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Net Lease Office Properties (NLOP)

CIK: 0001952976. SIC: 6798 Real Estate Investment Trusts. Latest 10-K as of: 2026-02-25.

SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1952976. Latest filing source: 0001952976-26-000012.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue118,915,000USD20252026-02-25
Net income-145,262,000USD20252026-02-25
Assets453,371,000USD20252026-02-25

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001952976.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric20212022202320242025
Revenue147,906,000156,214,000174,965,000142,247,000118,915,000
Net income1,418,00015,779,000-131,746,000-91,471,000-145,262,000
Diluted EPS1.08-9.00-6.18-9.81
Operating cash flow75,335,00084,282,00070,966,00071,859,00064,111,000
Dividends paid0.000.001,072,000
Assets1,462,201,0001,305,089,000805,069,000453,371,000
Liabilities352,682,000623,659,000219,666,000155,546,000
Stockholders' equity1,107,776,000677,009,000581,228,000293,911,000
Cash and cash equivalents3,966,0004,671,00016,269,00025,121,000119,621,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric20212022202320242025
Net margin0.96%10.10%-75.30%-64.30%-122.16%
Return on equity1.42%-19.46%-15.74%-49.42%
Return on assets1.08%-10.09%-11.36%-32.04%
Liabilities / equity0.320.920.380.53

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001952976.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

QuarterEnd DateRevenueNet IncomeDiluted EPSMethod
2023-Q42023-12-31174,965,000-131,745,761derived Q4 = FY annual - nine-month YTD
2024-Q12024-03-3144,007,000-27,842,000-1.88reported discrete quarter
2024-Q22024-06-3039,029,00012,451,0000.84reported discrete quarter
2024-Q32024-09-3031,481,000-40,295,000-2.73reported discrete quarter
2024-Q42024-12-3127,730,000-35,785,000derived Q4 = FY annual - nine-month YTD
2025-Q12025-03-3129,213,000492,0000.03reported discrete quarter
2025-Q22025-06-3029,174,000-81,540,000-5.50reported discrete quarter
2025-Q32025-09-3029,784,000-64,161,000-4.33reported discrete quarter
2025-Q42025-12-3130,744,000-53,000derived Q4 = FY annual - nine-month YTD
2026-Q12026-03-319,025,00024,998,0001.69reported discrete quarter

Quarterly Charts

Macro Cross-References

Latest quarter (10-Q)

Latest 10-Q source: 0001952976-26-000031.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period. This item also provides our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. Our Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the 2025 Annual Report and subsequent reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Refer to Item 1 of the 2025 Annual Report for a description of our business.

Emerging Growth Company

NLOP is an “emerging growth company,” as defined in Section 2(a) of the U.S. Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, reduced disclosure obligations regarding executive compensation in NLOP’s periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation, and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. NLOP has elected to take advantage of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, NLOP, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of NLOP’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

NLOP will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Spin-Off, (b) in which NLOP has total annual gross revenue of at least $1.235 billion, or (c) in which NLOP is deemed to be a large accelerated filer, which means the market value of the common equity of NLOP that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which NLOP has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Financial Highlights

During the three months ended March 31, 2026 and through the date of this Report, we completed the following (as further described in the consolidated financial statements):

Dispositions

•During the three months ended March 31, 2026, we sold six properties for total proceeds, net of selling costs, of $127.5 million (Note 12). These proceeds exclude a $20.0 million deposit received during the fourth of quarter of 2025 related to the disposition of a property in January 2026 located in Houston, Texas, and leased to KBR, our largest tenant by ABR as of December 31, 2025.

Net Lease Office Properties 3/31/2026 10-Q – 19

Special Cash Distributions

•In January 2026, our Board of Trustees declared a special cash distribution of $6.75 per share, totaling approximately $100.0 million. The distribution was paid on February 17, 2026 to shareholders of record as of January 30, 2026 (Note 10).

•In March 2026, our Board of Trustees declared a special cash distribution of $3.30 per share, totaling approximately $49.0 million. The distribution was paid on April 14, 2026 to shareholders of record as of March 30, 2026 (Note 10).

•Future special cash distributions will be at the discretion of our Board of Trustees and will depend upon, among other things, our actual and anticipated results of operations and liquidity, which will be affected by various factors, including the timely receipt of rental income from our portfolio; the timing of and proceeds from asset sales; our operating expenses (including management fees); capital expenditures for our portfolio; our current intention to maintain our qualification as a REIT; and other factors which may be outside of our control. There can be no assurance as to the amount or timing of future distributions.

Summary Results

(in thousands)

Three Months Ended March 31,

2026

2025

Total revenues

$

9,025 

$

29,213 

Net income attributable to NLOP

24,998 

492 

Dividends declared

148,882 

— 

Net cash provided by operating activities (a)

8,128 

14,122 

Net cash provided by investing activities

118,825 

8,656 

Net cash used in financing activities

(175,551)

(25,769)

Supplemental financial measures (b):

Funds from operations attributable to NLOP (FFO)

(5,394)

12,093 

Adjusted funds from operations attributable to NLOP (AFFO)

6,124 

14,965 

__________

(a)Amount for the three months ended March 31, 2026 includes $8.0 million of proceeds from the sale of a net investment in sales-type lease (Note 5). Such proceeds are included within Net cash provided by operating activities in accordance with ASC 842, Leases.

(b)We consider Funds from operations (“FFO”) and Adjusted funds from operations (“AFFO”), supplemental measures that are not defined by GAAP (a “non-GAAP measure”), to be important measures in the evaluation of our operating performance. See Supplemental Financial Measures below for our definition of this non-GAAP measure and a reconciliation to its most directly comparable GAAP measure.

Since January 1, 2025, we have disposed of 21 properties for total proceeds, net of selling costs, of $339.8 million, which has resulted in significant declines in our revenues, expenses, net cash provided by operating activities, FFO, and AFFO.

Revenues

Total revenues decreased for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to the impact of disposition activity.

Net Income Attributable to NLOP

Net income attributable to NLOP increased for the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to higher gain on sale of real estate and lower interest expense, partially offset by the impact of disposition activity and a non-cash allowance for credit loss recorded on a net investment in a sales-type lease during the current year period (Note 5).

Net Lease Office Properties 3/31/2026 10-Q – 20

FFO

FFO decreased for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to the impact of disposition activity and a non-cash allowance for credit loss recorded on a net investment in a sales-type lease during the current year period (Note 5), partially offset by lower interest expense.

AFFO

AFFO decreased for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to the impact of disposition activity, partially offset by lower interest expense.

Portfolio Overview

Portfolio information is provided on a pro rata basis, unless otherwise noted below, to better illustrate the economic impact of our one jointly owned investment. See Terms and Definitions below for a description of pro rata amounts.

Portfolio Summary

March 31, 2026

December 31, 2025

ABR (in thousands)

$

25,763 

$

54,122 

Number of properties

18 

24 

Number of tenants

11 

26 

Occupancy

73.1 

%

79.0 

%

Weighted-average lease term (in years)

2.9 

3.9 

Leasable square footage (in thousands) (a)

1,875 

3,375 

__________

(a)Excludes 570,999 of operating square footage for a parking garage at a domestic property as of December 31, 2025. This property was sold in January 2026 (Note 12).

Portfolio

The tables below represent information about our portfolio at March 31, 2026 on a pro rata basis. See Terms and Definitions below for a description of pro rata amounts and ABR.

Tenant List

(dollars in thousands)

Tenant

State/Country

ABR

ABR Percent

Square Footage

Number of Properties

Weighted-Average Lease Term (Years)

Iowa Board of Regents

Iowa

$

4,056 

15.7 

%

191,700 

1 

4.6 

Omnicom

California

3,961 

15.4 

%

120,000 

1 

2.5 

RRD

Illinois

3,461 

13.4 

%

167,215 

1 

1.5 

Intuit

Texas

2,577 

10.0 

%

166,033 

1 

0.2 

Grande Communications

Texas

2,407 

9.4 

%

134,009 

5 

2.4 

Cenlar FSB

Pennsylvania

2,158 

8.4 

%

105,584 

1 

2.3 

iHeart Communications

Texas

2,091 

8.1 

%

120,147 

1 

8.8 

Arbella Insurance

Massachusetts

1,850 

7.2 

%

132,160 

1 

1.2 

Safelite

New Mexico

1,555 

6.0 

%

94,649 

1 

3.2 

Arcfield (a)

Pennsylvania

1,000 

3.9 

%

88,578 

1 

0.0 

APCO

Georgia

647 

2.5 

%

50,600 

1 

4.9 

Total

$

25,763 

100.0 

%

1,370,675 

15 

2.9 

__________

(a)This property is vacant as of the date of this Report.

Net Lease Office Properties 3/31/2026 10-Q – 21

Lease Expirations

(dollars in thousands)

Year of Lease Expiration (a)

Number of Leases Expiring

Number of Tenants with Leases Expiring

ABR

ABR Percent

Square Footage

Square Footage Percent

Remaining 2026

2 

2 

$

3,577 

13.9 

%

254,611 

13.6 

%

2027

2 

2 

5,311 

20.6 

%

299,375 

16.0 

%

2028

4 

3 

8,527 

33.1 

%

359,593 

19.2 

%

2029

1 

1 

1,555 

6.0 

%

94,649 

5.0 

%

2030

1 

1 

4,056 

15.8 

%

191,700 

10.2 

%

2031

1 

1 

646 

2.5 

%

50,600 

2.7 

%

2035

1 

1 

2,091 

8.1 

%

120,147 

6.4 

%

Vacant

— 

— 

— 

— 

%

504,649 

26.9 

%

Total

12 

$

25,763 

100.0 

%

1,875,324 

100.0 

%

__________

(a)Assumes tenants do not exercise any renewal options or purchase options.

Terms and Definitions

Pro Rata Metrics — The portfolio information above contains certain metrics prepared on a pro rata basis. We refer to these metrics as pro rata metrics. We have one investment in which our economic ownership is less than 100%. On a full consolidation basis, we report 100% of the assets, liabilities, revenues, and expenses of this investment that is deemed to be under our control, even if our ownership is less than 100%. On a pro rata basis, we generally present our proportionate share, based on our economic ownership of this jointly owned investment, of the portfolio metrics of this investment. Multiplying this jointly owned investment’s financial statement line items by our percentage ownership and adding or subtracting those amounts from our totals, as applicable, may not accurately depict the legal and economic implications of holding an ownership interest of less than 100% in our jointly owned investment.

ABR — ABR represents contractual minimum annualized base rent for our properties. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period.

Results of Operations

Revenues

Three Months Ended March 31,

(in thousands)

2026

2025

Chan

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-25. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period. This item also provides our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results.

The following discussion should be read in conjunction with our consolidated financial statements in Item 8 of this Report and the matters described under Item 1A. Risk Factors. Please see our Annual Report on Form 10-K for the year ended December 31, 2024 for discussion of our financial condition and results of operations for the year ended December 31, 2023. Refer to Item 1. Business for a description of our business.

Basis of Presentation

Prior to the Spin-Off

The historical results of operations and liquidity and capital resources of NLOP prior to the Spin-Off do not represent the historical results of operations and liquidity and capital resources of a legal entity, but rather a combination of entities under common control that have been “carved-out” of WPC’s consolidated financial statements and presented herein, in each case, in accordance with U.S. generally accepted accounting principles (“GAAP”). Intercompany transactions and balances have been eliminated in combination. The preparation of the financial results of NLOP prior to the Spin-Off required management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the relevant reporting periods and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

The financial results of NLOP prior to the Spin-Off reflect the revenues and direct expenses of NLOP and include material assets and liabilities of WPC that are specifically attributable to NLOP. Equity represents the excess of total assets over total liabilities. Equity is impacted by contributions from and distributions to WPC, which are the result of treasury activities and net funding provided by or distributed to WPC prior to the Separation, as well as the allocated costs and expenses.

The financial results of NLOP prior to the Spin-Off also include an allocation of indirect costs and expenses incurred by WPC related to NLOP, primarily consisting of compensation and other general and administrative costs using the relative percentage of property revenue of NLOP and WPC management’s knowledge of NLOP. In addition, the financial results reflect the allocation of interest expense from WPC unsecured debt, excluding debt that is specifically attributable to NLOP; interest expense was allocated by calculating the unencumbered net investment in real estate of each property held by NLOP as a percentage of WPC’s total consolidated unencumbered net investment in real estate and multiplying that percentage by the interest expense on WPC unsecured debt. The amounts allocated in the financial results of NLOP prior to the Spin-Off are not necessarily indicative of the actual amount of such indirect expenses that would have been recorded had the NLOP been a separate independent entity during the applicable periods. NLOP believes the assumptions underlying NLOP’s allocation of indirect expenses prior to the Spin-Off are reasonable.

Emerging Growth Company

NLOP is an “emerging growth company,” as defined in Section 2(a) of the U.S. Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, reduced disclosure obligations regarding executive compensation in NLOP’s periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation, and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt

Net Lease Office Properties 2025 10-K – 21

out is irrevocable. NLOP has elected to take advantage of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, NLOP, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of NLOP’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

NLOP will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Spin-Off, (b) in which NLOP has total annual gross revenue of at least $1.235 billion, or (c) in which NLOP is deemed to be a large accelerated filer, which means the market value of the common equity of NLOP that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which NLOP has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Significant Developments

Dispositions

In January 2026, we sold the KBR property located in Houston, Texas, for gross proceeds of $66.0 million (Note 17). KBR was our largest tenant by ABR as of December 31, 2025.

In January 2026, we sold a property located in Venice, California, for gross proceeds of $39.6 million (Note 17).

In February 2026, we sold a property located in Martinsville, Virginia, for gross proceeds of $3.9 million (Note 17).

In February 2026, we sold a property located in Raleigh, North Carolina, for gross proceeds of $8.7 million (Note 17).

Special Cash Distribution

In January 2026, our Board of Trustees declared a special cash distribution of $6.75 per share, totaling approximately $100.0 million. The distribution was paid on February 17, 2026 to shareholders of record as of January 30, 2026 (Note 17).

Financial Highlights

During the year ended December 31, 2025 and through the date of this Report, we completed the following (as further described in the consolidated financial statements):

Dispositions

•During the year ended December 31, 2025, we sold 14 properties for total proceeds, net of selling costs, of $198.6 million (Note 15).

•In September 2025, we disposed of our last international property by transferring ownership to a buyer, in satisfaction of the non-recourse mortgage loan encumbering the property for $45.7 million (Note 15).

Leasing Activity

•In September 2025, we entered into a lease termination agreement with a tenant at a property located in Oak Creek, Wisconsin, to terminate the lease on October 31, 2025 (the previous lease expiration date was May 31, 2032). In connection with the agreement, the tenant paid us a lease termination fee of $13.0 million, which was recognized within Other lease-related income in our consolidated statements of operations during the year ended December 31, 2025. This property was sold in December 2025 (Note 5).

Net Lease Office Properties 2025 10-K – 22

Financing

•During the year ended December 31, 2025, we fully repaid the NLOP Mezzanine Loan, which had $61.1 million of outstanding principal as of December 31, 2024, using net proceeds from certain dispositions, as well as excess cash flow from operations and other sources, including the application of loan reserves (Note 10).

•During the year ended December 31, 2025, we repaid four non-recourse mortgage loans totaling $49.8 million with a weighted-average interest rate of 7.5% (Note 10).

Special Cash Distributions

•In August 2025, our Board of Trustees declared a special cash distribution of $3.10 per share, totaling approximately $45.9 million. The distribution was paid on September 3, 2025 to shareholders of record as of August 18, 2025 (Note 12).

•In November 2025, our Board of Trustees declared a special cash distribution of $4.10 per share, totaling approximately $60.7 million. The distribution was paid on December 19, 2025 to shareholders of record as of December 4, 2025 (Note 12).

•In December 2025, our Board of Trustees declared a special cash distribution of $5.10 per share, totaling approximately $75.6 million. The distribution was paid on January 20, 2026 to shareholders of record as of January 2, 2026 (Note 12).

•Future special cash distributions will be at the discretion of our Board of Trustees and will depend upon, among other things, our actual and anticipated results of operations and liquidity, which will be affected by various factors, including the timely receipt of rental income from our portfolio; the timing of and proceeds from asset sales; our operating expenses (including management fees); capital expenditures for our portfolio; our current intention to maintain our qualification as a REIT; and other factors which may be outside of our control. There can be no assurance as to the amount or timing of future distributions.

Summary Results

(in thousands)

Years Ended December 31,

2025

2024

Total revenues

$

118,915 

$

142,247 

Net loss attributable to NLOP

(145,262)

(91,471)

Dividends declared

182,212 

— 

Net cash provided by operating activities (a)

64,111 

71,859 

Net cash provided by investing activities

208,242 

297,749 

Net cash used in financing activities

(218,885)

(367,984)

Supplemental financial measures (b):

Funds from operations attributable to NLOP (FFO)

60,229 

23,039 

Adjusted funds from operations attributable to NLOP (AFFO)

73,809 

62,048 

__________

(a)Amount for the year ended December 31, 2024 includes $10.3 million of proceeds from the sale of a net investment in sales-type lease (Note 6). Such proceeds are included within Net cash provided by operating activities in accordance with Accounting Standards Codification (“ASC”) 842, Leases.

(b)We consider Funds from operations (“FFO”) and Adjusted funds from operations (“AFFO”), supplemental measures that are not defined by GAAP (a “non-GAAP measure”), to be important measures in the evaluation of our operating performance. See Supplemental Financial Measures below for our definition of this non-GAAP measure and a reconciliation to its most directly comparable GAAP measure.

Net Lease Office Properties 2025 10-K – 23

Revenues

Total revenues decreased in 2025 as compared to 2024, primarily due to the impact of disposition activity and tenant vacancies at certain properties, partially offset by higher other lease-related income.

Net Loss Attributable to NLOP

Net loss attributable to NLOP increased in 2025 as compared to 2024, primarily due to higher impairment charges and higher loss on sale of real estate, partially offset by lower interest expense. See Note 8 for information on impairment charges recorded during the reporting period.

FFO

FFO increased in 2025 as compared to 2024, primarily due to lower interest expense and higher other lease-related income, partially offset by the impact of disposition activity.

AFFO

AFFO increased in 2025 as compared to 2024, primarily due to lower interest expense and higher other lease-related income, partially offset by the impact of disposition activity.

Portfolio Overview

Portfolio information is provided on a pro rata basis, unless otherwise noted below, to better illustrate the economic impact of our one jointly owned investment. See Terms and Definitions below for a description of pro rata amounts.

Portfolio Summary

As of December 31,

2025

2024

ABR (in thousands)

$

54,122 

$

88,124 

Number of properties

24 

39 

Number of tenants

26 

43 

Occupancy

79.0 

%

85.2 

%

Weighted-average lease term (in years)

3.9 

4.3 

Leasable square footage (in thousands) (a)

3,375 

5,613 

__________

(a)Excludes 570,999 of operating square footage for a parking garage associated with the KBR property in Houston, Texas. This property was sold in January 2026 (Note 17).

Net Lease Office Properties 2025 10-K – 24

Portfolio

The tables below represent information about our portfolio at December 31, 2025 on a pro rata basis. See Terms and Definitions below for a description of pro rata amounts and ABR.

Top Ten Tenants by ABR

(dollars in thousands)

Tenant

State/Country

ABR

ABR Percent

Square Footage (a)

Number of Properties

Weighted-Average Lease Term (Years)

KBR (a) (b)

Texas

$

20,158 

37.2 

%

913,713 

1 

4.5 

Iowa Board of Regents

Iowa

4,056 

7.5 

%

191,700 

1 

4.8 

Omnicom

California

3,961 

7.3 

%

120,000 

1 

2.7 

RRD

Illinois

3,461 

6.4 

%

167,215 

1 

1.7 

Google (b)

California

3,108 

5.7 

%

67,681 

1 

4.8 

Intuit

Texas

2,577 

4.8 

%

166,033 

1 

0.5 

Grande Communications

Texas

2,407 

4.5 

%

134,009 

5 

2.7 

Cenlar FSB

Pennsylvania

2,105 

3.9 

%

105,584 

1 

2.5 

iHeart Communications

Texas

2,050 

3.8 

%

120,147 

1 

9.1 

Arbella Insurance

Massachusetts

1,850 

3.4 

%

132,160 

1 

1.4 

Total

$

45,733 

84.5 

%

2,118,242 

14 

3.9 

__________

(a)Excludes 570,999 of operating square footage for a parking garage associated with the KBR property in Houston, Texas.

(b)These properties were sold in January 2026 (Note 17).

Lease Expirations

(dollars in thousands)

Year of Lease Expiration (a)

Number of Leases Expiring

Number of Tenants with Leases Expiring

ABR

ABR Percent

Square Footage (b)

Square Footage Percent

2026

7 

7 

$

6,188 

11.4 

%

409,351 

12.1 

%

2027

5 

4 

5,586 

10.3 

%

318,176 

9.4 

%

2028

6 

5 

8,745 

16.2 

%

371,471 

11.0 

%

2029

3 

2 

1,918 

3.5 

%

113,277 

3.4 

%

2030

5 

5 

27,375 

50.6 

%

1,175,257 

34.8 

%

2031

1 

1 

631 

1.2 

%

50,600 

1.5 

%

2035

1 

1 

2,050 

3.8 

%

120,147 

3.6 

%

2037

1 

1 

545 

1.0 

%

31,120 

0.9 

%

2041

1 

1 

1,084 

2.0 

%

75,286 

2.3 

%

Vacant

— 

— 

— 

— 

%

710,428 

21.0 

%

Total

30 

$

54,122 

100.0 

%

3,375,113 

100.0 

%

__________

(a)Assumes tenants do not exercise any renewal options or purchase options.

(b)Excludes 570,999 of operating square footage for a parking garage associated with the KBR property in Houston, Texas. This property was sold in January 2026 (Note 17).

Net Lease Office Properties 2025 10-K – 25

Terms and Definitions

Pro Rata Metrics —The portfolio information above contains certain metrics prepared on a pro rata basis. We refer to these metrics as pro rata metrics. We have one investment in which our economic ownership is less than 100%. On a full consolidation basis, we report 100% of the assets, liabilities, revenues, and expenses of this investment that is deemed to be under our control, even if our ownership is less than 100%. On a pro rata basis, we generally present our proportionate share, based on our economic ownership of this jointly owned investment, of the portfolio metrics of this investment. Multiplying our jointly owned investment’s financial statement line items by our percentage ownership and adding or subtracting those amounts from our totals, as applicable, may not accurately depict the legal and economic implications of holding an ownership interest of less than 100% in our jointly owned investment.

ABR — ABR represents contractual minimum annualized base rent for our properties. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period.

Results of Operations

Revenues

Years Ended December 31,

(in thousands)

2025

2024

Change

Revenues

Lease revenues

$

99,262 

$

128,857 

$

(29,595)

Income from finance leases

610 

89 

521 

Other lease-related income

19,043 

13,301 

5,742 

$

118,915 

$

142,247 

$

(23,332)

Lease Revenues

For the year ended December 31, 2025 as compared to 2024, lease revenues decreased by $29.6 million, primarily due to disposition activity and tenant vacancies at certain properties.

Income from Finance Leases

For the year ended December 31, 2025 as compared to 2024, income from finance leases increased by $0.5 million, primarily due to a reclassification of a net-lease asset to net investments in sales-type lease in the fourth quarter of 2025. We also disposed of a property classified as net investments in sales-type lease during the first quarter of 2024 (Note 6).

Other Lease-Related Income

Other lease-related income is described in Note 5.

Net Lease Office Properties 2025 10-K – 26

Operating Expenses

Years Ended December 31,

(in thousands)

2025

2024

Change

Operating Expenses

Impairment charges — real estate

$

140,814 

$

78,237 

$

62,577 

Depreciation and amortization

35,878 

56,696 

(20,818)

Reimbursable tenant costs

22,451 

26,520 

(4,069)

Property expenses, excluding reimbursable tenant costs

8,588 

10,901 

(2,313)

General and administrative

7,309 

7,502 

(193)

Asset management fees

4,577 

6,243 

(1,666)

Separation and distribution related costs and other

— 

16 

(16)

$

219,617 

$

186,115 

$

33,502 

Impairment Charges — Real Estate

Our impairment charges on real estate are described in Note 8.

Depreciation and Amortization

For the year ended December 31, 2025 as compared to 2024, depreciation and amortization expense decreased by $20.8 million, primarily due to the impact of disposition activity and accelerated amortization of intangible assets in connection with a lease restructuring during the year ended December 31, 2024.

Reimbursable Tenant Costs

For the year ended December 31, 2025 as compared to 2024, reimbursable tenant costs decreased by $4.1 million, primarily due to the impact of disposition activity, as well as lower real estate taxes and maintenance costs at certain properties.

Property Expenses, Excluding Reimbursable Tenant Costs

For the year ended December 31, 2025 as compared to 2024, property expenses, excluding reimbursable tenant costs, decreased by $2.3 million, primarily due to the impact of disposition activity, partially offset by tenant vacancies (which resulted in property expenses no longer being reimbursable).

General and Administrative

For the year ended December 31, 2025 as compared to 2024, general and administrative expenses decreased by $0.2 million, primarily due to lower professional fees.

Asset Management Fees

Asset management fees paid to our Advisor are calculated based on the ABR of properties in our portfolio and are being proportionately reduced following the disposition of each portfolio property (Note 4).

For the year ended December 31, 2025 as compared to 2024, asset management fees decreased by $1.7 million, primarily due to the impact of disposition activity.

Net Lease Office Properties 2025 10-K – 27

Other Income and Expenses, and (Provision for) Benefit from Income Taxes

Years Ended December 31,

(in thousands)

2025

2024

Change

Other Income and Expenses, and (Provision for) Benefit from Income Taxes

(Loss) gain on sale of real estate, net

$

(29,006)

$

20,216 

$

(49,222)

Interest expense

(12,739)

(67,962)

55,223 

Other gains and (losses)

(2,557)

(2,154)

(403)

(Provision for) benefit from income taxes

(158)

2,382 

(2,540)

$

(44,460)

$

(47,518)

$

3,058 

(Loss) Gain on Sale of Real Estate, Net

(Loss) gain on sale of real estate, net, consists of (loss) gain on (i) the sale of properties that were disposed of, net of taxes, (ii) properties subject to a purchase agreement resulting in a lease modification during the reporting period, (iii) properties included in assets held for sale and subject to a revised estimated purchase price, or (iv) the reclassification of foreign currency translation adjustments from accumulated other comprehensive income to net loss since we exited all investments denominated in a currency (which totaled losses of $41.6 million for the year ended December 31, 2025), as more fully described in Note 3, Note 5 and Note 15.

Interest Expense

Interest expense comprises interest on Non-recourse mortgages, our NLOP Mortgage Loan, and our NLOP Mezzanine Loan. Our NLOP Mortgage Loan was fully repaid in December 2024 and our NLOP Mezzanine Loan was fully repaid in April 2025 (Note 10).

For the year ended December 31, 2025 as compared to 2024, interest expense decreased by $55.2 million, primarily due to repayments of our debt since January 1, 2024 (Note 10).

Other Gains and (Losses)

For the year ended December 31, 2025, other gains and (losses) of $(2.6) million primarily comprised (i) a non-cash allowance for credit loss on a sales-type lease of $(4.8) million (Note 6), (ii) interest income on our cash deposits of $2.1 million, (iii) escrow refund related to facility improvements of $0.4 million, and (iv) loss on extinguishment of debt of $(0.3) million primarily related to the full repayment of the NLOP Mezzanine Loan in April 2025 (Note 10).

For the year ended December 31, 2024, other gains and (losses) of $(2.2) million primarily comprised (i) loss of $(3.2) million related to damages at a property, (ii) net realized and unrealized losses on our interest rate cap derivative of $(1.0) million (Note 9), (iii) net realized and unrealized gains on foreign currency exchange rate movements of $(0.8) million, (iv) loss of $(0.3) million on extinguishment of debt, (v) interest income on our cash deposits of $2.3 million, and (vi) gain of $0.9 million related to a forfeited deposit on a potential disposition.

(Provision for) Benefit from Income Taxes

For the year ended December 31, 2025, we recognized a provision for income taxes of $0.2 million, as compared to a benefit from income taxes of $2.4 million for the year ended December 31, 2024, primarily due to the impact of an impairment charge recognized on an international property during 2024.

Net Lease Office Properties 2025 10-K – 28

Liquidity and Capital Resources

Sources and Uses of Cash During the Year

We use the cash flow generated from our investments primarily to meet our operating expenses, pay distributions to shareholders, make capital expenditures as necessary, and pay debt service. Our cash flows fluctuate periodically due to a number of factors, which may include, among other things: the timing of capital expenditures and sales of real estate; the timing of the repayment of debt and receipt of lease revenues; the timing and amount of other lease-related payments; and the timing of advisory fees and reimbursements paid to our Advisor. Despite these fluctuations, we believe that we will generate sufficient cash from operations to meet our normal recurring short-term and long-term liquidity needs. We may also use existing cash resources and proceeds from dispositions of properties in order to meet these needs. We assess our ability to access capital on an ongoing basis. The following table summarizes the changes in cash flows for the periods presented (in thousands):

Years Ended December 31,

2025

2024

Change

Net cash provided by operating activities

$

64,111 

$

71,859 

$

(7,748)

Net cash provided by investing activities

208,242 

297,749 

(89,507)

Net cash used in financing activities

(218,885)

(367,984)

149,099 

Net Cash Provided by Operating Activities — Net cash provided by operating activities decreased by $7.7 million during 2025 as compared to 2024, primarily due to the impact of disposition activity and $10.3 million of proceeds received from the sale of a net investment in sales-type lease during 2024 (Note 6), partially offset by lower interest expense.

Net Cash Provided by Investing Activities — Net cash provided by investing activities decreased by $89.5 million during 2025 as compared to 2024, primarily due to lower proceeds from dispositions (Note 15).

Net Cash Used in Financing Activities — Net cash used in financing activities decreased by $149.1 million during 2025 as compared to 2024, primarily due to lower payments of the NLOP Financing Arrangements and mortgage principal (following the full repayment of the NLOP Mortgage Loan during 2024 and full repayment of the NLOP Mezzanine Loan during 2025 (Note 10)), partially offset by $106.7 million of distributions paid during 2025.

Net Lease Office Properties 2025 10-K – 29

Summary of Financing

The table below summarizes our non-recourse mortgages and NLOP Mezzanine Loan (dollars in thousands):

December 31,

2025

2024

Carrying Value

Fixed rate:

Non-recourse mortgages, net (a)

$

21,900 

$

71,488 

NLOP Mezzanine Loan, net (a) (b)

— 

57,957 

21,900 

129,445 

Variable rate:

Non-recourse mortgages, net (a)

— 

39,771 

— 

39,771 

$

21,900 

$

169,216 

Percent of Total Debt

Fixed rate

100 

%

76 

%

Variable rate

— 

%

24 

%

100 

%

100 

%

Weighted-Average Interest Rate at End of Year

Fixed rate

7.0 

%

9.0 

%

Variable rate

— 

%

4.9 

%

Total debt

7.0 

%

8.1 

%

____________

(a)Aggregate debt balance includes unamortized discount, net, totaling $1.8 million and unamortized deferred financing costs totaling $1.0 million as of December 31, 2024.

(b)In April 2025, we fully repaid the NLOP Mezzanine Loan (Note 10).

During the year ended December 31, 2025, we fully repaid the NLOP Mezzanine Loan, which had $61.1 million of outstanding principal as of December 31, 2024, using net proceeds from certain dispositions, as well as excess cash flow from operations and other sources, including the application of loan reserves (Note 10).

Cash Resources

At December 31, 2025, our cash resources consisted of the following:

•cash and cash equivalents totaling $119.6 million; and

•unleveraged properties that had an aggregate asset carrying value of approximately $276.8 million at December 31, 2025, although there can be no assurance that we would be able to sell or obtain financing for these properties.

Net Lease Office Properties 2025 10-K – 30

Cash Requirements and Liquidity

As of December 31, 2025, scheduled debt principal payments total $21.9 million during 2026 (Note 10).

During the next 12 months following December 31, 2025 and thereafter, we expect that our significant cash requirements will include:

•making scheduled principal and balloon payments on our non-recourse mortgage debt obligations, totaling $21.9 million, which are due during the next 12 months;

•making scheduled interest payments on our non-recourse mortgage debt obligations, totaling $0.9 million, which are due during the next 12 months; and

•other normal recurring operating expenses.

We expect to fund these cash requirements through cash generated from operations and cash received from dispositions of properties.

Our liquidity could be adversely affected by refinancing debt at higher interest rates or an unanticipated disruption to our operating cash flow, which could include interrupted rent collections or greater-than-anticipated operating expenses.

Environmental Obligations

In connection with the purchase of many of our properties, we have required the sellers to perform environmental reviews. We believe, based on the results of these reviews, that these properties were in substantial compliance with federal, state, and foreign environmental statutes at the time the properties were acquired. In most instances where contamination has been identified, tenants are actively engaged in the remediation process and addressing identified conditions. We believe that the ultimate resolution of any environmental matters should not have a material adverse effect on our financial condition, liquidity, or results of operations. We record environmental obligations within Accounts payable, accrued expenses and other liabilities in the consolidated financial statements. See Item 1A. Risk Factors for further discussion of potential environmental risks.

New Tax Legislation

Effective July 4, 2025, certain changes to U.S. tax law were approved that may impact us and our shareholders. Among other changes, this legislation (i) permanently extended the 20% deduction for “qualified REIT dividends” for individuals and other non-corporate taxpayers under Section 199A of the Code, (ii) increased the percentage limit under the REIT asset test applicable to TRSs from 20% to 25% for taxable years beginning after December 31, 2025, and (iii) increases the base on which the 30% interest deduction limit under Section 163(j) of the Code applies by excluding depreciation, amortization, and depletion from the definition of “adjusted taxable income” (i.e. based on EBITDA rather than EBIT) for taxable years beginning after December 31, 2024.

Critical Accounting Estimates

Our significant accounting policies are described in Note 3. Many of these accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our consolidated financial statements. On a quarterly basis, we evaluate these estimates and judgments based on historical experience as well as other factors that we believe to be reasonable under the circumstances. These estimates are subject to change in the future if underlying assumptions or factors change. Certain accounting policies, while significant, may not require the use of estimates. Below is a summary of certain critical accounting estimates used in the preparation of our consolidated financial statements. Please also refer to our accounting policies described under Critical Accounting Policies and Estimates in Note 3.

Net Lease Office Properties 2025 10-K – 31

Impairments of Real Estate

For real estate assets held for investment and related intangible assets in which an impairment indicator is identified, we follow a two-step process to determine whether an asset is impaired and to determine the amount of the charge. First, we compare the carrying value of the property’s asset group to the estimated future net undiscounted cash flow that we expect the property’s asset group will generate, including any estimated proceeds from the eventual sale of the property’s asset group. The undiscounted cash flow analysis requires us to make our best estimate of market rents, residual values, and holding periods. We estimate market rents and residual values using market information from outside sources such as third-party market research, external appraisals, broker quotes, or recent comparable sales.

Holding periods used in the undiscounted cash flow analysis are evaluated on an individual property basis based on our strategic hold time for each asset. Depending on the assumptions made and estimates used, the future cash flow projected in the evaluation of long-lived assets and associated intangible assets can vary within a range of outcomes. We consider the likelihood of possible outcomes in determining our estimate of future cash flows and, if warranted, we apply a probability-weighted method to the different possible scenarios. If the future net undiscounted cash flow of the property’s asset group is less than the carrying value, the carrying value of the property’s asset group is considered not recoverable. We then measure the impairment loss as the excess of the carrying value of the property’s asset group over its estimated fair value, less costs to sell.

Supplemental Financial Measures

In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies. Additionally, in the formulation of our goals and in the evaluation of the effectiveness of our strategies, we use FFO and AFFO, which are non-GAAP measures defined by our management. We believe that these measures are useful to investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar companies. A description of FFO and AFFO and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are provided below.

Funds from Operations and Adjusted Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has promulgated a non-GAAP measure known as FFO, which we believe to be an appropriate supplemental measure, when used in addition to and in conjunction with results presented in accordance with GAAP, to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental non-GAAP measure. FFO is not equivalent to, nor a substitute for, net income or loss as determined under GAAP.

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as restated in December 2018. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from the sale of certain real estate, impairment charges on real estate or other assets incidental to the company’s main business, gains or losses on changes in control of interests in real estate, and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and jointly owned investments. Adjustments for unconsolidated partnerships and jointly owned investments are calculated to reflect FFO on the same basis.

We also modify the NAREIT computation of FFO to adjust GAAP net income for certain non-cash charges, such as amortization of real estate-related intangibles, deferred income tax benefits and expenses, straight-line rent and related reserves, other non-cash rent adjustments, non-cash allowance for credit losses on finance leases, stock-based compensation, non-cash environmental accretion expense, amortization of discounts and premiums on debt, and amortization of deferred financing costs. Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows. Additionally, we exclude non-core income and expenses, such as gains or losses from extinguishment of debt, merger and acquisition expenses, and spin-off expenses. We also exclude realized and unrealized gains/losses on foreign currency exchange rate movements, which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP net income to arrive at AFFO because they are not the primary drivers in our decision-making process and excluding these items provides investors with a view of our portfolio performance over time and makes it more comparable to other REITs. AFFO also reflects adjustments for jointly owned

Net Lease Office Properties 2025 10-K – 32

investments. We use AFFO as one measure of our operating performance when we formulate corporate goals and evaluate the effectiveness of our strategies.

We believe that AFFO is a useful supplemental measure for investors to consider because we believe it will help them better assess the sustainability of our operating performance without the potentially distorting impact of these short-term fluctuations. However, there are limits on the usefulness of AFFO to investors. For example, impairment charges and unrealized foreign currency losses that we exclude may become actual realized losses upon the ultimate disposition of the properties in the form of lower cash proceeds or other considerations. We use our FFO and AFFO measures as supplemental financial measures of operating performance. We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net income computed under GAAP, alternatives to net cash provided by operating activities computed under GAAP, or indicators of our ability to fund our cash needs.

FFO and AFFO were as follows (in thousands):

Years Ended December 31,

2025

2024

Net loss attributable to NLOP

$

(145,262)

$

(91,471)

Adjustments:

Impairment charges — real estate (a)

140,814 

78,237 

Depreciation and amortization of real property

35,878 

56,696 

Loss (gain) on sale of real estate, net (b)

29,006 

(20,216)

Proportionate share of adjustments for noncontrolling interests (c)

(207)

(207)

Total adjustments

205,491 

114,510 

FFO (as defined by NAREIT) attributable to NLOP

60,229 

23,039 

Adjustments:

Amortization of deferred financing costs

4,970 

31,446 

Other (gains) and losses (d)

4,620 

3,855 

Straight-line and other leasing and financing adjustments

2,523 

2,314 

Above- and below-market rent intangible lease amortization, net

1,080 

3,003 

Other amortization and non-cash items

439 

1,449 

Tax benefit — deferred

— 

(3,271)

Stock-based compensation

— 

250 

Separation and distribution related costs and other

— 

16 

Proportionate share of adjustments for noncontrolling interests (c)

(52)

(53)

Total adjustments

13,580 

39,009 

AFFO attributable to NLOP

$

73,809 

$

62,048 

Summary

FFO (as defined by NAREIT) attributable to NLOP

$

60,229 

$

23,039 

AFFO attributable to NLOP

$

73,809 

$

62,048 

__________

(a)Amount for the year ended December 31, 2025 represents impairment charges totaling $84.8 million recognized on the KBR property in Houston, Texas (Note 8).

(b)Amount for the year ended December 31, 2025 includes loss on sale of real estate of $41.6 million, comprising foreign currency translation adjustments reclassified from accumulated other comprehensive income to net loss since we exited all investments denominated in the Norwegian krone during the third quarter of 2025 and the euro during the first quarter of 2025 (Note 3, Note 15).

(c)Adjustments disclosed elsewhere in this reconciliation are on a consolidated basis. This adjustment reflects our FFO or AFFO on a pro rata basis.

(d)Amount for the year ended December 31, 2025 includes a non-cash allowance for credit loss recorded on a net investment in a sales-type lease of $4.8 million (Note 6). Amount for the year ended December 31, 2024 includes a loss of $3.2 million related to damages at a property. These amounts also include gains and losses on extinguishment of debt and foreign currency transactions.

Net Lease Office Properties 2025 10-K – 33

While we believe that FFO and AFFO are important supplemental measures, they should not be considered as alternatives to net income as an indication of a company’s operating performance. These non-GAAP measures should be used in conjunction with net income as defined by GAAP. FFO and AFFO, or similarly titled measures disclosed by other REITs, may not be comparable to our FFO and AFFO measures.

Net Lease Office Properties 2025 10-K – 34