0001952976false00019529762025-02-272025-02-27


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 27, 2025
NLOP_Logo_Color.jpg
Net Lease Office Properties
(Exact Name of Registrant as Specified in its Charter)
Maryland001-4181292-0887849
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
One Manhattan West, 395 9th Avenue, 58th Floor
New York,New York10001
(Address of principal executive offices)(Zip Code)
 

Registrant’s telephone number, including area code: (844) 656-7348

(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares of Beneficial Interest, par value $0.001 per shareNLOPNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☑
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 7.01 Regulation FD Disclosure.

On February 27, 2025, Net Lease Office Properties (the “Company”) made available certain unaudited supplemental financial information at December 31, 2024. A copy of this supplemental information is attached as Exhibit 99.1.

The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits
Exhibit No.Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).



SIGNATURES

Pursuant to the requirements 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.
Net Lease Office Properties
Date:February 27, 2025By:/s/ ToniAnn Sanzone
ToniAnn Sanzone
Chief Financial Officer


Exhibit 99.1



Net Lease Office Properties
Supplemental Financial Information
Fourth Quarter 2024



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Terms and Definitions

As used in this supplemental package, the terms “Net Lease Office Properties,” “NLOP,” “we,” “us” and “our” include Net Lease Office Properties, its consolidated subsidiaries and its predecessors, unless otherwise indicated. Other terms and definitions are as follows:
REITReal estate investment trust
WPCW. P. Carey Inc., a net-lease REIT (also our “Advisor”)
U.S.United States
ABRContractual minimum annualized base rent
NAREITNational Association of Real Estate Investment Trusts (an industry trade group)
WALTWeighted-average lease term
NLOP Mortgage Loan
Our $335.0 million senior secured mortgage loan, which was fully repaid during the year ended December 31, 2024
NLOP Mezzanine Loan
Our $120.0 million mezzanine loan facility, which is collateralized by the assignment of certain of our previously unencumbered real estate properties
NLOP Financing ArrangementsThe NLOP Mortgage Loan and NLOP Mezzanine Loan

Important Note Regarding Non-GAAP Financial Measures

This supplemental package includes certain “non-GAAP” supplemental measures that are not defined by generally accepted accounting principles (“GAAP”), including funds from operations (“FFO”); adjusted funds from operations (“AFFO”); pro rata cash net operating income (“pro rata cash NOI”); and normalized pro rata cash NOI. FFO is a non-GAAP measure defined by NAREIT. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures are provided within this supplemental package. In addition, refer to the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of these non-GAAP financial measures and other metrics.

Amounts may not sum to totals due to rounding.


Net Lease Office Properties
Supplemental Information – Fourth Quarter 2024
Table of Contents


Net Lease Office Properties
Fourth Quarter 2024
Summary Metrics
As of or for the three months ended December 31, 2024.
Financial Results
Revenues, including reimbursable costs – consolidated ($000s)$27,730 
Net loss attributable to NLOP ($000s)(35,785)
Net loss attributable to NLOP per diluted share(2.42)
Normalized pro rata cash NOI ($000s) (a) (b)
17,114 
AFFO attributable to NLOP ($000s) (a) (b)
11,526 
AFFO attributable to NLOP per diluted share (a) (b)
0.78 
Balance Sheet and Capitalization
Equity market capitalization – based on quarter end share price of $31.21 ($000s)$462,347 
Total consolidated debt ($000s)169,216 
Gross assets ($000s) (c)
957,136 
Total consolidated debt to gross assets17.7 %
NLOP Mortgage Loan principal outstanding ($000s) (d)
$— 
NLOP Mezzanine Loan principal outstanding ($000s) (d)
61,141 
Advisory Fees and Reimbursements Paid to WPC
Asset management fees (e)
$1,375 
Administrative reimbursements (f)
1,000 
Portfolio (Pro Rata) (b)
ABR (in thousands) (g)
$88,124 
Number of properties39 
Number of tenants43 
Occupancy85.2 %
Weighted-average lease term (in years)4.3 
Leasable square footage (in thousands) (h)
5,613 
ABR from investment grade tenants as a % of total ABR (i)
44.4 %
Dispositions – number of properties sold6 
Dispositions – gross proceeds (in thousands)$47,174 
Subsequent to Quarter End
NLOP Mezzanine Loan principal outstanding as of the date of this report ($000s) (j)
$57,874 
________
(a)Normalized pro rata cash NOI and AFFO are non-GAAP measures. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of our non-GAAP measures and for details on how certain non-GAAP measures are calculated.
(b)Presented on a pro rata basis. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of pro rata.
(c)Gross assets represent consolidated total assets before accumulated depreciation on buildings and improvements. Gross assets are net of accumulated amortization on in-place lease intangible assets of $123.0 million and above-market rent intangible assets of $17.6 million.
(d)Original principal outstanding for the NLOP Mortgage Loan was $335.0 million. The NLOP Mortgage Loan was fully repaid during the year ended December 31, 2024. Original principal outstanding for the NLOP Mezzanine Loan was $120.0 million. NLOP Mezzanine Loan principal outstanding (as a % of original principal) was 51.0% as of December 31, 2024.
(e)Pursuant to certain advisory agreements, our Advisor provides us with strategic management services, including asset management, property disposition support, and various related services. We pay our Advisor an asset management fee that was initially set at an annual amount of $7.5 million and is being proportionately reduced each month following the disposition of each portfolio property.
(f)Pursuant to certain advisory agreements, we will reimburse our Advisor a base administrative amount of approximately $4.0 million annually, for certain administrative services, including day-to-day management services, investor relations, accounting, tax, legal, and other administrative matters.
(g)See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of ABR.
(h)Excludes 570,999 of operating square footage for a parking garage at a domestic property.
(i)Percentage of portfolio is based on ABR, as of December 31, 2024. Includes tenants or guarantors with investment grade ratings (24.8%) and subsidiaries of non-guarantor parent companies with investment grade ratings (19.6%). Investment grade refers to an entity with a rating of BBB- or higher from Standard & Poor’s Ratings Services or Baa3 or higher from Moody’s Investors Service. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of ABR.
(j)NLOP Mezzanine Loan principal outstanding (as a % of original principal) was 48.2% as of the date of this report.

 Net Lease Office Properties | 1

Net Lease Office Properties
Fourth Quarter 2024
Components of Net Asset Value
In thousands.
Three Months Ended December 31, 2024
Normalized Pro Rata Cash NOI (a) (b)
$17,114 
Balance Sheet – Selected Information
As of December 31, 2024
Assets
Book value of select real estate (c)
$30,633 
Cash and cash equivalents25,121 
Restricted cash, including escrow (d)
43,305 
Other assets, net:
Straight-line rent adjustments$20,489 
Accounts receivable2,216 
Prepaid expenses2,213 
Deferred charges2,123 
Taxes receivable228 
Other1,931 
Total other assets, net$29,200 
Liabilities
Non-recourse mortgages, net (e)
$110,841 
NLOP Mezzanine Loan (f)
61,141 
NLOP Mortgage Loan (g)
— 
Accounts payable, accrued expenses and other liabilities:
Accounts payable and accrued expenses$12,713 
Prepaid and deferred rents11,064 
Accrued taxes payable1,199 
Tenant security deposits821 
Operating lease liabilities259 
Other18,089 
Total accounts payable, accrued expenses and other liabilities$44,145 
________
(a)Normalized pro rata cash NOI is a non-GAAP measure. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of our non-GAAP measures and for details on how they are calculated.
(b)Presented on a pro rata basis. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of pro rata.
(c)Represents the value of real estate not appropriately captured in normalized pro rata cash NOI, such as vacant assets.
(d)Comprised of approximately $41.7 million related to certain reserve requirements for debt service, capital improvements, and real estate taxes pursuant to the NLOP Financing Arrangements. Approximately $1.6 million is related to certain reserve requirements for other loan agreements.
(e)Excludes unamortized premium, net totaling $0.4 million as of December 31, 2024.
(f)Excludes unamortized discount, net totaling $2.2 million and unamortized deferred financing costs totaling $1.0 million as of December 31, 2024.
(g)The NLOP Mortgage Loan was fully repaid during the year ended December 31, 2024.
 Net Lease Office Properties | 2

Net Lease Office Properties
Fourth Quarter 2024
Consolidated Statement of Operations
In thousands, except share and per share amounts.
Three Months Ended December 31, 2024
Revenues
Lease revenues$25,419 
Other lease-related income2,311 
27,730 
Operating Expenses
Impairment charges — real estate31,786 
Depreciation and amortization11,229 
Reimbursable tenant costs6,716 
Property expenses, excluding reimbursable tenant costs2,963 
General and administrative (a)
1,898 
Asset management fees (b)
1,375 
55,967 
Other Income and Expenses
Interest expense (c)
(7,620)
Other gains and (losses)(2,060)
Loss on sale of real estate, net(1,087)
(10,767)
Loss before income taxes(39,004)
Benefit from income taxes3,240 
Net Loss(35,764)
Net income attributable to noncontrolling interests(21)
Net Loss Attributable to NLOP$(35,785)
Basic and Diluted Loss Per Share$(2.42)
Weighted-Average Shares Outstanding
Basic and Diluted14,802,703 
________
(a)Includes $1.0 million of administrative reimbursements to our Advisor.
(b)Amount is comprised of fees paid to Advisor for strategic management services, including asset management, property disposition support, and various related services.
(c)Includes $2.6 million of non-cash amortization of deferred financing costs.
 Net Lease Office Properties | 3

Net Lease Office Properties
Fourth Quarter 2024
FFO and AFFO, Consolidated
In thousands, except share and per share amounts.
Three Months Ended December 31, 2024
Net loss attributable to NLOP$(35,785)
Adjustments:
Impairment charges — real estate31,786 
Depreciation and amortization of real property11,229 
Loss on sale of real estate, net1,087 
Proportionate share of adjustments for noncontrolling interests (a)
(52)
Total adjustments44,050 
FFO (as defined by NAREIT) Attributable to NLOP (b)
8,265 
Adjustments:
Tax benefit — deferred and other(2,900)
Other (gains) and losses (c)
2,635 
Amortization of deferred financing costs2,622 
Above- and below-market rent intangible lease amortization, net
476 
Straight-line and other leasing and financing adjustments309 
Other amortization and non-cash items108 
Stock-based compensation 25 
Proportionate share of adjustments for noncontrolling interests (a)
(14)
Total adjustments3,261 
AFFO Attributable to NLOP (b)
$11,526 
Summary
FFO (as defined by NAREIT) attributable to NLOP (b)
$8,265 
FFO (as defined by NAREIT) attributable to NLOP per diluted share (b)
$0.56 
AFFO attributable to NLOP (b)
$11,526 
AFFO attributable to NLOP per diluted share (b)
$0.78 
Diluted weighted-average shares outstanding14,802,703 
________
(a)Adjustments disclosed elsewhere in this reconciliation are on a consolidated basis. This adjustment reflects our FFO or AFFO on a pro rata basis.
(b)FFO and AFFO are non-GAAP measures. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of our non-GAAP measures.
(c)Includes a loss of $3.2 million related to damages at a property.
 Net Lease Office Properties | 4

Net Lease Office Properties
Fourth Quarter 2024
Consolidated Balance Sheets
In thousands, except share and per share amounts.
December 31,
20242023
Assets
Investments in real estate:
Land, buildings and improvements$730,345 $1,203,991 
Net investments in finance leases— 10,522 
In-place lease intangible assets and other209,968 357,788 
Above-market rent intangible assets30,512 57,954 
Investments in real estate970,825 1,630,255 
Accumulated depreciation and amortization(292,679)(458,430)
Assets held for sale, net29,297 — 
Net investments in real estate707,443 1,171,825 
Restricted cash43,305 51,560 
Cash and cash equivalents25,121 16,269 
Other assets, net29,200 65,435 
Total assets$805,069 $1,305,089 
Liabilities and Equity
Debt:
Non-recourse mortgages, net$111,259 $168,836 
NLOP Mezzanine Loan, net57,957 106,299 
NLOP Mortgage Loan, net— 266,844 
Debt, net169,216 541,979 
Accounts payable, accrued expenses and other liabilities44,145 59,527 
Below-market rent intangible liabilities, net6,305 10,643 
Deferred income taxes— 10,450 
Dividends payable— 1,060 
Total liabilities219,666 623,659 
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued
— — 
Common stock, $0.001 par value, 45,000,000 shares authorized; 14,814,075 and 14,620,919 shares, respectively, issued and outstanding
15 15 
Additional paid-in capital855,813 855,554 
Distributions in excess of accumulated earnings(234,443)(142,960)
Accumulated other comprehensive loss(40,157)(35,600)
Total shareholders' equity581,228 677,009 
Noncontrolling interests4,175 4,421 
Total equity585,403 681,430 
Total liabilities and equity$805,069 $1,305,089 

 Net Lease Office Properties | 5

Net Lease Office Properties
Fourth Quarter 2024
Capitalization
In thousands, except share and per share amounts. As of December 31, 2024.
Total Enterprise ValueSharesShare PriceMarket Value
Equity
Common equity14,814,075 $31.21 $462,347 
Total Equity Market Capitalization462,347 
Outstanding Balance (a)
Debt
Non-recourse mortgages110,841 
NLOP Mezzanine Loan61,141 
Total Debt171,982 
Less: Cash and cash equivalents(25,121)
Net Debt146,861 
Total Enterprise Value$609,208 
________
(a)Excludes unamortized discount, net totaling $1.8 million and unamortized deferred financing costs totaling $1.0 million as of December 31, 2024.
 Net Lease Office Properties | 6

Net Lease Office Properties
Fourth Quarter 2024
Debt Overview
Dollars in thousands. Pro rata. As of December 31, 2024.
Maturity DateFixed / FloatingInterest Rate
Total Outstanding Balance (a)
% of Total
NLOP Mezzanine Loan
NLOP Mezzanine Loan (b)
11/9/2028Fixed14.5 %$61,141 35.6 %
Other Mortgages (Tenant Listed)
Northrop Grumman Systems Corporation (c)
1/6/2025Fixed4.2 %25,220 14.7 %
Midcontinent Independent Stm Op Inc5/6/2025Fixed4.0 %8,933 5.2 %
Intuit Inc.5/6/2025Fixed4.0 %21,900 12.7 %
Acosta, Inc.8/6/2025Fixed4.4 %9,869 5.7 %
Siemens AS12/15/2025Floating4.9 %38,867 22.6 %
North American Lighting, Inc.5/6/2026Fixed6.3 %6,052 3.5 %
Total Debt Outstanding8.1 %$171,982 100.0 %
________
(a)Excludes unamortized discount, net totaling $1.8 million and unamortized deferred financing costs totaling $1.0 million as of December 31, 2024.
(b)The NLOP Mezzanine Loan bears interest at an annual rate of 14.5% (10.0% of which is required to be paid current on a monthly basis, and 4.5% of which is a payment-in-kind accrual, on a quarterly basis). In February 2025, we repaid $3.3 million of outstanding principal on the NLOP Mezzanine Loan using excess cash. See the Summary Metrics section for the NLOP Mezzanine Loan principal outstanding following these repayments..
(c)This non-recourse mortgage loan has not been repaid as of the date of this report.
 Net Lease Office Properties | 7

Net Lease Office Properties
Fourth Quarter 2024
Dispositions
Dollars in thousands. Pro rata.
Tenant / Lease GuarantorProperty Location(s)Gross Sale Price
ABR (a)
Closing DateGross Square Footage
4Q23
Raytheon CompanyTucson, AZ$24,575 $1,978 Dec-23143,650 
Carhartt, Inc.Dearborn, MI9,806 748 Dec-2358,722 
BCBSM, Inc.Eagan, MN2,500 298 Dec-2329,916 
AVL Michigan Holding CorporationPlymouth, MI6,200 575 Dec-2370,000 
4Q23 Total43,081 3,599 302,288 
1Q24
Undisclosed – UK insurance company (b)
Newport, United Kingdom10,497 1,761 Jan-2480,664 
Total E&P Norge AS (b)
Stavanger, Norway33,072 5,185 Mar-24275,725 
1Q24 Total43,569 6,946 356,389 
2Q24
Exelon Generation Company, LLC (c)
Warrenville, IL19,830 2,935 Apr-24146,745 
Vacant (formerly AVT Technology Solutions LLC) (c)
Tempe, AZ13,160 — Apr-24132,070 
FedEx CorporationCollierville, TN62,500 5,491 Apr-24390,380 
DMG MORI SEIKI U.S.A., INC. Hoffman Estates, IL35,984 2,458 Apr-24104,598 
BCBSM, Inc. (2 properties)Eagan, MN60,700 4,663 Jun-24347,472 
2Q24 Total192,174 15,547 1,121,265 
3Q24
CVS Health CorporationScottsdale, AZ71,500 4,252 Aug-24354,888 
Xileh Holding Inc.Auburn Hills, MI9,000 711 Sep-2455,490 
3Q24 Total80,500 4,963 410,378 
4Q24
E.On UK PLC (b)
Houghton le Spring, United Kingdom3,924 3,819 Oct-24217,339 
Vacant (formerly BCBSM, Inc.)Eagan, MN11,650 — Nov-24227,666 
Merative L.P.Hartland, WI6,750 669 Dec-2481,082 
Charter Communications Operating, LLCBridgeton, MO7,350 820 Dec-2478,080 
Caremark RX, L.L.C.Chandler, AZ15,000 1,645 Dec-24183,000 
Cofinity, Inc./ Aetna Life Insurance Co.Southfield, MI2,500 1,833 Dec-2494,453 
4Q24 Total47,174 8,786 881,620 
Total Dispositions (d)
$406,498 $39,841 3,071,940 
________
(a)ABR is pro forma for any agreed to and signed future rent restructurings.
(b)Amount reflects the applicable exchange rate on the date of the transaction.
(c)We transferred ownership of these properties and the related non-recourse mortgage loans to the respective mortgage lenders. Gross proceeds from these dispositions represent the mortgage principal outstanding on the respective dates of transfer.

 Net Lease Office Properties | 8

Net Lease Office Properties
Fourth Quarter 2024
Capital Expenditures and Leasing Activity
Capital Expenditures
In thousands. For the three months ended December 31, 2024.
Tenant Improvements and Leasing Costs
Tenant Improvements (Tenant Listed)
Merative L.P.$767 
S&ME, Inc.447 
Nokia Corporation245 
1,459 
Leasing Costs
CVS Health Corporation$480 
Caremark RX, L.L.C.415 
895 
Tenant Improvements and Leasing Costs2,354 
Maintenance Capital Expenditures (Tenant Listed)
KBR, Inc.415 
Pharmaceutical Product Development, LLC397 
ICU MEDICAL, INC.258 
Charter Communications Operating, LLC69 
Other18 
1,157 
Total: Tenant Improvements and Leasing Costs, and Maintenance Capital Expenditures$3,511 

Leasing Activity
Dollars in thousands. For the three months ended December 31, 2024, except ABR. Pro rata.
Lease Renewals and Extensions (a)
Expected Tenant Improvements ($000s)Leasing Commissions ($000s)
ABR
TenantLocationSquare FeetPrior Lease ($000s)
New Lease ($000s) (b)
Rent RecaptureIncremental Lease Term
Google, LLC (c)
Venice, CA67,681 $3,018 $3,108 103.0 %$— $357 5.0 years
Total / Weighted Average (d)
67,681 $3,018 $3,108 103.0 %$— $357 5.0 years

New LeasesExpected Tenant Improvements ($000s)Leasing Commissions ($000s)
ABR
TenantLocationSquare FeetNumber of Leases
New Lease ($000s) (b)
New Lease Term
Phoenix Data Systems (e)
Southfield, MI6,431 1 $72 $— $— 5.0 years
CT Logic (e)
Southfield, MI1,668 1 24 — — 3.0 years
Total / Weighted Average (f)
8,099 2 $96 $— $— 4.5 years
_______
(a)Excludes lease extensions for a period of one year or less.
(b)New lease amounts are based on in-place rents at time of lease commencement and exclude any free rent periods.
(c)Lease renewal period commences on November 1, 2025.
(d)Weighted average refers to the incremental lease term.
(e)Phoenix Data Systems and CT Logic were tenants at our multi-tenant property in Southfield, Michigan, prior to that property’s disposition in December 2024.
(f)Weighted average refers to the new lease term.
 Net Lease Office Properties | 9

Net Lease Office Properties
Fourth Quarter 2024
Top Ten Tenants
Dollars in thousands. Pro rata. As of December 31, 2024.
Tenant / Lease GuarantorState / CountryABRABR %Square FootageNumber of PropertiesWeighted-Average Lease Term (Years)
KBR, Inc. (a)
Texas$20,156 22.9 %913,713 1 5.5 
JPMorgan Chase Bank, N.A.Florida, Texas9,069 10.3 %666,869 3 4.4 
Siemens AS (b)
Norway4,198 4.8 %165,905 1 1.0 
Pharmaceutical Product Development, LLCNorth Carolina4,063 4.6 %219,812 1 8.9 
Omnicom Group, Inc.California3,961 4.5 %120,000 1 3.7 
R.R. Donnelley & Sons CompanyIllinois3,393 3.9 %167,215 1 2.7 
Board of Regents, State of IowaIowa3,254 3.7 %191,700 1 5.8 
Bankers Financial CorporationFlorida3,228 3.6 %111,357 1 0.6 
Google, LLCCalifornia2,930 3.3 %67,681 1 5.8 
Northrop Grumman Systems CorporationMinnesota2,679 3.0 %191,336 1 4.9 
Total (c)
$56,931 64.6 %2,815,588 12 4.7 
________
(a)Excludes 570,999 of operating square footage for a parking garage associated with the KBR, Inc. property in Houston, Texas.
(b)ABR amounts are subject to fluctuations in foreign currency exchange rates.
(c)See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of pro rata.
 Net Lease Office Properties | 10

Net Lease Office Properties
Fourth Quarter 2024
Lease Expirations
Dollars in thousands. Pro rata. As of December 31, 2024.
Year of Lease Expiration (a)
Number of Leases ExpiringNumber of Tenants with Leases ExpiringABRABR %
Square Footage (b)
Square Footage %
202513 12 $13,890 15.8 %730,062 13.0 %
20267 7 6,014 6.8 %369,460 6.6 %
20277 6 8,834 10.0 %499,571 8.9 %
20285 4 8,628 9.8 %371,447 6.6 %
20295 4 5,349 6.1 %358,013 6.4 %
20307 6 34,484 39.1 %1,772,623 31.6 %
20311 1 615 0.7 %50,600 0.9 %
20322 2 3,692 4.2 %257,008 4.6 %
20331 1 4,063 4.6 %219,812 3.9 %
20351 1 2,010 2.3 %120,147 2.1 %
20371 1 545 0.6 %31,120 0.6 %
Vacant— — — — %833,297 14.8 %
Total (c)
50 $88,124 100.0 %5,613,160 100.0 %

chart-5e6773a87c3f43d5b05a.jpg
________
(a)Assumes tenants do not exercise any renewal options or purchase options.
(b)Excludes 570,999 of operating square footage for a garage at a domestic property.
(c)See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of pro rata.
 Net Lease Office Properties | 11

Net Lease Office Properties
Fourth Quarter 2024
Property List
Dollars in thousands. Pro rata. As of December 31, 2024.

U.S. Assets:
Encumbered Status
#Primary TenantIndustry
Credit (a)
CityState
Square Footage (b)
ABRRent Increase TypeDate of Next Increase
WALT (c)
NLOP Mezzanine LoanOther Mortgages
1
KBR, Inc. (d) (e)
Construction & EngineeringNon-IGHoustonTexas1,064,788$21,306Fixed: One-time 7.78%Jan-275.4
✓
$—
2JPMorgan Chase Bank, N.A.Diversified BanksIGFort WorthTexas386,154$4,755CPI: 0.0% Floor / 2.0% CapMar-255.2
✓
$—
3Pharmaceutical Product Development, LLCPharmaceuticalsIGMorrisvilleNorth Carolina219,812$4,063Fixed: 2.00% annuallyOct-258.9
✓
$—
4Omnicom Group, Inc.AdvertisingIGPlaya VistaCalifornia120,000$3,961NoneN/A3.7
✓
$—
5R.R. Donnelley & Sons CompanyCommercial PrintingNon-IGWarrenvilleIllinois167,215$3,393Fixed: 2.00% annuallySep-252.7✓$—
6
Board of Regents, State of Iowa (f)
Government Related ServicesIGCoralvilleIowa191,700$3,254CPI: 0.0% Floor / No CapNov-255.8$—
7
Bankers Financial Corporation (d) (e)
Property & Casualty InsuranceNon-IGSt. PetersburgFlorida167,581$3,228Fixed: 2.50% annuallyN/A0.6✓$—
8JPMorgan Chase Bank, N.A.Diversified BanksIGTampaFlorida176,150$2,993CPI: 0.0% Floor / 2.0% CapMar-255.2✓$—
9
Google, LLC (g)
Internet Software & ServicesIGVeniceCalifornia67,681$2,930Fixed: 3.00% annuallyJan-255.8$—
10
ICU MEDICAL, INC. (d)
Health Care SuppliesNon-IGPlymouthMinnesota182,250$2,840Fixed: 3.25% annuallyFeb-250.8✓$—
11Northrop Grumman Systems Corporation Aerospace & DefenseIGPlymouthMinnesota191,336$2,679Fixed: 2.00% annuallyDec-254.9$25,220
12Intuit Inc.Internet Software & ServicesIGPlanoTexas166,033$2,577Fixed: One-time $2.00/SF in '21N/A1.5$21,900
13Veritas Bermuda, LTDSystems SoftwareNon-IGRosevilleMinnesota136,125$2,255Fixed: 2.00% annuallyDec-257.9✓$—
14Cenlar FSBRegional BanksNon-IGYardleyPennsylvania105,584$2,052Fixed: 2.70% annuallyJan-253.5✓$—
15iHeartCommunications, Inc.BroadcastingNon-IGSan AntonioTexas120,147$2,010Fixed: 2.00% annuallyFeb-2510.1✓$—
16Arbella Service Company, Inc.Property & Casualty InsuranceIGQuincyMassachusetts132,160$1,850Fixed: One-time $1.00/SF in '22N/A2.4✓$—
17ICF Consulting Group, Inc.IT Consulting & Other ServicesNon-IGMartinsvilleVirginia93,333$1,785CPI: 0.0% Floor / No CapJan-252.1✓$—
18Acosta, Inc.AdvertisingNon-IGJacksonvilleFlorida88,062$1,541Fixed: $0.50/SF annuallyJul-252.6$9,869
19Safelite Group, Inc.Specialized Consumer ServicesNon-IGRio RanchoNew Mexico94,649$1,500Fixed: 2.00% annuallyJan-254.4✓$—
20Master Lock Company, LLCBuilding ProductsNon-IGOak CreekWisconsin120,883$1,437Fixed: 2.00% annuallyJun-257.4✓$—
21
JPMorgan Chase Bank, N.A. (d) (e)
Diversified BanksIGTampaFlorida135,733$1,389CPI: 0.0% Floor / 2.0% CapN/A0.2✓$—
22Midcontinent Independent Stm Op Inc.Electric UtilitiesIGEaganMinnesota60,463$1,133Fixed: $0.25/SF annuallyMar-251.2$8,933
 Net Lease Office Properties | 12

23Emerson Electric Co.Industrial MachineryIGHoustonTexas52,144$1,108Fixed: $0.50/SF annuallyN/A0.8✓$—
24Radiate Holdings, L.P.Cable & SatelliteNon-IGSan MarcosTexas47,000$1,074CPI: 0.0% Floor / 3.0% CapAug-253.7$—
25North American Lighting, Inc.Auto Parts & EquipmentNon-IGFarmington HillsMichigan75,286$1,058Fixed: 2.50% annuallyApr-251.2$6,052
26Arcfield Acquisition CorporationAerospace & DefenseNon-IGKing of PrussiaPennsylvania88,578$1,000Fixed: One-time 17.50% in '23N/A0.9✓$—
27
Pioneer Credit Recovery, Inc. (d)
Diversified Support ServicesNon-IGMoorestownNew Jersey65,567$924Fixed: 2.50% annuallyJan-253.1✓$—
28Undisclosed – multi-national provider of industrial gasesIndustrial GasesIGHoustonTexas49,821$617Fixed: 2.00% annuallyJan-251.0✓$—
29APCO Holdings, Inc.Property & Casualty InsuranceNon-IGNorcrossGeorgia50,600$615Fixed: 2.50% annuallyMar-256.2✓$—
30S&ME, Inc. Environmental & Facilities ServicesNon-IGRaleighNorth Carolina31,120$545Fixed: 2.75% annuallyMar-2512.2✓$—
31Radiate Holdings, L.P.Cable & SatelliteNon-IGWacoTexas30,699$473CPI: 0.0% Floor / 3.0% CapAug-253.7$—
32Radiate Holdings, L.P.Cable & SatelliteNon-IGCorpus ChristiTexas20,717$354CPI: 0.0% Floor / 3.0% CapAug-253.7$—
33Radiate Holdings, L.P.Cable & SatelliteNon-IGOdessaTexas21,193$236CPI: 0.0% Floor / 3.0% CapAug-253.7$—
34Radiate Holdings, L.P.Cable & SatelliteNon-IGSan MarcosTexas14,400$212CPI: 0.0% Floor / 3.0% CapAug-253.7✓$—
35
Vacant (formerly BCBSM, Inc.) (h)
N/AN/AEaganMinnesota442,542$0N/AN/A0.0✓$—
36
Vacant (formerly McKesson Corporation) (h)
N/AN/AThe WoodlandsTexas204,063$0N/AN/A0.0
✓
$—
37
Vacant (formerly BCBSM, Inc.) (h)
N/AN/AEaganMinnesota12,286$0N/AN/A0.0✓$—
U.S. Total (i)
5,393,855$83,1474.5$71,974
European Assets:
Encumbered Status
#Primary TenantIndustry
Credit (a)
CityCountrySquare FootageABRRent Increase TypeDate of Next Increase
WALT (c)
NLOP Mezzanine LoanOther Mortgages
1Siemens ASIndustrial ConglomeratesIGOsloNorway165,905$4,198CPI: 0.0% Floor / No CapJan-251.0$38,867
2Nokia CorporationCommunications EquipmentIGKrakowPoland53,400$779CPI: 0.0% Floor / No CapSep-254.7$—
European Total (i)
219,305$4,9771.5$38,867
________
✓ Indicates an asset that is in the NLOP Mezzanine Loan collateral pool.
(a)“IG” refers to investment grade rated tenants.
(b)Excludes 570,999 of operating square footage for a parking garage associated with the KBR, Inc. property in Houston, Texas.
(c)Assumes parties do not exercise any renewal or purchase options pursuant to their applicable leases.
(d)Denotes multi-tenant property. Primary tenant generating largest percentage of ABR shown. Industry, credit, rent increase type and next rent increase are for primary tenant.
(e)Denotes leased property that is not 100% occupied.
(f)We own a 90% controlling interest in this consolidated property.
(g)In October 2024, the tenant exercised its renewal option, which begins November 1, 2025. Renewal rent resets to $3.1 million, with 3.00% annual rent increases beginning November 1, 2026.
(h)Denotes property that is vacant as of the date of this report.
(i)See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of pro rata.
 Net Lease Office Properties | 13





Net Lease Office Properties
Appendix
Fourth Quarter 2024



financialdocumentcoverslidc.jpg
 Net Lease Office Properties | 14

Net Lease Office Properties
Fourth Quarter 2024
Normalized Pro Rata Cash NOI
In thousands.
Three Months Ended December 31, 2024
Consolidated Lease Revenues and Other
Total lease revenues – as reported$25,419 
Parking garage revenues (a)
545 
Less: Consolidated Reimbursable and Non-Reimbursable Property Expenses
Reimbursable property expenses – as reported6,716 
Non-reimbursable property expenses – as reported2,963 
16,285 
Adjustments for Pro Rata Ownership of Real Estate Joint Ventures:
Less: Pro rata share of NOI attributable to noncontrolling interests(90)
(90)
16,195 
Adjustments for Pro Rata Non-Cash Items:
Add: Above- and below-market rent intangible lease amortization476 
Less: Straight-line and other leasing and financing adjustments309 
Add: Other non-cash items107 
892 
Pro Rata Cash NOI (b)
17,087 
Adjustment to normalize for intra-period dispositions (c)
27 
Normalized Pro Rata Cash NOI (b)
$17,114 
 Net Lease Office Properties | 15

Net Lease Office Properties
Fourth Quarter 2024

The following table presents a reconciliation from Net loss attributable to NLOP to Normalized pro rata cash NOI:
Three Months Ended December 31, 2024
Net Loss Attributable to NLOP
Net loss attributable to NLOP – as reported$(35,785)
Adjustments for Consolidated Operating Expenses
Add: Operating expenses – as reported55,967 
Less: Property expenses, excluding reimbursable tenant costs – as reported(2,963)
53,004 
Adjustments for Other Consolidated Revenues and Expenses:
Less: Other lease-related income (excluding parking garage revenues)(1,766)
Less: Reimbursable property expenses – as reported(6,716)
Add: Other income and (expenses) – as reported10,767 
Add: Benefit from income taxes – as reported(3,240)
(955)
Other Adjustments:
Add: Above- and below-market rent intangible lease amortization476 
Less: Straight-line and other leasing and financing adjustments309 
Add: Property expenses, excluding reimbursable tenant costs, non-cash107 
Add: Adjustments for pro rata ownership(69)
Adjustment to normalize for intra-period dispositions (c)
27 
850 
Normalized Pro Rata Cash NOI (b)
$17,114 
________
(a)Amount is comprised of revenues from a parking garage at a domestic property and is included in Other lease-related income on our consolidated income statements.
(b)Pro rata cash NOI and normalized pro rata cash NOI are non-GAAP measures. See the Disclosures Regarding Non-GAAP and Other Metrics section that follows for a description of our non-GAAP measures and for details on how pro rata cash NOI and normalized pro rata cash NOI are calculated.
(c)For properties disposed of during the period, the adjustment eliminates our pro rata share of cash NOI for the period.
 Net Lease Office Properties | 16

Net Lease Office Properties
Fourth Quarter 2024
Disclosures Regarding Non-GAAP and Other Metrics

Non-GAAP Financial Disclosures
FFO and AFFO
Due to certain unique operating characteristics of real estate companies, as discussed below, 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 (other than those realized on the settlement of foreign currency derivatives), 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 as they are not the primary drivers in our decision-making process and excluding these items provides investors a view of our portfolio performance over time and makes it more comparable to other REITs. AFFO also reflects adjustments for jointly owned investments. We use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies and determine executive compensation.
We believe that AFFO is a useful supplemental measure for investors to consider as we believe it will help them to 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 exchange rate 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, or as alternatives to net cash provided by operating activities computed under GAAP, or as indicators of our ability to fund our cash needs.
Pro Rata Cash NOI
Cash net operating income (“cash NOI”) is a non-GAAP financial measure that is intended to reflect the performance of our properties. We define cash NOI as cash rents from our properties less non-reimbursable property expenses. Cash NOI excludes amortization of intangibles and straight-line rent adjustments that are included in GAAP lease revenues. We present cash NOI on a pro rata basis (“pro rata cash NOI”) to account for our share of income related to noncontrolling interests. We believe that pro rata cash NOI is a helpful measure that both investors and management can use to evaluate the financial performance of our properties and it allows for comparison of our operating performance between periods and to other REITs. Pro rata cash NOI should not be considered as an alternative to net income as an indication of our financial performance or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present cash NOI and/or pro rata cash NOI may not be directly comparable to the way other REITs present such metrics.
Normalized Pro Rata Cash NOI
Normalized pro rata cash NOI is pro rata cash NOI as defined above adjusted primarily to exclude our pro rata share of cash NOI from properties disposed of during the most recent quarter. We believe this measure provides a helpful representation of our net operating income from our in-place leased properties.
 Net Lease Office Properties | 17

Net Lease Office Properties
Fourth Quarter 2024

Other Metrics
Pro Rata Metrics
This supplemental package 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 though 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 assets, liabilities, revenues and expenses 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 and reflects exchange rates as of December 31, 2024. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period. ABR is presented on a pro rata basis.
 Net Lease Office Properties | 18
v3.25.0.1
Cover Page Document
Feb. 27, 2025
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 27, 2025
Entity Registrant Name Net Lease Office Properties
Entity Incorporation, State or Country Code MD
Entity File Number 001-41812
Entity Tax Identification Number 92-0887849
Entity Address, Street Address One Manhattan West, 395 9th Avenue, 58th Floor
Entity Address, City New York,
Entity Address, State NY
Entity Address, Postal Zip Code 10001
City Area Code 844
Local Phone Number 656-7348
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of each class Common Shares of Beneficial Interest, par value $0.001 per share
Trading Symbol(s) NLOP
Name of each exchange on which registered NYSE
Entity Emerging Growth Company true
Entity Central Index Key 0001952976
Amendment Flag false
Entity Ex Transition Period false
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