort Worth Acworth Douglasville Hiram Marietta Early Childhood Education Medical / Dental Car Washes Car Washes Car Washes Car Washes Medical / Dental Port Charlotte Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Car Washes Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Movie Theatres Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Medical / Dental Stevenson Medical / Dental Medical / Dental Miami Medical / Dental Sarasota Medical / Dental Sarasota Medical / Dental Dalton Medical / Dental Alton Medical / Dental Quincy Medical / Dental Clarksville Medical / Dental Medical / Dental Brewster Medical / Dental Kansas City Medical / Dental Medical / Dental Picayune Medical / Dental Rochester Medical / Dental Canandaigua Medical / Dental Anderson Medical / Dental Camden Medical / Dental Columbia Medical / Dental Austin Medical / Dental Richmond Terrell Hills Medical / Dental West Valley Health and Fitness City Medical / Dental Rock Springs Florence Gardendale Terre Haute Homewood Tucson Jasper Laurel GA TX GA GA GA GA FL NY NY NY NY NY NY AZ IA IA IA IA NE NE IA AL AL AL AL AL AZ FL FL FL GA IL IL IN IN MA MO MS MS NH NY SC SC SC TX TX TX UT WY {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} $ 922 $ 2,108 $ — $ — $ 922 $ 2,108 $ 3,030 $ 1,617 1,346 1,974 1,376 1,302 1,820 231 367 410 615 419 255 1,048 444 436 304 344 363 304 254 1,519 589 468 808 191 323 485 323 485 323 252 272 657 292 60 333 100 70 181 70 211 211 211 242 495 282 1,936 620 — 2,615 2,882 2,947 2,136 2,072 232 509 606 1,025 1,302 187 2,190 1,171 1,179 1,284 846 748 1,302 1,010 6,294 1,984 2,144 1,233 466 780 982 557 446 406 568 608 1,033 325 578 568 1,033 517 426 527 487 537 426 375 446 588 4,210 2,550 4,187 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 99 — — — — — — — — — — — — — — — — — — — 117 — — — — — — — — — — — — — — — — — — — — — — — — — — — F-5 1,716 1,346 1,974 1,376 1,302 1,820 231 367 410 615 419 255 4,187 2,615 2,882 2,947 2,136 2,072 232 5,903 3,961 4,856 4,323 3,438 3,892 463 509 876 606 1,016 1,025 1,640 1,302 1,721 187 442 1,048 444 2,190 1,171 3,238 1,615 436 304 344 363 304 254 1,179 1,615 1,284 1,588 846 1,190 748 1,111 1,302 1,606 1,010 1,264 1,636 589 6,294 1,984 7,930 2,573 468 808 191 323 485 323 485 323 252 272 657 292 60 333 100 70 181 70 211 211 211 242 495 282 1,936 620 2,144 2,612 1,233 2,041 466 780 982 557 446 406 568 608 1,033 325 578 568 1,033 517 426 527 487 537 426 375 446 588 4,210 2,550 657 1,103 1,467 880 931 729 820 880 1,690 617 638 901 1,133 587 607 597 698 748 637 617 941 870 6,146 3,170 283 361 340 374 383 277 299 33 71 85 144 182 26 279 174 176 191 126 111 194 150 834 250 254 167 68 86 104 69 64 73 87 91 144 54 61 84 114 60 56 58 57 73 56 57 77 70 482 299 Year Constructed Date Acquired 2009 9/30/2016 2017 2006 2006 2004 2002 2000 1987 10/12/2016 10/17/2016 10/17/2016 10/17/2016 10/17/2016 10/20/2016 10/28/2016 1978 10/28/2016 1998 10/28/2016 1985 10/28/2016 1988 10/28/2016 1980 10/28/2016 2010 1976 11/9/2016 11/15/2016 1991 11/15/2016 1987 11/15/2016 1982 11/15/2016 2014 11/15/2016 1999 11/15/2016 2000 11/15/2016 2015 2005 12/19/2016 12/29/2016 2005 12/29/2016 1976 12/29/2016 1990 1967 1981 1973 2001 1960 2001 2001 1994 1998 1986 1979 1970 1977 1958 2009 1948 1985 1986 1970 1982 2002 1984 2001 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 12/30/2016 1/17/2017 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired $ — $ $ 1,136 824 4,332 3,759 $ 5,468 $ 4,583 Car Washes Car Washes Conyers Covington North Myrtle Beach Bridgeton Lexington Islip Terrace Alpharetta Westland Ann Arbor Muskegon Battle Creek Grapevine Southlake Cedartown Frisco Prosper Movie Theatres Medical / Dental Medical / Dental Mokena Medical / Dental Medical / Dental Early Childhood Education Home Furnishings Home Furnishings Home Furnishings Home Furnishings Automotive Service Automotive Service Automotive Service Automotive Service Restaurants - Quick Service Restaurants - Quick Service Convenience Stores Automotive Service Car Washes Automotive Service Convenience Stores Early Childhood Education Medical / Dental Medical / Dental Medical / Dental Car Washes Car Washes Restaurants - Quick Service Topeka Forsyth Tyler San Antonio Payson Brownsville Baytown Las Cruces Las Cruces Inverness Columbia Station Building Materials Building Materials Maumee Building Materials Troy Building Materials Jackson Building Materials Lancaster Building Materials Portsmouth Building Materials Radcliff Building Materials Gainesville Building Materials Cartersville Building Materials Douglasville Building Materials El Paso Building Materials Garland New Freedom Huntingtown Gambrills GA GA SC MO IL KY NY GA MI MI MI MI TX TX TX TX GA GA KS PA MD MD TX TX AZ TX TX NM NM FL OH OH OH OH OH OH KY FL GA GA TX TX {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} $ $ 1,136 824 $ 4,332 3,759 1,465 199 237 199 313 7,081 578 303 474 436 1,595 4,177 1,858 14,560 2,096 13,399 1,113 6,436 1,212 7,904 1,279 1,314 1,244 1,396 1,161 2,534 657 258 464 603 904 984 997 812 808 1,584 872 1,857 2,461 6,139 404 1,433 928 548 1,626 286 510 570 3,312 1,944 — 1,790 2,290 2,187 — — 1,078 733 403 288 376 133 414 934 1,313 1,026 901 1,250 1,437 1,238 693 211 833 160 200 638 1,743 2,421 177 2,283 — — — — — — — — — — — — — — — — — — — — — — — — — 982 — — — — — — — — — — — — — — — — — — — — — — 1,125 1,625 125 125 — — — — — — — — — — — — — 7,743 — — — — — — — — — — — — — — — — F-6 1,465 199 237 199 313 7,081 578 303 474 436 8,546 777 540 673 749 1,595 4,177 5,772 551 495 733 68 61 63 54 519 2013 2011 2006 1982 2008 2014 1986 1/24/2017 1/24/2017 1/31/2017 2/9/2017 2/9/2017 2/9/2017 2/9/2017 2016 2/28/2017 1,858 15,685 17,543 1,525 1987 3/1/2017 2,096 15,024 17,120 1,371 1992 3/1/2017 1,113 6,561 7,674 1,212 8,029 9,241 1,279 1,314 2,593 1,244 1,396 2,640 1,161 2,534 3,695 657 258 464 603 904 984 997 1,654 812 1,070 808 1,272 1,584 2,187 872 1,857 1,776 2,841 2,461 6,139 8,600 404 1,433 1,837 928 548 2,608 286 510 570 3,312 1,944 7,743 1,790 2,290 2,187 4,240 2,492 10,351 2,076 2,800 2,757 — — — 1,078 733 403 288 376 133 414 934 1,313 1,026 901 1,250 1,437 1,238 693 211 833 160 200 638 1,743 2,421 177 2,283 2,515 1,971 1,096 499 1,209 293 614 1,572 3,056 3,447 1,078 3,533 675 852 177 188 303 126 97 96 241 122 227 636 214 350 201 584 176 256 244 183 157 88 27 106 21 26 81 221 307 23 290 1987 3/1/2017 1996 3/1/2017 2003 3/8/2017 2001 3/8/2017 2010 3/8/2017 2002 3/8/2017 1987 3/9/2017 1989 3/9/2017 2008 3/10/2017 1997 1998 3/28/2017 3/28/2017 2009 3/28/2017 1980 3/30/2017 2016 1988 2018 2008 2008 2010 4/25/2017 4/28/2017 5/5/2017 5/18/2017 5/24/2017 5/24/2017 2003 5/30/2017 1961 1963 1991 1995 1995 1996 1984 2003 2003 2004 1984 2001 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/1/2017 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Nashville Conroe Amarillo Grand Junction Mt. Pleasant Irondale Bessemer Farmington Farmington Pueblo Soperton Kenosha Visalia Building Materials Building Materials Building Materials Building Materials Building Materials Building Materials Car Washes Car Washes Car Washes Restaurants - Quick Service Restaurants - Quick Service Movie Theatres Entertainment Automotive Service Knoxville Automotive Service Forest Park Automotive Service Martinez Automotive Service Clarksville Automotive Service Ocala Automotive Service Orlando Medical / Dental Restaurants - Quick Service Car Washes Early Childhood Education Automotive Service Garden City Automotive Service Troy Automotive Service Burton Arvada Pet Care Services Round Rock Medical / Dental Little Rock Car Washes Car Washes Bryant Automotive Service Longwood Anderson Car Washes Cornelia Car Washes South Car Washes Commerce Seneca Algona Buford Montgomery Orlando Grantsburg East Bethel Isanti Braham Car Washes Restaurants - Quick Service Restaurants - Quick Service Convenience Stores Restaurants - Quick Service Health and Fitness Hobbs Health and Fitness Florence Automotive Service Magnolia Early Childhood Education Car Washes Car Washes Car Washes Convenience Stores Convenience Stores Convenience Stores Jacksonville Daingerfield Jacksonville Winter Garden Springdale Rogers Shreveport TX TX CO SC AL AL NM NM CO GA GA WI CA TN GA GA TN FL FL AL IA GA FL MI MI MI CO TX AR AR FL SC GA GA SC MN MN MN WI NM KY TX FL AR AR LA TX TX TX {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} {f} $ $ 2,150 927 760 1,097 546 1,514 634 746 898 $ 631 655 403 171 227 3,413 4,945 2,795 5,103 — — 312 3,159 1,320 518 498 612 498 518 456 477 150 1,353 1,175 366 794 188 1,342 713 685 489 887 793 470 607 255 764 443 3,755 2,320 695 850 570 633 715 664 2,976 528 3,693 4,362 961 1,389 1,180 2,808 6,821 3,361 2,790 1,263 4,031 2,670 3,072 2,994 1,353 1,167 1,859 289 1,043 640 938 868 1,402 1,169 597 763 460 587 269 368 1,673 1,503 2,186 2,480 4,603 1,908 2,663 2,615 1,357 1,135 916 $ $ 2,150 927 760 1,097 546 1,514 634 746 898 631 655 403 171 227 3,413 4,945 2,795 5,103 $ 2,781 $ 1,582 1,163 1,268 773 4,927 5,579 3,541 6,001 — — — 312 3,275 1,320 518 498 612 498 518 456 477 150 1,353 1,175 366 794 188 778 713 685 489 887 793 470 607 255 764 443 3,755 2,320 695 850 570 633 715 664 2,976 528 3,693 4,362 961 1,389 1,180 2,750 6,821 3,361 2,790 1,263 4,031 2,670 3,072 2,994 755 7,030 3,640 1,213 1,348 1,182 1,131 1,233 1,120 3,453 678 5,046 5,537 1,327 2,183 1,368 3,528 7,534 4,046 3,279 2,150 4,824 3,140 3,679 3,249 1,353 2,117 1,167 1,859 3,026 289 1,043 1,332 640 938 868 1,402 1,169 597 763 460 587 269 368 1,673 1,503 2,186 2,480 4,603 1,908 2,663 2,615 2,313 2,441 3,054 3,882 5,772 2,505 3,426 3,075 1,357 1,944 1,933 2,202 1,723 2,091 — — — — — — — — — — — — — — — — — — — — — — — — — — (58) — — — — — — — — — — — — — — — — — — — — 798 807 (g) $ (g) — — — — — — — — — — — 116 — — — — — — — — — — — — — — (564) — — — — — — — — — — — — — — — — — — — — — — F-7 80 83 51 22 29 433 552 312 569 — 71 500 283 102 113 96 90 106 88 285 63 426 416 106 153 120 300 608 309 250 164 385 256 299 269 236 270 125 239 180 227 311 457 198 261 255 188 125 126 2002 2002 1983 1983 1975 2002 2005 2013 2008 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/1/2017 6/6/2017 6/6/2017 6/6/2017 1991 6/6/2017 1992 1997 1984 2008 1992 1992 1998 1989 1989 2001 1993 2010 2010 1984 1974 1955 1982 2016 1976 1997 2000 2008 2001 2016 2005 6/6/2017 6/8/2017 6/30/2017 7/21/2017 7/21/2017 7/21/2017 7/21/2017 7/21/2017 7/21/2017 8/7/2017 8/10/2017 8/15/2017 8/25/2017 8/29/2017 8/29/2017 8/29/2017 9/5/2017 9/12/2017 9/12/2017 9/20/2017 9/25/2017 9/26/2017 9/26/2017 9/26/2017 9/26/2017 1996 9/27/2017 1989 9/27/2017 1986 9/27/2017 2005 2016 1994 2017 2015 2009 2005 2017 9/27/2017 9/28/2017 9/28/2017 9/29/2017 9/29/2017 9/29/2017 9/29/2017 9/29/2017 2012 9/29/2017 1979 9/29/2017 1996 9/29/2017 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements 4,242 — 2,290 112 Entertainment Medical / Dental Medical / Dental West Orlando North Lima Lafayette Salem Toledo Pittsburgh Youngstown Youngstown Penn Yan Kent Sandersville Barnesville Farmington Farmington Farmington Farmington Farmington Farmington Farmington Farmington Gray Aztec Ignacio Kirtland Tyler Hoover Medical / Dental Medical / Dental Medical / Dental Medical / Dental Medical / Dental Madison Medical / Dental Medical / Dental Medical / Dental Convenience Stores Entertainment Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Convenience Stores Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Health and Fitness Restaurants - Quick Service Medical / Dental Medical / Dental Convenience Stores Pet Care Services Pet Care Services Pet Care Services Pet Care Services Early Childhood Education Early Childhood Education Restaurants - Casual Dining Restaurants - Casual Dining Movie Theatres Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Augusta Dublin Daleville Franklin Greeley Roanoke Jasper Alexander City Headland Tallassee Talladega Enterprise Fayetteville Greenwood Indianapolis Lansdowne Overland Park Bossier City Hutchinson Tyler Lindale Farmington FL OH IN OH OH PA OH OH OH NY OH TX AL NM NM NM NM NM NM NM CO NM NM NM GA GA GA CO KS TX TX NM IN AR IN IN VA KS LA GA OH AL AL AL AL AL AL AL AL {f} {f} 2,290 112 122 92 448 — 275 387 366 132 173 706 1,403 332 342 372 322 282 503 735 272 332 453 332 293 283 243 4,377 926 397 468 1,750 — 702 488 1,394 651 610 511 2,939 302 604 886 685 1,077 815 352 1,047 775 1,027 906 374 515 414 1,484 4,491 194 985 394 554 395 905 312 52 777 5,675 1,429 785 2,319 1,456 593 416 2,167 2,982 1,189 4,062 {f} 976 2,347 1,663 2,126 1,909 10,097 127 224 370 263 273 195 88 166 409 526 331 506 370 302 273 380 — — — — — — — — — — — — — — — — — — — — — — — — — — Total 10,909 1,038 519 560 2,198 — 977 875 1,760 783 783 2,167 4,342 634 946 8,619 926 397 468 1,750 — 702 488 1,394 651 610 1,461 2,939 302 604 886 1,258 685 1,007 1,077 1,359 815 1,318 352 1,087 1,047 1,319 775 1,107 1,027 1,480 906 1,238 374 515 222 667 798 352 122 92 448 — 275 387 366 132 173 706 1,403 332 342 372 322 282 503 735 272 332 453 332 293 283 130 — — — — — — — — — 950 — — — — — — — — — — — — — — (113) (g) (192) (g) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,484 4,491 5,975 194 985 394 554 395 905 312 52 777 5,675 1,429 971 6,660 1,823 785 1,339 2,319 2,714 1,456 2,361 593 416 905 468 2,167 2,982 5,149 1,189 4,062 5,251 976 2,347 3,323 1,663 2,126 1,909 10,097 3,572 12,223 127 224 370 263 273 195 88 166 409 526 331 506 370 302 273 380 536 750 701 769 643 497 361 546 Accumulated Depreciation (d)(e) Year Constructed Date Acquired 428 82 39 45 156 — 75 53 142 66 61 124 307 41 69 111 80 124 101 54 115 96 137 106 47 60 52 421 81 519 153 119 215 153 59 37 298 388 241 187 882 41 57 49 58 57 39 30 42 2007 1976 1976 1985 1995 1983 1971 1950 1995 1986 1970 1996 2017 9/29/2017 10/5/2017 10/5/2017 10/5/2017 10/5/2017 10/5/2017 10/5/2017 10/5/2017 10/5/2017 10/5/2017 10/5/2017 10/16/2017 10/13/2017 1966 11/8/2017 1972 11/8/2017 2013 11/8/2017 1982 11/8/2017 1980 11/8/2017 1980 11/8/2017 1982 11/8/2017 1983 11/8/2017 1985 11/8/2017 1990 11/8/2017 1980 11/8/2017 1992 11/10/2017 1989 11/10/2017 1996 11/10/2017 1989 11/16/2017 1971 1999 2013 11/16/2017 11/17/2017 11/17/2017 1998 11/21/2017 2007 12/1/2017 1979 12/1/2017 1952 12/1/2017 1954 12/1/2017 2006 12/4/2017 2017 12/8/2017 1993 12/15/2017 1982 1994 12/15/2017 12/15/2017 1983 12/19/2017 1990 12/19/2017 2005 12/19/2017 2004 12/19/2017 2007 12/19/2017 2008 12/19/2017 1999 12/19/2017 1974 12/19/2017 F-8 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Depreciation (d)(e) Year Constructed Date Acquired {f} {f} {f} Restaurants - Quick Service Restaurants - Quick Service Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Quick Service Automotive Service Car Washes Health and Fitness Health and Fitness Early Childhood Education Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Health and Fitness Convenience Stores Early Childhood Education Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Automotive Service Automotive Service Grocery Health and Fitness Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Movie Theatres Health and Fitness Automotive Service Early Childhood Education Pet Care Services Valley Selma Linthcum Pocomoke City D'Iberville Clarksville Scranton Alexander City Columbia Palm City AL AL MD MD MS TN PA AL SC FL St Robert MO Jasper Spring Bentonville Auburn Columbus Southaven Saginaw Grand Rapids Grand Rapids Wichita Bloomfield Trumbull Davenport Bettendorf Kewanee Davenport Davenport Roseville Woodbury Burlington Aiken Burlington Canton Farmington Dublin Shelby Tulsa Elk River San Antonio Cave Creek IN TX AR AL GA MS MI MI MI KS NM CT IA IA IL IA IA MN MN NC SC CT CT CT OH NC OK MN TX AZ 185 175 302 409 1,691 1,124 653 927 861 785 511 785 672 644 226 721 — 849 623 736 755 802 500 727 755 931 932 — 1,104 2,411 2,175 2,540 1,060 1,496 528 299 349 2,594 221 864 57 402 115 459 153 489 978 762 1,086 1,205 1,166 — 784 — 479 1,050 432 1,304 1,268 1,602 2,049 1,300 1,063 3,787 432 730 278 740 1,826 2,856 433 482 1,408 761 1,459 2,934 2,798 — 898 1,496 1,789 2,540 755 1,540 114 1995 12/21/2017 — — — — — — — — — — — — — — — — (338) (g) (208) (g) (59) — — — — — — — — — — 326 — 206 — — — — — — — — — — — — — — (61) — — 300 — — — 124 — — — — — — — — — — — — — — — — — — — 185 175 302 487 409 584 1,691 1,124 2,815 653 927 861 785 511 447 613 644 226 721 — 1,104 2,175 1,060 528 299 349 849 1,502 623 1,550 736 1,597 802 1,313 292 739 666 1,279 755 1,399 931 1,157 1,232 — 1,953 — 2,411 3,515 2,540 4,715 1,620 2,680 1,086 1,614 1,205 1,504 1,166 1,515 57 402 115 459 153 489 978 762 479 536 1,050 1,452 432 547 1,304 1,763 1,268 1,421 1,602 2,091 2,049 1,300 3,027 2,062 1,063 3,787 4,850 432 730 278 740 1,826 2,964 433 482 1,408 1,840 761 1,491 1,459 1,737 2,934 2,798 3,674 4,624 4,329 7,293 898 1,331 1,496 1,978 108 4,329 — — — F-9 1,405 1,789 3,945 5,734 4,812 2,920 4,812 7,732 — 221 784 1,005 3,392 1,070 3,392 4,462 37 45 147 123 79 86 2004 12/19/2017 1996 12/19/2017 2004 12/21/2017 2005 12/21/2017 2004 12/21/2017 2003 12/21/2017 93 67 86 82 91 153 — 259 298 158 118 121 106 346 77 140 39 92 41 118 104 141 187 128 322 137 95 129 256 274 253 83 124 227 2007 12/21/2017 2003 12/21/2017 2003 12/21/2017 2001 12/21/2017 1998 12/22/2017 2017 2017 12/27/2017 12/28/2017 2007 12/29/2017 2005 12/29/2017 2002 12/29/2017 2012 1/4/2018 2016 1/4/2018 2013 1/4/2018 2018 1/19/2018 1980 1/24/2018 2018 1/31/2018 1955 2/8/2018 1975 2/8/2018 1993 2/8/2018 1990 2/8/2018 1952 2/8/2018 1971 2/16/2018 2000 1992 2/16/2018 2/16/2018 1998 3/1/2018 2004 3/9/2018 1979 3/9/2018 1985 3/9/2018 2008 2004 3/13/2018 3/22/2018 2018 3/22/2018 1996 3/29/2018 2007 3/29/2018 2008 4/5/2018 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Pet Care Services Early Childhood Education Medical / Dental Car Washes Automotive Service Automotive Service Automotive Service Movie Theatres Automotive Service Automotive Service Maricopa Byron Center Russellville Bel Air Apex Holly Springs Fuquay Varina Decatur North Canton Clinton Township Baltimore Sartell St. Augusta Pine City Automotive Service Convenience Stores Convenience Stores Convenience Stores Rice Convenience Stores Convenience Stores Cambridge Early Childhood Education Pet Care Services Acworth Lakewood Ranch Bluff City Erwin Sparta Kingsport Cleveland Cleveland Castlewood Covington Harlem London Elizabethton Elizabethton Mountain City Other Services Other Services Other Services Other Services Other Services Other Services Other Services Other Services Other Services Other Services Other Services Other Services Other Services Convenience Stores Mosinee Convenience Stores Wausau Convenience Stores Wausau Convenience Stores Wausau Convenience Stores Wausau Convenience Stores Prentice Convenience Stores Rothschild Phillips Convenience Stores Convenience Stores Pound Convenience Stores Gillett Convenience Stores Convenience Stores Convenience Stores Merrill Convenience Stores Convenience Stores Marathon Convenience Stores Edgar Plover Convenience Stores Convenience Stores Hatley Tigerton Stevens Point Tomahawk AZ MI AR MD NC NC NC AL OH MI MD MN MN MN MN MN GA FL TN TN NC TN TN TN VA GA GA KY TN TN TN WI WI WI WI WI WI WI WI WI WI WI WI WI WI WI WI WI WI $ 1,057 $ 1,057 $ — $ 1,520 $ 1,057 $ 2,577 $ 3,634 $ {f} {f} {f} {f} {f} 513 710 321 229 308 487 1,491 481 1,179 206 988 473 782 792 1,008 1,591 1,297 3,120 428 1,283 318 4,350 982 688 1,709 607 1,111 1,461 1,173 2,161 {f} 637 1,365 442 146 713 713 1,220 673 615 1,259 849 703 937 254 488 78 260 311 402 502 412 1,164 703 191 321 241 954 1,054 1,857 683 261 502 1,275 783 — 1,347 1,484 1,942 3,143 1,083 2,938 1,786 3,309 1,610 2,391 517 849 176 509 372 1,470 361 445 753 760 722 478 591 1,014 522 1,305 1,008 1,244 949 883 851 — — — — — — — — — — — — 14 — — — 1,054 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-10 — — — — — — — — — — — — 104 — — — 2,677 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 513 710 321 229 308 487 1,491 481 1,179 206 988 473 796 792 1,008 1,591 1,297 3,120 428 1,283 318 4,350 982 688 1,709 607 1,111 1,565 1,173 2,161 2,104 2,007 3,441 657 1,591 805 5,841 1,463 1,867 1,915 1,595 1,584 2,361 1,965 3,169 637 1,365 2,002 1,496 146 713 713 1,220 673 615 1,259 849 703 937 254 488 78 260 311 402 502 412 1,164 703 191 321 241 954 1,054 1,857 683 261 502 1,275 783 2,677 1,347 1,484 1,942 3,143 1,083 2,938 1,786 3,309 1,610 2,391 517 849 176 509 372 1,470 361 445 753 760 722 478 591 1,014 522 1,305 1,008 1,244 949 883 851 4,173 1,493 2,197 2,655 4,363 1,756 3,553 3,045 4,158 2,313 3,328 771 1,337 254 769 683 1,872 863 857 1,917 1,463 913 799 832 1,968 1,576 3,162 1,691 1,505 1,451 2,158 1,634 104 159 110 266 41 105 43 405 86 121 119 112 124 194 163 257 141 194 94 125 181 302 95 209 181 283 138 220 59 74 15 63 57 131 79 70 230 113 73 81 75 204 134 311 166 113 127 154 149 Year Constructed Date Acquired 2008 4/5/2018 2012 2015 2016 2000 2003 2008 2013 1960 1983 1952 2013 1978 2005 1967 2007 4/9/2018 4/20/2018 4/26/2018 5/1/2018 5/1/2018 5/1/2018 5/10/2018 5/17/2018 5/17/2018 5/17/2018 5/17/2018 5/17/2018 5/17/2018 5/17/2018 5/17/2018 2000 5/18/2018 2019 1949 1981 1973 1979 1975 1964 1991 1991 1895 1999 2010 1996 1936 1994 1995 1995 1989 1991 1989 1985 1970 1983 1990 1998 1993 1996 1992 1987 1984 2006 1997 5/24/2018 6/1/2018 6/1/2018 6/1/2018 6/1/2018 6/1/2018 6/1/2018 6/1/2018 6/1/2018 6/1/2018 6/1/2018 6/1/2018 6/1/2018 6/1/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Erial Exton Frazer Malvern Voorhees Glen Mills Royersford Collegeville Phoenixville Downingtown West Norriton King of Prussia Surprise Fayetteville Convenience Stores Minoqua Convenience Stores Wittenberg Convenience Stores Rudolph Convenience Stores Mountain Convenience Stores Park Falls Convenience Stores Weston Early Childhood Education Car Washes Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Medical / Dental Medical / Dental Medical / Dental Medical / Dental Medical / Dental Medical / Dental Health and Fitness Health and Fitness Health and Fitness Health and Fitness Medical / Dental Pet Care Services Pet Care Services Pet Care Services Restaurants - Quick Service Car Washes Car Washes Car Washes Car Washes Car Washes Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Automotive Service Oklahoma City Blue Bell Mountain Grove Harrison Jonesboro El Dorado Berryville Batesville Salisbury Peabody Methuen Moncks Corner Brownsville Mesa Chandler Green Valley Brownsville Athen Winder Decatur Decatur Duluth Fort Oglethorpe Chattanooga Chattanooga Chattanooga Soddy Daisy Ooltewah Ringgold Dayton WI WI WI WI WI WI AZ AR PA PA PA NJ PA NJ PA PA PA PA PA PA PA MO AR AR AR AR AR MA MA MA SC TX AZ AZ AZ KY GA GA GA GA GA GA GA TN TN TN TN TN TN OK $ $ 371 1,405 412 371 392 622 1,546 — 701 730 $ 412 1,305 840 663 1,164 843 1,736 — 2,084 2,276 3,938 3,246 740 442 509 259 557 490 605 423 1,546 2,007 1,892 1,892 1,998 2,171 2,219 1,940 1,431 4,466 788 113 144 329 93 62 237 1,169 3,497 4,544 978 172 1,329 1,775 913 297 1,011 683 703 828 1,261 3,218 527 835 1,021 228 120 1,139 14,584 6,523 5,179 1,439 1,683 1,531 3,033 2,454 1,024 2,536 2,027 3,031 2,029 2,187 1,283 1,045 387 438 876 1,406 1,061 1,255 1,497 1,161 468 1,283 1,079 1,262 825 152 992 596 $ $ 371 1,405 412 371 392 622 1,546 — 701 730 412 1,305 840 663 1,164 843 1,757 — $ 783 $ 2,710 1,252 1,034 1,556 1,465 3,303 — 2,084 2,785 2,276 3,006 3,938 3,246 7,184 740 442 509 259 557 490 605 423 1,546 2,286 2,007 2,449 1,892 2,401 1,892 2,151 1,998 2,555 2,171 2,661 2,219 2,824 1,940 2,363 1,431 4,466 5,897 788 113 144 329 93 62 237 2,500 3,497 4,544 978 172 1,329 1,775 913 297 1,011 683 703 828 1,261 3,218 527 835 1,021 228 120 1,139 17,427 6,523 5,179 1,439 1,683 1,586 3,088 2,509 1,024 3,136 2,027 3,031 2,029 2,187 4,006 640 979 1,350 321 182 1,376 19,927 10,020 9,723 2,417 1,855 2,915 4,863 3,422 1,321 4,147 2,710 3,734 2,857 3,448 1,283 1,045 2,328 387 438 876 1,406 1,793 1,061 1,499 1,255 2,131 1,497 1,161 2,658 468 1,283 1,751 1,079 1,262 2,341 825 152 992 596 1,817 748 — — — — — — 21 — — — — — — — — — — — — — — — — — — — — 2,843 — — — — 55 55 55 — 600 — — — — — — — — — — — — — $ — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,331 — — — — — — — — — — — — — — — — — — — — — — F-11 73 283 106 98 131 120 148 — 182 191 375 123 155 154 139 157 160 173 147 366 238 45 63 80 18 13 94 959 466 446 146 116 123 242 186 87 250 180 233 183 187 85 118 87 107 93 111 99 95 48 1984 1999 1992 1998 1984 1993 2008 2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/15/2018 6/21/2018 6/21/2018 2006 6/28/2018 1998 6/28/2018 1992 6/28/2018 2000 6/28/2018 2000 6/28/2018 2002 6/28/2018 2002 6/28/2018 2003 6/28/2018 2004 6/28/2018 2007 6/28/2018 2008 6/28/2018 2010 6/28/2018 1967 2012 2006 2005 2000 2000 2017 2004 2009 2002 2002 2008 1990 2002 2015 1990 2006 2008 1967 2007 2006 6/28/2018 6/28/2018 6/28/2018 6/28/2018 6/28/2018 6/28/2018 6/28/2018 6/29/2018 6/29/2018 6/29/2018 6/29/2018 7/13/2018 7/13/2018 7/13/2018 7/13/2018 7/18/2018 7/26/2018 7/26/2018 7/26/2018 7/26/2018 7/26/2018 2001 8/8/2018 2015 8/8/2018 2009 8/8/2018 2004 8/8/2018 2012 8/8/2018 2016 8/8/2018 2003 8/8/2018 2006 1980 8/8/2018 8/9/2018 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Eden Prairie Midwest City Del City Midwest City San Antonio Macon Macon Augusta Montrose Fairbanks Colleyville Blytheville Paragould Marion Metairie San Angelo Springfield Eugene Automotive Service Automotive Service Automotive Service Early Childhood Education Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Van Buren Service Seguin Convenience Stores Convenience Stores Burleson Convenience Stores Winfield Automotive Service Pontiac Restaurants - Quick Service Health and Fitness Health and Fitness Early Childhood Education Early Childhood Education Restaurants - Quick Service Entertainment Restaurants - Quick Service Restaurants - Family Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Quick Service Restaurants - Quick Service Medical / Dental Automotive Service Car Washes Restaurants - Quick Service Medical / Dental Early Childhood Education Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Early Childhood Education Restaurants - Quick Service Health and Fitness Restaurants - Quick Service Medical / Dental Early Childhood McDonough Education Tucson Convenience Stores Convenience Stores Phoenix Convenience Stores Centralia Medical / Dental Medical / Dental Convenience Stores Duncanville Early Childhood Education Restaurants - Quick Service Medical / Dental Medical / Dental Medical / Dental Medical / Dental Early Childhood Education Pembroke Fort Worth Arlington Burleson Dallas Fairbanks Abilene Bremen Springdale Countryside Midland Hot Springs Tucson Andalusia Forrest City Grapevine Canton Montgomery Prattville St Augustine Olive Branch Ashburn North Richard Hills Fleming Island OK OK OK MN AR AR AR TX TX TX MI TX OR OR TX TX AR LA CO GA GA GA AK AK TX IN AR AL AR VA TX TX FL FL AR AZ IL TX GA AZ AZ WA AL AL TX GA NY TX TX TX TX MS $ $ 253 364 172 $ 495 384 526 {f} 1,264 1,651 {f} {f} {f} {f} {f} {f} 785 744 642 435 823 908 445 161 2,024 1,046 617 695 459 1,323 698 825 648 923 438 687 336 221 — 384 143 898 875 775 917 872 240 4,227 727 298 604 977 1,037 568 454 237 469 736 784 946 995 1,660 2,474 1,077 806 2,468 2,986 2,258 1,022 920 2,143 1,036 894 992 972 1,524 1,633 1,959 1,284 — 727 608 671 1,113 904 1,964 2,523 899 — 1,302 1,760 2,065 827 429 509 1,528 857 538 504 2,079 577 466 546 61 1,813 898 845 649 1,091 3,606 1,027 1,050 $ $ 253 364 172 495 384 526 $ 748 $ 748 698 1,264 1,651 2,915 785 744 642 435 823 908 445 161 2,024 1,046 617 695 459 1,323 698 825 648 923 438 692 336 221 — 384 143 898 875 775 917 872 240 4,367 727 298 604 977 1,037 568 454 237 469 736 1,521 784 1,528 946 995 1,660 2,474 1,077 806 2,468 2,986 1,588 1,430 2,483 3,382 1,522 967 4,492 4,032 2,258 2,875 1,022 1,717 920 2,143 1,379 3,466 1,036 1,734 894 1,719 992 1,640 972 1,895 1,524 1,962 1,810 1,959 1,284 — 2,502 2,295 1,505 — 727 608 1,111 751 671 1,569 1,113 1,988 904 1,679 1,964 2,881 2,523 3,395 899 4,264 1,139 8,631 1,302 1,760 2,029 2,058 2,065 827 429 509 1,528 857 538 2,669 1,804 1,466 1,077 1,982 1,094 1,007 504 2,079 2,583 577 466 546 61 1,813 898 845 649 1,091 3,606 1,475 1,311 1,195 1,152 5,419 1,027 1,050 2,077 $ — — — — — — — — — — — — — — — — — — — — — — — 5 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 177 — — — — — — — — — — — 140 — 4,264 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-12 50 48 43 146 70 67 79 85 159 240 95 61 232 196 166 85 80 174 89 68 77 90 125 137 132 86 — 61 47 56 105 87 146 164 63 123 94 106 146 107 47 62 107 59 57 146 90 62 55 57 212 108 1995 1985 1980 8/9/2018 8/9/2018 8/9/2018 1995 8/10/2018 2007 8/22/2018 2008 8/22/2018 2008 1974 1985 1979 1978 1978 1999 1980 8/22/2018 9/4/2018 9/4/2018 9/4/2018 9/7/2018 9/12/2018 9/13/2018 9/13/2018 2008 9/14/2018 1997 9/18/2018 2007 2016 9/21/2018 9/21/2018 2000 9/25/2018 1968 9/25/2018 1983 9/25/2018 1972 9/25/2018 1971 9/27/2018 2006 2006 1970 2018 1988 2007 9/27/2018 9/27/2018 9/28/2018 9/28/2018 9/28/2018 9/28/2018 2001 9/28/2018 2017 9/28/2018 2016 9/28/2018 2010 9/28/2018 2006 9/28/2018 1979 2019 2013 1993 2002 1985 1987 1976 2004 2012 1980 10/4/2018 10/10/2018 10/26/2018 10/31/2018 11/2/2018 11/7/2018 11/7/2018 11/7/2018 11/7/2018 11/7/2018 11/8/2018 2006 11/9/2018 2017 1997 1999 1942 1979 11/28/2018 11/30/2018 11/30/2018 11/30/2018 11/30/2018 2009 12/5/2018 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Manchester Macon Early Childhood Education Early Childhood Education Early Childhood Education Entertainment Entertainment Macon Andover Rochester South St. Paul Mounds View St. Paul Park Oakdale Monticello St. Paul Ramsey Winston Salem Entertainment Entertainment Entertainment Entertainment Entertainment Entertainment Entertainment Health and Fitness Automotive Denton Service Dubuque Car Washes Davenport Car Washes Car Washes Rock Island Pet Care Services Georgetown Pet Care Services Middleburg Early Childhood Education Home Furnishings Kansas City Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Car Washes Entertainment Alexandria Arlington Leesville Saginaw Flint Griffin Springdale Nampa West Memphis Medical / Dental Early Childhood Education Pet Care Services Medical / Dental Medical / Dental Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Early Childhood Education Restaurants - Casual Dining Medical / Dental Health and Fitness Early Childhood Education Early Childhood Education Early Childhood Education Health and Fitness Automotive Service Gilbert Denham Springs Little Rock Bryant Ruston El Dorado Percival Garner Wilder Meridian Abilene St. Augustine St. Augustine St. Augustine Las Vegas St. Augusta CT GA GA MN MN MN MN MN MN MN MN MN NC TX IA IA IL TX FL TX MO MI MI LA LA GA AR ID AR AZ LA AR AR LA AR IA NC KY MS TX FL FL FL NV MN {f} {f} {f} {f} {f} {f} {f} {f} $ 915 $ 939 $ — $ 1,805 $ 915 $ 2,744 $ 3,659 $ 128 1977 12/7/2018 538 508 898 379 1,008 1,986 529 2,136 1,527 1,218 609 1,067 1,067 1,208 968 928 3,264 1,058 5,699 3,414 1,407 749 — — — — — — — — — — — — — — — — — — — — — — 538 508 898 379 1,008 1,986 529 2,136 1,527 1,218 609 1,067 1,605 1,067 1,208 968 928 3,264 1,058 5,699 3,414 1,407 749 1,575 2,106 1,347 1,936 5,250 1,587 7,835 4,941 2,625 1,358 986 1,205 (75) (g) (90) (g) 911 1,115 2,026 1,278 990 757 1,030 753 803 1,296 273 619 335 271 140 923 1,032 886 247 1,074 485 770 460 544 661 578 378 317 886 1,582 2,121 2,394 2,949 — — 3,239 4,683 274 294 953 812 1,103 2,325 2,768 543 — 701 1,562 1,519 1,399 1,448 1,252 1,962 1,169 5,947 1,326 2,478 183 611 1,436 2,149 1,385 2,108 491 518 2,543 1,057 — — — — 790 1,842 — — — — — — — (1,032) — — 632 — — — — — — — — — — — — — — — — — — — 3,473 2,384 — — — — — — — (2,325) — — 1,278 990 757 1,030 1,543 2,645 1,296 273 619 335 271 140 923 — 886 247 1,582 2,121 2,394 2,949 3,473 2,384 3,239 4,683 2,860 3,111 3,151 3,979 5,016 5,029 4,535 4,956 274 893 294 629 953 1,224 812 952 1,103 — 2,768 2,026 — 3,654 543 790 3,641 1,706 3,641 5,347 — — — — — — — — — 485 770 460 544 661 578 378 317 886 701 1,562 1,519 1,186 2,332 1,979 1,399 1,943 1,448 2,109 1,252 1,830 1,962 2,340 1,169 5,947 1,486 6,833 144 1,326 2,622 3,948 — — — — — 183 611 1,436 1,619 2,149 2,760 1,385 2,108 3,493 491 518 2,543 3,034 1,057 1,575 88 78 91 60 78 233 79 371 278 99 81 62 130 146 158 195 47 167 207 256 38 34 63 53 77 — 157 40 100 50 93 87 95 103 94 108 64 300 168 77 122 145 135 80 2007 12/14/2018 2008 2005 1958 1978 1967 1959 2009 2007 1955 1988 12/14/2018 12/12/2018 12/12/2018 12/12/2018 12/12/2018 12/12/2018 12/12/2018 12/12/2018 12/12/2018 12/12/2018 1972 12/19/2018 1982 1992 1990 1996 2020 2020 1989 2007 12/20/2018 12/20/2018 12/20/2018 12/20/2018 12/21/2018 12/21/2018 12/27/2018 12/28/2018 1975 1/2/2019 1967 1/2/2019 1985 1/10/2019 1983 1/10/2019 1983 2018 2008 1/10/2019 1/10/2019 1/17/2019 2007 1/22/2019 2020 1/29/2019 2007 2004 2014 1/31/2019 1/31/2019 1/31/2019 2016 2/14/2019 2017 2/14/2019 2004 2/15/2019 2007 2/28/2019 2010 2006 2/28/2019 3/8/2019 1974 3/8/2019 2016 3/8/2019 2006 3/8/2019 1981 3/8/2019 1970 3/13/2019 1991 3/13/2019 F-13 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Woodstock Duluth Indianapolis Fort Wayne Commerce Norman Alpena Gassville Stockbridge Huntersville Greensboro Tuscaloosa Carbondale Energy Crete Ballwin Pea Ridge Norman Martinsville Carbondale Nashville Monroeville Pet Care Services Pet Care Services Pet Care Services Pet Care Services Pet Care Services Pet Care Services Pet Care Services Pet Care Services Pet Care Services Entertainment Early Childhood Education Entertainment Entertainment Medical / Dental Early Childhood Education Medical / Dental Medical / Dental Restaurants - Quick Service Restaurants - Quick Service Health and Fitness Convenience Stores Convenience Stores Convenience Stores Mountain Home Early Childhood Education Early Childhood Education Medical / Dental Medical / Dental Medical / Dental Medical / Dental Pet Care Services Entertainment Early Childhood Education Convenience Stores Convenience Stores Waterford Creston Convenience Stores Alexandria Convenience Stores Richmond Convenience Stores Convenience Stores Canton Convenience Stores Wooster Louisville Convenience Stores Fairfield Convenience Stores Nicholasville Convenience Stores Louisville Convenience Stores Paris Convenience Stores Fairborn Convenience Stores Eastlake Convenience Stores Convenience Stores Beavercreek Convenience Stores Milford Convenience Stores Louisville Convenience Stores Wauseon Johns Creek Tyler Groesbeck Greenville Marshall Prescott Trussville Coral Springs New Lexington Alpharetta IL IL NE MO AR OK IN IL IN PA GA NC NC AL GA IN IN GA GA OK AR AR AR GA GA TX TX TX TX AZ AL FL OH PA OH KY KY OH OH KY OH KY KY KY OH OH OH OH KY OH $ {f} {f} $ — — — — — — — — — — — — — — 150 — 2,694 — — 559 — — — 400 — — — — — — — — — — — — — — — — — — — — — — — — — — $ 605 313 381 537 518 225 88 557 146 823 645 4,087 2,593 262 843 509 4,403 435 435 730 151 181 242 835 1,137 365 142 172 487 223 4,403 1,939 595 467 596 425 1,132 782 516 571 426 864 634 965 553 804 1,066 675 883 722 713 254 332 752 654 283 664 537 703 2,028 1,345 9,719 8,381 1,682 2,689 3,504 2,694 $ 1,318 $ 567 713 1,289 1,172 508 752 1,094 849 2,851 1,990 13,806 10,974 1,944 3,532 4,013 7,097 932 1,367 851 3,496 667 688 747 1,286 4,226 818 869 989 1,265 2,100 744 477 406 609 1,167 1,277 5,693 2,639 832 383 630 502 357 392 862 395 305 264 772 538 386 861 574 738 402 381 1,881 842 548 781 1,654 1,500 10,096 4,578 1,427 850 1,226 927 1,489 1,174 1,378 966 731 1,128 1,406 1,503 939 1,665 1,640 1,413 1,285 1,103 61 19 38 47 46 32 33 55 39 140 78 502 446 82 134 168 38 52 47 181 34 32 44 55 57 24 21 32 55 58 303 146 67 49 46 51 55 58 70 46 40 39 60 56 45 84 81 73 53 53 $ 605 313 381 537 518 225 88 557 146 823 645 4,087 2,593 262 843 509 4,006 435 435 730 151 181 242 835 1,137 365 142 172 487 223 4,403 1,939 595 467 596 425 1,132 782 516 571 426 864 634 965 553 804 1,066 675 883 722 $ 713 254 332 752 654 283 664 537 703 2,028 1,345 9,719 8,381 1,682 2,539 3,504 — 932 851 2,937 667 688 747 865 744 477 406 609 1,167 1,277 5,693 2,639 832 383 630 502 357 392 862 395 305 264 772 538 386 861 574 738 402 381 $ — — — — — — — — — — — — — — — — 397 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-14 1986 1995 1967 1986 1996 1993 1989 1976 1970 2016 2004 1996 1988 1991 1994 2016 2020 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 3/29/2019 1990 4/5/2019 1990 2018 1970 1995 1977 4/5/2019 4/17/2019 4/19/2019 4/19/2019 4/19/2019 1999 4/30/2019 2004 1940 2005 1985 1969 1990 2002 2004 1997 1996 1997 1998 1998 1998 1998 1998 1999 1999 1998 1998 1998 1998 1999 1998 1998 1998 4/30/2019 5/15/2019 5/15/2019 5/15/2019 5/15/2019 5/24/2019 5/30/2019 5/31/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Detroit Livonia Warren Danville Wooster Dearborn Farmington Hills Albion Huntsville Longview Convenience Stores Milan Convenience Stores Canton Convenience Stores Mount Sterling Convenience Stores Lorain Convenience Stores Fairdale Convenience Stores South Bloomfield Convenience Stores Newtown Convenience Stores Hudson Convenience Stores Seymour Convenience Stores Powell Convenience Stores Avon Convenience Stores Columbus Convenience Stores Louisville Convenience Stores Bedford Convenience Stores Elizabethtown Convenience Stores Parma Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Quick Service Medical / Dental Medical / Dental Convenience Stores Deming Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Restaurants - Casual Dining Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Restaurants - Casual Dining Restaurants - Casual Dining Medical / Dental Restaurants - Family Dining Restaurants - Family Dining Restaurants - Family Dining Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Pet Care Services Convenience Stores Yuma Car Washes Car Washes Car Washes Car Washes Medical / Dental Sioux Falls Sioux Falls Sioux Falls Sioux Falls Amarillo Centerville Lancaster Alden Highland Klamath Falls Port Orchard Gig Harbor Milwaukee Tumwater Knoxville Sisseton Olympia Olympia Olympia Tacoma Cadillac Bristol Kelso New Philadelphia OH OH KY OH KY OH OH OH IN OH OH OH KY OH KY OH MI MI MI MI MI NY TX TX NM IL OH OH VA WA WA OR WA WA WA WA MI MI AR WA WA WI SD IA IA SC CO SD SD SD SD TX $ $ 585 565 721 696 683 1,381 373 1,270 840 841 561 644 1,119 655 1,446 884 983 572 702 883 943 600 277 257 384 553 955 $ 770 767 383 854 711 894 346 670 838 503 392 702 450 619 856 903 1,685 923 2,397 2,337 1,725 1,089 503 452 676 1,619 1,720 1,116 2,001 1,136 1,991 377 665 447 546 477 427 218 41 102 182 804 983 1,569 1,003 1,202 665 566 1,410 506 1,627 671 1,060 1,846 2,015 1,526 2,365 70 199 259 554 430 757 627 1,225 1,484 396 259 528 538 1,017 990 2,519 1,852 2,678 2,768 2,588 $ — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-15 {f} {f} {f} {f} — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — $ $ 585 565 721 696 683 1,381 373 1,270 840 841 561 644 1,119 655 1,446 884 983 572 702 883 943 600 277 257 384 553 955 770 767 383 854 711 894 346 670 838 503 392 702 450 619 856 903 $ 1,355 $ 1,332 1,104 1,550 1,394 2,275 719 1,940 1,678 1,344 953 1,346 1,569 1,274 2,302 1,787 1,685 2,668 923 1,495 2,397 3,099 2,337 3,220 1,725 2,668 1,089 503 452 676 1,689 780 709 1,060 1,619 2,172 1,720 2,675 76 65 37 88 71 144 34 99 92 60 37 74 64 60 102 78 105 52 108 122 99 61 28 20 43 85 86 1999 1999 1998 1999 1999 1999 1999 1999 1999 1996 1999 1999 1999 1999 1999 2001 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 6/6/2019 1969 6/7/2019 1948 6/7/2019 1992 6/7/2019 1964 6/7/2019 1974 6/7/2019 1968 2003 1998 1990 6/12/2019 6/13/2019 6/13/2019 6/21/2019 1991 6/26/2019 1995 6/26/2019 1,116 2,001 3,117 100 1991 6/26/2019 1,136 1,991 3,127 377 665 447 546 477 427 218 41 102 182 804 983 1,569 1,946 1,003 1,668 1,202 1,649 665 1,211 566 1,043 1,410 1,837 506 724 1,627 1,668 671 1,060 773 1,242 1,846 2,650 2,015 2,998 1,526 2,365 3,891 70 199 259 554 430 757 627 1,225 1,484 396 259 329 528 727 538 1,017 990 2,519 1,852 2,678 2,768 2,588 797 1,571 1,420 3,276 2,479 3,903 4,252 2,984 97 75 46 59 33 33 69 28 61 29 52 99 111 137 15 32 34 55 54 114 92 127 128 107 2005 6/26/2019 2002 6/27/2019 1997 6/27/2019 2010 6/27/2019 1990 6/27/2019 1984 6/27/2019 1987 6/27/2019 1924 6/27/2019 1906 6/27/2019 1952 2008 6/27/2019 6/27/2019 1982 6/27/2019 1999 6/27/2019 2018 6/28/2019 1984 6/28/2019 1972 6/28/2019 1975 1994 1977 2006 2015 2017 2017 1994 6/28/2019 6/28/2019 6/28/2019 6/28/2019 6/28/2019 6/28/2019 6/28/2019 6/28/2019 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Cabot Searcy Owosso Nashville Cloverdale Port Huron Bull Shoals Stevensville Schaumburg Conway Amarillo Myrtle Beach Champaign Flippin Early Childhood Education Early Childhood Education Health and Fitness Convenience Stores Convenience Stores Mountain Home Convenience Stores Milan Convenience Stores Wynne Convenience Stores Montain View Convenience Stores Convenience Stores Marshall Convenience Stores Mountain Home Convenience Stores Midway Convenience Stores West Plains Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Medical / Dental Restaurants - Quick Service Restaurants - Quick Service Early Childhood Education Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Health and Fitness Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Pet Care Services Convenience Stores Gassville Convenience Stores West Plains Convenience Stores Convenience Stores Willow Springs Convenience Stores Mountain Home Convenience Stores Calico Rock Convenience Stores Convenience Stores Russellville Convenience Stores Russellville Convenience Stores Harrisburg Convenience Stores Horseshoe Bend Convenience Stores Health and Fitness Health and Fitness Health and Fitness Car Washes Car Washes Koshkonong Greenville Anderson Spartanburg Denver Aurora Cedar Springs Gainesville Essex Kittrell Philadelphia Bald Knob Louisville Quitman Ruleville Prentiss Macon Atkins Aston TN SC IL AR AR TN AR AR AR AR AR AR MO AR AR AR TX MI MI IL IN MI MI FL MS MS MS MS MS MS PA MD NC AR MO AR MO AR AR AR AR AR AR AR MO SC SC SC CO CO {f} $ 1,326 $ 1,945 $ — $ — $ 1,326 $ 1,945 $ 3,271 $ 386 2,150 113 — — — — — — 45 — — — — — — — — — 420 — — 2,398 — — — — — — — — — — — — — — — — — — — — — — — — — — 319 1,133 518 229 358 378 438 319 856 368 388 159 479 359 528 1,309 693 655 866 226 784 918 4,376 382 348 279 219 2,678 259 2,011 423 488 368 1,237 5,509 900 577 637 597 3,116 578 2,867 791 876 527 1,189 1,668 1,150 1,509 1,045 6,791 1,573 8,100 732 1,425 712 1,367 — 866 708 934 746 1,530 671 1,312 1,369 4,886 2,040 6,198 155 330 196 309 330 350 440 338 303 1,178 663 1,258 663 852 475 525 426 525 446 376 604 732 691 1,052 1,594 703 680 835 340 670 422 618 237 546 371 701 350 700 522 962 624 394 673 327 743 1,327 396 327 376 455 396 842 327 743 1,361 1,402 1,474 1,484 1,504 962 697 1,851 990 2,001 1,990 1,248 802 901 881 921 1,288 703 1,347 2,093 2,093 2,526 3,078 2,207 319 1,133 518 229 358 378 438 319 856 368 388 159 479 359 528 1,309 693 655 866 226 784 532 2,226 269 348 279 219 2,678 259 2,011 378 488 368 1,189 1,150 1,045 6,791 732 712 — 288 746 671 1,312 1,369 2,488 155 330 196 309 330 350 440 338 303 1,178 663 1,258 663 852 475 525 426 525 446 376 604 732 691 1,052 1,594 703 680 340 422 237 371 350 522 624 394 673 327 743 1,327 396 327 376 455 396 842 327 743 1,361 1,402 1,474 1,484 1,504 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-16 136 34 165 39 24 29 31 120 26 111 35 42 23 59 54 50 270 39 36 — 49 38 54 154 30 20 25 19 29 24 31 31 27 91 53 115 90 61 44 38 46 43 55 33 62 51 55 60 71 63 1996 7/5/2019 1999 1986 2004 1960 2003 1992 1999 1999 2012 1999 1995 2000 7/5/2019 7/11/2019 7/16/2019 7/16/2019 7/16/2019 7/16/2019 7/16/2019 7/16/2019 7/16/2019 7/16/2019 7/16/2019 7/16/2019 2008 7/31/2019 2008 7/31/2019 2009 1994 7/31/2019 7/31/2019 1998 8/15/2019 1981 8/15/2019 8/30/2019 1996 9/3/2019 1973 9/5/2019 2000 1983 9/5/2019 9/6/2019 2018 9/13/2019 1992 9/13/2019 2017 9/13/2019 1978 9/13/2019 2003 9/13/2019 1978 9/13/2019 1963 9/13/2019 2002 2014 1999 1999 2006 2003 1999 1979 1990 1991 2000 2007 1999 1997 1993 1997 2010 2012 2008 9/13/2019 9/19/2019 9/20/2019 9/20/2019 9/20/2019 9/20/2019 9/20/2019 9/20/2019 9/20/2019 9/20/2019 9/20/2019 9/20/2019 9/20/2019 9/20/2019 9/25/2019 9/25/2019 9/25/2019 9/26/2019 9/26/2019 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired West Chester Bryant Cheyenne Jonesboro Frankfort Onalaska Denver Fort Collins Thornton Car Washes Car Washes Car Washes Restaurants - Family Dining Early Childhood Education Pet Care Services Restaurants - Quick Service Restaurants - Quick Service Restaurants - Casual Dining Early Childhood Leawood Education Claremore Grocery Little Rock Other Services Conyers Other Services LaVergne Other Services Seattle Other Services Albany Automotive Service Bainridge Automotive Service Hinesville Automotive Service Macon Automotive Service Perry Automotive Service Valdosta Automotive Service Pratville Automotive Service Montgomery Automotive Service Medford Pet Care Services Horizon City Medical / Dental Medical / Dental El Paso Convenience Stores Houston Convenience Stores Early Childhood Education Convenience Stores Car Washes Car Washes Medical / Dental Other Services Early Childhood Education Pet Care Services Pet Care Services Pet Care Services Pet Care Services Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Brandon Griffin Indianapolis Wildwood Tucson Avon Davenport Moline West Helena Springfield Charlotte Pasadena Conway Tucson Tucson Tucson Tucson Tucson Tucson Tucson Tempe CO CO CO WY KY WI AR AR OH KS OK AR GA TN WA GA GA GA GA GA GA AL AL OR TX TX TX TX SC MN IA IL AR MO NC FL GA IN FL AZ AZ AZ AZ AZ AZ AZ AZ AZ {f} {f} {f} {f} $ $ 1,103 491 582 739 387 403 $ 1,805 1,093 1,795 1,569 1,224 598 1,213 1,108 622 878 867 246 1,492 1,821 2,790 2,905 410 339 298 154 133 215 451 318 192 3,587 121 631 869 201 673 1,038 1,120 155 1,313 860 134 196 165 350 586 339 463 494 401 411 422 444 370 885 1,088 851 3,330 1,037 6,235 2,302 3,287 421 288 310 287 447 274 636 246 324 11,550 11,529 662 2,152 — 1,204 1,705 1,572 1,052 1,663 1,657 876 495 453 1,165 885 730 1,440 586 453 411 576 566 288 $ — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-17 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — $ $ 1,103 491 582 1,805 1,093 1,795 $ 2,908 $ 1,584 2,377 739 387 403 1,569 2,308 1,224 598 1,611 1,001 1,213 1,108 2,321 622 878 867 246 1,492 1,821 2,790 2,905 410 339 298 154 133 215 451 318 192 3,587 121 631 869 201 673 1,038 1,120 155 1,313 860 134 196 165 350 586 339 463 494 401 411 422 444 370 885 1,507 1,088 1,966 851 3,330 1,037 6,235 2,302 3,287 421 288 310 287 447 274 636 246 324 11,550 11,529 662 2,152 — 1,204 1,705 1,572 1,052 1,663 1,657 876 495 453 1,165 1,718 3,576 2,529 8,056 5,092 6,192 831 627 608 441 580 489 1,087 564 516 15,137 11,650 1,293 3,021 201 1,877 2,743 2,692 1,207 2,976 2,517 1,010 691 618 1,515 885 1,471 730 1,069 1,440 1,903 586 1,080 453 854 411 822 576 998 566 1,010 288 658 78 47 77 65 50 29 50 37 54 50 116 30 178 63 81 19 13 13 12 17 13 24 12 14 425 371 34 101 — 73 83 73 37 44 59 29 19 19 46 36 26 51 24 19 17 19 21 12 2014 2002 2018 9/26/2019 9/26/2019 9/26/2019 1982 9/27/2019 2002 2011 9/27/2019 9/27/2019 2006 9/30/2019 2008 9/30/2019 2004 9/30/2019 2007 1989 1982 1999 2018 1977 1994 1999 1998 2000 1996 1996 2003 1991 1990 2017 2019 2009 2016 2004 2001 1998 2003 2007 1996 2003 1979 1967 2005 9/30/2019 9/30/2019 9/30/2019 9/30/2019 9/30/2019 9/30/2019 10/1/2019 10/1/2019 10/1/2019 10/1/2019 10/1/2019 10/1/2019 10/1/2019 10/1/2019 10/4/2019 10/10/2019 10/10/2019 10/11/2019 10/11/2019 10/17/2019 10/17/2019 10/24/2019 10/24/2019 10/28/2019 10/31/2019 11/1/2019 11/1/2019 11/1/2019 11/1/2019 11/1/2019 1965 11/5/2019 1975 11/5/2019 1985 11/5/2019 1971 11/5/2019 1971 11/5/2019 1932 11/5/2019 1986 11/5/2019 1958 11/5/2019 1976 11/5/2019 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Columbia City Salt Lake City Sanford Mosinee Boulder Odessa Odessa Houston Houston Vicksburg Lewisburg Hazlehurst Prairie View North Manchester Winona Ocala Hampstead Conyers Covington Convenience Stores Convenience Stores Convenience Stores Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Other Services Other Services Convenience Stores Car Washes Car Washes Medical / Dental Medical / Dental Automotive Service Fayetteville Early Childhood Education Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Car Washes Car Washes Car Washes Car Washes Automotive Service Crystal Lake Car Washes Medical / Dental Convenience Stores Medical / Dental Medical / Dental Medical / Dental Medical / Dental Jonesboro Grand Blanc Roscoe Bloomington Shelbyville Blytheville Whiteland Somerset Memphis Wynne Salem Ashland City Arnold Allen Flower Mound Plano Cheektowaga Sioux Falls Sioux Falls Sioux City South Sioux City TX TX TX TN TX TX UT FL WI FL NC GA GA GA CO IN IN MS MS MS AR AR IN TN KY IN IN NY TN KY SD SD IA NE IL AR MI IL MO TX TX TX {f} {f} {f} {f} {f} {f} $ 211 $ 1,414 $ — $ — $ 211 $ 1,414 $ 1,625 $ — — — — — — — — — — — — — — 515 504 — — — — — — — — — — — — — — — 2,478 2,157 — — — — — — — 221 241 461 601 1,031 1,731 1,498 351 1,383 1,129 393 373 347 742 312 363 522 522 553 849 665 532 614 911 389 225 1,402 1,623 1,178 1,419 676 1,137 1,353 1,954 1,353 3,542 1,859 812 2,644 2,644 2,078 1,816 746 2,384 5,273 3,357 1,163 4,027 3,773 2,471 2,189 1,093 801 1,543 686 998 776 1,139 1,126 1,648 1,269 1,791 1,238 1,791 1,126 1,975 931 1,596 1,013 1,545 1,044 1,658 972 1,883 839 1,228 665 890 1,381 1,903 3,284 880 921 1,801 798 1,075 723 992 551 265 1,217 748 656 417 397 427 376 1,105 3,384 2,882 2,478 2,157 1,103 4,776 1,537 832 823 2,230 905 1,698 1,903 4,459 3,605 3,469 2,708 1,368 5,993 2,285 1,488 1,240 2,627 1,332 2,074 221 241 461 601 1,031 1,731 1,498 351 1,383 1,129 393 373 347 742 312 363 522 522 553 849 665 532 614 911 389 225 1,402 1,178 676 1,353 1,353 3,542 1,859 812 2,644 2,644 2,078 1,816 746 801 171 272 1,126 1,269 1,238 1,126 931 1,013 1,044 972 839 665 1,381 1,903 880 921 798 1,075 723 707 303 265 1,217 748 656 417 397 427 376 1,105 3,384 2,882 — — 1,103 4,776 1,537 832 823 2,230 905 1,698 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 285 248 — — — — — — — — F-18 49 54 49 39 60 61 108 66 41 95 93 72 65 32 23 19 23 43 50 47 49 44 47 43 44 35 26 74 44 49 100 50 48 6 37 129 48 50 33 39 30 50 1975 11/14/2019 1965 11/14/2019 1984 11/14/2019 2016 11/18/2019 2019 11/21/2019 2019 1973 1964 1975 2019 2019 1996 2004 2006 11/21/2019 11/27/2019 11/27/2019 12/2/2019 12/10/2019 12/10/2019 12/12/2019 12/12/2019 12/13/2019 1988 12/13/2019 1973 12/17/2019 1987 12/17/2019 2019 12/19/2019 2019 12/19/2019 2019 12/19/2019 2019 12/19/2019 2019 12/19/2019 2019 12/19/2019 2019 12/19/2019 2018 12/19/2019 2003 12/19/2019 2018 12/23/2019 2000 12/23/2019 2019 12/23/2019 2019 1992 1987 2020 2020 1974 2019 2007 1999 2015 1983 1999 1998 12/23/2019 12/19/2019 12/19/2019 12/19/2019 12/19/2019 12/20/2019 12/20/2019 12/23/2019 12/27/2019 12/30/2019 12/31/2019 12/31/2019 12/31/2019 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Loudon Weston Sudbury Plainville Memphis Memphis Fall River St. Mary's Worcester Worcester Stoughton Dyersburg Dorchester Leominster Manor Charlotte Tulsa Tulsa Fall River Automotive Service Houston Automotive Service Pasadena Early Childhood Education Grocery Grocery Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Car Washes Early Childhood Education Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Car Washes Car Washes Car Washes Restaurants - Casual Dining Early Childhood Education Early Childhood Education Medical / Dental Early Childhood Education Restaurants - Casual Dining Medical / Dental Medical / Dental Other Services Early Childhood Education Medical / Dental Automotive Service King Automotive Service Elkin Automotive Service Yadkinville Automotive Service Lancaster Automotive Service Lenoir Automotive Service Hickory Automotive Service St. Albans Automotive Service Hurricane Automotive Service South Boston Flagstaff Portland Watsontown Concord Arvada Golden Sioux City Fort Wayne Tyler Franklin Northbrook Senatobia Naperville Memphis Memphis Jackson DeLand Grand Rapids TX TX MA OK OK MA MA MA MA MA MA MA MA MA TX NC TN PA TN TN TN TN TN MS MS CO CO IA IN IL IL TX TN MI AZ OR PA NC FL NC NC NC SC NC NC WV WV VA $ $ 292 252 $ 513 705 3,200 713 670 2,423 2,098 3,298 592 532 602 552 612 402 512 743 744 905 548 615 550 811 461 313 703 1,074 182 3,270 1,021 1,198 668 1,091 {f} 878 1,080 675 959 1,358 1,283 828 1,131 801 1,198 984 1,202 886 1,120 178 566 1,031 886 1,542 100 2,374 1,566 1,855 — 1,564 4,638 1,080 463 5,347 3,250 {f} 617 1,025 1,055 1,446 1,457 751 1,283 909 408 337 235 388 326 398 235 398 224 1,754 1,856 1,230 1,678 2,419 4,404 153 286 347 286 235 132 459 388 734 $ — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-19 — — — — — — — — — — — — — — — — — — — — — — — — 240 — 400 500 — — — — — — — — — — — — — — — — — — — — $ $ 292 252 513 705 $ 805 $ 957 3,200 713 670 2,423 2,098 3,298 5,623 2,811 3,968 592 532 602 552 612 402 512 743 744 1,336 905 1,437 548 1,150 615 1,167 550 1,162 811 1,213 461 973 313 1,056 20 23 74 70 93 30 29 23 24 26 29 17 15 703 1,074 182 3,270 885 4,344 12 115 1,021 1,198 2,219 668 878 675 1,091 1,759 1,080 1,958 959 1,634 1,358 1,283 2,641 828 801 984 886 178 566 1,031 886 1,542 1,131 1,959 1,198 1,999 1,202 2,186 1,120 2,006 340 2,374 1,966 2,355 518 2,940 2,997 3,241 — 1,542 1,564 4,638 6,202 1,080 463 5,347 3,250 6,427 3,713 617 1,025 1,642 1,055 1,446 1,457 751 1,283 909 408 337 235 388 326 398 235 398 224 1,754 1,856 1,230 1,678 2,419 4,404 153 286 347 286 235 132 459 388 734 2,809 3,302 2,687 2,429 3,702 5,313 561 623 582 674 561 530 694 786 958 14 42 38 33 41 36 40 40 37 30 74 56 33 — 126 141 101 13 59 51 42 67 33 118 7 12 11 11 10 7 14 14 21 1986 1971 1990 1991 1993 1/30/2020 1/30/2020 2/7/2020 3/24/2020 3/24/2020 1984 1/15/2020 1965 1/15/2020 1984 1/15/2020 1983 1/15/2020 1987 1/15/2020 1965 1/15/2020 1980 1/15/2020 1984 1/15/2020 1983 2019 1/15/2020 1/21/2020 1987 8/17/2020 2020 2/26/2020 2020 4/3/2020 2007 1/30/2020 2011 1/30/2020 2011 1/30/2020 2000 1/30/2020 1994 1/30/2020 2013 1/30/2020 1985 2008 2005 2020 1/29/2020 1/24/2020 1/24/2020 8/13/2020 1999 1/7/2020 2009 2/21/2020 2014 2015 2/24/2020 1/17/2020 1996 9/4/2020 2003 1980 1981 1987 2003 2004 1985 1997 2001 2007 1991 1988 1987 1989 1996 1/29/2020 2/27/2020 2/27/2020 2/13/2020 8/17/2020 3/9/2020 3/10/2020 3/10/2020 3/10/2020 3/10/2020 3/10/2020 3/10/2020 3/10/2020 3/10/2020 3/10/2020 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) $ 520 $ 183 $ — $ — $ 520 $ 183 $ 703 $ West Dundee Catonsville Hartland Menomonee Falls Menomonee Falls Oconomowoc Lake City Tucson Casa Grande Charleston Waukesha Orange Marietta Waterford Greenville Alpharetta Automotive Service Pittsboro Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Early Childhood Education Medical / Dental Early Childhood Education Early Childhood Education Car Washes Early Childhood Education Early Childhood Education Automotive Service Arlington Medical / Dental Automotive Service Little Elm Automotive Service McKinney Restaurants - Quick Service Pet Care Services Restaurants - Family Dining Restaurants - Family Dining Automotive Service Gilbert Restaurants - Quick Service Other Services Other Services Other Services Other Services Automotive Service Tempe Restaurants - Quick Service Restaurants - Quick Service Car Washes Car Washes Car Washes Car Washes Car Washes Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Grocery Grocery Grocery Grocery Grocery Big Spring Flagstaff Phoenix Sun City Scottsdale Yuma Newnan Newnan Sparta Byram Lawrenceville Dexter Kennett Park Hills Piggott Potosi Yazoo City Richmond Hill Centennial Joplin Kansas City NC WI WI WI WI WI FL MI AZ AZ GA GA TX TX TX TX IL MD SC SC AZ MS GA CO MO MO AZ MS TX AZ AZ AZ AZ AZ TN TN GA GA GA MO MO MO AR MO {f} {f} {f} {f} {f} {f} {f} Year Constructed Date Acquired 2006 3/10/2020 2000 3/6/2020 1978 3/6/2020 2000 3/6/2020 1996 3/6/2020 2007 1974 3/6/2020 3/4/2020 1997 9/18/2020 2008 2020 3/6/2020 2/6/2020 1997 3/6/2020 1995 2015 2015 2007 2010 2020 1998 3/6/2020 2/14/2020 2/21/2020 3/6/2020 3/6/2020 3/6/2020 5/4/2020 1972 3/19/2020 1978 2019 1975 2019 2005 1997 2015 1987 3/19/2020 4/30/2020 5/7/2020 6/8/2020 6/8/2020 6/8/2020 6/8/2020 5/28/2020 2003 6/8/2020 2020 2018 2018 1988 1994 2001 6/25/2020 7/24/2020 7/24/2020 7/24/2020 7/24/2020 7/24/2020 1997 6/25/2020 2017 7/16/2020 1987 8/19/2020 2005 8/19/2020 2005 1998 2013 1970 1986 1970 8/19/2020 9/30/2020 9/30/2020 9/30/2020 9/30/2020 9/30/2020 9 83 84 107 83 113 64 9 29 30 78 76 104 88 27 28 22 35 35 32 45 15 33 113 21 53 66 15 1 56 47 37 45 33 27 14 26 19 22 16 21 26 15 19 462 976 3,390 3,852 3,464 4,440 1,354 4,314 5,668 577 3,485 4,062 882 1,046 419 956 821 4,734 2,450 5,616 3,496 783 1,202 906 1,970 1,862 2,791 1,799 3,234 5,033 1,621 833 337 647 1,016 523 602 626 1,303 370 249 2,502 3,008 991 1,531 915 3,148 3,603 3,293 1,006 807 1,310 1,915 4,769 4,436 3,630 1,653 1,823 1,833 2,517 1,091 1,717 1,020 2,108 753 761 3,993 941 1,391 3,304 2,323 2,478 1,002 3,263 7,000 1,932 2,922 4,219 150 775 734 1,509 1,030 — — — — — — — — — — — — — — — 287 1,873 2,204 1,613 3,666 280 733 911 1,030 3,456 2,634 2,134 2,093 1,883 1,317 5,329 4,838 3,747 5,759 2,163 1,383 2,116 569 1,480 1,413 1,494 2,907 724 1,189 1,913 1,122 813 427 653 614 371 1,363 697 1,688 1,819 789 1,569 2,485 1,510 2,115 2,472 1,403 1,940 462 3,390 976 3,464 1,354 4,314 577 3,485 882 1,046 419 956 504 4,734 2,450 783 906 — 1,799 3,234 1,621 833 337 647 1,016 523 586 626 1,303 370 249 2,502 3,003 991 1,531 915 3,148 3,603 3,293 1,006 807 539 1,881 1,091 1,020 2,108 753 761 2,972 941 1,391 3,304 775 584 — 3,456 2,634 2,134 2,093 1,883 1,383 287 1,873 2,204 1,613 3,666 280 733 711 — — — — — — — — — — — — — — — 317 — 1,970 — — — — — — 771 34 — — — — — 1,021 — — — — — — — — — — 16 — — — — — 5 — — — — — — — — — — — 1,413 1,494 724 1,189 1,122 813 427 653 614 371 1,363 697 1,688 1,819 789 1,569 — — — — — — — — F-20 McMinnville 569 200 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Grocery Grocery Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Restaurants - Quick Service Car Washes Car Washes Car Washes Car Washes Restaurants - Quick Service Medical / Dental Other Services Other Services Other Services Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Medical / Dental Medical / Dental Medical / Dental Car Washes Medical / Dental Early Childhood Education Early Childhood Education Medical / Dental Medical / Dental Grocery Grocery Equipment Rental and Sales Malden Mayflower East Brunswick Washington Princeton Lawrenceville Madison Chester Manville North Caldwell Kerhonkson Bethlehem Langhorne Quakertown Hattiesburg Fort Worth Westminster Palatka Greenwood Flint Alabaster Albuquerque Shreveport Skiatook Bartlesville Owasso Bartlesville Broken Arrow Tulsa Bartlesville Taunton Plymouth Middleborough Phenix City Pine Bluff Jackson Jackson Valdosta Valdosta Jackson Marble Hill Chatham MO AR NJ NJ NJ NJ NJ NJ NJ NJ NY PA PA PA MS TX CO FL SC TX AL NM LA OK OK OK OK OK OK OK MA MA MA AL AR MI MI GA GA MO MO NY {f} $ $ 265 1,460 $ 1,873 3,042 1,173 1,540 388 1,969 1,448 1,918 632 1,999 1,714 1,306 1,295 1,550 867 561 938 602 898 989 663 2,805 1,642 1,550 1,652 1,295 882 1,475 842 914 1,526 273 428 690 1,686 1,006 324 118 275 932 847 2,747 1,174 2,490 2,490 652 879 207 286 227 2,695 2,853 6,094 4,587 1,060 3,425 1,226 1,374 177 201 296 296 1,111 65 379 170 262 214 458 504 987 599 1,289 444 475 2,722 552 1,046 614 1,726 1,351 1,719 2,052 1,317 {f} {f} {f} {f} {f} $ $ 265 1,460 1,873 3,042 $ 2,138 $ 4,502 1,173 1,540 2,713 388 1,969 2,357 1,448 1,918 3,366 632 1,999 2,631 1,714 1,306 3,020 1,295 1,550 2,845 867 561 938 602 898 989 1,856 663 1,224 2,805 3,743 1,642 2,244 1,550 2,448 1,652 1,295 2,947 882 1,475 842 914 1,526 273 428 702 1,711 1,022 324 118 275 932 847 2,747 1,174 2,490 2,490 652 879 1,054 2,148 1,391 1,729 4,222 2,016 3,404 4,016 925 1,307 1,756 3,859 2,412 2,695 3,019 2,853 2,971 6,094 6,369 4,587 5,519 1,060 3,425 4,485 1,226 1,374 2,600 177 201 296 296 1,111 65 379 170 262 214 458 504 987 599 1,289 444 475 2,722 647 776 1,490 740 771 3,833 712 1,046 1,425 614 1,726 1,351 1,719 2,052 784 1,988 1,565 2,177 2,556 1,317 2,304 — — — — — — — — — — — — — — — — — — — — — 847 1,862 1,164 — — — — — — — — — — — 95 — — — — — — — $ — — — — — — — — — — — — — — — — — — — — — 12 25 16 — — — — — — — — — — — — — — — — — — — F-21 19 45 19 20 22 24 14 20 12 11 31 16 23 19 13 41 13 26 30 8 11 10 22 18 26 25 54 49 33 18 7 9 5 4 22 5 10 5 14 11 15 18 15 1978 2020 9/30/2020 9/30/2020 1960 9/18/2020 1969 9/18/2020 1947 9/18/2020 1960 9/18/2020 1950 9/18/2020 1995 9/18/2020 1977 9/18/2020 1968 9/18/2020 1982 9/18/2020 1968 9/18/2020 1999 9/18/2020 2012 9/18/2020 2000 2020 2003 2020 2020 2014 2008 2003 1970 2012 9/11/2020 8/31/2020 9/24/2020 9/30/2020 9/30/2020 9/24/2020 9/24/2020 9/29/2020 9/29/2020 9/29/2020 2005 9/30/2020 1967 9/30/2020 2007 9/30/2020 2003 9/30/2020 2014 9/30/2020 2019 9/30/2020 1980 1972 2005 1925 2020 1983 9/30/2020 10/1/2020 10/1/2020 10/1/2020 10/5/2020 10/9/2020 1990 10/14/2020 1987 1996 1990 1995 1999 10/14/2020 10/15/2020 10/15/2020 10/22/2020 10/22/2020 1974 10/22/2020 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Fords Byram Jackson Westfield Lancaster East Windsor West Berlin Zeeland Wyoming Waterford Elkhart Mishawaka Equipment Rental and Sales Clifton Park Equipment Rental and Sales Goshen Equipment Rental and Sales Fultonville Equipment Rental and Sales Equipment Rental and Sales Greenfield Equipment Rental and Sales Farmington Equipment Rental and Sales Pembroke Farmington Grocery Grocery Fredericktown Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Automotive Service Other Services Other Services Other Services Other Services Other Services Restaurants - Quick Service Car Washes Automotive Service Pet Care Services Pet Care Services Grocery Automotive Service Automotive Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Alpharetta Fayetteville Franklin Princeton Grand Prairie Douglasville Richardson Carrollton Mesquite Arlington Fairmont Fairmont Owasso Norman Rowlett Moore Dallas Waco Point Pleasant Oklahoma City Oklahoma City NY NY NY MA MA CT NH MO MO NJ NJ NJ NJ NJ NJ MI MI MI IN IN IN TX NJ GA GA AR WV WV TX TX OK OK OK OK TX TX TX TX TX TX OK {f} {f} $551 732 1,775 1,285 304 411 318 789 682 1,193 1,904 1,599 1,300 1,464 1,061 2,086 1,066 1,286 544 527 670 1,030 1,763 640 766 423 232 291 501 949 553 605 303 929 553 605 553 855 814 845 542 $717 1,191 858 2,089 815 1,410 785 1,990 1,523 1,182 1,606 1,634 1,180 1,100 1,298 5,386 1,795 1,243 1,061 558 1,609 2,986 1,166 748 822 1,410 539 860 682 86 1,032 1,152 709 935 548 547 665 621 73 286 985 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — F-22 — $ 551 $ 717 $ 1,268 $ — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 732 1,191 1,923 1,775 858 2,633 1,285 2,089 3,374 304 411 318 789 682 815 1,119 1,410 1,821 785 1,990 1,523 1,103 2,779 2,205 1,193 1,182 2,375 1,904 1,606 3,510 1,599 1,634 3,233 1,300 1,180 2,480 1,464 1,100 2,564 1,061 2,086 1,066 1,286 544 527 670 1,030 1,298 5,386 1,795 1,243 1,061 558 1,609 2,986 2,359 7,472 2,861 2,529 1,605 1,085 2,279 4,016 1,763 1,166 2,929 640 766 423 232 291 501 949 553 605 303 929 553 605 553 855 814 845 542 748 1,388 822 1,410 1,588 1,833 539 771 860 1,151 682 1,183 86 1,035 1,032 1,585 1,152 1,757 709 1,012 935 1,864 548 1,101 547 1,152 665 1,218 621 1,476 73 887 286 1,131 985 1,527 6 11 12 17 8 12 6 21 19 13 15 15 12 11 13 39 15 13 8 7 9 17 8 5 5 6 2 3 3 1 4 4 3 3 2 3 3 3 1 2 4 2000 10/22/2020 1974 10/22/2020 1980 10/22/2020 2012 10/22/2020 1971 10/22/2020 2005 10/22/2020 1978 2006 2001 10/22/2020 10/29/2020 10/29/2020 1992 10/29/2020 1970 10/29/2020 1965 10/29/2020 1974 10/29/2020 1995 10/29/2020 1995 1973 2020 1995 1989 1979 2017 2020 10/29/2020 11/2/2020 11/2/2020 11/2/2020 11/2/2020 11/2/2020 11/12/2020 11/16/2020 1977 11/19/2020 1989 11/24/2020 2007 1990 11/24/2020 12/1/2020 1997 12/2/2020 1999 12/2/2020 1979 12/15/2020 1979 12/15/2020 1979 12/15/2020 1983 12/15/2020 1992 12/15/2020 1986 12/15/2020 1987 12/15/2020 1992 12/15/2020 1999 12/15/2020 1999 12/15/2020 1999 12/15/2020 1977 12/15/2020 2010 12/15/2020 Description(a) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount at December 31, 2020(b)(c) Tenant Industry City State Encumbrances Land & Improvements Building & Improvements Land & Improvements Building & Improvements Land & Improvements Building & Improvements Total Accumulated Depreciation (d)(e) Year Constructed Date Acquired Restaurants - Quick Service Car Washes Car Washes Car Washes Car Washes Car Washes Car Washes Car Washes Medical / Dental Automotive Service Automotive Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Restaurants - Quick Service Car Washes Car Washes Car Washes Medical / Dental Medical / Dental Medical / Dental Medical / Dental Medical / Dental Medical / Dental Car Washes Other Services Medical / Dental Medical / Dental Medical / Dental Equipment Rental and Sales Equipment Rental and Sales Equipment Rental and Sales Kilgore Fort Worth Hudson Oaks Garland Fort Worth Crowley Flower Mound Fort Worth Naperville Washington Court House Cincinnati Dothan Philadelphia Ashford Newton Slidell Gulfport Carbondale Arlington Austin Florissant Temple Norcross Carrolton Jacksonville Pensacola Amarillo Amarillo Amarillo Milford Beaumon Cibilo TX TX TX TX TX TX TX TX IL OH OH AL MS AL MS LA MS IL TX TX MO TX GA TX NC FL TX TX TX NH TX TX $ 449 1,590 1,824 1,303 1,907 1,571 1,623 1,655 315 550 448 459 373 410 471 962 666 1,674 176 581 454 145 652 1,534 915 1,187 221 369 468 $ 710 $ 2,724 2,745 2,287 3,129 2,873 2,730 2,129 786 1,061 911 1,431 1,540 1,338 1,316 2,919 973 3,227 329 346 920 854 981 1,073 1,436 3,344 990 2,186 848 709 407 1,314 2,728 1,231 3,334 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — $ — $ — — — — — — — — — — — — — — — — — — — — — — — — — — — — 11 — — 449 1,590 1,824 1,303 1,907 1,571 1,623 1,655 315 550 448 459 373 410 471 962 666 1,674 176 581 454 145 652 1,534 915 1,187 221 369 468 $ 710 $ 2,724 2,745 2,287 3,129 2,873 2,730 2,129 786 1,159 $ 4,314 4,569 3,590 5,036 4,444 4,353 3,784 1,101 1,061 1,611 911 1,359 1,431 1,890 1,540 1,913 1,338 1,748 1,316 2,919 973 3,227 329 346 920 854 981 1,073 1,436 3,344 990 2,186 848 1,787 3,881 1,639 4,901 505 927 1,374 999 1,633 2,607 2,351 4,531 1,211 2,555 1,316 709 418 1,127 1,314 2,728 4,042 1,231 3,334 4,565 3 9 7 6 10 9 9 8 2 4 3 5 5 4 5 9 4 10 1 1 3 2 3 3 6 8 3 5 3 2 9 9 1979 1942 1948 2012 2013 2016 2018 2018 1998 12/15/2020 12/18/2020 12/18/2020 12/18/2020 12/18/2020 12/18/2020 12/18/2020 12/18/2020 12/21/2020 2004 12/21/2020 1991 12/21/2020 2019 12/22/2020 2020 12/22/2020 2020 12/22/2020 2020 2012 2008 2018 1983 1968 1987 2015 1975 1983 2003 1970 2018 1978 2015 12/22/2020 12/23/2020 12/23/2020 12/23/2020 12/23/2020 12/23/2020 12/23/2020 12/23/2020 12/23/2020 12/23/2020 12/29/2020 12/29/2020 12/29/2020 12/29/2020 12/29/2020 1982 12/30/2020 1991 12/31/2020 1980 12/31/2020 $ 733,562 $ 1,435,310 $ 7,680 $ 84,367 $ 741,242 $ 1,519,677 $ 2,260,919 $ 112,144 (a) (b) As of December 31, 2020, the Company had investments in 1,181 single-tenant real estate property locations including 1,056 owned properties and 10 ground lease interests. All or a portion of 6 of the Company’s owned properties and 1 property subject to ground lease interests are subject to leases accounted for as direct financing leases and the portions relating to the direct financing leases are excluded from the table above. The Company owns 5 properties which are accounted for as a loan receivable, as the leases contain purchase options. Initial costs exclude intangible lease assets totaling $68.0 million. The aggregate cost for federal income tax purposes is $2.3 billion. F-23 (c) The following is a reconciliation of carrying value for land and improvements and building and improvements for the periods presented: (in thousands) Balance, beginning of period Additions Acquisitions Improvements Deductions Provisions for impairment of real estate Real estate investments held for sale Cost of real estate sold Balance, end of period $ $ Year ended December 31, 2020 Year ended December 31, 2019 Year ended December 31, 2018 1,812,961 $ 1,306,504 $ 527,482 28,889 (8,399) (17,058) (82,956) 2,260,919 $ 568,680 3,283 (1,527) (1,211) (62,768) 1,812,961 $ 866,762 495,265 1,689 (1,997) — (55,215) 1,306,504 (d) The following is a reconciliation of accumulated depreciation for the periods presented: (in thousands) Balance, beginning of period Additions Depreciation expense Deductions Accumulated depreciation associated with real estate sold Balance, end of period $ $ Year ended December 31, 2020 Year ended December 31, 2019 Year ended December 31, 2018 71,445 $ 51,736 (11,037) 112,144 $ 37,904 $ 36,354 (2,813) 71,445 $ 15,356 24,854 (2,306) 37,904 (e) (f) (g) Depreciation is calculated using the straight-line method over the estimated useful lives of the properties, which is up to 40 years for buildings and improvements and 15 years for land improvements. Property is collateral for non-recourse debt obligations totaling $399.7 million issued under the Company’s Master Trust Funding Program. Amounts shown as reductions to cost capitalized subsequent to acquisition represent provisions recorded for impairment of real estate. See accompanying report of independent registered public accounting firm. F-24   ESSENTIAL PROPERTIES REALTY TRUST, INC. AND ESSENTIAL PROPERTIES REALTY TRUST, INC. PREDECESSOR Schedule IV - Mortgage Loans on Real Estate As of December 31, 2020 (Dollar amounts in thousands)  Description First mortgage loans: Two Early Childhood Education Centers located in Florida Two Early Childhood Education Centers located in Florida Two Family Dining Restaurants located in Texas Sixty-nine Quick Service Restaurants located in fifteen states Eighteen Car Washes located in six states One Early Childhood Education Centers located in Florida One Medical/Dental Center located in Texas Three Convenience Stores located in Minnesota Eight Car Washes located in three states Eleven Car Washes located in six states Interest rate Final Maturity Date Periodic Payment Terms Final Payment Terms Prior Liens Face Amount of Mortgages Carrying Amount of Mortgages Principal Amount of Loans Subject to Delinquent Principal or Interest 8.80% 5/8/2039 Interest only Balloon - $12,000 None $ 12,000 $ 11,782 8.53% 7/15/2039 8.10% 6/30/2059 Interest only Principal + Interest Balloon - $7,300 None 7,300 7,160 Fully amortizing None 6,114 6,009 8.16% 8/31/2034 Interest only Balloon - $28,000 None 28,000 27,997 8.05% 12/31/2034 Interest only Balloon - $37,105 None 37,105 37,027 8.42% 2/29/2040 Interest only Balloon - $5,300 7.00% 4/21/2021 Interest only Balloon - $860 8.30% 12/10/2022 Interest only Balloon - $2,323 7.30% 12/31/2035 Interest only Balloon - $18,638 None None None None 7.30% 12/31/2035 Interest only Balloon - $27,362 None 5,300 5,207 860 860 2,323 2,199 18,638 18,575 27,362 27,231 $ 145,002 $ 144,048 None None None None None None None None None None The following shows changes in carrying amounts of mortgage loans receivable during the years ended December 31, 2020, 2019 and 2018 (in thousands): Balance, beginning of period Additions: New mortgage loans Subsequent funding on existing mortgage loans Deductions: Collections of principal Provision for loan losses Balance, end of period 2020 Year ended December 31, 2019 2018 87,029 $ 14,854 $ — 54,484 3,500 (11) (954) 144,048 $ 92,036 — (19,861) — 87,029 $ 14,854 — — — 14,854 $ $ See accompanying report of independent registered public accounting firm. F-25   DESCRIPTION OF REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934 Exhibit 4.4 Essential Properties Realty Trust, Inc. has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): its common stock, par value $0.01 per share (the “common stock”). For purposes of this exhibit, unless the context otherwise requires, the words “we,” “our,” “us” and “our company” refer to Essential Properties Realty Trust, Inc., a Maryland corporation. General DESCRIPTION OF COMMON STOCK The following summary sets forth some of the general terms of our common stock. Because this is a summary, it does not contain all of the information that may be important to you. For a more detailed description of our common stock, you should read our charter and bylaws, each of which is an exhibit to our Annual Report on Form 10-K to which this summary is also an exhibit, and the applicable provisions of the Maryland General Corporation Law (the “MGCL”). Our charter authorizes us to issue up to 500,000,000 shares of common stock, $0.01 par value per share, and 150,000,000 shares of preferred stock, $0.01 par value per share. A majority of our entire board of directors has the power, without common stockholder approval, to amend our charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue. Under Maryland law, our stockholders generally are not liable for our debts or obligations solely as a result of stockholders’ status as stockholders. Terms Our outstanding shares of common stock are duly authorized, fully paid and nonassessable. Holders of our common stock are entitled to receive distributions when authorized by our board of directors and declared by us out of assets legally available for the payment of dividends. Holders of our common stock are also entitled to share ratably in our assets legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up, after payment of, or adequate provision for, all of our known debts and liabilities. These rights are subject to the preferential rights of any other class or series of our stock, including any shares of preferred stock we may issue, ranking senior to our common stock and to the provisions of our charter regarding restrictions on ownership and transfer of our stock. Subject to our charter restrictions on ownership and transfer of our stock and the terms of any other class or series of our stock, each outstanding share of our common stock entitles the holder thereof to one vote on all matters submitted to a vote of stockholders, including the election of directors. Cumulative voting in the election of directors is not permitted. Directors are elected by a plurality of the votes cast at the meeting at which directors are being elected and at which a quorum is present. This means that the holders of a majority of the outstanding shares of our common stock can effectively elect all of the directors then standing for election, and the holders of the remaining shares will not be able to elect any directors. Our common stockholders have no preference, conversion, exchange, sinking fund or redemption rights and have no preemptive rights to subscribe for any of our capital stock. Our charter provides that our stockholders generally have no appraisal rights unless our board of directors determines that appraisal rights will apply to one or more transactions in which our common stockholders would otherwise be entitled to exercise such rights. Subject to our charter restrictions on ownership and transfer of our stock, holders of shares of our common stock will initially have equal dividend, liquidation and other rights. Under Maryland law, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, convert into another form of entity, engage in a statutory share exchange or engage in a similar transaction unless such transaction is declared advisable by the board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of all of the votes entitled to be cast on the matter, unless a lesser percentage (but not less than a majority of the votes entitled to be cast on the matter) is set forth in the corporation’s charter. Our charter provides for approval of these matters by the affirmative vote of stockholders entitled to cast a majority of all the votes entitled to be cast on such matter, except that the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on such matter is required to amend the provisions of our charter relating to the removal of directors or the vote required to amend the removal provisions. Maryland law also permits a corporation to transfer all or substantially all of its assets without the approval of its stockholders to an entity, all of the equity interests of which are owned, directly or indirectly, by the corporation. Because our operating assets are held by our operating partnership, Essential Properties, L.P., or its wholly owned subsidiaries, these subsidiaries may be able to merge or transfer all or substantially all of their assets without the approval of our stockholders. Power to Reclassify Unissued Shares of Common Stock and Issue Additional Shares of Common Stock Our charter authorizes our board of directors to reclassify any unissued shares of our common stock into other classes or series of stock, including classes or series of preferred stock, and to establish the designation and number of shares of each such class or series and to set, subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock and the terms of any other class or series of our stock, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of each such class or series. Thus, our board of directors could authorize the issuance of shares of common stock or preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for our common stock or that our common stockholders otherwise believe to be in their best interests. Transfer Agent and Registrar The registrar and transfer agent for our common stock is Computershare Trust Company, N.A. Listing Our common stock is listed on the NYSE under the symbol “EPRT.” Restrictions on Ownership and Transfer In order for us to maintain our qualification for taxation as a REIT under Internal Revenue Code of 1986, as amended (the “Code”), our stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of stock (after taking into account options to acquire shares of stock) may be owned, directly or through certain constructive ownership rules, by five or fewer individuals (as defined in the Code to include certain entities such as private foundations) at any time during the last half of a taxable year (other than the first year for which an election to be a REIT has been made). Our charter contains restrictions on the ownership and transfer of our stock that are intended to assist us in complying with these requirements and maintaining our qualification as a REIT, among other reasons. The relevant sections of our charter provide that no person or entity may actually or beneficially own, or be deemed to own by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% (in value or in number of shares, whichever is more restrictive) of the aggregate of the outstanding shares of our common stock or 9.8% in value of the aggregate of the outstanding shares of all classes and series of our stock, in each case excluding any shares of our stock that are not treated as outstanding for federal income tax purposes. We refer to each of these restrictions as an “ownership limit” and collectively as the “ownership limits.” A person or entity that would have acquired actual, beneficial or constructive ownership of our stock but for the application of the ownership limits or any of the other restrictions on ownership and transfer of our stock discussed below is referred to as a “prohibited owner.” The constructive ownership rules under the Code are complex and may cause stock owned actually or constructively by a group of related individuals and/or entities to be owned constructively by one individual or entity. As a result, the acquisition of less than 9.8% of our common stock (or the acquisition of an interest in an entity that owns, actually or constructively, our common stock) by an individual or entity could, nevertheless, cause that individual or entity, or another individual or entity, to own constructively in excess of 9.8% (in value or in number of shares, whichever is more restrictive) of the outstanding shares of our common stock and thereby violate the applicable ownership limit. In addition, certain entities that are defined as designated investment entities in our charter, which generally includes pension funds, mutual funds and certain investment management companies, are permitted to own up to 9.8% (in value or in number of shares, whichever is more restrictive) or our outstanding common stock, or 9.8% (in value or in number of shares, whichever is more restrictive) of the aggregate of the outstanding shares of all classes and series of stock, so long as each beneficial owner of the shares owned by such designated investment entity would satisfy the ownership limits if those beneficial owners owned directly their pro-rata share of our stock owned by the designated investment entity. Our charter provides that our board of directors, subject to certain limits, upon receipt of a request that complies with the requirements of our charter and any policy adopted by our board of directors, may retroactively or prospectively exempt a person from either or both of the ownership limits or the designated investment entity limit and establish a different limit on ownership for such person. Our board of directors may increase or decrease one or both of the ownership limits or the designated investment entity limit for one or more persons, except that a decreased ownership limit will not be effective for any person whose actual, beneficial or constructive ownership of our stock exceeds the decreased ownership limit or decreased investment entity limit at the time of the decrease until the person’s actual, beneficial or constructive ownership of our stock equals or falls below the decreased ownership limit or decreased investment entity limit, although any further acquisition of our stock (other than by a previously exempted person) will violate the decreased ownership limit or decreased investment entity limit, as applicable. Our board of directors may not increase or decrease any ownership limit or the designated investment entity limit if the new ownership limit or the designated investment entity limit would allow five or fewer persons to actually or beneficially own more than 49.9% in value of our outstanding stock or could cause us to be “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise cause us to fail to continue to qualify as a REIT. Our charter further prohibits: • any person from actually, beneficially or constructively owning shares of our stock that could result in us being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise cause us to fail to continue to qualify as a REIT (including, but not limited to, actual, beneficial or constructive ownership of shares of our stock that could result in us owning (actually or constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income we derive from such tenant, taking into account our other income that would not qualify under the gross income requirements of Section 856(c) of the Code, would cause us to fail to satisfy any the gross income requirements imposed on REITs); and • any person from transferring shares of our stock if such transfer would result in shares of our stock being beneficially owned by fewer than 100 persons (determined under the principles of Section 856(a)(5) of the Code). Any person who acquires or attempts or intends to acquire actual, beneficial or constructive ownership of shares of our stock that will or may violate the ownership limits, the designated investment entity limit or any of the other restrictions on ownership and transfer of our stock described above must give written notice immediately to us or, in the case of a proposed or attempted transaction, provide us at least 15 days prior written notice, and provide us with such other information as we may request in order to determine the effect, if any, of such transfer on our status as a REIT. The ownership limits, the designated investment entity limit and other restrictions on ownership and transfer of our stock described above will not apply if our board of directors determines that it is no longer in our best interests to continue to qualify or attempt to qualify as a REIT or that compliance with any such restriction is no longer required in order for us to continue to qualify as a REIT. Pursuant to our charter, if any purported transfer of our stock or any other event would otherwise result in any person violating the ownership limits, the designated investment entity limit or such other limit established by our board of directors, would result in us being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to continue to qualify as a REIT, then the number of shares causing the violation (rounded up to the nearest whole share) will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable beneficiaries selected by us. The prohibited owner will have no rights in shares of our stock held by the trustee. The automatic transfer will be effective as of the close of business on the business day prior to the date of the violative transfer or other event that results in the transfer to the trust. Any dividend or other distribution paid to the prohibited owner prior to our discovery that the shares had been automatically transferred to a trust as described above must be repaid to the trustee upon demand. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable restriction on ownership and transfer of our stock, then the transfer of the number of shares that otherwise would cause any person to violate the above restrictions will be void and of no force or effect, regardless of any action or inaction by the board of directors, and the intended transferee will acquire no rights in the shares. If any transfer of our stock would result in shares of our stock being beneficially owned by fewer than 100 persons (determined under the principles of Section 856(a)(5) of the Code), then any such purported transfer will be void and of no force or effect and the intended transferee will acquire no rights in the shares. Shares of our stock transferred to the trustee are deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (1) the price per share in the transaction that resulted in the transfer of the shares to the trust (or, in the event of a gift, devise or other such transaction, the last sale price reported on the NYSE on the day of the transfer or other event that resulted in the transfer of such shares to the trust) and (2) the last sale price reported on the NYSE on the date we accept, or our designee accepts, such offer. We must reduce the amount payable to the trustee by the amount of dividends and distributions paid to the prohibited owner and owed by the prohibited owner to the trustee and may pay the amount of such reduction to the trustee for the benefit of the charitable beneficiary. We have the right to accept such offer until the trustee has sold the shares of our stock held in the trust. Upon a sale to us, the interest of the charitable beneficiary in the shares sold terminates and the trustee must distribute the net proceeds of the sale to the prohibited owner and any dividends or other distributions held by the trustee with respect to such stock will be paid to the charitable beneficiary. Within 20 days of receiving notice from us of the transfer of shares to the trust, the trustee must sell the shares to a person or persons designated by the trustee who can own the shares without violating the ownership limits, the designated investment entity limit or the other restrictions on ownership and transfer of our stock. Upon such sale, the interest of the charitable beneficiary will terminate and the trustee must distribute to the prohibited owner an amount equal to the lesser of (1) the price paid by the prohibited owner for the shares (or, if the prohibited owner did not give value in connection with the transfer or other event that resulted in the transfer to the trust (e.g., a gift, devise or other such transaction), the last sale price reported on the NYSE on the day of the transfer or other event that resulted in the transfer of such shares to the trust) and (2) the sales proceeds (net of commissions and other expenses of sale) received by the trustee for the shares. The trustee must reduce the amount payable to the prohibited owner by the amount of dividends and other distributions paid to the prohibited owner and owed by the prohibited owner to the trustee. Any net sales proceeds in excess of the amount payable to the prohibited owner will be immediately paid to the charitable beneficiary, together with any dividends or other distributions thereon. In addition, if prior to discovery by us that shares of our stock have been transferred to the trustee, such shares of stock are sold by a prohibited owner, then such shares shall be deemed to have been sold on behalf of the trust and, to the extent that the prohibited owner received an amount for or in respect of such shares that exceeds the amount that such prohibited owner was entitled to receive, such excess amount must be paid to the trustee upon demand. The trustee will be designated by us and will be unaffiliated with us and with any prohibited owner. Prior to the sale of any shares by the trust, the trustee will receive, in trust for the beneficiary, all dividends and other distributions paid by us with respect to such shares, and may exercise all voting rights with respect to such shares for the exclusive benefit of the charitable beneficiary. Subject to Maryland law, effective as of the date that the shares have been transferred to the trust, the trustee may, at the trustee’s sole and absolute discretion: • rescind as void any vote cast by a prohibited owner prior to our discovery that the shares have been transferred to the trust; and • recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary. However, if we have already taken irreversible corporate action, then the trustee may not rescind and recast the vote. If our board of directors determines that a proposed transfer or other event has taken place that violates the restrictions on ownership and transfer of our stock set forth in our charter, our board of directors may take such action as it deems advisable to refuse to give effect to or to prevent such transfer, including, but not limited to, causing us to redeem shares of stock, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the transfer. Every owner of 5% or more (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) of the outstanding shares of our stock, within 30 days after the end of each taxable year, must give written notice to us stating the name and address of such owner, the number of shares of each class and series of our stock that the owner actually or beneficially owns and a description of the manner in which the shares are held. Each such owner also must provide to us in writing any additional information that we may request in order to determine the effect, if any, of the person’s actual or beneficial ownership on our status as a REIT and to ensure compliance with the ownership limits, the designated investment entity limit and the other restrictions on ownership and transfer of our stock set forth in our charter. In addition, any person that is an actual, beneficial owner or constructive owner of shares of our stock and any person (including the stockholder of record) who is holding shares of our stock for an actual, beneficial owner or constructive owner must disclose to us in writing such information as we may request in order to determine our status as a REIT and comply with requirements of any taxing authority or governmental authority or to determine such compliance. Any certificates representing shares of our stock will bear a legend referring to the restrictions on ownership and transfer of our stock described above. However, in lieu of a legend, the certificate may state that we will furnish a full statement regarding the applicable restrictions on ownership and transfer to the stockholder on request and without charge. These restrictions on ownership and transfer could delay, defer or prevent a transaction or a change of control of our company that might involve a premium price for our common stock that our stockholders believe to be in their best interest. Our Board of Directors Under our charter and bylaws, the number of directors of our company may be established, increased or decreased only by a majority of our entire board of directors but may not be fewer than the minimum number required under the MGCL (which is one) nor, unless our bylaws are amended, more than 15. Removal of Directors Our charter provides that, subject to the rights of holders of one or more classes or series of preferred stock to elect or remove one or more directors, a director may be removed only for cause (as defined in our charter), and then only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of directors. Business Combinations Under the MGCL, certain “business combinations” (including a merger, consolidation, statutory share exchange or, in certain circumstances specified under the statute, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and any interested stockholder, or an affiliate of such an interested stockholder, are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. Maryland law defines an interested stockholder as: • any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock; or • an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation. A person is not an interested stockholder under the MGCL if the board of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. In approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of the approval, with any terms and conditions determined by it. After such five-year period, any such business combination must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: • 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation, voting together as a single voting group; and • two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected or held by an affiliate or associate of the interested stockholder, voting together as a single voting group. These supermajority approval requirements do not apply if, among other conditions, the corporation’s common stockholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares. These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a corporation’s board of directors prior to the time that the interested stockholder becomes an interested stockholder. As permitted by the MGCL, our board of directors has adopted a resolution exempting any business combination between us and any other person from the provisions of this statute. Consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations involving us. As a result, any person will be able to enter into business combinations with us that may not be in the best interests of our stockholders, without compliance with the supermajority vote requirements and other provisions of the statute. Our bylaws provide that this resolution or any other resolution of our board of directors exempting any business combination from the business combination provisions of the MGCL may only be revoked, altered or amended, and our board of directors may only adopt an inconsistent resolution, if approved by the affirmative vote of a majority of the votes cast on the matter by stockholders entitled to vote generally in the election of directors. Control Share Acquisitions The MGCL provides that a holder of “control shares” of a Maryland corporation acquired in a “control share acquisition” has no voting rights with respect to those shares except to the extent approved by the affirmative vote of at least two-thirds of the votes entitled to be cast by stockholders entitled to exercise or direct the exercise of voting power in the election of directors generally but excluding: (1) the person who has made or proposes to make the control share acquisition; (2) any officer of the corporation; or (3) any employee of the corporation who is also a director of the corporation. “Control shares” are voting shares of stock that, if aggregated with all other such shares of stock previously acquired by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges: • one-tenth or more but less than one-third; • one-third or more but less than a majority; or • a majority or more of all voting power. Control shares do not include shares that the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition, directly or indirectly, of ownership of, or the power to direct the exercise of voting power with respect to, issued and outstanding control shares, subject to certain exceptions. A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and making an “acquiring person statement” as described in the MGCL), may compel the board of directors of the Maryland corporation to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the control shares. If no request for a special meeting is made, the corporation may itself present the question at any stockholders meeting. If voting rights of control shares are not approved at the meeting or if the acquiring person does not deliver an “acquiring person statement” as required by the statute, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or, if a meeting of stockholders is held at which the voting rights of such shares are considered and not approved, as of the date of such meeting. If voting rights for control shares are approved at a stockholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition. The control share acquisition statute does not apply (1) to shares acquired in a merger, consolidation or statutory share exchange if the corporation is a party to the transaction or (2) to acquisitions approved or exempted by the charter or bylaws of the corporation. Our bylaws contain a provision exempting from the control share acquisition statute any and all control share acquisitions by any person of shares of our stock, and this provision of our bylaws cannot be amended without the affirmative vote of a majority of the votes cast on the matter by stockholders entitled to vote generally in the election of directors. Subtitle 8 Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to be subject to any or all of the following five provisions: • a classified board; • a two-thirds vote requirement for removing a director; • a requirement that the number of directors be fixed only by vote of the directors; • a requirement that a vacancy on the board be filled only by a vote of the remaining directors (whether or not they constitute a quorum) and for the remainder of the full term of the class of directors in which the vacancy occurred and until a successor is elected and qualifies; or • a majority requirement for the calling of a special meeting of stockholders. We have elected to be subject to the provision of Subtitle 8 providing that vacancies on our board of directors may be filled only by the remaining directors (whether or not they constitute a quorum) and that a director elected by the board of directors to fill a vacancy will serve for the remainder of the full term of the directorship. We have not elected to be subject to any of the other provisions of Subtitle 8, including the provisions that would permit us to classify our board of directors without stockholder approval. Moreover, our charter provides that, without the affirmative vote of a majority of the votes cast on the matter by stockholders entitled to vote generally in the election of directors, we may not elect to be subject to any of these additional provisions of Subtitle 8. Through provisions in our charter and bylaws unrelated to Subtitle 8, we (1) vest in our board of directors the exclusive power to fix the number of directors, (2) require, unless called by our chairman, our chief executive officer, our president or our board of directors, the request of stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting to call a special meeting of stockholders and (3) provide that a director may be removed only for cause and by the affirmative vote of two-thirds of the votes entitled to be cast generally in the election of directors. Amendments to Our Charter and Bylaws Except as described herein and as provided in the MGCL, amendments to our charter must be advised by our board of directors and approved by the affirmative vote of our stockholders entitled to cast a majority of all of the votes entitled to be cast on the matter. Any amendment to the provisions of our charter relating to the removal of directors or amendments to such provisions will require the affirmative vote of at least two- thirds of the votes entitled to be cast on the matter. Our board of directors has the power to amend our bylaws, provided that amendments to the provisions of our bylaws prohibiting our board of directors from revoking, altering or amending its resolution exempting any business combination from the “business combination” provisions of the MGCL or exempting any acquisition of our stock from the “control share” provisions of the MGCL without the approval of our stockholders must be approved by the affirmative vote of a majority of the votes cast on the matter by our stockholders entitled to vote generally in the election of directors. In addition, our stockholders may amend our bylaws, to the extent permitted by law, if any such amendment is approved by the affirmative vote of a majority of the votes entitled to be cast on the matter. Meetings of Stockholders Under our bylaws and pursuant to Maryland law, annual meetings of stockholders will be held each year at a date and at the time and place determined by our board of directors. Special meetings of stockholders may be called by our board of directors, the chairman of our board of directors, our president or our chief executive officer. Additionally, subject to the provisions of our bylaws, special meetings of the stockholders to act on any matter must be called by our secretary upon the written request of stockholders entitled to cast a majority of all the votes entitled to be cast on such matter at such meeting who have requested the special meeting in accordance with the procedures set forth in, and provided the information and certifications required by, our bylaws. Only matters set forth in the notice of the special meeting may be considered and acted upon at such a meeting. Our secretary will inform the requesting stockholders of the reasonably estimated cost of preparing and delivering the notice of meeting (including our proxy materials), and the requesting stockholder must pay such estimated cost before our secretary may prepare and deliver the notice of the special meeting. Corporate Opportunities Our charter provides that, to the maximum extent permitted by Maryland law, each of Eldridge Industries, LLC (“Eldridge”), its affiliates, each of their representatives, and each of our directors or officers that is an employee, affiliate or designee for nomination as a director of Eldridge or its affiliates has the right to, and has no duty not to, (x) directly or indirectly engage in the same or similar business activities or lines of business as us, including those deemed to be competing with us, or (y) directly or indirectly do business with any of our clients, customers or suppliers. In the event that Eldridge or any of its affiliates or employees, or any of their representatives or designees, acquires knowledge of a potential transaction or matter that may be a corporate opportunity for us, Eldridge, its affiliates and employees and any of their representatives or designees, to the maximum extent permitted by Maryland law, have no duty to communicate or present such corporate opportunity to us or any of our affiliates and shall not be liable to us or any of our affiliates, subsidiaries, stockholders or other equity holders for breach of any duty by reason of the fact that Eldridge or any of its affiliates or employees, or any of their representatives or designees, directly or indirectly, pursues or acquires such opportunity for themselves, directs such opportunity to another person or does not present such opportunity to us or any of our affiliates; provided, however, that such corporate opportunity is not presented to such person in his or her capacity as a director or officer of us. As of the date of filing, no affiliates of Eldridge currently serve as directors or officers of us. Advance Notice of Director Nominations and New Business Our bylaws provide that, with respect to an annual meeting of stockholders, nominations of individuals for election to our board of directors and the proposal of business to be considered by stockholders at the annual meeting may be made only: • pursuant to our notice of the meeting; • by or at the direction of our board of directors; or • by a stockholder who was a stockholder of record at the record date set by the board of directors for the meeting, at the time of giving of the notice of the meeting and at the time of the annual meeting (and any postponement or adjustment thereof), who is entitled to vote at the meeting in the election of each individual so nominated or on such other business and who has complied with the advance notice procedures set forth in, and provided the information and certifications required by, our bylaws. With respect to special meetings of stockholders, our bylaws provide that only the business specified in our company’s notice of meeting may be brought before the special meeting of stockholders, and nominations of individuals for election to our board of directors may be made only: • by or at the direction of our board of directors; or • provided that the meeting has been called in accordance with our bylaws for the purpose of electing directors, by a stockholder who is a stockholder of record at the record date set by the board of directors for the meeting, at the time of giving of the notice required by our bylaws and at the time of the meeting (and any postponement or adjustment thereof), who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice provisions set forth in, and provided the information and certifications required by, our bylaws. Requiring stockholders to give advance notice of nominations and other proposals affords our board of directors and our stockholders the opportunity to consider the qualifications of the proposed nominees or the advisability of the other proposals and, to the extent considered necessary by our board of directors, to inform stockholders and make recommendations regarding the nominations or other proposals. Although our bylaws do not give our board of directors the power to disapprove timely stockholder nominations and proposals, our bylaws may have the effect of precluding a contest for the election of directors or proposals for other action if the proper procedures are not followed, and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors to our board of directors or to approve its own proposal. Anti-Takeover Effect of Certain Provisions of Maryland Law and of Our Charter and Bylaws The restrictions on ownership and transfer of our stock, the supermajority vote required to remove directors, our election to be subject to the provision of Subtitle 8 vesting in our board of directors the exclusive power to fill vacancies on our board of directors and the advance notice provisions of our bylaws could delay, defer or prevent a transaction or a change of control of our company. Further, a majority of our entire board of directors has the power, without common stockholder action, to increase or decrease the aggregate number of authorized shares of stock or the number of shares of any class or series of stock that we are authorized to issue, to classify and reclassify any unissued shares of our stock into other classes or series of stock, and to authorize us to issue the newly classified shares, and could authorize the issuance of shares of common stock or another class or series of stock, including a class or series of preferred stock, that could have the effect of delaying, deferring or preventing a change in control of us. These actions may be taken without stockholder approval unless such approval is required by applicable law, the terms of any other class or series of our stock or the rules of any stock exchange or automated quotation system on which any of our stock is listed or traded. We believe that the power of our board of directors to increase or decrease the number of authorized shares of stock and to classify or reclassify unissued shares of our common stock or preferred stock and thereafter to cause us to issue such shares of stock will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs which might arise. Our charter and bylaws also provide that the number of directors may be established only by our board of directors, which prevents our stockholders from increasing the number of our directors and filling any vacancies created by such increase with their own nominees. The provisions of our bylaws discussed under the captions “Meetings of Stockholders” and “Advance Notice of Director Nominations and New Business” require stockholders seeking to call a special meeting, nominate an individual for election as a director or propose other business at an annual or special meeting to comply with certain notice and information requirements. We believe that these provisions will help to assure the continuity and stability of our business strategies and policies as determined by our board of directors and promote good corporate governance by providing us with clear procedures for calling special meetings, information about a stockholder proponent’s interest in us and adequate time to consider stockholder nominees and other business proposals. However, these provisions, alone or in combination, could make it more difficult for our stockholders to remove incumbent directors or fill vacancies on our board of directors with their own nominees and could delay, defer or prevent a change in control, including a proxy contest or tender offer that might involve a premium price for our common stockholders or otherwise be in the best interest of our stockholders. Exclusive Forum Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, 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, will be the sole and exclusive forum for (a) any Internal Corporate Claim, as such term is defined in the MGCL, (b) any derivative action or proceeding brought on our behalf, (c) any action asserting a claim of breach of any duty owed by any of our directors, officers or other employees to us or to our stockholders, (d) any action asserting a claim against us or any of our directors, officers or other employees arising pursuant to any provision of the MGCL or our charter or bylaws or (e) any action asserting a claim against us or any of our directors, officers or other employees that is governed by the internal affairs doctrine. Limitation of Liability and Indemnification of Directors and Officers Maryland law permits a Maryland corporation to include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty that is established by a final judgment and is material to the cause of action. Our charter contains such a provision that eliminates such liability to the maximum extent permitted by Maryland law. The MGCL requires a Maryland corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. The MGCL permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to or in which they may be made or are threatened to be made a party or witness by reason of their service in those or other capacities unless it is established that: • the act or omission of the director or officer was material to the matter giving rise to the proceeding and the action was committed in bad faith or was the result of active and deliberate dishonesty; • the director or officer actually received an improper personal benefit in money, property or services; or • in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. In addition, under the MGCL, a Maryland corporation may not indemnify a director or officer for an adverse judgment in a suit by or on behalf of the corporation or if the director or officer was adjudged liable on the basis that personal benefit was improperly received, unless, in either case, a court orders indemnification and then only for expenses. A court may order indemnification for expenses if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. In addition, the MGCL permits a Maryland corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of: • a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and • a written undertaking, which may be unsecured, by the director or officer or on his or her behalf to repay the amount paid if it shall ultimately be determined that the standard of conduct was not met. Our charter obligates us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding without requiring a preliminary determination of the director’s or officer’s ultimate entitlement to indemnification to: • any present or former director or officer who is made or threatened to be made a party to, or witness in, a proceeding by reason of his or her service in that capacity; or • any individual who, while a director or officer of us and at our request, serves or has served as a director, officer, partner, member, manager, trustee, employee or agent of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity. Our charter also permits us, with the approval of our board of directors, to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described above and to any employee or agent of our company or a predecessor of our company. REIT Qualification Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without approval of our stockholders if it determines that it is no longer in our best interest to attempt to continue to qualify as a REIT. List of Subsidiaries Exhibit 21.1 Name of Subsidiary Essential Properties, L.P. Essential Properties OP G.P., LLC SCF TRS LLC SCFRC-HW LLC SCFRC-HW-V LLC SCFRC-HW-G LLC SCF RC Funding I LLC SCF RC Funding II LLC SCF RC Funding III LLC SCF RC Funding IV LLC SCF Realty Capital Trust LLC SCF Realty IFH LLC SCF Realty Funding LLC SCF Realty Servicing Company LLC SCFRC-HW-528 South Broadway-Salem LLC SCF RC Funding Canal LLC LB Funding I LLC State of Incorporation Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the following Registration Statements: a. Registration Statement (Form S-3 No. 333-232490) of Essential Properties Realty Trust, Inc., and a. Registration Statement (Form S-8 No. 333-225837) pertaining to the 2018 Incentive Plan of Essential Properties Realty Trust, Inc. of our reports dated February 23, 2021, with respect to the consolidated financial statements of Essential Properties Realty Trust, Inc. and the effectiveness of internal control over financial reporting of Essential Properties Realty Trust, Inc. included in this Annual Report (Form 10-K) of Essential Properties Realty Trust, Inc. for the year ended December 31, 2020. Exhibit 23.1 /s/ Ernst & Young LLP New York, New York February 23, 2021 CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 31.1 I, Peter M. Mavoides, certify that: (1) (2) (3) (4) I have reviewed this Annual Report on Form 10-K of Essential Properties Realty Trust, Inc.; 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; 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; The registrant’s other certifying officer(s) 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) (b) (c) (d) 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; 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; 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 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(s) 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) (b) 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 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: February 23, 2021 By: /s/ Peter M. Mavoides Peter M. Mavoides President and Chief Executive Officer (Principal Executive Officer) CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 31.2 I, Mark E. Patten, certify that: (1) (2) (3) (4) I have reviewed this Annual Report on Form 10-K of Essential Properties Realty Trust, Inc.; 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; 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; The registrant’s other certifying officer(s) 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) (b) (c) (d) 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; 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; 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 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(s) 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) (b) 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 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: February 23, 2021 By: /s/ Mark E. Patten Mark E. Patten Chief Financial Officer, Treasurer and Executive Vice President (Principal Financial Officer)       CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.1 In connection with the Annual Report on Form 10-K of Essential Properties Realty Trust, Inc. (the “Company”) for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter M. Mavoides, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for the purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge: (1) (2) The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. Date: February 23, 2021 By: /s/ Peter M. Mavoides Peter M. Mavoides President and Chief Executive Officer (Principal Executive Officer) The foregoing certification is being furnished with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 pursuant to 18 U.S.C. Section 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. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.2 In connection with the Annual Report on Form 10-K of Essential Properties Realty Trust, Inc. (the “Company”) for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark E. Patten, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for the purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge: (1) (2) The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. Date: February 23, 2021 By: /s/ Mark E. Patten Mark E. Patten Chief Financial Officer, Treasurer and Executive Vice President (Principal Financial Officer) The foregoing certification is being furnished with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 pursuant to 18 U.S.C. Section 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. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. 

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