10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission file number 001-36004

SPIRIT REALTY CAPITAL, INC.

 (Exact name of registrant as specified in its charter)

Maryland	20-1676382
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
2727 North Harwood Street, Suite 300, Dallas, Texas 75201	(972) 476-1900
(Address of principal executive offices; zip code)	(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.05 per share	SRC	New York Stock Exchange
6.000% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share	SRC-A	New York Stock Exchange

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

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

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

 Large accelerated filer ☒ Accelerated filer □ Non-accelerated filer □

Smaller reporting company ☐ Emerging growth company ☐

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

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

As of November 4, 2022, there were 139,660,241 shares of common stock, par value $0.05, of Spirit Realty Capital, Inc. outstanding.

INDEX

Glossary			3
PART I — FINANCIAL INFORMATION			5
	Item 1.	Financial Statements (Unaudited)	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
	Item 4.	Controls and Procedures	43
PART II — OTHER INFORMATION			44
	Item 1.	Legal Proceedings	44
	Item 1A.	Risk Factors	44
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
	Item 3.	Defaults Upon Senior Securities	44
	Item 4.	Mine Safety Disclosures	44
	Item 5.	Other Information	44
	Item 6.	Exhibits	45
		Signatures	46

GLOSSARY

2016 ATM Program	At-the-market equity distribution program established in November 2016, which was terminated upon entry into the 2020 ATM Program
2017 Tax Legislation	Tax Cuts and Jobs Act of 2017
2019 Credit Facility	$800 million unsecured revolving credit facility, expanded to $1.2 billion in March 2022, pursuant to the 2019 Revolving Credit and Term Loan Agreement
2019 Revolving Credit and Term Loan Agreement	Revolving credit and term loan agreement between the Operating Partnership and certain lenders dated January 14, 2019, as amended or otherwise modified from time to time
2020 ATM Program	At-the-market equity distribution program established in November 2020, which was terminated upon entry into the 2021 ATM Program
2020 Term Loans	$400.0 million senior unsecured term facility pursuant to the 2020 Term Loan Agreement
2020 Term Loan Agreement	Term loan agreement between the Operating Partnership and certain lenders dated April 2, 2020, as amended or otherwise modified from time to time
2021 ATM Program	At-the-market equity distribution program established in November 2021, pursuant to which the Corporation may offer and sell registered shares of common stock from time to time
2021 Convertible Notes	$345.0 million convertible notes of the Corporation which matured in May 2021
2022 Term Loans	$800.0 million senior unsecured term facility pursuant to the 2022 Term Loan Agreement
2022 Term Loan Agreement	Term loan agreement between the Operating Partnership and certain lenders dated August 22, 2022, as amended or otherwise modified from time to time
2026 Senior Notes	$300.0 million principal amount senior notes issued in August 2016
2027 Senior Notes	$300.0 million principal amount senior notes issued in September 2019
2028 Senior Notes	$450.0 million principal amount senior notes issued in March 2021
2029 Senior Notes	$400.0 million principal amount senior notes issued in June 2019
2030 Senior Notes	$500.0 million principal amount senior notes issued in September 2019
2031 Senior Notes	$450.0 million principal amount senior notes issued in August 2020
2032 Senior Notes	$350.0 million principal amount senior notes issued in March 2021
Adjusted Debt	Adjusted Debt is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations
Adjusted EBITDAre	Adjusted EBITDAre is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations
AFFO	Adjusted Funds From Operations is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations
Amended Incentive Award Plan	Second Amended and Restated Spirit Realty Capital, Inc. and Spirit Realty, L.P. 2012 Incentive Award Plan, as amended
Annualized Base Rent (ABR)	Represents Base Rent plus earned income from direct financing leases and deferred revenue from development deals for the final month of the reporting period. It is adjusted to reflect acquisitions and dispositions for that month as if such acquisitions and dispositions had occurred as of the beginning of the month. The total is then multiplied by 12. ABR is used when calculating certain metrics to evaluate portfolio credit and diversification and to manage risk.
AOCIL	Accumulated Other Comprehensive Income / (Loss)
ASC	Accounting Standards Codification
Base Cash Rent	Represents Base Rent adjusted for contractual rental income abated, deemed not probable of collection, or recovered from prior period reserves
Base Rent	Represents contractual rental income for the period, prior to deferral or abatement agreements, and excluding contingent rents.
CMBS	Commercial Mortgage-Backed Securities
Code	Internal Revenue Code of 1986, as amended
Company	The Corporation and its consolidated subsidiaries
Convertible Notes	2021 Convertible Notes
Corporation	Spirit Realty Capital, Inc., a Maryland corporation
CPI	Consumer Price Index
EBITDAre	EBITDAre is a non-GAAP financial measure computed in accordance with standards established by NAREIT. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations
Exchange Act	Securities Exchange Act of 1934, as amended
FASB	Financial Accounting Standards Board

3

FFO	Funds From Operations is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations
GAAP	Generally Accepted Accounting Principles in the United States
LIBOR	London Interbank Offered Rate
NAREIT	National Association of Real Estate Investment Trusts
OP Holdings	Spirit General OP Holdings, LLC
Operating Partnership	Spirit Realty, L.P., a Delaware limited partnership
REIT	Real estate investment trust
S&P	S&P's Global Ratings
SEC	Securities and Exchange Commission
Securities Act	Securities Act of 1933, as amended
Senior Unsecured Notes	2026 Senior Notes, 2027 Senior Notes, 2028 Senior Notes, 2029 Senior Notes, 2030 Senior Notes, 2031 Senior Notes and 2032 Senior Notes, collectively
Series A Preferred Stock	6,900,000 shares of 6.000% Cumulative Redeemable Preferred Stock issued October 3, 2017, with a liquidation preference of $25.00 per share
SOFR	Secured Overnight Financing Rate

Unless otherwise indicated or unless the context requires otherwise, all references to the “registrant, the "Company," "Spirit Realty Capital," "we," "us" or "our" refer to the Corporation and its consolidated subsidiaries, including the Operating Partnership. Unless otherwise indicated or unless the context requires otherwise, all references to the "Operating Partnership" refer to Spirit Realty, L.P. and its consolidated subsidiaries.

4

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

SPIRIT REALTY CAPITAL, INC.

Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Data)

(Unaudited)

	September 30, 2022			December 31, 2021
Assets
Investments:
Real estate assets held for investment:
Land and improvements	$	2,734,123		$	2,516,715
Buildings and improvements		5,713,209			4,962,203
Less: accumulated depreciation		(1,188,794	)		(1,033,391	)
Total real estate assets held for investment, net		7,258,538			6,445,527
Intangible lease assets, net		440,910			426,972
Real estate assets under direct financing leases, net		7,434			7,442
Real estate assets held for sale, net		24,344			8,264
Loans receivable, net		23,023			10,450
Total investments, net		7,754,249			6,898,655
Cash and cash equivalents		109,829			17,799
Deferred costs and other assets, net		251,832			188,816
Goodwill		225,600			225,600
Total assets	$	8,341,510		$	7,330,870
Liabilities and stockholders’ equity
Liabilities:
Revolving credit facilities	$	—		$	288,400
Term loans		791,791			—
Senior Unsecured Notes, net		2,721,534			2,718,641
Mortgages payable, net		5,130			5,551
Total debt, net		3,518,455			3,012,592
Intangible lease liabilities, net		121,670			128,077
Accounts payable, accrued expenses and other liabilities		180,595			190,402
Total liabilities		3,820,720			3,331,071
Commitments and contingencies (see Note 6)
Stockholders’ equity:
Preferred stock and paid in capital, $0.01 par value, 20,000,000 shares authorized: 6,900,000 shares issued and outstanding at both September 30, 2022 and December 31, 2021		166,177			166,177
Common stock, $0.05 par value, 350,000,000 shares authorized: 139,661,826 and 127,699,235 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		6,983			6,385
Capital in excess of common stock par value		7,217,245			6,673,440
Accumulated deficit		(2,905,376	)		(2,840,356	)
Accumulated other comprehensive income (loss)		35,761			(5,847	)
Total stockholders’ equity		4,520,790			3,999,799
Total liabilities and stockholders’ equity	$	8,341,510		$	7,330,870

See accompanying notes.

5

SPIRIT REALTY CAPITAL, INC.

Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Revenues:
Rental income	$	180,296		$	151,376		$	520,930		$	450,483
Interest income on loans receivable		521			—			1,362			—
Earned income from direct financing leases		131			131			393			394
Other operating income		1,956			1,061			3,550			1,458
Total revenues		182,904			152,568			526,235			452,335
Expenses:
General and administrative		14,313			13,103			42,408			39,599
Property costs (including reimbursable)		7,395			5,862			22,600			17,633
Deal pursuit costs		470			361			1,490			860
Interest		30,956			25,078			84,573			77,872
Depreciation and amortization		74,600			63,061			216,606			180,222
Impairments		1,571			4,435			11,096			18,965
Total expenses		129,305			111,900			378,773			335,151
Other income:
Gain (loss) on debt extinguishment		—			1			(172	)		(29,186	)
Gain on disposition of assets		23,302			453			63,107			39,796
Other income		—			—			5,679			—
Total other income		23,302			454			68,614			10,610
Income before income tax expense		76,901			41,122			216,076			127,794
Income tax expense		(261	)		(244	)		(640	)		(461	)
Net income		76,640			40,878			215,436			127,333
Dividends paid to preferred shareholders		(2,587	)		(2,587	)		(7,763	)		(7,763	)
Net income attributable to common stockholders	$	74,053		$	38,291		$	207,673		$	119,570
Net income per share attributable to common stockholders:
Basic	$	0.54		$	0.32		$	1.56		$	1.02
Diluted	$	0.54		$	0.32		$	1.56		$	1.02
Weighted average shares of common stock outstanding:
Basic		136,314,369			119,775,871			132,835,210			116,503,634
Diluted		136,314,369			120,302,158			132,965,297			116,870,429
Dividends declared per common share issued	$	0.6630		$	0.6380		$	1.9390		$	1.8880

See accompanying notes.

6

SPIRIT REALTY CAPITAL, INC.

Consolidated Statements of Comprehensive Income

(In Thousands)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income attributable to common stockholders	$	74,053	$	38,291	$	207,673	$	119,570
Other comprehensive income:
Net reclassification of amounts from AOCIL		40,204		702		41,608		2,106
Total comprehensive income	$	114,257	$	38,993	$	249,281	$	121,676

See accompanying notes.

7

SPIRIT REALTY CAPITAL, INC.

Consolidated Statements of Stockholders' Equity

(In Thousands, Except Share Data)

(Unaudited)

Nine Months Ended September 30, 2022	Preferred Stock				Common Stock
	Shares		Par Value and Capital in Excess of Par Value		Shares			Par Value			Capital in Excess of Par Value		Accumulated Deficit			AOCIL			Total Stockholders’ Equity
Balances, December 31, 2021		6,900,000	$	166,177		127,699,235		$	6,385		$	6,673,440	$	(2,840,356	)	$	(5,847	)	$	3,999,799
Net income		—		—		—			—			—		56,056			—			56,056
Dividends declared on preferred stock		—		—		—			—			—		(2,588	)		—			(2,588	)
Net income attributable to common stockholders				—					—			—		53,468			—			53,468
Other comprehensive income		—		—		—			—			—		—			702			702
Dividends declared on common stock		—		—		—			—			—		(85,688	)		—			(85,688	)
Tax withholdings related to net stock settlements		—		—		(39,028	)		(2	)		—		(6,408	)		—			(6,410	)
Issuance of shares of common stock, net		—		—		6,559,406			328			299,440		—			—			299,768
Stock-based compensation, net		—		—		86,888			4			4,021		(496	)		—			3,529
Balances, March 31, 2022		6,900,000	$	166,177		134,306,501		$	6,715		$	6,976,901	$	(2,879,480	)	$	(5,145	)	$	4,265,168
Net income		—		—		—			—			—		82,740			—			82,740
Dividends declared on preferred stock		—		—		—			—			—		(2,588	)		—			(2,588	)
Net income attributable to common stockholders				—					—			—		80,152			—			80,152
Other comprehensive income		—		—		—			—			—		—			702			702
Dividends declared on common stock		—		—		—			—			—		(86,987	)		—			(86,987	)
Tax withholdings related to net stock settlements		—		—		(403	)		—			—		(17	)		—			(17	)
Issuance of shares of common stock, net		—		—		1,999,996			100			89,864		—			—			89,964
Stock-based compensation, net		—		—		35,591			2			4,385		(498	)		—			3,889
Balances, June 30, 2022		6,900,000	$	166,177		136,341,685		$	6,817		$	7,071,150	$	(2,886,830	)	$	(4,443	)	$	4,352,871
Net income		—		—		—			—			—		76,640			—			76,640
Dividends declared on preferred stock		—		—		—			—			—		(2,587	)		—			(2,587	)
Net income available to common stockholders				—					—			—		74,053			—			74,053
Other comprehensive income		—		—		—			—			—		—			40,204			40,204
Dividends declared on common stock		—		—		—			—			—		(92,595	)		—			(92,595	)
Issuance of shares of common stock, net		—		—		3,320,559			166			141,702		—			—			141,868
Stock-based compensation, net		—		—		(418	)		—			4,393		(4	)		—			4,389
Balances, September 30, 2022		6,900,000	$	166,177		139,661,826		$	6,983		$	7,217,245	$	(2,905,376	)	$	35,761		$	4,520,790

See accompanying notes.

8

SPIRIT REALTY CAPITAL, INC.

Consolidated Statements of Stockholders' Equity

(In Thousands, Except Share Data)

(Unaudited)

Nine Months Ended September 30, 2021	Preferred Stock				Common Stock
	Shares		Par Value and Capital in Excess of Par Value		Shares			Par Value			Capital in Excess of Par Value		Accumulated Deficit			AOCIL			Total Stockholders’ Equity
Balances, December 31, 2020		6,900,000	$	166,177		114,812,615		$	5,741		$	6,126,503	$	(2,688,647	)	$	(8,654	)	$	3,601,120
Net loss		—		—		—			—			—		(1,469	)		—			(1,469	)
Dividends declared on preferred stock		—		—		—			—			—		(2,588	)		—			(2,588	)
Net loss attributable to common stockholders				—					—			—		(4,057	)		—			(4,057	)
Other comprehensive income		—		—		—			—			—		—			702			702
Dividends declared on common stock		—		—		—			—			—		(71,837	)		—			(71,837	)
Tax withholdings related to net stock settlements		—		—		(98,413	)		(6	)		—		(3,837	)		—			(3,843	)
Stock-based compensation, net		—		—		233,784			12			3,366		(407	)		—			2,971
Balances, March 31, 2021		6,900,000	$	166,177		114,947,986		$	5,747		$	6,129,869	$	(2,768,785	)	$	(7,952	)	$	3,525,056
Net income		—		—		—			—			—		87,924			—			87,924
Dividends declared on preferred stock		—		—		—			—			—		(2,588	)		—			(2,588	)
Net income attributable to common stockholders				—					—			—		85,336			—			85,336
Other comprehensive income		—		—		—			—			—		—			702			702
Dividends declared on common stock		—		—		—			—			—		(74,436	)		—			(74,436	)
Tax withholdings related to net stock settlements		—		—		(12,597	)		(1	)		—		(548	)		—			(549	)
Issuance of shares of common stock, net		—		—		4,116,932			206			145,255		—			—			145,461
Stock-based compensation, net		—		—		51,591			3			3,611		(360	)		—			3,254
Balances, June 30, 2021		6,900,000	$	166,177		119,103,912		$	5,955		$	6,278,735	$	(2,758,793	)	$	(7,250	)	$	3,684,824
Net income		—		—		—			—			—		40,878			—			40,878
Dividends declared on preferred stock		—		—		—			—			—		(2,587	)		—			(2,587	)
Net income available to common stockholders				—					—			—		38,291			—			38,291
Other comprehensive income		—		—		—			—			—		—			702			702
Dividends declared on common stock		—		—		—			—			—		(78,674	)		—			(78,674	)
Issuance of shares of common stock, net		—		—		4,212,644			211			190,725		—			—			190,936
Stock-based compensation, net		—		—		(835	)		—			3,504		(953	)		—			2,551
Balances, September 30, 2021		6,900,000	$	166,177		123,315,721		$	6,166		$	6,472,964	$	(2,800,129	)	$	(6,548	)	$	3,838,630

See accompanying notes.

9

SPIRIT REALTY CAPITAL, INC.

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2022			2021
Operating activities
Net income	$	215,436		$	127,333
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		216,606			180,222
Impairments		11,096			18,965
Amortization of deferred financing costs		3,637			3,026
Amortization of debt discounts		947			1,830
Amortization of deferred losses on interest rate swaps		2,106			2,106
Stock-based compensation expense		12,805			10,496
Loss on debt extinguishment		172			29,186
Gain on dispositions of real estate and other assets		(63,107	)		(39,796	)
Non-cash revenue		(30,165	)		(38,190	)
Other		10			12
Changes in operating assets and liabilities:
Deferred costs and other assets, net		(1,683	)		3,508
Accounts payable, accrued expenses and other liabilities		(28,975	)		(23,315	)
Net cash provided by operating activities		338,885			275,383
Investing activities
Acquisitions of real estate		(1,118,290	)		(769,039	)
Capitalized real estate expenditures		(55,318	)		(6,748	)
Investments in loans receivable		(12,700	)		—
Proceeds from dispositions of real estate and other assets, net		183,767			94,449
Net cash used in investing activities		(1,002,541	)		(681,338	)
Financing activities
Borrowings under revolving credit facilities		1,267,800			764,200
Repayments under revolving credit facilities		(1,556,200	)		(714,900	)
Repayments under mortgages payable		(391	)		(208,765	)
Borrowings under term loans		800,000			—
Repayments under term loans		—			(178,000	)
Repayments under Convertible Notes		—			(190,426	)
Borrowings under Senior Unsecured Notes		—			794,842
Debt extinguishment costs		—			(26,685	)
Deferred financing costs		(17,028	)		(7,071	)
Proceeds from issuance of common stock, net of offering costs		531,565			336,602
Repurchase of shares of common stock, including tax withholdings related to net stock settlements		(6,427	)		(4,392	)
Common stock dividends paid		(255,870	)		(219,421	)
Preferred stock dividends paid		(7,763	)		(7,763	)
Net cash provided by financing activities		755,686			338,221
Net increase (decrease) in cash, cash equivalents and restricted cash		92,030			(67,734	)
Cash, cash equivalents and restricted cash, beginning of period		17,799			83,298
Cash, cash equivalents and restricted cash, end of period	$	109,829		$	15,564
Cash paid for interest, net of interest capitalized	$	99,575		$	89,098
Interest capitalized		741			—
Cash paid for income taxes		676			581

10

SPIRIT REALTY CAPITAL, INC.

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

Supplemental Disclosures of Non-Cash Activities:	Nine Months Ended September 30,
	2022		2021
Dividends declared and unpaid	$	92,595	$	78,675
Accrued market-based award dividend rights		998		1,674
Accrued capitalized costs		18,103		6,739
Derivative changes in fair value		39,502		—

See accompanying notes.

11

SPIRIT REALTY CAPITAL, INC.

Notes to Consolidated Financial Statements

September 30, 2022

(Unaudited)

NOTE 1. ORGANIZATION

Organization and Operations

Spirit Realty Capital, Inc. (the "Corporation" or "Spirit" or, with its consolidated subsidiaries, the "Company") operates as a self-administered and self-managed REIT that seeks to generate sustainable and attractive returns for stockholders by primarily investing in and managing a portfolio of single-tenant, operationally essential real estate throughout the United States that is generally leased on a long-term, triple-net basis to tenants operating retail, industrial and other property types. Single-tenant, operationally essential real estate refers to free-standing, commercial real estate facilities where tenants conduct activities that are essential to the generation of their sales and profits.

The Company’s operations are generally carried out through Spirit Realty, L.P. (the "Operating Partnership") and its subsidiaries. Spirit General OP Holdings, LLC, one of the Corporation’s wholly-owned subsidiaries, is the sole general partner and owns approximately 1% of the Operating Partnership. The Corporation and a wholly-owned subsidiary (Spirit Notes Partner, LLC) are the only limited partners and, together, own the remaining 99% of the Operating Partnership.

NOTE 2. SUMMARY OF SIGNIFICANT ACOUNTING POLICIES

Basis of Accounting and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC. In the opinion of management, the consolidated financial statements include the normal, recurring adjustments necessary for fair statement of the information required to be set forth therein. The results for interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements pursuant to SEC rules and regulations and, accordingly, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the year ended December 31, 2021.

The consolidated financial statements of the Company include the accounts of the Corporation and its wholly-owned subsidiaries, including the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation.

These consolidated financial statements include certain special purpose entities that were formed to acquire and hold real estate encumbered by indebtedness (see Note 4). Each special purpose entity is a separate legal entity and is the sole owner of its assets and responsible for its liabilities. The assets of these special purpose entities are not available to pay, or otherwise satisfy obligations to, the creditors of any affiliate or owner of another entity unless the special purpose entities have expressly agreed and are permitted to do so under their governing documents. As of September 30, 2022 and December 31, 2021, net assets totaling $11.8 million and $12.3 million, respectively, were held, and net liabilities totaling $5.1 million and $5.5 million, respectively, were owed by these encumbered special purpose entities and are included in the accompanying consolidated balance sheets.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates.

Segment Reporting

The Company views its operations as one segment, which consists of net leasing operations. The Company has no other reportable segments.

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Revenue Recognition

Rental Income: Cash and Straight-line Rent

The Company primarily leases real estate to its tenants under long-term, triple-net leases that are classified as operating leases. To evaluate lease classification, the Company assesses the terms and conditions of the lease to determine the appropriate lease term. Options to extend, terminate or purchase are not included in the evaluation for lease classification or for recognition of rental income unless the Company is reasonably certain the tenant will exercise the option. Evaluation of lease classification also requires an estimate of the residual value of the real estate at the end of the lease term. For acquisitions, the Company uses the tangible value of the property at the date of acquisition. For lease modifications, the Company generally uses sales comparables or a direct capitalization approach to determine residual value. 

The Company elected to account for lease concessions related to the COVID-19 pandemic consistent with ASC 842 as though enforceable rights and obligations for those concessions existed (regardless of whether they explicitly exist in the lease). As such, rent deferrals are recorded as an increase to rent receivables and recognized as income during the deferral period. For the three and nine months ended September 30, 2022, zero and $0.4 million, respectively, of deferrals were recognized in rental income, compared to $1.0 million and $12.8 million for the three and nine months ended September 30, 2021, respectively. Lease concessions other than rent deferrals are evaluated to determine if a substantive change to the consideration in the original lease contract has occurred and should be accounted for as a lease modification.       

The Company’s leases generally provide for rent escalations throughout the term of the lease. For leases with fixed rent escalators, rental income is recognized on a straight-line basis to produce a constant periodic rent over the term of the lease. Accordingly, the difference between rental income recognized on a straight-line basis and billed rents is recorded as rent receivables, which the Company will receive only if the tenant makes all rent payments required through the initial term of their lease. For leases with variable rent escalators, rental income typically increases at a multiple of any increase in the CPI over a specified period and may adjust annually or over multiple-year periods. Because of the volatility and uncertainty regarding future changes in the CPI and the Company’s inability to determine the extent to which any specific future change in the CPI is probable, increases from variable rent escalators are recognized when the changes in the rental rates have occurred.

Some of the Company’s leases also provide for contingent rent based on a percentage of the tenant’s gross sales, which is recognized as rental income when the change in the factor on which the contingent lease payment is based has occurred.

Rental income is subject to an evaluation for collectability, which includes management’s estimates of amounts that will not be realized based on an assessment of the risks inherent in the portfolio, considering historical experience, as well as the tenant's payment history and financial condition. The Company does not recognize rental income for amounts that are not probable of collection. For lease concessions granted in conjunction with the COVID-19 pandemic, management reviewed all amounts recognized on a tenant-by-tenant basis for collectability.

Rental Income: Tenant Reimbursement Revenue

Under a triple-net lease, the tenant is typically responsible for all improvements and is contractually obligated to pay all property operating expenses, such as real estate taxes, insurance premiums and repair and maintenance costs. Certain leases contain additional amounts recoverable from tenants for common area maintenance and certain other expenses, which are non-lease components. The Company elected to combine all its non-lease components, which were determined to have the same pattern of transfer as the related operating lease component, into a single combined lease component. Tenant reimbursement revenue is variable and is recognized in the period in which the related expenses are incurred, with the related expenses included in property costs (including reimbursable) on the Company’s consolidated statements of operations. Tenant reimbursements are recorded on a gross basis in instances when our tenants reimburse us for property costs which we incur. Tenant receivables are reduced for amounts that are not probable of collection.

Rental Income: Intangible Amortization

Initial direct costs associated with the origination of a lease are deferred and amortized as an adjustment to rental revenue. Above- and below-market lease intangibles are amortized as a decrease and increase, respectively, to rental revenue. Amortization of in-place lease intangibles is included in depreciation and amortization expense. All lease intangibles are amortized on a straight-line basis over the term of the lease, which includes any renewal options the Company is reasonably certain the tenant will exercise. If the Company subsequently determines it is reasonably certain that the tenant will not exercise the renewal options, the unamortized portion of any related lease intangible is accelerated over the remaining initial term of the lease. If the Company believes a lease intangible balance is no longer recoverable, the unamortized portion is immediately recognized in impairments in the Company’s consolidated statements of operations.

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Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money market funds of major financial institutions with fund investments consisting of highly-rated money market instruments and other short-term investments. Restricted cash is classified within deferred costs and other assets, net in the accompanying consolidated balance sheets. There was no restricted cash held as of either September 30, 2022 or December 31, 2021.

Tenant Receivables

The Company reviews its rent and other tenant receivables for collectability on a regular basis, considering changes in factors such as the tenant’s payment history, the tenant’s financial condition, industry conditions in which the tenant operates and economic conditions in the geographic area in which the tenant operates. If a receivable is not probable of collection, a direct write-off of the receivable will be made. The Company had accounts receivable balances of $17.9 million and $21.7 million at September 30, 2022 and December 31, 2021, respectively, after the impact of $3.3 million and $3.9 million of receivables, respectively, that were deemed not probable of collection. These receivables are recorded within deferred cost and other assets, net in the accompanying consolidated balance sheets.

For receivable balances related to the straight-line method of recognizing rental income, the collectability is generally assessed in conjunction with the evaluation of rental income as described above. The Company had straight-line rent receivables of $161.8 million and $137.6 million at September 30, 2022 and December 31, 2021, respectively, after the impact of $0.3 million and $2.6 million of receivables, respectively, that were deemed not probable of collection. These receivables are recorded within deferred costs and other assets, net in the accompanying consolidated balance sheets.

Goodwill

Goodwill arises from business combinations as the excess of the cost of an acquired entity over the net fair value amounts that were assigned to the identifiable assets acquired and the liabilities assumed. Goodwill is tested for impairment at the reporting unit level annually or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. The Company performs a qualitative assessment to determine if the quantitative impairment test is necessary. The quantitative impairment test, if deemed necessary, compares the fair value of each reporting unit with its carrying amount and impairment is recognized as the amount by which the carrying amount exceeds the reporting unit’s fair value. No impairment was recorded for the periods presented.

Income Taxes

The Corporation has elected to be taxed as a REIT under the Code. As a REIT, the Corporation generally will not be subject to federal income tax provided it continues to satisfy certain tests concerning the Company’s sources of income, the nature of the Company’s assets, the amounts distributed to the Corporation’s stockholders and the ownership of Corporation stock. Management believes the Corporation has qualified and will continue to qualify as a REIT. Even if the Corporation qualifies for taxation as a REIT, it may be subject to state and local income and franchise taxes, and to federal income tax and excise tax on its undistributed income. Taxable income earned by any of the Company's taxable REIT subsidiaries, including from non-REIT activities, is subject to federal, state and local taxes. Taxable income from non-REIT activities managed through any of the Company's taxable REIT subsidiaries is subject to federal, state and local taxes, which are not material.

Earnings Per Share

The Company’s unvested restricted common stock, which contains non-forfeitable rights to receive dividends, are considered participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on their respective weighted average shares outstanding during the period.

Under the terms of the Amended Incentive Award Plan, restricted stock awards are not allocated losses, including undistributed losses as a result of dividends declared exceeding net income. The Company uses income (loss) from continuing operations to determine whether potential common shares are dilutive or anti-dilutive and undistributed net income (loss) to determine whether undistributed earnings are allocable to participating securities.

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Forward Equity Sale Agreements

The Corporation may enter into forward sale agreements for the sale and issuance of shares of its common stock, either through an underwritten public offering or through the 2021 ATM Program. These agreements may be physically settled in stock, settled in cash, or net share settled at the Company’s election. The Company evaluated the forward sale agreements and concluded they meet the conditions to be classified within stockholders’ equity. Prior to settlement, a forward sale agreement will be reflected in the diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of the Corporation’s common stock used in diluted earnings per share is deemed to be increased by the excess, if any, of the number of shares of the Corporation’s common stock that would be issued upon full physical settlement of such forward sale agreement over the number of shares of the Corporation’s common stock that could be purchased by the Company in the market (based on the average market price during the period) using the proceeds receivable upon full physical settlement (based on the adjusted forward sale price at the end of the reporting period). Consequently, prior to settlement of a forward sale agreement, there will be no dilutive effect on the Company’s earnings per share except during periods when the average market price of the Corporation’s common stock is above the adjusted forward sale price. However, upon settlement of a forward sales agreement, if the Corporation elects to physically settle or net share settle such forward sale agreement, delivery of the Corporation’s shares will result in dilution to the Company’s earnings per share.

NOTE 3. INVESTMENTS

Owned Properties

As of September 30, 2022, the Company's gross investment in owned real estate properties totaled approximately $9.0 billion. The gross investment is comprised of land, buildings, lease intangible assets and lease intangible liabilities, as adjusted for any impairment, real estate assets held under direct financing leases and real estate assets held for sale. The portfolio is geographically dispersed throughout 49 states with Texas, at 14.3%, as the only state with a gross investment greater than 10.0% of the total gross investment of the Company's entire portfolio. During the nine months ended September 30, 2022, the Company had the following real estate activity (dollars in thousands):

	Number of Properties									Dollar Amount of Investments
	Held in Use			Held for Sale			Total			Held in Use			Held for Sale			Total
Gross balance, December 31, 2021		2,000			3			2,003		$	7,934,823		$	8,362		$	7,943,185
Acquisitions/improvements (1)		148			—			148			1,190,726			—			1,190,726
Dispositions of real estate (2) (3)		(22	)		(11	)		(33	)		(115,798	)		(17,471	)		(133,269	)
Transfers to Held for Sale		(23	)		23			—			(40,194	)		40,194			—
Impairments (4)		—			—			—			(10,969	)		—			(10,969	)
Reset of gross balances (5)		—			—			—			(16,224	)		—			(16,224	)
Gross balance, September 30, 2022		2,103			15			2,118			8,942,364			31,085			8,973,449
Accumulated depreciation and amortization											(1,357,152	)		(6,741	)		(1,363,893	)
Net balance, September 30, 2022 (6)										$	7,585,212		$	24,344		$	7,609,556

⁽¹⁾ Includes investments of $56.9 million in revenue producing capitalized expenditures, as well as $11.9 million of non-revenue producing capitalized expenditures during the nine months ended September 30, 2022.

⁽²⁾ For the nine months ended September 30, 2022, the net gains on disposal of properties held in use and held for sale were $60.3 million and $2.8 million, respectively.  

⁽³⁾ During the nine months ended September 30, 2022, the Company sold eight properties pursuant to a 1031 Exchange for $88.1 million. As of September 30, 2022, all the proceeds had been used to fund acquisitions.

⁽⁴⁾ Impairments on owned real estate is comprised of real estate and intangible asset impairment. For the nine months ended September 30, 2022, all of the impairments recorded were on properties held in use.

⁽⁵⁾ Represents write-off of gross investment balances against the related accumulated depreciation and amortization balances as a result of basis reset due to impairment or intangibles which have been fully amortized.

⁽⁶⁾ Reconciliation of total owned investments to the accompanying consolidated balance sheet at September 30, 2022 is as follows:

Real estate assets held for investment, net	$	7,258,538
Intangible lease assets, net		440,910
Real estate assets under direct financing leases, net		7,434
Real estate assets held for sale, net		24,344
Intangible lease liabilities, net		(121,670	)
Net balance	$	7,609,556

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Operating Leases

As of September 30, 2022, December 31, 2021 and September 30, 2021, the Company held 2,113; 1,998; and 1,909 properties under operating leases, respectively. The following table summarizes the components of rental income recognized on these operating leases in the accompanying consolidated statements of operations (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Base Cash Rent (1)	$	162,467	$	137,234	$	471,052	$	400,215
Variable cash rent (including reimbursables)		6,479		4,753		19,713		12,078
Straight-line rent, net of uncollectible reserve (2)		10,875		8,840		28,465		35,941
Amortization of above- and below- market lease intangibles, net (3)		475		549		1,700		2,249
Total rental income	$	180,296	$	151,376	$	520,930	$	450,483

⁽¹⁾ Includes net impact of amounts (reserved)/recovered of $(0.6) million and $(0.5) million for the three and nine months ended September 30, 2022, respectively, and $(0.1) million and $5.6 million for the three and nine months ended September 30, 2021, respectively.

⁽²⁾ Includes net impact of amounts recovered/(reserved) of $1.2 million and $1.1 million for the three and nine months ended September 30, 2022, respectively, and $(0.1) million and $11.0 million for the three and nine months ended September 30, 2021, respectively.

⁽³⁾ Excludes amortization of in-place leases of $11.3 million and $32.6 million for the three and nine months ended September 30, 2022, respectively, and $9.8 million and $28.6 million for the three and nine months ended September 30, 2021, respectively, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations.

Scheduled minimum future rent to be received under the remaining non-cancellable term of these operating leases (including contractual fixed rent increases occurring on or after October 1, 2022) at September 30, 2022 are as follows (in thousands):

	September 30, 2022
Remainder of 2022	$	167,283
2023		664,151
2024		649,973
2025		638,168
2026		609,487
Thereafter		4,885,095
Total future minimum rentals	$	7,614,157

Because lease renewal periods are exercisable at the lessees' options, the preceding table presents future minimum lease payments due during the initial lease term only. In addition, the future minimum rentals do not include any contingent rents based on a percentage of the lessees' gross sales or lease escalations based on future changes in the CPI.

The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):

	September 30, 2022			December 31, 2021
In-place leases	$	572,407		$	536,344
Above-market leases		101,195			100,837
Less: accumulated amortization		(232,692	)		(210,209	)
Intangible lease assets, net	$	440,910		$	426,972
Below-market leases	$	186,006		$	188,718
Less: accumulated amortization		(64,336	)		(60,641	)
Intangible lease liabilities, net	$	121,670		$	128,077

Direct Financing Leases

As of September 30, 2022, the Company held one property under a direct financing lease, which was held in use. As of September 30, 2022, this property had $2.6 million in scheduled minimum future payments to be received under its remaining non-cancellable lease term. As of September 30, 2022, the Company had a reserve of $0.1 million against the investment balance of $7.5 million, which was initially recorded in 2020 as a result of the initial term of the direct financing lease extending until 2027.     

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Loans Receivable

During 2022, the Company issued a fixed-rate, construction loan for $12.7 million. The Company evaluated the collectability of the amounts receivable under the loan and recorded an allowance for loan losses of $0.1 million for the nine months ended September 30, 2022. As of September 30, 2022, the Company held two fixed rate loans receivable with total outstanding principal of $23.7 million and a total allowance for credit losses of $0.7 million.

Impairments

The following table summarizes total impairments recognized in the accompanying consolidated statements of operations (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022		2021
Real estate asset impairment	$	1,632		$	4,092	$	10,535	$	17,875
Intangible net (liability)/asset impairment		(61	)		343		434		1,090
Allowance for credit losses on loans receivable		—			—		127		—
Total impairment loss	$	1,571		$	4,435	$	11,096	$	18,965

NOTE 4. DEBT

The Company's debt is summarized below (dollars in thousands):

	Weighted Average Effective Interest Rates (1)	Weighted Average Stated Interest Rates (2)		Weighted Average Remaining Years to Maturity (3)		September 30, 2022			December 31, 2021
Debt:
Revolving credit facilities	2.53%		—		3.5	$	—		$	288,400
Term loans	4.09%	3.73%			4.1		800,000			—
Senior Unsecured Notes	3.42%	3.25%			6.7		2,750,000			2,750,000
Mortgages payable	4.87%	5.82%			8.2		4,959			5,350
Total debt	3.31%	3.36%			6.1		3,554,959			3,043,750
Debt discount, net							(9,877	)		(10,824	)
Deferred financing costs, net (4)							(26,627	)		(20,334	)
Total debt, net						$	3,518,455		$	3,012,592

⁽¹⁾ Includes amortization of debt discount/premium, amortization of deferred financing costs, facility fees, non-utilization fees and impact of cash flow hedges, where applicable, calculated for the nine months ended September 30, 2022 based on the average principal balance outstanding during the period.

⁽²⁾ Represents the weighted average stated interest rate based on the outstanding principal balance as of September 30, 2022, including the impact of cash flow hedges on term loans. The weighted average stated interest rate for the term loans excluding the impact of cash flow hedges was 4.03% as of September 30, 2022.

⁽³⁾ Represents the weighted average remaining years to maturity based on the outstanding principal balance as of September 30, 2022.

⁽⁴⁾ Excludes deferred financing costs for the revolving credit facilities.

Deferred financing costs and offering discount/premium incurred in connection with entering into debt agreements are amortized to interest expense over the initial term of the respective agreement. Both deferred financing costs and offering discount/premium are recorded net against the principal debt balance on the consolidated balance sheets, except for deferred costs related to revolving credit facilities, which are recorded in deferred costs and other assets, net.

Revolving Credit Facilities

On January 14, 2019, the Operating Partnership entered into the 2019 Revolving Credit and Term Loan Agreement, which included the 2019 Credit Facility with a borrowing capacity of $800.0 million. On March 30, 2022, the Operating Partnership amended and restated the 2019 Revolving Credit and Term Loan Agreement, increasing the borrowing capacity of the 2019 Credit Facility to $1.2 billion. The borrowing capacity can be further increased by $500.0 million through exercise of an accordion feature, subject to satisfying certain requirements. The 2019 Credit Facility has a maturity date of March 31, 2026 and includes two six-month extensions that can be exercised at the Company’s option. Borrowings may be repaid, in whole or in part, at any time, without premium or penalty, but subject to applicable breakage fees, if any.

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As of September 30, 2022, outstanding loans under the 2019 Credit Facility bore interest at a 1-month adjusted SOFR rate plus an applicable margin of 0.775% per annum and the aggregate revolving commitments incurred a facility fee of 0.150% per annum, in each case, based on the Operating Partnership’s credit rating and leverage ratio (as defined in the agreement). Prior to March 30, 2022, outstanding loans under the 2019 Credit Facility bore interest at 1-month LIBOR plus an applicable margin of 0.90% per annum and the aggregate revolving commitments incurred a facility fee of 0.20% per annum.

In connection with the amendment and restatement of the 2019 Credit Facility, the Company wrote off $0.2 million in deferred financing costs and incurred deferred financing costs of $8.6 million. The unamortized deferred financing costs were $8.4 million as of September 30, 2022, compared to $1.4 million as of December 31, 2021.

As of September 30, 2022, the full $1.2 billion of borrowing capacity was available under the 2019 Credit Facility and there were no outstanding letters of credit. The Operating Partnership's ability to borrow under the 2019 Credit Facility is subject to ongoing compliance with a number of customary financial and other affirmative and negative covenants, all of which the Company and the Operating Partnership were in compliance with as of September 30, 2022.

Term Loans

On April 2, 2020, the Operating Partnership entered into the 2020 Term Loan Agreement. On January 4, 2021, the remaining $178.0 million of 2020 Term Loans were fully repaid and the related unamortized deferred financing costs were written-off.

On August 22, 2022, the Operating Partnership entered into the 2022 Term Loan Agreement, which provides for borrowings in an aggregate amount of $800.0 million comprised of a $300.0 million tranche with a maturity date of August 22, 2025 and a $500.0 million tranche with a maturity date of August 20, 2027. The Term Loan Agreement also includes an accordion feature to increase the available term loans by $200.0 million in aggregate, subject to satisfying certain requirements. As of September 30, 2022, the 2022 Term Loans bore interest at a 1-month adjusted SOFR rate plus an applicable margin of 0.850% per annum, based on the Operating Partnership’s credit rating. In conjunction with entering into the 2022 Term Loans, the Company entered into interest rate swaps as a cash flow hedge. See Note 7 for further detail.

The Company incurred $8.4 million in deferred financing costs in connection with entering into the 2022 Term Loan Agreement, and the unamortized deferred financing costs were $8.2 million as of September 30, 2022. In connection with the issuance of the 2022 Term Loan Agreement, the Company and Operating Partnership are subject to ongoing compliance with a number of customary financial and other affirmative and negative covenants, all of which the Company and the Operating Partnership were in compliance with as of September 30, 2022.

Senior Unsecured Notes       

The Senior Unsecured Notes were issued by the Operating Partnership and are guaranteed by the Company. The following is a summary of the Senior Unsecured Notes outstanding (dollars in thousands):

	Maturity Date	Interest Payment Dates	Stated Interest Rate	September 30, 2022		December 31, 2021
2026 Senior Notes	September 15, 2026	March 15 and September 15	4.45%	$	300,000	$	300,000
2027 Senior Notes	January 15, 2027	January 15 and July 15	3.20%		300,000		300,000
2028 Senior Notes	March 15, 2028	March 15 and September 15	2.10%		450,000		450,000
2029 Senior Notes	July 15, 2029	January 15 and July 15	4.00%		400,000		400,000
2030 Senior Notes	January 15, 2030	January 15 and July 15	3.40%		500,000		500,000
2031 Senior Notes	February 15, 2031	February 15 and August 15	3.20%		450,000		450,000
2032 Senior Notes	February 15, 2032	February 15 and August 15	2.70%		350,000		350,000
Total Senior Unsecured Notes			3.25%	$	2,750,000	$	2,750,000

On March 3, 2021, the Operating Partnership issued $800.0 million aggregate principal amount of Senior Unsecured Notes, comprised of the 2028 Senior Notes and 2032 Senior Notes, resulting in net proceeds of $787.7 million. In connection with the March 2021 offering, the Operating Partnership incurred $7.1 million in deferred financing costs and an offering discount of $5.2 million.

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The Senior Unsecured Notes are redeemable in whole at any time or in part from time to time, at the Operating Partnership’s option, at a redemption price equal to the sum of 100% of the principal amount of the respective Senior Unsecured Notes to be redeemed plus accrued and unpaid interest and liquidated damages, if any, up to, but not including, the redemption date; and a make-whole premium. If any of the Senior Unsecured Notes are redeemed three months or less (or two months or less in the case of the 2027 Senior Notes and 2028 Senior Notes) prior to their respective maturity dates, the redemption price will not include a make-whole premium.  

As of September 30, 2022 and December 31, 2021, the unamortized deferred financing costs were $18.4 million and $20.3 million, respectively, and the unamortized discount was $10.0 million and $11.0 million, respectively. In connection with the issuance of the Senior Unsecured Notes, the Company and Operating Partnership are subject to ongoing compliance with a number of customary financial and other affirmative and negative covenants, all of which the Company and the Operating Partnership were in compliance with as of September 30, 2022.

Mortgages Payable

Indirect wholly-owned special purpose entity subsidiaries of the Company were borrowers under five fixed-rate non-recourse loans, which were securitized into CMBS and secured by the borrowers’ respective leased properties and related assets. In connection with the issuance of the 2028 and 2032 Senior Unsecured Notes, the Company repaid three of these loans in March 2021 and, as of September 30, 2022, had two non-defaulted loans with stated interest rates of 5.80% and 6.00%, respectively. Each loan was secured by one property. There were no unamortized deferred financing costs as of either September 30, 2022 and December 31, 2021, and the unamortized net premium as of both September 30, 2022 and December 31, 2021 was $0.2 million.

Convertible Notes

In May 2014, the Company issued $345.0 million aggregate principal amount of 3.75% convertible notes. During the year ended December 31, 2020, the Company repurchased $154.6 million of the 2021 Convertible Notes in cash. The remaining 2021 Convertible Notes matured on May 15, 2021 at which time they were settled in cash and the remaining discount and deferred financing costs were fully amortized.

Debt Extinguishment

During the nine months ended September 30, 2022, the Company recognized a loss on debt extinguishment of $0.2 million as a result of the amendment and restatement of the 2019 Revolving Credit and Term Loan Agreement.

During the nine months ended September 30, 2021, the Company extinguished the following debt:

• $178.0 million of indebtedness outstanding under the 2020 Term Loans, resulting in a loss on debt extinguishment of $0.7 million,

• $207.4 million aggregate principal amount of CMBS indebtedness on three loans secured by 86 properties, resulting in a loss on debt extinguishment of $28.5 million, and

• $190.4 million of Convertible Notes upon their maturity.

Debt Maturities

As of September 30, 2022, scheduled debt maturities, including balloon payments, were as follows (in thousands):

	Scheduled Principal		Balloon Payment		Total
Remainder of 2022	$	134	$	—	$	134
2023		556		—		556
2024		590		—		590
2025		610		300,016		300,626
2026		468		300,000		300,468
Thereafter		2,532		2,950,053		2,952,585
Total	$	4,890	$	3,550,069	$	3,554,959

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Interest Expense

The following table is a summary of the components of interest expense related to the Company's borrowings (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Revolving credit facilities (1)	$	3,550		$	765	$	8,520		$	2,118
Term loans (2)		2,940			—		2,940			24
Senior Unsecured Notes		22,313			22,313		66,939			63,683
Mortgages payable		73			81		225			2,427
Convertible Notes		—			—		—			2,658
Non-cash:
Amortization of deferred financing costs		1,475			910		3,637			3,026
Amortization of debt discount, net		318			307		947			1,830
Amortization of net losses related to interest rate swaps		702			702		2,106			2,106
Capitalized interest		(415	)		—		(741	)		—
Total interest expense	$	30,956		$	25,078	$	84,573		$	77,872

⁽¹⁾ Includes facility fees of approximately $0.5 million and $1.4 million for the three and nine months ended September 30, 2022, respectively, and $0.4 million and $1.3 million for the three and nine months ended September 30, 2021.

⁽²⁾ Includes impact of cash flow hedge.

NOTE 5. STOCKHOLDERS’ EQUITY

Common Stock              

In January 2022, the Company entered into forward sale agreements in connection with an offering of 9.4 million shares of common stock at an initial public offering price of $47.60 per share, before underwriting discounts and offering expenses. The Company did not receive any proceeds from the sale of its shares of common stock by the forward purchasers at the time of the offering. All of these shares were settled during the nine months ended September 30, 2022, generating net proceeds of $427.7 million.  

In November 2020, the Board of Directors approved a new $500.0 million ATM Program, and the Company terminated its 2016 ATM Program. From inception of the 2020 ATM Program through its termination in November 2021, 9.3 million shares of the Company’s common stock were sold, all through forward sale agreements. All of these shares were settled during the year ended December 31, 2021, generating net proceeds of $391.4 million.

In November 2021, the Board of Directors approved a new $500.0 million ATM Program, and the Company terminated its 2020 ATM Program. The following details the activity under the 2021 ATM Program since its inception (in thousands):

2021 ATM	Forward Shares			Regular Shares			Total Shares			Net Proceeds on Issuances
Month ended 12/31/2021
Shares sold		2,268			438			2,706
Shares issued		(2,212	)		(438	)		(2,650	)		$	120,286
Unsettled shares sold as of 12/31/2021		56			—			56
Nine months ended 9/30/2022
Shares sold		1,234			1,161			2,395
Shares issued		(1,290	)		(1,161	)		(2,451	)		$	103,946
Unsettled shares sold as of 9/30/2022		—			—			—

As of September 30, 2022, approximately $273.2 million of capacity remained available under the 2021 ATM Program.

Preferred Stock         

As of September 30, 2022, the Company had 6.9 million shares of 6.00% Series A Preferred Stock outstanding. The Series A Preferred Stock pays cumulative cash dividends at the rate of 6.00% per annum on the liquidation preference of $25.00 per share (equivalent to $1.50 per share on an annual basis).  

20

Dividends Declared

For the nine months ended September 30, 2022, the Company's Board of Directors declared the following dividends:

Declaration Date	Dividend Per Share		Record Date	Total Amount (in thousands)		Payment Date
Common Stock
February 9, 2022	$	0.638	March 31, 2022	$	85,688	April 14, 2022
May 18, 2022	$	0.638	June 30, 2022	$	86,987	July 15, 2022
August 8, 2022	$	0.663	September 30, 2022	$	92,595	October 14, 2022
Preferred Stock
February 9, 2022	$	0.375	March 15, 2022	$	2,588	March 31, 2022
May 18, 2022	$	0.375	June 15, 2022	$	2,588	June 30, 2022
August 8, 2022	$	0.375	September 15, 2022	$	2,587	September 30, 2022

The common stock dividend declared on August 8, 2022 is included in accounts payable, accrued expenses and other liabilities in the consolidated balance sheet as of September 30, 2022.

NOTE 6. COMMITMENTS AND CONTINGENCIES

The Company is periodically subject to claims or litigation in the ordinary course of business, including claims generated from business conducted by tenants on real estate owned by the Company. In these instances, the Company is typically indemnified by the tenant against any losses that might be suffered, and the Company and/or the tenant are typically insured against such claims. The Company was contingently liable for $5.7 million of debt owed by one of its former tenants, which was fully accrued in accounts payable, accrued expenses and other liabilities in the consolidated balance sheet as of December 31, 2021. No payments were made in relation to this contingent liability. Therefore, upon the maturity of the tenant’s debt on March 15, 2022, the Company reversed the full $5.7 million of the accrued liability, which is reflected as other income in the consolidated statement of operations.

The Company estimates future costs for known environmental remediation requirements when it is probable that the Company has incurred a liability and the related costs can be reasonably estimated. The Company considers various factors when estimating its environmental liabilities, and adjustments are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues. When only a wide range of estimated amounts can be reasonably established and no other amount within the range is better than another, the low end of the range is recorded in the consolidated financial statements. As of September 30, 2022, no accruals have been made.

As of September 30, 2022, there were no outstanding claims against the Company that are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Purchase and Capital Improvement Commitments

As of September 30, 2022, the Company had commitments totaling $169.2 million, of which $27.4 million relates to future acquisitions and the remainder relates to improvements on properties the Company already owns. Acquisition commitments contain standard cancellation clauses contingent on the results of due diligence. $56.4 million of the Company’s commitments are expected to be funded during 2022, with the remainder to be funded by the end of 2024.

Lessee Contracts

The Company leases its corporate office space and certain office equipment, which are classified as operating leases. The Company's corporate office lease has an initial term through January 31, 2027 and is renewable at the Company's option for two additional periods of five years each after the initial term. The corporate office lease contains a variable cost for the lease of parking spaces and a non-lease component related to the reimbursement of certain common area maintenance expenses, both of which are recognized as incurred.

As of September 30, 2022, the Company is also a lessee under four long-term, non-cancellable ground leases under which it is obligated to pay monthly rent. For all of the ground leases, rental expenses are reimbursed by unrelated third parties, and the corresponding rental revenue is recorded in rental income on the accompanying consolidated statements of operations. All leases are classified as operating leases and have a weighted average remaining lease term of 5.3 years. As of September 30, 2022 and December 31, 2021, the Company had a right-of-use lease asset balance of $3.6 million and $3.7 million, respectively, and operating lease liabilities of $4.9 million and $5.1 million, respectively, for these leases.     

21

NOTE 7. DERIVATIVE AND HEDGING ACTIVITIES

The Company may use interest rate derivative contracts to manage its exposure to changes in interest rates on its variable rate debt. These derivatives are considered cash flow hedges and are recorded on a gross basis at fair value. Assessments of hedge effectiveness are performed quarterly using either a qualitative or quantitative approach. The Company recognizes the entire change in the fair value in AOCIL and the change is reflected as cash flow hedge changes in fair value in the supplemental disclosures of non-cash investing and financing activities in the consolidated statement of cash flows. Amounts will subsequently be reclassified to earnings when the hedged item affects earnings. The Company does not enter into derivative contracts for speculative or trading purposes and does not have derivative netting arrangements.

The Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company evaluates counterparty credit risk through monitoring the creditworthiness of counterparties, which includes review of debt ratings and financial performance. To mitigate credit risk, the Company enters into agreements with counterparties it considers credit-worthy, such as large financial institutions with favorable credit ratings.

In the third quarter of 2019, the Company terminated interest rate swaps which had been entered into in December 2018 and accelerated the reclassification of a loss of $12.5 million from AOCIL to termination of interest rate swaps as a result of a portion of the hedged forecasted transactions becoming probable not to occur. There were no events of default related to the interest rate swaps prior to their termination. Given that a portion of the hedged transactions remained probable to occur, $12.3 million of the loss was deferred in other comprehensive loss and is being amortized over the remaining initial term of the interest rate swaps, which ends January 31, 2024. As of September 30, 2022, the unamortized portion of loss in AOCIL related to terminated interest rate swaps was $3.7 million.

During the third quarter of 2022, the Company entered into new interest rate swaps, which were designated as cash flow hedge instruments and are recorded in deferred costs and other assets, net on the Company’s consolidated balance sheet. These instruments swap 1-month SOFR for a fixed payment. The following table summarizes the key terms and fair value of these instruments (in thousands):

						Fair Value of Asset
Interest Rate Swap Notional Amount			Fixed Interest Rate	Effective Date	Maturity Date	September 30, 2022
	$	300,000	2.501%	September 15, 2022	August 22, 2027	$	17,070
	$	200,000	2.507%	September 15, 2022	August 22, 2027		11,200
	$	300,000	2.636%	September 15, 2022	August 22, 2025		11,232
						$	39,502

The following table provides information about the amounts recorded in AOCIL, as well as any amounts reclassified to operations (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Cash flow hedge derivatives	$	39,606		$	—	$	39,606		$	—
Amount of gain reclassified from AOCIL to interest		(104	)		—		(104	)		—
Amount of loss reclassified from AOCIL to interest		702			702		2,106			2,106
Total	$	40,204		$	702	$	41,608		$	2,106

During the next 12 months, we estimate that approximately $2.8 million will be reclassified as an increase to interest expense related to terminated hedges of existing floating-rate debt and $12.7 million will be reclassified as a decrease to interest expense related to cash flow hedge derivatives.

22

NOTE 8. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The Company’s interest rate swaps are measured using a market approach, using prices obtained from a nationally recognized pricing service and pricing models with market observable inputs such as interest rates and volatilities. These measurements are classified as Level 2 of the fair value hierarchy. The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis (in thousands):

			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
Derivatives held at September 30, 2022
Interest rate swaps	$	39,502	$	—	$	39,502	$	—

Nonrecurring Fair Value Measurements

Fair value measurement of an asset on a nonrecurring basis occurs when events or changes in circumstances related to an asset indicate that the carrying amount of the asset is no longer recoverable. Real estate assets and their related intangible assets are evaluated for impairment based on certain indicators including, but not limited to: the asset being held for sale, vacant, tenant bankruptcy or delinquency, and leases expiring in 60 days or less. The fair values of real estate and intangible assets were determined using the following information, depending on availability, in order of preference: signed purchase and sale agreements (“PSA”) or letters of intent (“LOI”); broker opinions of value (“BOV”); recently quoted bid or ask prices, or market prices for comparable properties; estimates of discounted cash flows, which consider, among other things, contractual and forecasted rental revenues, leasing assumptions, expenses based upon market conditions and capitalization rates; and expectations for the use of the real estate. The following table sets forth the Company’s assets that were accounted for at fair value on a nonrecurring basis as of their respective measurement dates (in thousands):

			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
Assets held at September 30, 2022
Impaired at March 31, 2022	$	—	$	—	$	—	$	—
Impaired at June 30, 2022	$	8,006	$	—	$	—	$	8,006
Impaired at September 30, 2022	$	4,094	$	—	$	—	$	4,094
Assets held at December 31, 2021
Impaired at March 31, 2021	$	1,739	$	—	$	—	$	1,739
Impaired at June 30, 2021	$	9,655	$	—	$	—	$	9,655
Impaired at September 30, 2021	$	3,479	$	—	$	—	$	3,479
Impaired at December 31, 2021	$	11,656	$	—	$	—	$	11,656

As of September 30, 2022, the Company held eight properties that were impaired during 2022. As of December 31, 2021, the Company held 14 properties that were impaired during 2021. For one property held at December 31, 2021, the Company estimated fair value using a capitalization rate of 14.00% based on capitalization rates from market comparables. For the remaining properties, the Company estimated property fair value using price per square foot from unobservable inputs. The unobservable inputs for the remaining properties are as follows:

Unobservable Input	Asset Type	Property Count		Price Per Square Foot Range	Weighted Average Price Per Square Foot		Square Footage
September 30, 2022
PSA, LOI or BOV	Retail		6	$41.46 - $105.63	$	89.13		45,931
PSA, LOI or BOV	Data Center		1	$24.94	$	24.94		188,475
Comparable Properties	Retail		1	$60.14 - $75.51	$	69.28		48,042
December 31, 2021
PSA, LOI or BOV	Retail		6	$63.83 - $418.57	$	102.35		39,603
PSA, LOI or BOV	Medical		2	$65.63 - $105.16	$	75.60		41,496
PSA, LOI or BOV	Data Center		1	$38.57	$	38.57		188,475
Comparable Properties	Retail		3	$29.35 - $483.09	$	67.48		42,357
Comparable Properties	Medical		1	$78.66 - $106.35	$	95.00		15,974

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Estimated Fair Value of Financial Instruments

Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash and escrow deposits; and accounts receivable and payable. Generally, these assets and liabilities are short-term in duration and are recorded at cost, which approximates fair value, on the accompanying consolidated balance sheets. In addition, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair values. The fair values of financial instruments are estimates based upon market conditions and perceived risks at measurement date. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities. The estimated fair values of these financial instruments have been derived either based on (i) market quotes for identical or similar instruments in markets or (ii) discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. The estimated fair values of the Senior Unsecured Notes are classified as Level 1 of the fair value of the hierarchy and the remaining estimates are classified as Level 2.  

The following table discloses fair value information for these financial instruments (in thousands):  

	September 30, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Loans receivable, net(1)	$	23,023	$	23,228	$	10,450	$	11,381
2019 Credit Facility		—		—		288,400		288,549
2022 Term Loans, net (2)		791,791		831,032		—		—
Senior Unsecured Notes, net (2)		2,721,534		2,263,756		2,718,641		2,865,187
Mortgages payable, net (2)		5,130		4,790		5,551		5,748

⁽¹⁾ The carrying value of the loans receivable are net of an allowance for credit losses.

⁽²⁾ The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums.

NOTE 9. INCENTIVE AWARD PLAN

Amended Incentive Award Plan

Pursuant to the Amended Incentive Award Plan, restricted share awards and market-based awards are granted to certain of the Company’s officers, directors and other employees. The vesting of these awards results in federal and state income tax liabilities for the recipients. As permitted by the terms of the Amended Incentive Award Plan and the award grants, certain executive officers and employees elected to surrender shares of common stock valued at $6.4 million during the nine months ended September 30, 2022 solely to pay the associated statutory tax withholdings.

Restricted Share Awards

During the nine months ended September 30, 2022, the Company granted 122 thousand restricted shares under the Amended Incentive Award Plan to certain directors and employees and recorded $5.6 million in deferred compensation associated with these grants. Deferred compensation for restricted shares will be recognized in expense over the requisite service period, which generally ranges from one to three years. As of September 30, 2022, there were approximately 216 thousand unvested restricted shares outstanding.

Market-Based Awards

During the nine months ended September 30, 2022, the Board of Directors, or committee thereof, approved target grants of 166 thousand market-based awards to executive officers of the Company. The performance period of these grants is generally three years. Potential shares of the Corporation’s common stock that each participant is eligible to receive is based on the initial target number of shares granted, multiplied by a percentage range between 0% and 375%. Grant date fair value of the market-based awards was calculated using the Monte Carlo simulation model, which incorporated stock price volatility of the Company and each of the Company’s peers and other variables over the time horizons matching the performance periods. Significant inputs for the calculation for the grants approved in 2022 were expected volatility of the Company of 39.5% and expected volatility of the Company's peers, ranging from 21.5% to 53.6%, with an average volatility of 35.7% and a risk-free interest rate of 1.59%. The fair value of the market-based award per share of these grants was $93.26 as of the grant date.  

Approximately $2.4 million and $3.3 million in dividend rights have been accrued as of September 30, 2022 and December 31, 2021, respectively. For outstanding non-vested awards at September 30, 2022, 0.3 million shares would have been released based on the Corporation’s TSR relative to the specified peer groups through that date.

24

Stock-based Compensation Expense

Stock-based compensation is recognized on a straight-line basis over the minimum required service period of each award described above. The Company recorded stock-based compensation expense of $4.4 million and $12.8 million for the three and nine months ended September 30, 2022, respectively, and $3.5 million and $10.5 million for the three and nine months ended September 30, 2021, respectively. These amounts are included in general and administrative expenses in the accompanying consolidated statements of operations.

The following is a summary of remaining unamortized stock-based compensation expense (in thousands):

	September 30, 2022		December 31, 2021
Restricted share awards	$	6,121	$	4,787
Market-based awards		18,147		11,143
Total unamortized stock-based compensation expense	$	24,268	$	15,930

NOTE 10. INCOME PER SHARE

The table below is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per share computed using the two-class method (dollars in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Basic and diluted income:
Income from continuing operations	$	76,640		$	40,878		$	215,436		$	127,333
Less: dividends paid to preferred stockholders		(2,587	)		(2,587	)		(7,763	)		(7,763	)
Less: dividends attributable to unvested restricted stock		(142	)		(147	)		(412	)		(433	)
Net income attributable to common stockholders used in basic and diluted income per share	$	73,911		$	38,144		$	207,261		$	119,137
Basic weighted average shares of common stock outstanding:
Weighted average shares of common stock outstanding		136,530,530			120,009,550			133,058,487			116,752,993
Less: unvested weighted average shares of restricted stock		(216,161	)		(233,679	)		(223,277	)		(249,359	)
Basic weighted average shares of common stock outstanding		136,314,369			119,775,871			132,835,210			116,503,634
Net income per share attributable to common stockholders - basic	$	0.54		$	0.32		$	1.56		$	1.02
Diluted weighted average shares of common stock outstanding: (1)
Plus: unvested market-based awards		—			523,432			130,087			365,843
Plus: unsettled shares under open forward equity contracts		—			2,855			—			952
Diluted weighted average shares of common stock outstanding		136,314,369			120,302,158			132,965,297			116,870,429
Net income per share attributable to common stockholders - diluted	$	0.54		$	0.32		$	1.56		$	1.02
Potentially dilutive shares of common stock related to:
Unvested restricted share awards		51,338			93,711			65,060			88,050

⁽¹⁾ Assumes the most dilutive issuance of potentially issuable shares between the two-class and treasury stock method unless the result would be anti-dilutive.

25

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

Special Note Regarding Forward-looking Statements

This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act, the Private Securities Litigation Reform Act of 1995 and other federal securities laws. When used in this quarterly report, the words “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximately” or “plan,” or the negative of these words or similar words or phrases that are predictions of or indicate future events or trends and which do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management.

Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).

The following risks and uncertainties, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

• industry and economic conditions;

• volatility and uncertainty in the financial markets, including potential fluctuations in the CPI and interest rates;

• our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate, integrate and manage diversifying acquisitions or investments;

• the financial performance of our retail tenants and the demand for retail space;

• our ability to diversify our tenant base;

• the nature and extent of future competition;

• increases in our costs of borrowing as a result of changes in interest rates and other factors;

• our ability to access debt and equity capital markets;

• our ability to pay down, refinance, restructure and/or extend our indebtedness as it becomes due;

• our ability and willingness to renew our leases upon expiration and to reposition our properties on the same or better terms upon expiration in the event such properties are not renewed by tenants or we exercise our rights to replace existing tenants upon default;

• the impact of any financial, accounting, legal or regulatory issues or litigation that may affect us or our major tenants;

• our ability to manage our expanded operations;

• our ability and willingness to maintain our qualification as a REIT;

• the impact on our business and those of our tenants from epidemics, pandemics or other outbreaks of illness, disease or virus (such as the strain of coronavirus known as COVID-19); and

• other risks inherent in the real estate business, including tenant defaults, potential liability relating to environmental matters, illiquidity of real estate investments and potential damages from natural disasters.

The factors included in this quarterly report, including the documents incorporated by reference, and documents we subsequently file with the SEC and incorporate by reference, are not exhaustive and additional factors could adversely affect our business and financial performance. Additional factors that may cause risks and uncertainties include those discussed in the sections entitled "Business", "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2021 and this report and subsequent filings with the SEC. All forward-looking statements are based on information that was available, and speak only, to the date on which they were made. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by law.

26

Overview

Spirit Realty Capital, Inc. is a New York Stock Exchange listed company under the ticker symbol "SRC."

We are a self-administered and self-managed REIT with in-house capabilities including acquisition, credit research, asset management, portfolio management, real estate research, legal, finance and accounting functions. We primarily invest in single-tenant, operationally essential real estate assets throughout the United States, which are subsequently leased on a long-term, triple-net basis to high quality tenants with operations in retail, industrial and certain other industries. Single-tenant, operationally essential real estate consists of properties that are free-standing, commercial real estate facilities where our tenants conduct activities that are essential to the generation of their sales and profits. Under a triple-net lease, the tenant is responsible for all improvements and is contractually obligated to pay all property operating expenses, such as real estate taxes, insurance premiums and repair and maintenance costs.

As of September 30, 2022, our diverse portfolio consisted of 2,118 owned properties across 49 states, which were leased to 346 tenants operating in 34 industries. As of September 30, 2022, our properties were approximately 99.8% occupied.

Our operations are carried out through the Operating Partnership. OP Holdings, one of our wholly-owned subsidiaries, is the sole general partner and owns approximately 1% of the Operating Partnership. We and one of our wholly-owned subsidiaries are the only limited partners, and together own the remaining 99% of the Operating Partnership. As of September 30, 2022, our assets, liabilities, and results of operations are materially the same as those of the Operating Partnership.

We have elected to be taxed as a REIT for federal income tax purposes and believe we have been organized and have operated in a manner that allows us to qualify as a REIT for federal income tax purposes.

Business Impact of the COVID-19 Pandemic

At the onset of the COVID-19 pandemic in 2020, many of our tenants, particularly those in the movie theater, casual dining restaurant, entertainment, health and fitness and hotel industries, requested rent deferrals or other forms of relief. Since the beginning of 2021, we have seen a significant reduction in the impact of the COVID-19 pandemic and we expect that trend to continue. For the nine months ended September 30, 2022, we deferred $0.2 million of rent and reversed previous reserves against deferred rent of $0.2 million, both of which were recognized in rental income. Additionally, we did not recognize any rent abatements for the nine months ended September 30, 2022.

As of September 30, 2022, we had an accounts receivable balance of $9.2 million related to deferred rent, with 62% of the balance expected to be repaid by the end of 2023. Although we are actively engaged in rent collection efforts related to uncollected rent, we can provide no assurance that such efforts will be successful.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our experience and various other assumptions deemed reasonable under the circumstances. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. A summary of our critical accounting policies is included in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2021. We have not made any material changes to these policies during the periods covered by this quarterly report.

27

Results of Operations

Comparison of the three and nine months ended September 30, 2022 to the three and nine months ended September 30, 2021

	Three Months Ended September 30,						Nine Months Ended September 30,						Increase / (Decrease)
(In Thousands)	2022			2021			2022			2021			Three Months			Nine Months
Revenues:
Rental income	$	180,296		$	151,376		$	520,930		$	450,483		$	28,920		$	70,447
Interest income on loans receivable		521			—			1,362			—			521			1,362
Earned income from direct financing leases		131			131			393			394			—			(1	)
Other operating income		1,956			1,061			3,550			1,458			895			2,092
Total revenues		182,904			152,568			526,235			452,335			30,336			73,900
Expenses:
General and administrative		14,313			13,103			42,408			39,599			1,210			2,809
Property costs (including reimbursable)		7,395			5,862			22,600			17,633			1,533			4,967
Deal pursuit costs		470			361			1,490			860			109			630
Interest		30,956			25,078			84,573			77,872			5,878			6,701
Depreciation and amortization		74,600			63,061			216,606			180,222			11,539			36,384
Impairments		1,571			4,435			11,096			18,965			(2,864	)		(7,869	)
Total expenses		129,305			111,900			378,773			335,151			17,405			43,622
Other income:
Gain (loss) on debt extinguishment		—			1			(172	)		(29,186	)		(1	)		29,014
Gain on disposition of assets		23,302			453			63,107			39,796			22,849			23,311
Other income		—			—			5,679			—			—			5,679
Total other income		23,302			454			68,614			10,610			22,848			58,004
Income before income tax expense		76,901			41,122			216,076			127,794			35,779			88,282
Income tax expense		(261	)		(244	)		(640	)		(461	)		(17	)		(179	)
Net income	$	76,640		$	40,878		$	215,436		$	127,333		$	35,762		$	88,103

Changes related to operating properties

The components of rental income are summarized below (in thousands):

28

Base Cash Rent; Depreciation and amortization

The increase in Base Cash Rent, the largest component of rental income, was driven by our net acquisitions, which also was the driver for the increase in depreciation and amortization. We acquired 240 properties during the trailing twelve months ended September 30, 2022, with a total of $101.2 million of annual in-place rent. During the same period, we disposed of 37 properties, of which 16 were vacant and the remaining 21 had annual in-place rents of $8.4 million. Our acquisitions and dispositions for the trailing twelve months ended September 30, 2022 is summarized below (in thousands):

We have had minimal tenant credit issues since March 31, 2021 and have seen continued recovery from the COVID-19 pandemic. In 2021, we recognized recoveries of Base Cash Rent previously reserved due to the COVID-19 pandemic and had minimal new reserves, resulting in net reserves of $0.1 million and net recoveries of $5.6 million for the three and nine months ended September 30, 2021, respectively. The trend for minimal new reserves has continued in 2022, along with minor recoveries from amounts previously reserved due to the COVID-19 pandemic, resulting in net reserves of $0.6 million and $0.5 million for the three and nine months ended September 30, 2022, respectively. Further, rent abatements executed as relief for the COVID-19 pandemic also decreased from $0.4 million and $1.5 million for the three and nine months ended September 30, 2021, respectively, to zero for both the three and nine months ended September 30, 2022.

Variable cash rent; Property costs (including reimbursable)

Variable cash rent income is primarily comprised of tenant reimbursements, where our tenants are obligated under the lease agreement to reimburse us for certain property costs we incur, less reimbursements we deem not probable of collection. As such, the change in variable cash rent is driven by the change in reimbursable property costs. For the three and nine months ended September 30, 2022, we recognized reimbursable property costs of $5.2 million and $17.1 million, respectively, compared to $3.9 million and $10.4 million, respectively, for the three and nine months ended September 30, 2021. The increase for both comparative periods was primarily due to increased reimbursable property taxes due to our net acquisitions. For the three and nine months ended September 30, 2022 , we recognized non-reimbursable property costs of $2.2 million and $5.5 million, respectively, compared to $2.0 million and $7.2 million, respectively, for the three and nine months ended September 30, 2021. The three-month comparative period was relatively flat, while the decrease for nine-month comparative period was primarily due to a reduction in non-reimbursable property taxes driven by fewer tenant credit issues in 2022.

Other variable cash income increased to $1.3 million and $2.6 million, respectively, for the three and nine months ended September 30, 2022, compared to $0.8 million and $1.7 million for the three and nine months ended September 30, 2021. This increase was primarily due to a lease converting to a contingent rent arrangement based on tenant sales in the third quarter of 2021.

Non-cash rental income

Non-cash rental income consists of straight-line rental revenue and amortization of above- and below- market lease intangibles, less amounts we deem not probable of collection. Straight-line rental revenue and amortization of lease intangibles increased for both comparative periods due to net acquisitions and certain lease modifications. Due to the reduction in tenant credit issues, we recognized significant recoveries for straight-line rent previously deemed not probable of collection in the second quarter of 2021 and had smaller recoveries with minimal new reserves in 2022. For the three and nine months ended September 30, 2021, net reserves of $0.1 million and net recoveries of $11.0 million were recognized, compared to net recoveries of $1.2 million and $1.1 million for the three and nine months ended September 30, 2022.

29

Impairments

The number of impaired properties declined from 2021, driven by tenant performance and continued low vacancy rates. We recorded impairment as follows (impairment in thousands):

	Three Months Ended September 30,										Nine Months Ended September 30,
	2022				2021				2022				2021
	Count		Impairment		Count		Impairment		Count		Impairment		Count		Impairment
Underperforming properties		6	$	1,571		4	$	4,325		8	$	10,155		17	$	16,109
Vacant properties		—		—		1		110		1		814		5		2,856
Total			$	1,571			$	4,435			$	10,969			$	18,965

Additionally, an allowance for credit loss of $0.1 million was recorded in 2022 as a result of entering into a new loan receivable in the first quarter of 2022, with no allowance for credit loss in the comparative period.

Gain on disposition of assets

Gain on disposition of assets increased for both comparative periods. During the three months ended September 30, 2022, we disposed of ten active properties, resulting in net gains of $23.0 million, and disposed of one vacant property, resulting in a gain of $0.4 million. During the nine months ended September 30, 2022, we disposed of 21 active properties, resulting in net gains of $60.4 million, and disposed of 12 vacant properties, resulting in net gains of $2.4 million. Additionally, we recognized other losses of $0.1 million and gains of $0.3 million, respectively, for the three and nine months ended September 30, 2022.

During the three months ended September 30, 2021, we recognized net gains of $0.1 million on the sale of three vacant properties, a $0.3 million gain related to a property reconstructed after previous fire damage and other net gains of $0.1 million. During the nine months ended September 30, 2021, we recognized net gains of $38.0 million on the sales of eight occupied properties, net gains of $0.7 million on the sale of 11 vacant properties, a $0.6 million gain on an asset substitution, a $0.3 million gain related to a property reconstructed after previous fire damage and other net gains of $0.2 million.

Changes related to debt

Interest expense; Loss on debt extinguishment

Our debt is summarized below (in thousands):

In January 2021, we repaid the 2020 Term Loan in full, resulting in a loss on debt extinguishment of $0.7 million primarily due to the write-off of unamortized deferred financing costs. In March 2021, we issued $800.0 million aggregate principal amount of the 2028 and 2032 Senior Notes. Proceeds from these issuances were used to extinguish $207.4 million of CMBS loans, resulting in a loss on debt extinguishment of $28.5 million primarily due to pre-payment penalties. The Convertible Notes matured in May 2021, at which time they were settled in cash and the remaining discount and deferred financing costs were fully amortized.

30

In March 2022, we amended and restated the 2019 Revolving Credit and Term Loan Agreement, resulting in a loss of $0.2 million on the partial debt extinguishment. In August 2022, we entered into the 2022 Term Loans, comprised of a $300.0 million tranche which matures in 2025 and a $500.0 million tranche which matures in 2027. In conjunction with the 2022 Term Loans, we entered into interest rate swaps beginning in September 2022 to swap the variable rate for a fixed rate.

Our weighted average effective interest rate decreased from 3.57% at September 30, 2021 to 3.31% at September 30, 2022 primarily as a result of these changes in our debt structure. However, the higher level of borrowings outstanding under the 2019 Credit Facility paired with the increased effective interest rate on those borrowings due to rising market rates have resulted in increased interest expense. The components of interest expense are summarized below (in thousands):

Changes related to general and administrative expenses

The increase in general and administrative expense was primarily driven by an increase in compensation expenses of $1.1 million for the three months ended September 30, 2022 and $3.7 million for the nine months ended September 30, 2022, compared to their respective prior year periods. The increase in compensation expenses was due to increases in cash compensation primarily due to internal promotions and new hires and increases in non-cash compensation primarily due to a higher grant date fair value for the 2022 market-based awards due to a high expected volatility and the maximum potential pay-out percentage. The increases in general and administrative expenses for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 were partially offset by a decrease of $0.8 million in expenses related to the COVID-19 pandemic, as these costs were predominately incurred in the first half of 2021.

Changes related to other income

We were contingently liable for $5.7 million of debt owed by one of our former tenants, which we fully reserved in 2018 due to the tenant filing for bankruptcy. No payments were made in relation to this contingent liability and, as the underlying debt had a maturity of March 15, 2022, we reversed our reserve in the first quarter of 2022.

31

Property Portfolio Information

2,118	99.8%	49	346	34
Properties	Occupancy	States	Tenants	Tenant Industries

Diversification By Tenant

The following is a summary of tenant concentration for our owned real estate properties as of September 30, 2022:

Tenant Concept (1)	Number of Properties		Total Square Feet (in thousands)		Percent of ABR
Life Time Fitness		12		1,399		4.1	%
Invited Clubs		21		1,005		2.8	%
BJ's Wholesale Club		11		1,233		2.4	%
At Home		16		1,861		2.1	%
Dave & Buster's / Main Event		15		807		2.1	%
Church's Chicken		160		231		2.0	%
Dollar Tree / Family Dollar		128		1,167		1.8	%
Home Depot		8		946		1.8	%
Circle K		76		230		1.7	%
GPM		108		303		1.6	%
Other(2)		1,559		46,005		77.6	%
Vacant		4		551		—
Total		2,118		55,738		100.0	%

⁽¹⁾ Tenant concentration represents concentration by the legal entities ultimately responsible for obligations under the lease agreements or affiliated entities. Concentration is shown by tenant concept, which represents the brand or trade name under which the tenant operates. Other tenants may operate under the same or similar brand or trade name.

⁽²⁾ No tenants within other individually account for greater than 1.6% of ABR.

Lease Expirations

As of September 30, 2022, the weighted average remaining non-cancelable initial term of our leases (based on ABR) was 10.4 years. The following is a summary of lease expirations for our owned real estate as of September 30, 2022, assuming that tenants do not exercise any renewal options or early termination rights:

Leases Expiring In:	Number of Properties		Total Square Feet (in thousands)		ABR (in thousands)		Percent of ABR
Remainder of 2022		7		27	$	598		0.1	%
2023		75		1,675		20,903		3.2	%
2024		48		1,571		17,756		2.7	%
2025		56		2,437		22,319		3.4	%
2026		132		5,022		46,818		7.1	%
2027		168		4,469		58,710		8.9	%
2028		137		2,867		38,319		5.8	%
2029		318		2,922		43,731		6.6	%
2030		82		2,536		25,225		3.8	%
2031		76		4,725		39,953		6.0	%
Thereafter		1,015		26,936		346,706		52.4	%
Vacant		4		551		—		—
Total owned properties		2,118		55,738	$	661,038		100.0	%

32

Diversification By Geography

The following is a summary of geographic concentration for our owned real estate properties as of September 30, 2022:

Location	Number of Properties		Total Square Feet (in thousands)		Percent of ABR			Location (continued)	Number of Properties		Total Square Feet (in thousands)		Percent of ABR
Texas		301		6,709		14.1	%	Massachusetts		8		750		1.3	%
Florida		160		2,838		7.9	%	Arkansas		47		690		1.2	%
Georgia		148		2,864		6.0	%	Louisiana		28		490		1.1	%
Ohio		101		4,139		5.5	%	Kansas		20		829		0.9	%
Michigan		100		2,916		4.5	%	Wisconsin		15		850		0.9	%
Tennessee		119		2,469		4.0	%	New Jersey		14		471		0.8	%
California		30		1,602		3.8	%	Alaska		9		319		0.8	%
Illinois		57		1,558		3.4	%	New Hampshire		17		645		0.8	%
North Carolina		91		1,874		3.1	%	Connecticut		7		910		0.7	%
South Carolina		72		1,095		2.9	%	Idaho		16		273		0.7	%
Alabama		107		1,476		2.8	%	Iowa		12		1,304		0.6	%
Arizona		48		968		2.7	%	Washington		9		160		0.5	%
New York		37		1,943		2.6	%	West Virginia		13		206		0.4	%
Missouri		66		1,541		2.5	%	Maine		28		103		0.4	%
Colorado		33		1,264		2.5	%	Nebraska		10		262		0.4	%
Maryland		12		1,413		2.5	%	Delaware		2		128		0.3	%
Virginia		47		1,348		2.1	%	Montana		3		152		0.3	%
Indiana		42		2,157		2.0	%	North Dakota		4		110		0.3	%
Minnesota		29		1,064		2.0	%	Rhode Island		3		94		0.2	%
New Mexico		35		863		1.8	%	Oregon		3		104		0.2	%
Pennsylvania		33		1,073		1.7	%	South Dakota		2		30		0.2	%
Oklahoma		58		1,068		1.7	%	Wyoming		1		35		0.1	%
Mississippi		51		992		1.7	%	U.S. Virgin Islands		1		38		0.1	%
Utah		19		966		1.6	%	Nevada		1		12	*
Kentucky		48		571		1.4	%	Vermont		1		2	*

* Less than 0.1%

33

Diversification By Asset Type and Tenant Industry

The following is a summary of asset type concentration, the industry of the underlying tenant operations for our retail properties and the underlying property use for our non-retail properties as of September 30, 2022:

Asset Type	Tenant Industry / Underlying Use	Number of Properties		Total Square Feet (in thousands)		Percent of ABR
Retail			1,824		29,891		70.4	%
	Health & Fitness		53		3,176		8.1	%
	Convenience Stores		318		1,012		5.9	%
	Quick Service Restaurants		354		771		5.0	%
	Casual Dining		131		936		4.7	%
	Car Washes		115		542		4.6	%
	Movie Theaters		37		1,953		4.0	%
	Dealerships		34		1,122		3.6	%
	Drug Stores		77		990		3.3	%
	Entertainment		28		1,220		3.3	%
	Automotive Service		128		1,046		3.2	%
	Home Improvement		35		2,114		3.1	%
	Dollar Stores		212		1,995		3.0	%
	Supercenters & Clubs		17		1,864		2.8	%
	Home Décor		19		2,459		2.5	%
	Home Furnishings		28		1,277		2.2	%
	Sporting Goods		20		1,154		1.9	%
	Department Stores		18		1,619		1.8	%
	Grocery		32		1,465		1.8	%
	Other		29		900		1.6	%
	Early Education		41		450		1.5	%
	Specialty Retail		32		669		1.1	%
	Automotive Parts		55		388		0.8	%
	Pet Supplies & Service		4		133		0.3	%
	Discount Retail		4		273		0.3	%
	Vacant		3		363		—
Non-Retail			294		25,847		29.6	%
	Distribution		138		12,157		10.4	%
	Manufacturing		67		9,568		8.3	%
	Country Club		21		1,005		2.8	%
	Office		9		1,079		2.6	%
	Medical		31		543		2.2	%
	Industrial Outdoor Storage		10		423		1.2	%
	Data Center		3		309		0.8	%
	Flex		13		453		0.8	%
	Hotel		1		122		0.5	%
	Vacant		1		188		—
Total			2,118		55,738		100.0	%

34

Liquidity and Capital Resources

ATM PROGRAM

In November 2021, the Board of Directors approved a new $500.0 million 2021 ATM Program, and we terminated the 2020 ATM Program. Sales of shares of our common stock under the 2021 ATM Program may be made in sales deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act. The 2021 ATM Program contemplates that, in addition to the issuance and sale by us of shares of our common stock to or through the agents, we may enter into separate forward sale agreements with one of the agents or one of their respective affiliates (in such capacity, each, a “forward purchaser”). When we enter into a forward sale agreement, we expect that the forward purchaser will attempt to borrow from third parties and sell, through a forward seller, shares of our common stock to hedge the forward purchaser's exposure under the forward sale agreement. We will not initially receive any proceeds from any sale of shares of our common stock borrowed by a forward purchaser and sold through a forward seller.

We currently expect to fully physically settle any forward sale agreement with the respective forward purchaser on one or more dates specified by us on or prior to the maturity date of such forward sale agreement, in which case we expect to receive aggregate net cash proceeds at settlement equal to the number of shares specified in such forward sale agreement multiplied by the relevant forward price per share. The forward sale price that we receive upon physical settlement of the agreements is subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchasers’ stock borrowing costs and (iii) scheduled dividends during the term of the forward sale agreements. However, subject to certain exceptions, we may also elect, in our sole discretion, to cash settle or net share settle all or any portion of our obligations under any forward sale agreement, in which case we may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and we may owe cash (in the case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant forward purchaser.

As of September 30, 2022, 5.1 million shares of our common stock have been sold under the 2021 ATM Program, of which 3.5 million of these shares were sold through forward sale agreements. 2.4 million of these shares were sold during the nine months ended September 30, 2022. As of September 30, 2022, there were no open forward contracts and approximately $273.2 million of capacity remained available under the 2021 ATM Program as of September 30, 2022.

FORWARD EQUITY OFFERING

In January 2022, we entered into forward sale agreements with certain financial institutions acting as forward purchasers in connection with an offering of 9.4 million shares of common stock at an initial public offering price of $47.60 per share, before underwriting discounts and offering expenses, and an initial forward sales price of $45.696 per share. We did not receive any proceeds from the sale of our shares of common stock by the forward purchasers at the time of the offering. All of these shares were settled during the nine months ended September 30, 2022, generating net proceeds of $427.7 million.

SHORT-TERM LIQUIDITY AND CAPITAL RESOURCES

On a short-term basis, our principal demands for funds will be for operating expenses, acquisitions, distributions to stockholders and payment of interest and principal on current and any future debt financings. We expect to fund these demands primarily through cash provided by operating activities, borrowings under the 2019 Credit Facility and, when market conditions warrant, issuances of equity securities, including shares of our common stock under our 2021 ATM program. As of September 30, 2022, available liquidity was comprised of $109.8 million in cash and cash equivalents and $1.2 billion of borrowing capacity under the 2019 Credit Facility.

LONG-TERM LIQUIDITY AND CAPITAL RESOURCES

We plan to meet our long-term capital needs, including long-term financing of property acquisitions, by issuing registered debt or equity securities, by obtaining asset level financing and by issuing fixed-rate secured or unsecured notes and bonds. In the future, some of our property acquisitions could be made by issuing partnership interests of our Operating Partnership in exchange for property owned by third parties. These partnership interests would be exchangeable for cash or, at our election, shares of our common stock. We continually evaluate financing alternatives and believe that we can obtain financing on reasonable terms. However, we cannot be sure that we will have access to the capital markets at times and on terms that are acceptable to us, particularly as uncertainty related to rising interest rates, rising inflation rates, economic outlook, geopolitical events (including the military conflict between Russia and Ukraine) and other factors have contributed and may continue to contribute to significant volatility and negative pressure in financial markets. We expect that our primary uses of capital will be for property and other asset acquisitions, the payment of tenant improvements, operating expenses, debt service payments and distributions to our stockholders.

35

DESCRIPTION OF CERTAIN DEBT

The following descriptions of debt should be read in conjunction with Note 4 to the consolidated financial statements herein.

2019 Credit Facility

On March 30, 2022, we amended and restated the 2019 Revolving Credit and Term Loan Agreement. As of September 30, 2022, the aggregate gross commitment under the 2019 Credit Facility was $1.2 billion, which may be increased up to $1.7 billion by exercising an accordion feature, subject to satisfying certain requirements. The 2019 Credit Facility has a maturity of March 31, 2026 and includes two six-month extensions that can be exercised at our option.

We may voluntarily prepay the 2019 Credit Facility, in whole or in part, at any time without premium or penalty. Payment of the 2019 Credit Facility is unconditionally guaranteed by the Company and material subsidiaries that meet certain conditions. As of September 30, 2022, there were no subsidiaries that met this requirement.

As of September 30, 2022, the 2019 Credit Facility bore interest at a 1-month adjusted SOFR rate plus 0.775% and incurred a facility fee of 0.150% per annum, in each case, based on the Operating Partnership’s credit rating and leverage ratio (as defined in the agreement). As of September 30, 2022, there were no borrowings or letters of credit outstanding.

2022 Term Loans

On August 22, 2022, we entered into the 2022 Term Loan Agreement which provides for borrowings in an aggregate amount of $800.0 million comprised of a $300.0 million tranche with a maturity date of August 22, 2025 and a $500.0 million tranche with a maturity date of August 20, 2027. Borrowings may be increased up to $1.0 billion by exercising an accordion feature, subject to satisfying certain requirements. The full borrowing capacity of $800.0 million under the term loans was fully drawn as of September 30, 2022.

Borrowings may be repaid without premium or penalty. As of September 30, 2022, the 2022 Term Loans bore interest at a 1-month adjusted SOFR rate plus 0.850% per annum, based on the Operating Partnership’s credit rating. In conjunction with entering into the 2022 Term Loans, we entered into interest rate swaps to swap 1-month SOFR for a weighted average fixed rate of 2.55%.

Senior Unsecured Notes

As of September 30, 2022, we had the following Senior Unsecured Notes outstanding (dollars in thousands):

	Maturity Date	Interest Payment Dates	Stated Interest Rate	September 30, 2022
2026 Senior Notes	September 15, 2026	March 15 and September 15	4.45%	$	300,000
2027 Senior Notes	January 15, 2027	January 15 and July 15	3.20%		300,000
2028 Senior Notes	March 15, 2028	March 15 and September 15	2.10%		450,000
2029 Senior Notes	July 15, 2029	January 15 and July 15	4.00%		400,000
2030 Senior Notes	January 15, 2030	January 15 and July 15	3.40%		500,000
2031 Senior Notes	February 15, 2031	February 15 and August 15	3.20%		450,000
2032 Senior Notes	February 15, 2032	February 15 and August 15	2.70%		350,000
Total Senior Unsecured Notes			3.25%	$	2,750,000

The Senior Unsecured Notes are redeemable in whole at any time or in part from time to time, at the Operating Partnership’s option, at a redemption price equal to the sum of: an amount equal to 100% of the principal amount of the respective Senior Unsecured Notes to be redeemed plus accrued and unpaid interest and liquidated damages, if any, up to, but not including, the redemption date; and a make-whole premium calculated in accordance with the respective indenture. Notwithstanding the foregoing, if any of the Senior Unsecured Notes are redeemed three months or less (or two months or less in the case of the 2027 Senior Notes and 2028 Senior Notes) prior to their respective maturity dates, the redemption price will not include a make-whole premium.

Mortgages payable

The obligors of our property level debt are special purpose entities that hold the real estate and other collateral securing the indebtedness. Each special purpose entity is a bankruptcy remote separate legal entity and is the sole owner of its assets and solely responsible for its liabilities other than typical non-recurring covenants. As of September 30, 2022, we had two fixed-rate CMBS loans with $5.0 million of aggregate outstanding principal. One of the CMBS loans, with principal outstanding of $4.4 million, matures in August 2031 and has a stated interest rate of 5.80%. The other CMBS loan, with principal outstanding of $0.6 million, matures in December 2025 and has a stated interest rate of 6.00%. Both CMBS loans are partially amortizing and require a balloon payment at maturity.

36

DEBT MATURITIES

Future principal payments due on our various types of debt outstanding as of September 30, 2022 (in thousands):

	Total		Remainder of 2022		2023		2024		2025		2026		Thereafter
2019 Credit Facility	$	—	$	—	$	—	$	—	$	—			$	—
Term loans		800,000		—		—		—		300,000		—		500,000
Senior Unsecured Notes		2,750,000		—		—		—		—		300,000		2,450,000
Mortgages payable		4,959		134		556		590		626		468		2,585
	$	3,554,959	$	134	$	556	$	590	$	300,626	$	300,468	$	2,952,585

CONTRACTUAL OBLIGATIONS

During the three months ended March 31, 2022, we amended and restated the 2019 Revolving Credit and Term Loan Agreement, which increased our borrowing capacity under the 2019 Credit Facility. Additionally, we entered into the 2022 Term Loan Agreement during the three months ended September 30, 2022. There were no other material changes during the nine months ended September 30, 2022 outside the ordinary course of business to the information regarding specified contractual obligations contained in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC.

We may enter into commitments to purchase goods and services in connection with the operations of our properties. Those commitments generally have terms of one-year or less and reflect expenditure levels comparable to our historical expenditures.

DISTRIBUTION POLICY

Distributions from our current or accumulated earnings are generally classified as ordinary income, whereas distributions in excess of our current and accumulated earnings, to the extent of a stockholder’s federal income tax basis in our common stock, are generally characterized as a return of capital. Under the 2017 Tax Legislation, U.S. stockholders that are individuals, trusts and estates generally may deduct up to 20% of the ordinary dividends (e.g., dividends not designated as capital gain dividends or qualified dividend income) received from a REIT for taxable years beginning after December 31, 2017 and before January 1, 2026. Distributions in excess of a stockholder’s federal income tax basis in our common stock are generally characterized as capital gain.

We are required to distribute 90% of our taxable income (subject to certain adjustments and excluding net capital gains) on an annual basis to maintain qualification as a REIT for federal income tax purposes and are required to pay federal income tax at regular corporate rates to the extent we distribute less than 100% of our taxable income (including capital gains).

We intend to make distributions that will enable us to meet the distribution requirements applicable to REITs and to eliminate or minimize our obligation to pay corporate-level federal income and excise taxes.

Any distributions will be at the sole discretion of our Board of Directors, and their form, timing and amount, if any, will depend upon a number of factors, including our actual and projected results of operations, FFO, liquidity, cash flows and financial condition, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements, applicable laws and such other factors as our Board of Directors deems relevant.

Cash Flows

The following table presents a summary of our cash flows for the nine months ended September 30, 2022 and 2021 (in thousands):

	Nine Months Ended September 30,
	2022			2021			Change
Net cash provided by operating activities	$	338,885		$	275,383		$	63,502
Net cash used in investing activities		(1,002,541	)		(681,338	)		(321,203	)
Net cash provided by financing activities		755,686			338,221			417,465
Net increase (decrease) in cash, cash equivalents and restricted cash	$	92,030		$	(67,734	)	$	159,764

37

As of September 30, 2022, we had $109.8 million of cash, cash equivalents and restricted cash as compared to $17.8 million as of December 31, 2021 and $15.6 million as of September 30, 2021.

Operating Activities

Our cash flows from operating activities are primarily dependent upon the occupancy level of our portfolio, the rental rates specified in our leases, the collectability of rent and the level of our operating expenses and other general and administrative costs.

The increase in net cash provided by operating activities was driven by the net increase in cash rental revenue of $75.1 million, largely as a result of our net acquisitions over the trailing twelve month period. This increase was partially offset by an increase in cash interest paid of $10.5 million driven by the issuance of the 2028 Senior Notes and 2032 Senior Notes during 2021 and other changes within our debt structure (see Management’s Discussion and Analysis of Financial Condition: Results of Operations), an increase of $5.7 million in lease incentives paid and an increase of approximately $2.9 million in cash bonus payments.

Investing Activities

Cash used in investing activities is generally used to fund property acquisitions, for investments in loans receivable and for capital expenditures. Cash provided by investing activities generally relates to property dispositions.

Net cash used in investing activities during the nine months ended September 30, 2022 was comprised of $1.1 billion for the acquisition of 148 properties, $55.3 million of capitalized real estate expenditures and $12.7 million for investment in one loan receivable. These outflows were partially offset by $183.8 million in net proceeds from the disposition of 33 properties.

During the same period in 2021, net cash used in investing activities was comprised of $769.0 million for the acquisition of 74 properties and $6.7 million of capitalized real estate expenditures. These outflows were partially offset by $94.5 million in net proceeds from the disposition of 19 properties and $2.0 million that was collected from a disposal that occurred in 2020.

Financing Activities

Generally, our net cash provided by or used in financing activities is impacted by our borrowings and repayments under our revolving credit facilities and term loans, debt offerings, issuances of common stock and dividend payments on our common and preferred stock.

Net cash provided by financing activities during the nine months ended September 30, 2022 was primarily attributable to borrowings of $800.0 million on term loans and net proceeds from the issuance of common stock of $531.6 million. These amounts were partially offset by net repayments of $288.4 million under our revolving credit facilities, payment of dividends to equity owners of $263.6 million, deferred financing costs of $17.0 million, common stock repurchases for employee tax withholdings totaling $6.4 million and repayments of $0.4 million on mortgages payable.

During the same period in 2021, net cash provided by financing activities was primarily attributable to borrowings of $794.8 million under Senior Unsecured Notes, net proceeds from the issuance of common stock of $336.6 million and net borrowings of $49.3 million under our revolving credit facilities. These amounts were partially offset by payment of dividends to equity owners of $227.2 million, repayments of $208.8 million on mortgages payable, repayments of $190.4 million on convertible notes, repayments of $178.0 million on term loans, debt extinguishment costs of $26.7 million, deferred financing costs of $7.1 million and common stock repurchases for employee tax withholdings totaling $4.4 million.

Off-Balance Sheet Arrangements

As of September 30, 2022, we did not have any material off-balance sheet arrangements.

New Accounting Pronouncements

See Note 2 to the consolidated financial statements herein.

38

Non-GAAP Financial Measures

FFO: FFO is a non-GAAP financial measure calculated in accordance with the standards established by NAREIT. FFO represents net income (loss) attributable to common stockholders (computed in accordance with GAAP), excluding real estate-related depreciation and amortization, impairment charges and net (gains) losses from property dispositions. We believe that FFO is beneficial to investors as a starting point in measuring our operational performance. Specifically, in excluding real estate-related depreciation and amortization, impairment charges and net (gains) losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year-over-year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of equity REITs, FFO will be used by investors as a basis to compare our operating performance with that of other equity REITs. However, because FFO excludes depreciation and amortization and does not capture the changes in the value of our properties that result from use or market conditions, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited.

AFFO: AFFO is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. We adjust FFO to eliminate the impact of certain items that we believe are not indicative of our core operating performance, such as net gains (losses) on debt extinguishment, deal pursuit costs, costs related to the COVID-19 pandemic, income associated with expiration of a contingent liability related to a guarantee of a former tenant's debt and certain non-cash items. These certain non-cash items include certain non-cash interest expenses (comprised of amortization of deferred financing costs, amortization of net debt discount/premium, and amortization of interest rate swap losses), non-cash revenues (comprised of straight-line rents net of bad debt expense, amortization of lease intangibles, and amortization of net premium/discount on loans receivable), and non-cash compensation expense.

Other equity REITs may not calculate FFO and AFFO as we do, and, accordingly, our FFO and AFFO may not be comparable to such other equity REITs’ FFO and AFFO. FFO and AFFO do not represent cash generated from operating activities determined in accordance with GAAP, are not necessarily indicative of cash available to fund cash needs and should only be considered a supplement, and not an alternative, to net income (loss) attributable to common stockholders (computed in accordance with GAAP) as a performance measure.

Adjusted Debt: Adjusted Debt represents interest bearing debt (reported in accordance with GAAP) adjusted to exclude unamortized debt discount/premium and deferred financing costs and reduced by cash and cash equivalents and restricted cash. By excluding these amounts, the result provides an estimate of the contractual amount of borrowed capital to be repaid, net of cash available to repay it. We believe this calculation constitutes a beneficial supplemental non-GAAP financial disclosure to investors in understanding our financial condition.

EBITDAre: EBITDAre is a non-GAAP financial measure computed in accordance with the standards established by NAREIT. EBITDAre represents net income (loss) (computed in accordance with GAAP), excluding interest expense, income tax expense, depreciation and amortization, net (gains) losses from property dispositions, and impairment charges.

Adjusted EBITDAre: Adjusted EBITDAre represents EBITDAre as adjusted for revenue producing acquisitions, capital expenditures and dispositions for the quarter (as if such acquisitions and dispositions had occurred as of the beginning of the quarter), construction rent collected, not yet recognized in earnings, and for other certain items that we believe are not indicative of our core operating performance. These other certain items include deal pursuit costs, net (gains) losses on debt extinguishment, costs related to the COVID-19 pandemic, and non-cash compensation. We believe that excluding these items, which are not key drivers of our investment decisions and may cause short-term fluctuations in net income (loss), provides a useful supplemental measure to investors and analysts in assessing the net earnings contribution of our real estate portfolio. Because these measures do not represent net income (loss) that is computed in accordance with GAAP, they should only be considered a supplement, and not an alternative, to net income (loss) (computed in accordance with GAAP) as a performance measure.

Annualized Adjusted EBITDAre: Annualized Adjusted EBITDAre is calculated as Adjusted EBITDAre, adjusted for straight-line rent related to prior periods, including amounts deemed not probable of collection (recoveries), and items where annualization would not be appropriate, multiplied by four. Our computation of Adjusted EBITDAre and Annualized Adjusted EBITDAre may differ from the methodology used by other equity REITs to calculate these measures and, therefore, may not be comparable to such other REITs.

39

Adjusted Debt to Annualized Adjusted EBITDAre: Adjusted Debt to Annualized Adjusted EBITDAre is a non-GAAP financial measure we use to evaluate the level of borrowed capital being used to increase the potential return of our real estate investments, and a proxy for a measure we believe is used by many lenders and ratings agencies to evaluate our ability to repay and service our debt obligations. We believe the ratio is a beneficial disclosure to investors as a supplemental means of evaluating our ability to meet obligations senior to those of our equity holders. Our computation of this ratio may differ from the methodology used by other equity REITs, and, therefore, may not be comparable to such other REITs.

FFO and AFFO

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2022			2021			2022			2021
Net income attributable to common stockholders	$	74,053		$	38,291		$	207,673		$	119,570
Portfolio depreciation and amortization		74,455			62,919			216,175			179,794
Portfolio impairments		1,571			4,435			11,096			18,965
Gain on disposition of assets		(23,302	)		(453	)		(63,107	)		(39,796	)
FFO attributable to common stockholders	$	126,777		$	105,192		$	371,837		$	278,533
(Gain) loss on debt extinguishment		—			(1	)		172			29,186
Deal pursuit costs		470			361			1,490			860
Non-cash interest expense, excluding capitalized interest		2,495			1,919			6,690			6,962
Straight-line rent, net of uncollectible reserve		(10,875	)		(8,840	)		(28,465	)		(35,941	)
Other amortization and non-cash charges		(475	)		(714	)		(1,700	)		(2,249	)
Non-cash compensation expense		4,393			3,504			12,805			10,496
Costs related to COVID-19 (1)		—			46			6			752
Other income		—			—			(5,679	)		—
AFFO attributable to common stockholders	$	122,785		$	101,467		$	357,156		$	288,599
Net income per share of common stock - Diluted	$	0.54		$	0.32		$	1.56		$	1.02
FFO per share of common stock - Diluted (2)	$	0.93		$	0.87		$	2.79		$	2.38
AFFO per share of common stock - Diluted (2)	$	0.90		$	0.84		$	2.68		$	2.46
Weighted average shares of common stock outstanding - Diluted		136,314,369			120,302,158			132,965,297			116,870,429

⁽¹⁾ Costs related to COVID-19 are included in general and administrative expense and primarily relate to legal fees for executing rent deferral or abatement agreements.

⁽²⁾ Dividends paid and undistributed earnings allocated, if any, to unvested restricted stockholders are deducted from FFO and AFFO for the computation of the per share amounts. The following amounts were deducted:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
FFO	$0.2 million	$0.2 million	$0.6 million	$0.5 million
AFFO	$0.2 million	$0.2 million	$0.6 million	$0.6 million

40

Adjusted Debt, Adjusted EBITDAre and Annualized Adjusted EBITDAre

	September 30,
(Dollars in thousands)	2022			2021
2019 Credit Facility	$	—		$	49,300
2022 Term Loans, net		791,791			—
Senior Unsecured Notes, net		2,721,534			2,717,693
Mortgages payable, net		5,130			5,687
Total debt, net		3,518,455			2,772,680
Unamortized debt discount, net		9,877			11,134
Unamortized deferred financing costs		26,627			20,962
Cash and cash equivalents		(109,829	)		(15,564	)
Adjusted Debt	$	3,445,130		$	2,789,212

	Three Months Ended September 30,
(Dollars in thousands)	2022			2021
Net income	$	76,640		$	40,878
Interest		30,956			25,078
Depreciation and amortization		74,600			63,061
Income tax expense		261			244
Gain on disposition of assets		(23,302	)		(453	)
Portfolio impairments		1,571			4,435
EBITDAre	$	160,726		$	133,243
Adjustments to revenue producing acquisitions and dispositions		2,657			1,820
Construction rent collected, not yet recognized in earnings (1)		193			—
Deal pursuit costs		470			361
Gain on debt extinguishment		—			(1	)
Costs related to COVID-19 (2)		—			46
Non-cash compensation expense		4,393			3,504
Adjusted EBITDAre	$	168,439		$	138,973
Adjustments related to straight-line rent (3)		(1,058	)		(233	)
Other adjustments for Annualized EBITDAre (4)		(1,120	)		(164	)
Annualized Adjusted EBITDAre	$	665,044		$	554,304
Adjusted Debt / Annualized Adjusted EBITDAre (5)		5.2	x		5.0	x

⁽¹⁾ Construction rent collected, not yet recognized in earnings was not included as an adjustment to EBITDAre during the three months ended September 30, 2021.

⁽²⁾ Costs related to COVID-19 are included in general and administrative expense and primarily relate to legal fees for executing rent deferral or abatement agreements.

⁽³⁾ Adjustment for the three months ended September 30, 2022 relates to current period net recoveries related to prior period straight-line rent deemed not probable of collection. Adjustment for the three months ended September 30, 2021 relates to prior period straight-line rent recognized in the current period.

⁽⁴⁾ Adjustment for the three months ended September 30, 2022 relates to current period recoveries related to prior period rent deemed not probable of collection, prior period rent and rent deemed not probable of collection, prior period property costs and certain other income where annualization would not be appropriate. For the same period in 2021, the adjustment is comprised of certain other property costs, general and administrative expenses and non-recurring revenue recognized in other income.

⁽⁵⁾ Adjusted Debt / Annualized Adjusted EBITDAre would be 4.9x if the 1.6 million shares under open forward sales agreements had been settled as of September 30, 2021.

41

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to financial market risks, including interest rate risk. Interest rates and other factors, such as occupancy, rental rates and our tenants’ financial condition, influence our performance more than inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. As described above, we generally enter into leases that provide for payments of rent with scheduled increases and, to a lesser extent, contingent rent based on a percentage of the tenant’s gross sales, to help mitigate the effect of inflation. Because the properties in our portfolio are generally leased to tenants under triple-net leases, our exposure to rising property operating costs due to inflation is mitigated.

Interest rates are highly sensitive to many factors, including governmental monetary policies and domestic and global economic and political conditions, which are beyond our control. Our operating results depend heavily on the difference between the revenue from our assets and the interest expense incurred on our borrowings. We may incur additional variable-rate debt in the future, including amounts that we may borrow under our 2019 Credit Facility. In addition, decreases in interest rates may lead to additional competition for the acquisition of real estate due to a reduction in desirable alternative income-producing investments, which may lead to a decrease in the yields on real estate we have targeted for acquisition. In such circumstances, if we are not able to offset the decrease in yields by obtaining lower interest costs on our borrowings, our results of operations will be adversely affected. Significant increases in interest rates may also have an adverse impact on our earnings if we are unable to acquire real estate with rental rates high enough to offset the increase in interest rates on our borrowings. In the event interest rates rise significantly or there is an economic downturn, defaults may increase and result in credit losses, which may adversely affect our liquidity and operating results.

As of September 30, 2022, our assets were primarily leased on a long-term, triple-net basis with contractual rent increases during the term of the lease. As of September 30, 2022, $2.8 billion of our indebtedness outstanding was fixed-rate, consisting of our Senior Unsecured Notes and mortgages payable, with a weighted average stated interest rate of 3.25%, excluding amortization of deferred financing costs and debt discounts/premiums. The remaining $800.0 million of our indebtedness was variable-rate borrowings outstanding under our 2022 Term Loans, which bear interest at 1-month adjusted SOFR rate plus an applicable margin of 0.850% per annum, resulting in a stated interest rate of 4.03% as of September 30, 2022. There were no borrowings outstanding under our 2019 Credit Facility as of September 30, 2022. In conjunction with the 2022 Term Loans, we entered into interest rate swaps to swap 1-month SOFR with a weighted average fixed rate of 2.55%. As such, if 1-month SOFR as of September 30, 2022 increased by 100 basis points, or 1.0%, there would be no impact to our future earnings and cash flows. However, there continues to be uncertainty in market and economic conditions, including the possibility of additional measures that could be taken by the Federal Reserve and other government agencies related to concerns over inflation risk, which could result in continued increases in market interest rates and, thus, increased interest expenses on any future borrowings under our 2019 Credit Facility.  

The estimated fair values of our Senior Unsecured Notes have been derived based on quoted prices in active markets, while the estimated fair values of the remaining debt instruments have been derived based on discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates and credit spreads. The debt instrument balances as of September 30, 2022 are as follows (in thousands):

	Carrying Value		Estimated Fair Value
2019 Credit Facility	$	—	$	—
2022 Term Loans, net (1)		791,791		831,032
Senior Unsecured Notes, net (1)		2,721,534		2,263,756
Mortgages payable, net (1)		5,130		4,790

⁽¹⁾ The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums.

42

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness as of September 30, 2022 of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that occurred during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

43

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

From time-to-time, we may be subject to certain claims and lawsuits in the ordinary course of business, the outcome of which cannot be determined at this time. We are not currently a party as plaintiff or defendant to any legal proceedings that we believe to be material or that individually or in the aggregate would be expected to have a material effect on our business, financial condition or results of operations if determined adversely to us.

Item 1A. Risk Factors.

There have been no material changes to the risk factors as disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

44

Item 6. Exhibits.

Exhibit No.	Description
3.1	Articles of Restatement of Spirit Realty Capital, Inc. filed as Exhibit 3.1 to the Company's Registration Statement on Form S-3 on November 8, 2013 and incorporated herein by reference.
3.2	Articles of Amendment of Spirit Realty Capital, Inc. filed as Exhibit 3.1 to the Company's Current Report on Form 8-K on May 13, 2014 and incorporated herein by reference.
3.3	Articles Supplementary of Spirit Realty Capital, Inc. filed as Exhibit 3.1 to the Company's Current Report on Form 8-K on March 3, 2017 and incorporated herein by reference.
3.4	Fifth Amended and Restated Bylaws of Spirit Realty Capital, Inc. filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K on August 15, 2017 and incorporated herein by reference.
3.5	Articles Supplementary designating Spirit Realty Capital, Inc.'s 6.000% Series A Cumulative Redeemable Preferred Stock filed as Exhibit 3.4 to the Company's Registration Statement on Form 8-A on October 2, 2017 and incorporated herein by reference.
3.6	Articles of Amendment of Spirit Realty Capital, Inc. filed as Exhibit 3.1 to the Company's Current Report on Form 8-K on April 29, 2019 and incorporated herein by reference.
3.7	Articles of Amendment of Spirit Realty Capital, Inc. filed as Exhibit 3.1 to the Company's Current Report on Form 8-K on November 18, 2021 and incorporated herein by reference.
10.1	Term Loan Agreement dated as of August 22, 2022 filed as Exhibit 10.1 to the Company's Current Report on Form 8-K on August 22, 2022 and incorporated herein by reference.
10.2	Guaranty dated as of August 22, 2022 filed as Exhibit 10.2 to the Company's Current Report on Form 8-K on August 22, 2022 and incorporated herein by reference.
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Spirit Realty Capital, Inc.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Spirit Realty Capital, Inc.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Spirit Realty Capital, Inc.
101.INS*	Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase
104.1*	Cover Page Interactive Data File - The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
*	Filed herewith.

45

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

SPIRIT REALTY CAPITAL, INC.
(Registrant)
By:	/s/ Prakash J. Parag
Name:	Prakash J. Parag
Title:	Senior Vice President and Chief Accounting Officer
	(Principal Accounting Officer)

Date: November 8, 2022

46

EX-31.1

Exhibit 31.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER

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

I, Jackson Hsieh, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Spirit Realty Capital, Inc.;

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

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

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

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

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

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

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

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

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

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

Date:	November 8, 2022	/s/ Jackson Hsieh
		Jackson Hsieh
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS OF PRINCIPAL FINANCIAL OFFICER

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

I, Michael Hughes, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Spirit Realty Capital, Inc.;

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

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

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

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

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

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

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

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

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

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

Date:	November 8, 2022	/s/ Michael Hughes
		Michael Hughes
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

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

(18 U.S.C 1350)

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

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and

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

Date:	November 8, 2022	/s/ Jackson Hsieh
		Jackson Hsieh
		President and Chief Executive Officer
		/s/ Michael Hughes
		Michael Hughes
		Executive Vice President and Chief Financial Officer

The foregoing certification is being furnished with the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2022 pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Nov. 04, 2022
Document Information [Line Items]
Entity Registrant Name	SPIRIT REALTY CAPITAL, INC.
Entity Central Index Key	0001308606
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		139,660,241
Entity File Number	001-36004
Entity Tax Identification Number	20-1676382
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	2727 North Harwood Street
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75201
City Area Code	972
Local Phone Number	476-1900
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Common Stock
Document Information [Line Items]
Trading Symbol	SRC
Title of 12(b) Security	Common stock, par value $0.05 per share
Security Exchange Name	NYSE
6.000% Series A Cumulative Redeemable Preferred Stock
Document Information [Line Items]
Trading Symbol	SRC-A
Title of 12(b) Security	6.000% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share
Security Exchange Name	NYSE

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Real estate assets held for investment:
Land and improvements	$ 2,734,123	$ 2,516,715
Buildings and improvements	5,713,209	4,962,203
Less: accumulated depreciation	(1,188,794)	(1,033,391)
Total real estate assets held for investment, net	7,258,538	6,445,527
Intangible lease assets, net	440,910	426,972
Real estate assets under direct financing leases, net	7,434	7,442
Real estate assets held for sale, net	24,344	8,264
Loans receivable, net	23,023	10,450
Total investments, net	7,754,249	6,898,655
Cash and cash equivalents	109,829	17,799
Deferred costs and other assets, net	251,832	188,816
Goodwill	225,600	225,600
Total assets	8,341,510	7,330,870
Liabilities:
Revolving credit facilities		288,400
Term loans	791,791
Senior Unsecured Notes, net	2,721,534	2,718,641
Mortgages payable, net	5,130	5,551
Total debt, net	3,518,455	3,012,592
Intangible lease liabilities, net	121,670	128,077
Accounts payable, accrued expenses and other liabilities	180,595	190,402
Total liabilities	3,820,720	3,331,071
Commitments and contingencies (see Note 6)
Stockholders’ equity:
Preferred stock and paid in capital, $0.01 par value, 20,000,000 shares authorized: 6,900,000 shares issued and outstanding at both September 30, 2022 and December 31, 2021	166,177	166,177
Common stock, $0.05 par value, 350,000,000 shares authorized: 139,661,826 and 127,699,235 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	6,983	6,385
Capital in excess of common stock par value	7,217,245	6,673,440
Accumulated deficit	(2,905,376)	(2,840,356)
Accumulated other comprehensive income (loss)	35,761	(5,847)
Total stockholders’ equity	4,520,790	3,999,799
Total liabilities and stockholders’ equity	$ 8,341,510	$ 7,330,870

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Stockholders’ equity:
Preferred stock, par value (in USD per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	6,900,000	6,900,000
Preferred stock, shares outstanding	6,900,000	6,900,000
Common stock, par value per share (in USD per share)	$ 0.05	$ 0.05
Common stock, shares authorized	350,000,000	350,000,000
Common stock, shares issued	139,661,826	127,699,235
Common stock, shares outstanding	139,661,826	127,699,235

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Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues:
Rental income	$ 180,296	$ 151,376	$ 520,930	$ 450,483
Interest income on loans receivable	521		1,362
Earned income from direct financing leases	131	131	393	394
Other operating income	1,956	1,061	3,550	1,458
Total revenues	182,904	152,568	526,235	452,335
Expenses:
General and administrative	14,313	13,103	42,408	39,599
Property costs (including reimbursable)	7,395	5,862	22,600	17,633
Deal pursuit costs	470	361	1,490	860
Interest	30,956	25,078	84,573	77,872
Depreciation and amortization	74,600	63,061	216,606	180,222
Impairments	1,571	4,435	11,096	18,965
Total expenses	129,305	111,900	378,773	335,151
Other income:
Gain (loss) on debt extinguishment		1	(172)	(29,186)
Gain on disposition of assets	23,302	453	63,107	39,796
Other income			5,679
Total other income	23,302	454	68,614	10,610
Income before income tax expense	76,901	41,122	216,076	127,794
Income tax expense	(261)	(244)	(640)	(461)
Net income	76,640	40,878	215,436	127,333
Dividends paid to preferred shareholders	(2,587)	(2,587)	(7,763)	(7,763)
Net income attributable to common stockholders	$ 74,053	$ 38,291	$ 207,673	$ 119,570
Net income per share attributable to common stockholders:
Basic (in USD per share)	$ 0.54	$ 0.32	$ 1.56	$ 1.02
Diluted (in USD per share)	$ 0.54	$ 0.32	$ 1.56	$ 1.02
Weighted average shares of common stock outstanding:
Basic (in shares)	136,314,369	119,775,871	132,835,210	116,503,634
Diluted (in shares)	136,314,369	120,302,158	132,965,297	116,870,429
Dividends declared per common share/per partnership unit issued (in USD per share)	$ 0.6630	$ 0.6380	$ 1.9390	$ 1.8880

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement Of Income And Comprehensive Income [Abstract]
Net income attributable to common stockholders	$ 74,053	$ 38,291	$ 207,673	$ 119,570
Other comprehensive income:
Net reclassification of amounts from AOCIL	40,204	702	41,608	2,106
Total comprehensive income	$ 114,257	$ 38,993	$ 249,281	$ 121,676

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Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Capital in Excess of Par Value	Accumulated Deficit	AOCIL
Beginning balance, value at Dec. 31, 2020	$ 3,601,120	$ 166,177	$ 5,741	$ 6,126,503	$ (2,688,647)	$ (8,654)
Preferred shares outstanding, beginning balance at Dec. 31, 2020		6,900,000
Common shares outstanding, beginning balance at Dec. 31, 2020			114,812,615
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(1,469)				(1,469)
Dividends declared on preferred stock	(2,588)				(2,588)
Net income attributable to common stockholders	(4,057)				(4,057)
Other comprehensive income	702					702
Dividends declared on common stock	(71,837)				(71,837)
Tax withholdings related to net stock settlements	(3,843)		$ (6)		(3,837)
Tax withholdings related to net stock settlements (in shares)			(98,413)
Stock-based compensation, net	2,971		$ 12	3,366	(407)
Stock-based compensation, net (in shares)			233,784
Ending balance, value at Mar. 31, 2021	3,525,056	$ 166,177	$ 5,747	6,129,869	(2,768,785)	(7,952)
Preferred shares outstanding, ending balance at Mar. 31, 2021		6,900,000
Common shares outstanding, ending balance at Mar. 31, 2021			114,947,986
Beginning balance, value at Dec. 31, 2020	3,601,120	$ 166,177	$ 5,741	6,126,503	(2,688,647)	(8,654)
Preferred shares outstanding, beginning balance at Dec. 31, 2020		6,900,000
Common shares outstanding, beginning balance at Dec. 31, 2020			114,812,615
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	127,333
Net income attributable to common stockholders	119,570
Other comprehensive income	2,106
Ending balance, value at Sep. 30, 2021	3,838,630	$ 166,177	$ 6,166	6,472,964	(2,800,129)	(6,548)
Preferred shares outstanding, ending balance at Sep. 30, 2021		6,900,000
Common shares outstanding, ending balance at Sep. 30, 2021			123,315,721
Beginning balance, value at Mar. 31, 2021	3,525,056	$ 166,177	$ 5,747	6,129,869	(2,768,785)	(7,952)
Preferred shares outstanding, beginning balance at Mar. 31, 2021		6,900,000
Common shares outstanding, beginning balance at Mar. 31, 2021			114,947,986
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	87,924				87,924
Dividends declared on preferred stock	(2,588)				(2,588)
Net income attributable to common stockholders	85,336				85,336
Other comprehensive income	702					702
Dividends declared on common stock	(74,436)				(74,436)
Tax withholdings related to net stock settlements	(549)		$ (1)		(548)
Tax withholdings related to net stock settlements (in shares)			(12,597)
Issuance of shares of common stock, net	145,461		$ 206	145,255
Issuance of shares of common stock, net (in shares)			4,116,932
Stock-based compensation, net	3,254		$ 3	3,611	(360)
Stock-based compensation, net (in shares)			51,591
Ending balance, value at Jun. 30, 2021	3,684,824	$ 166,177	$ 5,955	6,278,735	(2,758,793)	(7,250)
Preferred shares outstanding, ending balance at Jun. 30, 2021		6,900,000
Common shares outstanding, ending balance at Jun. 30, 2021			119,103,912
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	40,878				40,878
Dividends declared on preferred stock	(2,587)				(2,587)
Net income attributable to common stockholders	38,291				38,291
Other comprehensive income	702					702
Dividends declared on common stock	(78,674)				(78,674)
Issuance of shares of common stock, net	190,936		$ 211	190,725
Issuance of shares of common stock, net (in shares)			4,212,644
Stock-based compensation, net	2,551			3,504	(953)
Stock-based compensation, net (in shares)			(835)
Ending balance, value at Sep. 30, 2021	3,838,630	$ 166,177	$ 6,166	6,472,964	(2,800,129)	(6,548)
Preferred shares outstanding, ending balance at Sep. 30, 2021		6,900,000
Common shares outstanding, ending balance at Sep. 30, 2021			123,315,721
Beginning balance, value at Dec. 31, 2021	$ 3,999,799	$ 166,177	$ 6,385	6,673,440	(2,840,356)	(5,847)
Preferred shares outstanding, beginning balance at Dec. 31, 2021	6,900,000	6,900,000
Common shares outstanding, beginning balance at Dec. 31, 2021	127,699,235		127,699,235
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 56,056				56,056
Dividends declared on preferred stock	(2,588)				(2,588)
Net income attributable to common stockholders	53,468				53,468
Other comprehensive income	702					702
Dividends declared on common stock	(85,688)				(85,688)
Tax withholdings related to net stock settlements	(6,410)		$ (2)		(6,408)
Tax withholdings related to net stock settlements (in shares)			(39,028)
Issuance of shares of common stock, net	299,768		$ 328	299,440
Issuance of shares of common stock, net (in shares)			6,559,406
Stock-based compensation, net	3,529		$ 4	4,021	(496)
Stock-based compensation, net (in shares)			86,888
Ending balance, value at Mar. 31, 2022	4,265,168	$ 166,177	$ 6,715	6,976,901	(2,879,480)	(5,145)
Preferred shares outstanding, ending balance at Mar. 31, 2022		6,900,000
Common shares outstanding, ending balance at Mar. 31, 2022			134,306,501
Beginning balance, value at Dec. 31, 2021	$ 3,999,799	$ 166,177	$ 6,385	6,673,440	(2,840,356)	(5,847)
Preferred shares outstanding, beginning balance at Dec. 31, 2021	6,900,000	6,900,000
Common shares outstanding, beginning balance at Dec. 31, 2021	127,699,235		127,699,235
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 215,436
Net income attributable to common stockholders	207,673
Other comprehensive income	41,608
Tax withholdings related to net stock settlements	(6,400)
Ending balance, value at Sep. 30, 2022	$ 4,520,790	$ 166,177	$ 6,983	7,217,245	(2,905,376)	35,761
Preferred shares outstanding, ending balance at Sep. 30, 2022	6,900,000	6,900,000
Common shares outstanding, ending balance at Sep. 30, 2022	139,661,826		139,661,826
Beginning balance, value at Mar. 31, 2022	$ 4,265,168	$ 166,177	$ 6,715	6,976,901	(2,879,480)	(5,145)
Preferred shares outstanding, beginning balance at Mar. 31, 2022		6,900,000
Common shares outstanding, beginning balance at Mar. 31, 2022			134,306,501
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	82,740				82,740
Dividends declared on preferred stock	(2,588)				(2,588)
Net income attributable to common stockholders	80,152				80,152
Other comprehensive income	702					702
Dividends declared on common stock	(86,987)				(86,987)
Tax withholdings related to net stock settlements	(17)				(17)
Tax withholdings related to net stock settlements (in shares)			(403)
Issuance of shares of common stock, net	89,964		$ 100	89,864
Issuance of shares of common stock, net (in shares)			1,999,996
Stock-based compensation, net	3,889		$ 2	4,385	(498)
Stock-based compensation, net (in shares)			35,591
Ending balance, value at Jun. 30, 2022	4,352,871	$ 166,177	$ 6,817	7,071,150	(2,886,830)	(4,443)
Preferred shares outstanding, ending balance at Jun. 30, 2022		6,900,000
Common shares outstanding, ending balance at Jun. 30, 2022			136,341,685
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	76,640				76,640
Dividends declared on preferred stock	(2,587)				(2,587)
Net income attributable to common stockholders	74,053				74,053
Other comprehensive income	40,204					40,204
Dividends declared on common stock	(92,595)				(92,595)
Issuance of shares of common stock, net	141,868		$ 166	141,702
Issuance of shares of common stock, net (in shares)			3,320,559
Stock-based compensation, net	4,389			4,393	(4)
Stock-based compensation, net (in shares)			(418)
Ending balance, value at Sep. 30, 2022	$ 4,520,790	$ 166,177	$ 6,983	$ 7,217,245	$ (2,905,376)	$ 35,761
Preferred shares outstanding, ending balance at Sep. 30, 2022	6,900,000	6,900,000
Common shares outstanding, ending balance at Sep. 30, 2022	139,661,826		139,661,826

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Operating activities
Net income (loss)	$ 76,640	$ 40,878	$ 215,436	$ 127,333
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	74,600	63,061	216,606	180,222
Impairments	1,571	4,435	11,096	18,965
Amortization of deferred financing costs	1,475	910	3,637	3,026
Amortization of debt discounts	318	307	947	1,830
Amortization of deferred losses on interest rate swaps	702	702	2,106	2,106
Stock-based compensation expense			12,805	10,496
Loss on debt extinguishment		(1)	172	29,186
Gain on dispositions of real estate and other assets	(23,302)	(453)	(63,107)	(39,796)
Non-cash revenue			(30,165)	(38,190)
Other			10	12
Changes in operating assets and liabilities:
Deferred costs and other assets, net			(1,683)	3,508
Accounts payable, accrued expenses and other liabilities			(28,975)	(23,315)
Net cash provided by operating activities			338,885	275,383
Investing activities
Acquisitions of real estate			(1,118,290)	(769,039)
Capitalized real estate expenditures			(55,318)	(6,748)
Investments in loans receivable			(12,700)
Proceeds from dispositions of real estate and other assets, net			183,767	94,449
Net cash used in investing activities			(1,002,541)	(681,338)
Financing activities
Borrowings under revolving credit facilities			1,267,800	764,200
Repayments under revolving credit facilities			(1,556,200)	(714,900)
Repayments under mortgages payable			(391)	(208,765)
Borrowings under term loans			800,000
Repayments under term loans				(178,000)
Repayments under Convertible Notes				(190,426)
Borrowings under Senior Unsecured Notes				794,842
Debt extinguishment costs				(26,685)
Deferred financing costs			(17,028)	(7,071)
Proceeds from issuance of common stock, net of offering costs			531,565	336,602
Repurchase of shares of common stock, including tax withholdings related to net stock settlements			(6,427)	(4,392)
Common stock dividends paid			(255,870)	(219,421)
Preferred stock dividends paid			(7,763)	(7,763)
Net cash provided by financing activities			755,686	338,221
Net increase (decrease) in cash, cash equivalents and restricted cash			92,030	(67,734)
Cash, cash equivalents and restricted cash, beginning of period			17,799	83,298
Cash, cash equivalents and restricted cash, end of period	109,829	15,564	109,829	15,564
Cash paid for interest, net of interest capitalized			99,575	89,098
Interest capitalized			741
Cash paid for income taxes			676	581
Supplemental Disclosures of Non-Cash Activities:
Dividends declared and unpaid	92,595	78,675	92,595	78,675
Accrued market-based award dividend rights			998	1,674
Accrued capitalized costs	$ 18,103	$ 6,739	18,103	$ 6,739
Derivative changes in fair value			$ 39,502

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Organization

9 Months Ended

Sep. 30, 2022

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization

NOTE 1. ORGANIZATION

Organization and Operations

Spirit Realty Capital, Inc. (the "Corporation" or "Spirit" or, with its consolidated subsidiaries, the "Company") operates as a self-administered and self-managed REIT that seeks to generate sustainable and attractive returns for stockholders by primarily investing in and managing a portfolio of single-tenant, operationally essential real estate throughout the United States that is generally leased on a long-term, triple-net basis to tenants operating retail, industrial and other property types. Single-tenant, operationally essential real estate refers to free-standing, commercial real estate facilities where tenants conduct activities that are essential to the generation of their sales and profits.

The Company’s operations are generally carried out through Spirit Realty, L.P. (the "Operating Partnership") and its subsidiaries. Spirit General OP Holdings, LLC, one of the Corporation’s wholly-owned subsidiaries, is the sole general partner and owns approximately 1% of the Operating Partnership. The Corporation and a wholly-owned subsidiary (Spirit Notes Partner, LLC) are the only limited partners and, together, own the remaining 99% of the Operating Partnership.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2. SUMMARY OF SIGNIFICANT ACOUNTING POLICIES

Basis of Accounting and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC. In the opinion of management, the consolidated financial statements include the normal, recurring adjustments necessary for fair statement of the information required to be set forth therein. The results for interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements pursuant to SEC rules and regulations and, accordingly, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the year ended December 31, 2021.

The consolidated financial statements of the Company include the accounts of the Corporation and its wholly-owned subsidiaries, including the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation.

These consolidated financial statements include certain special purpose entities that were formed to acquire and hold real estate encumbered by indebtedness (see Note 4). Each special purpose entity is a separate legal entity and is the sole owner of its assets and responsible for its liabilities. The assets of these special purpose entities are not available to pay, or otherwise satisfy obligations to, the creditors of any affiliate or owner of another entity unless the special purpose entities have expressly agreed and are permitted to do so under their governing documents. As of September 30, 2022 and December 31, 2021, net assets totaling $11.8 million and $12.3 million, respectively, were held, and net liabilities totaling $5.1 million and $5.5 million, respectively, were owed by these encumbered special purpose entities and are included in the accompanying consolidated balance sheets.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates.

Segment Reporting

The Company views its operations as one segment, which consists of net leasing operations. The Company has no other reportable segments.

Revenue Recognition

Rental Income: Cash and Straight-line Rent

The Company primarily leases real estate to its tenants under long-term, triple-net leases that are classified as operating leases. To evaluate lease classification, the Company assesses the terms and conditions of the lease to determine the appropriate lease term. Options to extend, terminate or purchase are not included in the evaluation for lease classification or for recognition of rental income unless the Company is reasonably certain the tenant will exercise the option. Evaluation of lease classification also requires an estimate of the residual value of the real estate at the end of the lease term. For acquisitions, the Company uses the tangible value of the property at the date of acquisition. For lease modifications, the Company generally uses sales comparables or a direct capitalization approach to determine residual value. 

The Company elected to account for lease concessions related to the COVID-19 pandemic consistent with ASC 842 as though enforceable rights and obligations for those concessions existed (regardless of whether they explicitly exist in the lease). As such, rent deferrals are recorded as an increase to rent receivables and recognized as income during the deferral period. For the three and nine months ended September 30, 2022, zero and $0.4 million, respectively, of deferrals were recognized in rental income, compared to $1.0 million and $12.8 million for the three and nine months ended September 30, 2021, respectively. Lease concessions other than rent deferrals are evaluated to determine if a substantive change to the consideration in the original lease contract has occurred and should be accounted for as a lease modification.       

The Company’s leases generally provide for rent escalations throughout the term of the lease. For leases with fixed rent escalators, rental income is recognized on a straight-line basis to produce a constant periodic rent over the term of the lease. Accordingly, the difference between rental income recognized on a straight-line basis and billed rents is recorded as rent receivables, which the Company will receive only if the tenant makes all rent payments required through the initial term of their lease. For leases with variable rent escalators, rental income typically increases at a multiple of any increase in the CPI over a specified period and may adjust annually or over multiple-year periods. Because of the volatility and uncertainty regarding future changes in the CPI and the Company’s inability to determine the extent to which any specific future change in the CPI is probable, increases from variable rent escalators are recognized when the changes in the rental rates have occurred.

Some of the Company’s leases also provide for contingent rent based on a percentage of the tenant’s gross sales, which is recognized as rental income when the change in the factor on which the contingent lease payment is based has occurred.

Rental income is subject to an evaluation for collectability, which includes management’s estimates of amounts that will not be realized based on an assessment of the risks inherent in the portfolio, considering historical experience, as well as the tenant's payment history and financial condition. The Company does not recognize rental income for amounts that are not probable of collection. For lease concessions granted in conjunction with the COVID-19 pandemic, management reviewed all amounts recognized on a tenant-by-tenant basis for collectability.

Rental Income: Tenant Reimbursement Revenue

Under a triple-net lease, the tenant is typically responsible for all improvements and is contractually obligated to pay all property operating expenses, such as real estate taxes, insurance premiums and repair and maintenance costs. Certain leases contain additional amounts recoverable from tenants for common area maintenance and certain other expenses, which are non-lease components. The Company elected to combine all its non-lease components, which were determined to have the same pattern of transfer as the related operating lease component, into a single combined lease component. Tenant reimbursement revenue is variable and is recognized in the period in which the related expenses are incurred, with the related expenses included in property costs (including reimbursable) on the Company’s consolidated statements of operations. Tenant reimbursements are recorded on a gross basis in instances when our tenants reimburse us for property costs which we incur. Tenant receivables are reduced for amounts that are not probable of collection.

Rental Income: Intangible Amortization

Initial direct costs associated with the origination of a lease are deferred and amortized as an adjustment to rental revenue. Above- and below-market lease intangibles are amortized as a decrease and increase, respectively, to rental revenue. Amortization of in-place lease intangibles is included in depreciation and amortization expense. All lease intangibles are amortized on a straight-line basis over the term of the lease, which includes any renewal options the Company is reasonably certain the tenant will exercise. If the Company subsequently determines it is reasonably certain that the tenant will not exercise the renewal options, the unamortized portion of any related lease intangible is accelerated over the remaining initial term of the lease. If the Company believes a lease intangible balance is no longer recoverable, the unamortized portion is immediately recognized in impairments in the Company’s consolidated statements of operations.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money market funds of major financial institutions with fund investments consisting of highly-rated money market instruments and other short-term investments. Restricted cash is classified within deferred costs and other assets, net in the accompanying consolidated balance sheets. There was no restricted cash held as of either September 30, 2022 or December 31, 2021.

Tenant Receivables

The Company reviews its rent and other tenant receivables for collectability on a regular basis, considering changes in factors such as the tenant’s payment history, the tenant’s financial condition, industry conditions in which the tenant operates and economic conditions in the geographic area in which the tenant operates. If a receivable is not probable of collection, a direct write-off of the receivable will be made. The Company had accounts receivable balances of $17.9 million and $21.7 million at September 30, 2022 and December 31, 2021, respectively, after the impact of $3.3 million and $3.9 million of receivables, respectively, that were deemed not probable of collection. These receivables are recorded within deferred cost and other assets, net in the accompanying consolidated balance sheets.

For receivable balances related to the straight-line method of recognizing rental income, the collectability is generally assessed in conjunction with the evaluation of rental income as described above. The Company had straight-line rent receivables of $161.8 million and $137.6 million at September 30, 2022 and December 31, 2021, respectively, after the impact of $0.3 million and $2.6 million of receivables, respectively, that were deemed not probable of collection. These receivables are recorded within deferred costs and other assets, net in the accompanying consolidated balance sheets.

Goodwill

Goodwill arises from business combinations as the excess of the cost of an acquired entity over the net fair value amounts that were assigned to the identifiable assets acquired and the liabilities assumed. Goodwill is tested for impairment at the reporting unit level annually or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. The Company performs a qualitative assessment to determine if the quantitative impairment test is necessary. The quantitative impairment test, if deemed necessary, compares the fair value of each reporting unit with its carrying amount and impairment is recognized as the amount by which the carrying amount exceeds the reporting unit’s fair value. No impairment was recorded for the periods presented.

Income Taxes

The Corporation has elected to be taxed as a REIT under the Code. As a REIT, the Corporation generally will not be subject to federal income tax provided it continues to satisfy certain tests concerning the Company’s sources of income, the nature of the Company’s assets, the amounts distributed to the Corporation’s stockholders and the ownership of Corporation stock. Management believes the Corporation has qualified and will continue to qualify as a REIT. Even if the Corporation qualifies for taxation as a REIT, it may be subject to state and local income and franchise taxes, and to federal income tax and excise tax on its undistributed income. Taxable income earned by any of the Company's taxable REIT subsidiaries, including from non-REIT activities, is subject to federal, state and local taxes. Taxable income from non-REIT activities managed through any of the Company's taxable REIT subsidiaries is subject to federal, state and local taxes, which are not material.

Earnings Per Share

The Company’s unvested restricted common stock, which contains non-forfeitable rights to receive dividends, are considered participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on their respective weighted average shares outstanding during the period.

Under the terms of the Amended Incentive Award Plan, restricted stock awards are not allocated losses, including undistributed losses as a result of dividends declared exceeding net income. The Company uses income (loss) from continuing operations to determine whether potential common shares are dilutive or anti-dilutive and undistributed net income (loss) to determine whether undistributed earnings are allocable to participating securities.

Forward Equity Sale Agreements

The Corporation may enter into forward sale agreements for the sale and issuance of shares of its common stock, either through an underwritten public offering or through the 2021 ATM Program. These agreements may be physically settled in stock, settled in cash, or net share settled at the Company’s election. The Company evaluated the forward sale agreements and concluded they meet the conditions to be classified within stockholders’ equity. Prior to settlement, a forward sale agreement will be reflected in the diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of the Corporation’s common stock used in diluted earnings per share is deemed to be increased by the excess, if any, of the number of shares of the Corporation’s common stock that would be issued upon full physical settlement of such forward sale agreement over the number of shares of the Corporation’s common stock that could be purchased by the Company in the market (based on the average market price during the period) using the proceeds receivable upon full physical settlement (based on the adjusted forward sale price at the end of the reporting period). Consequently, prior to settlement of a forward sale agreement, there will be no dilutive effect on the Company’s earnings per share except during periods when the average market price of the Corporation’s common stock is above the adjusted forward sale price. However, upon settlement of a forward sales agreement, if the Corporation elects to physically settle or net share settle such forward sale agreement, delivery of the Corporation’s shares will result in dilution to the Company’s earnings per share.

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Investments

9 Months Ended

Sep. 30, 2022

Real Estate [Abstract]

Investments

NOTE 3. INVESTMENTS

Owned Properties

As of September 30, 2022, the Company's gross investment in owned real estate properties totaled approximately $9.0 billion. The gross investment is comprised of land, buildings, lease intangible assets and lease intangible liabilities, as adjusted for any impairment, real estate assets held under direct financing leases and real estate assets held for sale. The portfolio is geographically dispersed throughout 49 states with Texas, at 14.3%, as the only state with a gross investment greater than 10.0% of the total gross investment of the Company's entire portfolio. During the nine months ended September 30, 2022, the Company had the following real estate activity (dollars in thousands):

	Number of Properties									Dollar Amount of Investments
	Held in Use			Held for Sale			Total			Held in Use			Held for Sale			Total
Gross balance, December 31, 2021		2,000			3			2,003		$	7,934,823		$	8,362		$	7,943,185
Acquisitions/improvements (1)		148			—			148			1,190,726			—			1,190,726
Dispositions of real estate (2) (3)		(22	)		(11	)		(33	)		(115,798	)		(17,471	)		(133,269	)
Transfers to Held for Sale		(23	)		23			—			(40,194	)		40,194			—
Impairments (4)		—			—			—			(10,969	)		—			(10,969	)
Reset of gross balances (5)		—			—			—			(16,224	)		—			(16,224	)
Gross balance, September 30, 2022		2,103			15			2,118			8,942,364			31,085			8,973,449
Accumulated depreciation and amortization											(1,357,152	)		(6,741	)		(1,363,893	)
Net balance, September 30, 2022 (6)										$	7,585,212		$	24,344		$	7,609,556

⁽¹⁾ Includes investments of $56.9 million in revenue producing capitalized expenditures, as well as $11.9 million of non-revenue producing capitalized expenditures during the nine months ended September 30, 2022.

⁽²⁾ For the nine months ended September 30, 2022, the net gains on disposal of properties held in use and held for sale were $60.3 million and $2.8 million, respectively.  

⁽³⁾ During the nine months ended September 30, 2022, the Company sold eight properties pursuant to a 1031 Exchange for $88.1 million. As of September 30, 2022, all the proceeds had been used to fund acquisitions.

⁽⁴⁾ Impairments on owned real estate is comprised of real estate and intangible asset impairment. For the nine months ended September 30, 2022, all of the impairments recorded were on properties held in use.

⁽⁵⁾ Represents write-off of gross investment balances against the related accumulated depreciation and amortization balances as a result of basis reset due to impairment or intangibles which have been fully amortized.

⁽⁶⁾ Reconciliation of total owned investments to the accompanying consolidated balance sheet at September 30, 2022 is as follows:

Real estate assets held for investment, net	$	7,258,538
Intangible lease assets, net		440,910
Real estate assets under direct financing leases, net		7,434
Real estate assets held for sale, net		24,344
Intangible lease liabilities, net		(121,670	)
Net balance	$	7,609,556

Operating Leases

As of September 30, 2022, December 31, 2021 and September 30, 2021, the Company held 2,113; 1,998; and 1,909 properties under operating leases, respectively. The following table summarizes the components of rental income recognized on these operating leases in the accompanying consolidated statements of operations (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Base Cash Rent (1)	$	162,467	$	137,234	$	471,052	$	400,215
Variable cash rent (including reimbursables)		6,479		4,753		19,713		12,078
Straight-line rent, net of uncollectible reserve (2)		10,875		8,840		28,465		35,941
Amortization of above- and below- market lease intangibles, net (3)		475		549		1,700		2,249
Total rental income	$	180,296	$	151,376	$	520,930	$	450,483

⁽¹⁾ Includes net impact of amounts (reserved)/recovered of $(0.6) million and $(0.5) million for the three and nine months ended September 30, 2022, respectively, and $(0.1) million and $5.6 million for the three and nine months ended September 30, 2021, respectively.

⁽²⁾ Includes net impact of amounts recovered/(reserved) of $1.2 million and $1.1 million for the three and nine months ended September 30, 2022, respectively, and $(0.1) million and $11.0 million for the three and nine months ended September 30, 2021, respectively.

⁽³⁾ Excludes amortization of in-place leases of $11.3 million and $32.6 million for the three and nine months ended September 30, 2022, respectively, and $9.8 million and $28.6 million for the three and nine months ended September 30, 2021, respectively, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations.

Scheduled minimum future rent to be received under the remaining non-cancellable term of these operating leases (including contractual fixed rent increases occurring on or after October 1, 2022) at September 30, 2022 are as follows (in thousands):

	September 30, 2022
Remainder of 2022	$	167,283
2023		664,151
2024		649,973
2025		638,168
2026		609,487
Thereafter		4,885,095
Total future minimum rentals	$	7,614,157

Because lease renewal periods are exercisable at the lessees' options, the preceding table presents future minimum lease payments due during the initial lease term only. In addition, the future minimum rentals do not include any contingent rents based on a percentage of the lessees' gross sales or lease escalations based on future changes in the CPI.

The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):

	September 30, 2022			December 31, 2021
In-place leases	$	572,407		$	536,344
Above-market leases		101,195			100,837
Less: accumulated amortization		(232,692	)		(210,209	)
Intangible lease assets, net	$	440,910		$	426,972
Below-market leases	$	186,006		$	188,718
Less: accumulated amortization		(64,336	)		(60,641	)
Intangible lease liabilities, net	$	121,670		$	128,077

Direct Financing Leases

As of September 30, 2022, the Company held one property under a direct financing lease, which was held in use. As of September 30, 2022, this property had $2.6 million in scheduled minimum future payments to be received under its remaining non-cancellable lease term. As of September 30, 2022, the Company had a reserve of $0.1 million against the investment balance of $7.5 million, which was initially recorded in 2020 as a result of the initial term of the direct financing lease extending until 2027.     

Loans Receivable

During 2022, the Company issued a fixed-rate, construction loan for $12.7 million. The Company evaluated the collectability of the amounts receivable under the loan and recorded an allowance for loan losses of $0.1 million for the nine months ended September 30, 2022. As of September 30, 2022, the Company held two fixed rate loans receivable with total outstanding principal of $23.7 million and a total allowance for credit losses of $0.7 million.

Impairments

The following table summarizes total impairments recognized in the accompanying consolidated statements of operations (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022		2021
Real estate asset impairment	$	1,632		$	4,092	$	10,535	$	17,875
Intangible net (liability)/asset impairment		(61	)		343		434		1,090
Allowance for credit losses on loans receivable		—			—		127		—
Total impairment loss	$	1,571		$	4,435	$	11,096	$	18,965

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Debt

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt

NOTE 4. DEBT

The Company's debt is summarized below (dollars in thousands):

	Weighted Average Effective Interest Rates (1)	Weighted Average Stated Interest Rates (2)		Weighted Average Remaining Years to Maturity (3)		September 30, 2022			December 31, 2021
Debt:
Revolving credit facilities	2.53%		—		3.5	$	—		$	288,400
Term loans	4.09%	3.73%			4.1		800,000			—
Senior Unsecured Notes	3.42%	3.25%			6.7		2,750,000			2,750,000
Mortgages payable	4.87%	5.82%			8.2		4,959			5,350
Total debt	3.31%	3.36%			6.1		3,554,959			3,043,750
Debt discount, net							(9,877	)		(10,824	)
Deferred financing costs, net (4)							(26,627	)		(20,334	)
Total debt, net						$	3,518,455		$	3,012,592

⁽¹⁾ Includes amortization of debt discount/premium, amortization of deferred financing costs, facility fees, non-utilization fees and impact of cash flow hedges, where applicable, calculated for the nine months ended September 30, 2022 based on the average principal balance outstanding during the period.

⁽²⁾ Represents the weighted average stated interest rate based on the outstanding principal balance as of September 30, 2022, including the impact of cash flow hedges on term loans. The weighted average stated interest rate for the term loans excluding the impact of cash flow hedges was 4.03% as of September 30, 2022.

⁽³⁾ Represents the weighted average remaining years to maturity based on the outstanding principal balance as of September 30, 2022.

⁽⁴⁾ Excludes deferred financing costs for the revolving credit facilities.

Deferred financing costs and offering discount/premium incurred in connection with entering into debt agreements are amortized to interest expense over the initial term of the respective agreement. Both deferred financing costs and offering discount/premium are recorded net against the principal debt balance on the consolidated balance sheets, except for deferred costs related to revolving credit facilities, which are recorded in deferred costs and other assets, net.

Revolving Credit Facilities

On January 14, 2019, the Operating Partnership entered into the 2019 Revolving Credit and Term Loan Agreement, which included the 2019 Credit Facility with a borrowing capacity of $800.0 million. On March 30, 2022, the Operating Partnership amended and restated the 2019 Revolving Credit and Term Loan Agreement, increasing the borrowing capacity of the 2019 Credit Facility to $1.2 billion. The borrowing capacity can be further increased by $500.0 million through exercise of an accordion feature, subject to satisfying certain requirements. The 2019 Credit Facility has a maturity date of March 31, 2026 and includes two six-month extensions that can be exercised at the Company’s option. Borrowings may be repaid, in whole or in part, at any time, without premium or penalty, but subject to applicable breakage fees, if any.

As of September 30, 2022, outstanding loans under the 2019 Credit Facility bore interest at a 1-month adjusted SOFR rate plus an applicable margin of 0.775% per annum and the aggregate revolving commitments incurred a facility fee of 0.150% per annum, in each case, based on the Operating Partnership’s credit rating and leverage ratio (as defined in the agreement). Prior to March 30, 2022, outstanding loans under the 2019 Credit Facility bore interest at 1-month LIBOR plus an applicable margin of 0.90% per annum and the aggregate revolving commitments incurred a facility fee of 0.20% per annum.

In connection with the amendment and restatement of the 2019 Credit Facility, the Company wrote off $0.2 million in deferred financing costs and incurred deferred financing costs of $8.6 million. The unamortized deferred financing costs were $8.4 million as of September 30, 2022, compared to $1.4 million as of December 31, 2021.

As of September 30, 2022, the full $1.2 billion of borrowing capacity was available under the 2019 Credit Facility and there were no outstanding letters of credit. The Operating Partnership's ability to borrow under the 2019 Credit Facility is subject to ongoing compliance with a number of customary financial and other affirmative and negative covenants, all of which the Company and the Operating Partnership were in compliance with as of September 30, 2022.

Term Loans

On April 2, 2020, the Operating Partnership entered into the 2020 Term Loan Agreement. On January 4, 2021, the remaining $178.0 million of 2020 Term Loans were fully repaid and the related unamortized deferred financing costs were written-off.

On August 22, 2022, the Operating Partnership entered into the 2022 Term Loan Agreement, which provides for borrowings in an aggregate amount of $800.0 million comprised of a $300.0 million tranche with a maturity date of August 22, 2025 and a $500.0 million tranche with a maturity date of August 20, 2027. The Term Loan Agreement also includes an accordion feature to increase the available term loans by $200.0 million in aggregate, subject to satisfying certain requirements. As of September 30, 2022, the 2022 Term Loans bore interest at a 1-month adjusted SOFR rate plus an applicable margin of 0.850% per annum, based on the Operating Partnership’s credit rating. In conjunction with entering into the 2022 Term Loans, the Company entered into interest rate swaps as a cash flow hedge. See Note 7 for further detail.

The Company incurred $8.4 million in deferred financing costs in connection with entering into the 2022 Term Loan Agreement, and the unamortized deferred financing costs were $8.2 million as of September 30, 2022. In connection with the issuance of the 2022 Term Loan Agreement, the Company and Operating Partnership are subject to ongoing compliance with a number of customary financial and other affirmative and negative covenants, all of which the Company and the Operating Partnership were in compliance with as of September 30, 2022.

Senior Unsecured Notes       

The Senior Unsecured Notes were issued by the Operating Partnership and are guaranteed by the Company. The following is a summary of the Senior Unsecured Notes outstanding (dollars in thousands):

	Maturity Date	Interest Payment Dates	Stated Interest Rate	September 30, 2022		December 31, 2021
2026 Senior Notes	September 15, 2026	March 15 and September 15	4.45%	$	300,000	$	300,000
2027 Senior Notes	January 15, 2027	January 15 and July 15	3.20%		300,000		300,000
2028 Senior Notes	March 15, 2028	March 15 and September 15	2.10%		450,000		450,000
2029 Senior Notes	July 15, 2029	January 15 and July 15	4.00%		400,000		400,000
2030 Senior Notes	January 15, 2030	January 15 and July 15	3.40%		500,000		500,000
2031 Senior Notes	February 15, 2031	February 15 and August 15	3.20%		450,000		450,000
2032 Senior Notes	February 15, 2032	February 15 and August 15	2.70%		350,000		350,000
Total Senior Unsecured Notes			3.25%	$	2,750,000	$	2,750,000

On March 3, 2021, the Operating Partnership issued $800.0 million aggregate principal amount of Senior Unsecured Notes, comprised of the 2028 Senior Notes and 2032 Senior Notes, resulting in net proceeds of $787.7 million. In connection with the March 2021 offering, the Operating Partnership incurred $7.1 million in deferred financing costs and an offering discount of $5.2 million.

The Senior Unsecured Notes are redeemable in whole at any time or in part from time to time, at the Operating Partnership’s option, at a redemption price equal to the sum of 100% of the principal amount of the respective Senior Unsecured Notes to be redeemed plus accrued and unpaid interest and liquidated damages, if any, up to, but not including, the redemption date; and a make-whole premium. If any of the Senior Unsecured Notes are redeemed three months or less (or two months or less in the case of the 2027 Senior Notes and 2028 Senior Notes) prior to their respective maturity dates, the redemption price will not include a make-whole premium.  

As of September 30, 2022 and December 31, 2021, the unamortized deferred financing costs were $18.4 million and $20.3 million, respectively, and the unamortized discount was $10.0 million and $11.0 million, respectively. In connection with the issuance of the Senior Unsecured Notes, the Company and Operating Partnership are subject to ongoing compliance with a number of customary financial and other affirmative and negative covenants, all of which the Company and the Operating Partnership were in compliance with as of September 30, 2022.

Mortgages Payable

Indirect wholly-owned special purpose entity subsidiaries of the Company were borrowers under five fixed-rate non-recourse loans, which were securitized into CMBS and secured by the borrowers’ respective leased properties and related assets. In connection with the issuance of the 2028 and 2032 Senior Unsecured Notes, the Company repaid three of these loans in March 2021 and, as of September 30, 2022, had two non-defaulted loans with stated interest rates of 5.80% and 6.00%, respectively. Each loan was secured by one property. There were no unamortized deferred financing costs as of either September 30, 2022 and December 31, 2021, and the unamortized net premium as of both September 30, 2022 and December 31, 2021 was $0.2 million.

Convertible Notes

In May 2014, the Company issued $345.0 million aggregate principal amount of 3.75% convertible notes. During the year ended December 31, 2020, the Company repurchased $154.6 million of the 2021 Convertible Notes in cash. The remaining 2021 Convertible Notes matured on May 15, 2021 at which time they were settled in cash and the remaining discount and deferred financing costs were fully amortized.

Debt Extinguishment

During the nine months ended September 30, 2022, the Company recognized a loss on debt extinguishment of $0.2 million as a result of the amendment and restatement of the 2019 Revolving Credit and Term Loan Agreement.

During the nine months ended September 30, 2021, the Company extinguished the following debt:

• $178.0 million of indebtedness outstanding under the 2020 Term Loans, resulting in a loss on debt extinguishment of $0.7 million,

• $207.4 million aggregate principal amount of CMBS indebtedness on three loans secured by 86 properties, resulting in a loss on debt extinguishment of $28.5 million, and

• $190.4 million of Convertible Notes upon their maturity.

Debt Maturities

As of September 30, 2022, scheduled debt maturities, including balloon payments, were as follows (in thousands):

	Scheduled Principal		Balloon Payment		Total
Remainder of 2022	$	134	$	—	$	134
2023		556		—		556
2024		590		—		590
2025		610		300,016		300,626
2026		468		300,000		300,468
Thereafter		2,532		2,950,053		2,952,585
Total	$	4,890	$	3,550,069	$	3,554,959

Interest Expense

The following table is a summary of the components of interest expense related to the Company's borrowings (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Revolving credit facilities (1)	$	3,550		$	765	$	8,520		$	2,118
Term loans (2)		2,940			—		2,940			24
Senior Unsecured Notes		22,313			22,313		66,939			63,683
Mortgages payable		73			81		225			2,427
Convertible Notes		—			—		—			2,658
Non-cash:
Amortization of deferred financing costs		1,475			910		3,637			3,026
Amortization of debt discount, net		318			307		947			1,830
Amortization of net losses related to interest rate swaps		702			702		2,106			2,106
Capitalized interest		(415	)		—		(741	)		—
Total interest expense	$	30,956		$	25,078	$	84,573		$	77,872

⁽¹⁾ Includes facility fees of approximately $0.5 million and $1.4 million for the three and nine months ended September 30, 2022, respectively, and $0.4 million and $1.3 million for the three and nine months ended September 30, 2021.

⁽²⁾ Includes impact of cash flow hedge.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Stockholders' Equity

NOTE 5. STOCKHOLDERS’ EQUITY

Common Stock              

In January 2022, the Company entered into forward sale agreements in connection with an offering of 9.4 million shares of common stock at an initial public offering price of $47.60 per share, before underwriting discounts and offering expenses. The Company did not receive any proceeds from the sale of its shares of common stock by the forward purchasers at the time of the offering. All of these shares were settled during the nine months ended September 30, 2022, generating net proceeds of $427.7 million.  

In November 2020, the Board of Directors approved a new $500.0 million ATM Program, and the Company terminated its 2016 ATM Program. From inception of the 2020 ATM Program through its termination in November 2021, 9.3 million shares of the Company’s common stock were sold, all through forward sale agreements. All of these shares were settled during the year ended December 31, 2021, generating net proceeds of $391.4 million.

In November 2021, the Board of Directors approved a new $500.0 million ATM Program, and the Company terminated its 2020 ATM Program. The following details the activity under the 2021 ATM Program since its inception (in thousands):

2021 ATM	Forward Shares			Regular Shares			Total Shares			Net Proceeds on Issuances
Month ended 12/31/2021
Shares sold		2,268			438			2,706
Shares issued		(2,212	)		(438	)		(2,650	)		$	120,286
Unsettled shares sold as of 12/31/2021		56			—			56
Nine months ended 9/30/2022
Shares sold		1,234			1,161			2,395
Shares issued		(1,290	)		(1,161	)		(2,451	)		$	103,946
Unsettled shares sold as of 9/30/2022		—			—			—

As of September 30, 2022, approximately $273.2 million of capacity remained available under the 2021 ATM Program.

Preferred Stock         

As of September 30, 2022, the Company had 6.9 million shares of 6.00% Series A Preferred Stock outstanding. The Series A Preferred Stock pays cumulative cash dividends at the rate of 6.00% per annum on the liquidation preference of $25.00 per share (equivalent to $1.50 per share on an annual basis).  

Dividends Declared

For the nine months ended September 30, 2022, the Company's Board of Directors declared the following dividends:

Declaration Date	Dividend Per Share		Record Date	Total Amount (in thousands)		Payment Date
Common Stock
February 9, 2022	$	0.638	March 31, 2022	$	85,688	April 14, 2022
May 18, 2022	$	0.638	June 30, 2022	$	86,987	July 15, 2022
August 8, 2022	$	0.663	September 30, 2022	$	92,595	October 14, 2022
Preferred Stock
February 9, 2022	$	0.375	March 15, 2022	$	2,588	March 31, 2022
May 18, 2022	$	0.375	June 15, 2022	$	2,588	June 30, 2022
August 8, 2022	$	0.375	September 15, 2022	$	2,587	September 30, 2022

The common stock dividend declared on August 8, 2022 is included in accounts payable, accrued expenses and other liabilities in the consolidated balance sheet as of September 30, 2022.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 6. COMMITMENTS AND CONTINGENCIES

The Company is periodically subject to claims or litigation in the ordinary course of business, including claims generated from business conducted by tenants on real estate owned by the Company. In these instances, the Company is typically indemnified by the tenant against any losses that might be suffered, and the Company and/or the tenant are typically insured against such claims. The Company was contingently liable for $5.7 million of debt owed by one of its former tenants, which was fully accrued in accounts payable, accrued expenses and other liabilities in the consolidated balance sheet as of December 31, 2021. No payments were made in relation to this contingent liability. Therefore, upon the maturity of the tenant’s debt on March 15, 2022, the Company reversed the full $5.7 million of the accrued liability, which is reflected as other income in the consolidated statement of operations.

The Company estimates future costs for known environmental remediation requirements when it is probable that the Company has incurred a liability and the related costs can be reasonably estimated. The Company considers various factors when estimating its environmental liabilities, and adjustments are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues. When only a wide range of estimated amounts can be reasonably established and no other amount within the range is better than another, the low end of the range is recorded in the consolidated financial statements. As of September 30, 2022, no accruals have been made.

As of September 30, 2022, there were no outstanding claims against the Company that are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Purchase and Capital Improvement Commitments

As of September 30, 2022, the Company had commitments totaling $169.2 million, of which $27.4 million relates to future acquisitions and the remainder relates to improvements on properties the Company already owns. Acquisition commitments contain standard cancellation clauses contingent on the results of due diligence. $56.4 million of the Company’s commitments are expected to be funded during 2022, with the remainder to be funded by the end of 2024.

Lessee Contracts

The Company leases its corporate office space and certain office equipment, which are classified as operating leases. The Company's corporate office lease has an initial term through January 31, 2027 and is renewable at the Company's option for two additional periods of five years each after the initial term. The corporate office lease contains a variable cost for the lease of parking spaces and a non-lease component related to the reimbursement of certain common area maintenance expenses, both of which are recognized as incurred.

As of September 30, 2022, the Company is also a lessee under four long-term, non-cancellable ground leases under which it is obligated to pay monthly rent. For all of the ground leases, rental expenses are reimbursed by unrelated third parties, and the corresponding rental revenue is recorded in rental income on the accompanying consolidated statements of operations. All leases are classified as operating leases and have a weighted average remaining lease term of 5.3 years. As of September 30, 2022 and December 31, 2021, the Company had a right-of-use lease asset balance of $3.6 million and $3.7 million, respectively, and operating lease liabilities of $4.9 million and $5.1 million, respectively, for these leases.     

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Derivative and Hedging Activities

9 Months Ended

Sep. 30, 2022

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative and Hedging Activities

NOTE 7. DERIVATIVE AND HEDGING ACTIVITIES

The Company may use interest rate derivative contracts to manage its exposure to changes in interest rates on its variable rate debt. These derivatives are considered cash flow hedges and are recorded on a gross basis at fair value. Assessments of hedge effectiveness are performed quarterly using either a qualitative or quantitative approach. The Company recognizes the entire change in the fair value in AOCIL and the change is reflected as cash flow hedge changes in fair value in the supplemental disclosures of non-cash investing and financing activities in the consolidated statement of cash flows. Amounts will subsequently be reclassified to earnings when the hedged item affects earnings. The Company does not enter into derivative contracts for speculative or trading purposes and does not have derivative netting arrangements.

The Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company evaluates counterparty credit risk through monitoring the creditworthiness of counterparties, which includes review of debt ratings and financial performance. To mitigate credit risk, the Company enters into agreements with counterparties it considers credit-worthy, such as large financial institutions with favorable credit ratings.

In the third quarter of 2019, the Company terminated interest rate swaps which had been entered into in December 2018 and accelerated the reclassification of a loss of $12.5 million from AOCIL to termination of interest rate swaps as a result of a portion of the hedged forecasted transactions becoming probable not to occur. There were no events of default related to the interest rate swaps prior to their termination. Given that a portion of the hedged transactions remained probable to occur, $12.3 million of the loss was deferred in other comprehensive loss and is being amortized over the remaining initial term of the interest rate swaps, which ends January 31, 2024. As of September 30, 2022, the unamortized portion of loss in AOCIL related to terminated interest rate swaps was $3.7 million.

During the third quarter of 2022, the Company entered into new interest rate swaps, which were designated as cash flow hedge instruments and are recorded in deferred costs and other assets, net on the Company’s consolidated balance sheet. These instruments swap 1-month SOFR for a fixed payment. The following table summarizes the key terms and fair value of these instruments (in thousands):

						Fair Value of Asset
Interest Rate Swap Notional Amount			Fixed Interest Rate	Effective Date	Maturity Date	September 30, 2022
	$	300,000	2.501%	September 15, 2022	August 22, 2027	$	17,070
	$	200,000	2.507%	September 15, 2022	August 22, 2027		11,200
	$	300,000	2.636%	September 15, 2022	August 22, 2025		11,232
						$	39,502

The following table provides information about the amounts recorded in AOCIL, as well as any amounts reclassified to operations (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Cash flow hedge derivatives	$	39,606		$	—	$	39,606		$	—
Amount of gain reclassified from AOCIL to interest		(104	)		—		(104	)		—
Amount of loss reclassified from AOCIL to interest		702			702		2,106			2,106
Total	$	40,204		$	702	$	41,608		$	2,106

During the next 12 months, we estimate that approximately $2.8 million will be reclassified as an increase to interest expense related to terminated hedges of existing floating-rate debt and $12.7 million will be reclassified as a decrease to interest expense related to cash flow hedge derivatives.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 8. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The Company’s interest rate swaps are measured using a market approach, using prices obtained from a nationally recognized pricing service and pricing models with market observable inputs such as interest rates and volatilities. These measurements are classified as Level 2 of the fair value hierarchy. The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis (in thousands):

			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
Derivatives held at September 30, 2022
Interest rate swaps	$	39,502	$	—	$	39,502	$	—

Nonrecurring Fair Value Measurements

Fair value measurement of an asset on a nonrecurring basis occurs when events or changes in circumstances related to an asset indicate that the carrying amount of the asset is no longer recoverable. Real estate assets and their related intangible assets are evaluated for impairment based on certain indicators including, but not limited to: the asset being held for sale, vacant, tenant bankruptcy or delinquency, and leases expiring in 60 days or less. The fair values of real estate and intangible assets were determined using the following information, depending on availability, in order of preference: signed purchase and sale agreements (“PSA”) or letters of intent (“LOI”); broker opinions of value (“BOV”); recently quoted bid or ask prices, or market prices for comparable properties; estimates of discounted cash flows, which consider, among other things, contractual and forecasted rental revenues, leasing assumptions, expenses based upon market conditions and capitalization rates; and expectations for the use of the real estate. The following table sets forth the Company’s assets that were accounted for at fair value on a nonrecurring basis as of their respective measurement dates (in thousands):

			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
Assets held at September 30, 2022
Impaired at March 31, 2022	$	—	$	—	$	—	$	—
Impaired at June 30, 2022	$	8,006	$	—	$	—	$	8,006
Impaired at September 30, 2022	$	4,094	$	—	$	—	$	4,094
Assets held at December 31, 2021
Impaired at March 31, 2021	$	1,739	$	—	$	—	$	1,739
Impaired at June 30, 2021	$	9,655	$	—	$	—	$	9,655
Impaired at September 30, 2021	$	3,479	$	—	$	—	$	3,479
Impaired at December 31, 2021	$	11,656	$	—	$	—	$	11,656

As of September 30, 2022, the Company held eight properties that were impaired during 2022. As of December 31, 2021, the Company held 14 properties that were impaired during 2021. For one property held at December 31, 2021, the Company estimated fair value using a capitalization rate of 14.00% based on capitalization rates from market comparables. For the remaining properties, the Company estimated property fair value using price per square foot from unobservable inputs. The unobservable inputs for the remaining properties are as follows:

Unobservable Input	Asset Type	Property Count		Price Per Square Foot Range	Weighted Average Price Per Square Foot		Square Footage
September 30, 2022
PSA, LOI or BOV	Retail		6	$41.46 - $105.63	$	89.13		45,931
PSA, LOI or BOV	Data Center		1	$24.94	$	24.94		188,475
Comparable Properties	Retail		1	$60.14 - $75.51	$	69.28		48,042
December 31, 2021
PSA, LOI or BOV	Retail		6	$63.83 - $418.57	$	102.35		39,603
PSA, LOI or BOV	Medical		2	$65.63 - $105.16	$	75.60		41,496
PSA, LOI or BOV	Data Center		1	$38.57	$	38.57		188,475
Comparable Properties	Retail		3	$29.35 - $483.09	$	67.48		42,357
Comparable Properties	Medical		1	$78.66 - $106.35	$	95.00		15,974

Estimated Fair Value of Financial Instruments

Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash and escrow deposits; and accounts receivable and payable. Generally, these assets and liabilities are short-term in duration and are recorded at cost, which approximates fair value, on the accompanying consolidated balance sheets. In addition, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair values. The fair values of financial instruments are estimates based upon market conditions and perceived risks at measurement date. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities. The estimated fair values of these financial instruments have been derived either based on (i) market quotes for identical or similar instruments in markets or (ii) discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. The estimated fair values of the Senior Unsecured Notes are classified as Level 1 of the fair value of the hierarchy and the remaining estimates are classified as Level 2.  

The following table discloses fair value information for these financial instruments (in thousands):  

	September 30, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Loans receivable, net(1)	$	23,023	$	23,228	$	10,450	$	11,381
2019 Credit Facility		—		—		288,400		288,549
2022 Term Loans, net (2)		791,791		831,032		—		—
Senior Unsecured Notes, net (2)		2,721,534		2,263,756		2,718,641		2,865,187
Mortgages payable, net (2)		5,130		4,790		5,551		5,748

^{(1) The carrying value of the loans receivable are net of an allowance for credit losses.}

^{(2) The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums.}

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Incentive Award Plan

9 Months Ended

Sep. 30, 2022

Compensation Related Costs [Abstract]

Incentive Award Plan

NOTE 9. INCENTIVE AWARD PLAN

Amended Incentive Award Plan

Pursuant to the Amended Incentive Award Plan, restricted share awards and market-based awards are granted to certain of the Company’s officers, directors and other employees. The vesting of these awards results in federal and state income tax liabilities for the recipients. As permitted by the terms of the Amended Incentive Award Plan and the award grants, certain executive officers and employees elected to surrender shares of common stock valued at $6.4 million during the nine months ended September 30, 2022 solely to pay the associated statutory tax withholdings.

Restricted Share Awards

During the nine months ended September 30, 2022, the Company granted 122 thousand restricted shares under the Amended Incentive Award Plan to certain directors and employees and recorded $5.6 million in deferred compensation associated with these grants. Deferred compensation for restricted shares will be recognized in expense over the requisite service period, which generally ranges from one to three years. As of September 30, 2022, there were approximately 216 thousand unvested restricted shares outstanding.

Market-Based Awards

During the nine months ended September 30, 2022, the Board of Directors, or committee thereof, approved target grants of 166 thousand market-based awards to executive officers of the Company. The performance period of these grants is generally three years. Potential shares of the Corporation’s common stock that each participant is eligible to receive is based on the initial target number of shares granted, multiplied by a percentage range between 0% and 375%. Grant date fair value of the market-based awards was calculated using the Monte Carlo simulation model, which incorporated stock price volatility of the Company and each of the Company’s peers and other variables over the time horizons matching the performance periods. Significant inputs for the calculation for the grants approved in 2022 were expected volatility of the Company of 39.5% and expected volatility of the Company's peers, ranging from 21.5% to 53.6%, with an average volatility of 35.7% and a risk-free interest rate of 1.59%. The fair value of the market-based award per share of these grants was $93.26 as of the grant date.  

Approximately $2.4 million and $3.3 million in dividend rights have been accrued as of September 30, 2022 and December 31, 2021, respectively. For outstanding non-vested awards at September 30, 2022, 0.3 million shares would have been released based on the Corporation’s TSR relative to the specified peer groups through that date.

Stock-based Compensation Expense

Stock-based compensation is recognized on a straight-line basis over the minimum required service period of each award described above. The Company recorded stock-based compensation expense of $4.4 million and $12.8 million for the three and nine months ended September 30, 2022, respectively, and $3.5 million and $10.5 million for the three and nine months ended September 30, 2021, respectively. These amounts are included in general and administrative expenses in the accompanying consolidated statements of operations.

The following is a summary of remaining unamortized stock-based compensation expense (in thousands):

	September 30, 2022		December 31, 2021
Restricted share awards	$	6,121	$	4,787
Market-based awards		18,147		11,143
Total unamortized stock-based compensation expense	$	24,268	$	15,930

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Income Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Income Per Share

NOTE 10. INCOME PER SHARE

The table below is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per share computed using the two-class method (dollars in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Basic and diluted income:
Income from continuing operations	$	76,640		$	40,878		$	215,436		$	127,333
Less: dividends paid to preferred stockholders		(2,587	)		(2,587	)		(7,763	)		(7,763	)
Less: dividends attributable to unvested restricted stock		(142	)		(147	)		(412	)		(433	)
Net income attributable to common stockholders used in basic and diluted income per share	$	73,911		$	38,144		$	207,261		$	119,137
Basic weighted average shares of common stock outstanding:
Weighted average shares of common stock outstanding		136,530,530			120,009,550			133,058,487			116,752,993
Less: unvested weighted average shares of restricted stock		(216,161	)		(233,679	)		(223,277	)		(249,359	)
Basic weighted average shares of common stock outstanding		136,314,369			119,775,871			132,835,210			116,503,634
Net income per share attributable to common stockholders - basic	$	0.54		$	0.32		$	1.56		$	1.02
Diluted weighted average shares of common stock outstanding: (1)
Plus: unvested market-based awards		—			523,432			130,087			365,843
Plus: unsettled shares under open forward equity contracts		—			2,855			—			952
Diluted weighted average shares of common stock outstanding		136,314,369			120,302,158			132,965,297			116,870,429
Net income per share attributable to common stockholders - diluted	$	0.54		$	0.32		$	1.56		$	1.02
Potentially dilutive shares of common stock related to:
Unvested restricted share awards		51,338			93,711			65,060			88,050

⁽¹⁾ Assumes the most dilutive issuance of potentially issuable shares between the two-class and treasury stock method unless the result would be anti-dilutive.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Basis of Accounting

The accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC. In the opinion of management, the consolidated financial statements include the normal, recurring adjustments necessary for fair statement of the information required to be set forth therein. The results for interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements pursuant to SEC rules and regulations and, accordingly, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the year ended December 31, 2021.

Consolidation

The consolidated financial statements of the Company include the accounts of the Corporation and its wholly-owned subsidiaries, including the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation.

These consolidated financial statements include certain special purpose entities that were formed to acquire and hold real estate encumbered by indebtedness (see Note 4). Each special purpose entity is a separate legal entity and is the sole owner of its assets and responsible for its liabilities. The assets of these special purpose entities are not available to pay, or otherwise satisfy obligations to, the creditors of any affiliate or owner of another entity unless the special purpose entities have expressly agreed and are permitted to do so under their governing documents. As of September 30, 2022 and December 31, 2021, net assets totaling $11.8 million and $12.3 million, respectively, were held, and net liabilities totaling $5.1 million and $5.5 million, respectively, were owed by these encumbered special purpose entities and are included in the accompanying consolidated balance sheets.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates.

Segment Reporting

Segment Reporting

The Company views its operations as one segment, which consists of net leasing operations. The Company has no other reportable segments.

Revenue Recognition

Revenue Recognition

Rental Income: Cash and Straight-line Rent

The Company primarily leases real estate to its tenants under long-term, triple-net leases that are classified as operating leases. To evaluate lease classification, the Company assesses the terms and conditions of the lease to determine the appropriate lease term. Options to extend, terminate or purchase are not included in the evaluation for lease classification or for recognition of rental income unless the Company is reasonably certain the tenant will exercise the option. Evaluation of lease classification also requires an estimate of the residual value of the real estate at the end of the lease term. For acquisitions, the Company uses the tangible value of the property at the date of acquisition. For lease modifications, the Company generally uses sales comparables or a direct capitalization approach to determine residual value. 

The Company elected to account for lease concessions related to the COVID-19 pandemic consistent with ASC 842 as though enforceable rights and obligations for those concessions existed (regardless of whether they explicitly exist in the lease). As such, rent deferrals are recorded as an increase to rent receivables and recognized as income during the deferral period. For the three and nine months ended September 30, 2022, zero and $0.4 million, respectively, of deferrals were recognized in rental income, compared to $1.0 million and $12.8 million for the three and nine months ended September 30, 2021, respectively. Lease concessions other than rent deferrals are evaluated to determine if a substantive change to the consideration in the original lease contract has occurred and should be accounted for as a lease modification.       

The Company’s leases generally provide for rent escalations throughout the term of the lease. For leases with fixed rent escalators, rental income is recognized on a straight-line basis to produce a constant periodic rent over the term of the lease. Accordingly, the difference between rental income recognized on a straight-line basis and billed rents is recorded as rent receivables, which the Company will receive only if the tenant makes all rent payments required through the initial term of their lease. For leases with variable rent escalators, rental income typically increases at a multiple of any increase in the CPI over a specified period and may adjust annually or over multiple-year periods. Because of the volatility and uncertainty regarding future changes in the CPI and the Company’s inability to determine the extent to which any specific future change in the CPI is probable, increases from variable rent escalators are recognized when the changes in the rental rates have occurred.

Some of the Company’s leases also provide for contingent rent based on a percentage of the tenant’s gross sales, which is recognized as rental income when the change in the factor on which the contingent lease payment is based has occurred.

Rental income is subject to an evaluation for collectability, which includes management’s estimates of amounts that will not be realized based on an assessment of the risks inherent in the portfolio, considering historical experience, as well as the tenant's payment history and financial condition. The Company does not recognize rental income for amounts that are not probable of collection. For lease concessions granted in conjunction with the COVID-19 pandemic, management reviewed all amounts recognized on a tenant-by-tenant basis for collectability.

Rental Income: Tenant Reimbursement Revenue

Under a triple-net lease, the tenant is typically responsible for all improvements and is contractually obligated to pay all property operating expenses, such as real estate taxes, insurance premiums and repair and maintenance costs. Certain leases contain additional amounts recoverable from tenants for common area maintenance and certain other expenses, which are non-lease components. The Company elected to combine all its non-lease components, which were determined to have the same pattern of transfer as the related operating lease component, into a single combined lease component. Tenant reimbursement revenue is variable and is recognized in the period in which the related expenses are incurred, with the related expenses included in property costs (including reimbursable) on the Company’s consolidated statements of operations. Tenant reimbursements are recorded on a gross basis in instances when our tenants reimburse us for property costs which we incur. Tenant receivables are reduced for amounts that are not probable of collection.

Rental Income: Intangible Amortization

Initial direct costs associated with the origination of a lease are deferred and amortized as an adjustment to rental revenue. Above- and below-market lease intangibles are amortized as a decrease and increase, respectively, to rental revenue. Amortization of in-place lease intangibles is included in depreciation and amortization expense. All lease intangibles are amortized on a straight-line basis over the term of the lease, which includes any renewal options the Company is reasonably certain the tenant will exercise. If the Company subsequently determines it is reasonably certain that the tenant will not exercise the renewal options, the unamortized portion of any related lease intangible is accelerated over the remaining initial term of the lease. If the Company believes a lease intangible balance is no longer recoverable, the unamortized portion is immediately recognized in impairments in the Company’s consolidated statements of operations.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money market funds of major financial institutions with fund investments consisting of highly-rated money market instruments and other short-term investments. Restricted cash is classified within deferred costs and other assets, net in the accompanying consolidated balance sheets. There was no restricted cash held as of either September 30, 2022 or December 31, 2021.

Tenant Receivables

Tenant Receivables

The Company reviews its rent and other tenant receivables for collectability on a regular basis, considering changes in factors such as the tenant’s payment history, the tenant’s financial condition, industry conditions in which the tenant operates and economic conditions in the geographic area in which the tenant operates. If a receivable is not probable of collection, a direct write-off of the receivable will be made. The Company had accounts receivable balances of $17.9 million and $21.7 million at September 30, 2022 and December 31, 2021, respectively, after the impact of $3.3 million and $3.9 million of receivables, respectively, that were deemed not probable of collection. These receivables are recorded within deferred cost and other assets, net in the accompanying consolidated balance sheets.

For receivable balances related to the straight-line method of recognizing rental income, the collectability is generally assessed in conjunction with the evaluation of rental income as described above. The Company had straight-line rent receivables of $161.8 million and $137.6 million at September 30, 2022 and December 31, 2021, respectively, after the impact of $0.3 million and $2.6 million of receivables, respectively, that were deemed not probable of collection. These receivables are recorded within deferred costs and other assets, net in the accompanying consolidated balance sheets.

Goodwill

Goodwill

Goodwill arises from business combinations as the excess of the cost of an acquired entity over the net fair value amounts that were assigned to the identifiable assets acquired and the liabilities assumed. Goodwill is tested for impairment at the reporting unit level annually or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. The Company performs a qualitative assessment to determine if the quantitative impairment test is necessary. The quantitative impairment test, if deemed necessary, compares the fair value of each reporting unit with its carrying amount and impairment is recognized as the amount by which the carrying amount exceeds the reporting unit’s fair value. No impairment was recorded for the periods presented.

Income Taxes

Income Taxes

The Corporation has elected to be taxed as a REIT under the Code. As a REIT, the Corporation generally will not be subject to federal income tax provided it continues to satisfy certain tests concerning the Company’s sources of income, the nature of the Company’s assets, the amounts distributed to the Corporation’s stockholders and the ownership of Corporation stock. Management believes the Corporation has qualified and will continue to qualify as a REIT. Even if the Corporation qualifies for taxation as a REIT, it may be subject to state and local income and franchise taxes, and to federal income tax and excise tax on its undistributed income. Taxable income earned by any of the Company's taxable REIT subsidiaries, including from non-REIT activities, is subject to federal, state and local taxes. Taxable income from non-REIT activities managed through any of the Company's taxable REIT subsidiaries is subject to federal, state and local taxes, which are not material.

Earnings Per Share

Earnings Per Share

The Company’s unvested restricted common stock, which contains non-forfeitable rights to receive dividends, are considered participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on their respective weighted average shares outstanding during the period.

Under the terms of the Amended Incentive Award Plan, restricted stock awards are not allocated losses, including undistributed losses as a result of dividends declared exceeding net income. The Company uses income (loss) from continuing operations to determine whether potential common shares are dilutive or anti-dilutive and undistributed net income (loss) to determine whether undistributed earnings are allocable to participating securities.

Forward Equity Sale Agreements

Forward Equity Sale Agreements

The Corporation may enter into forward sale agreements for the sale and issuance of shares of its common stock, either through an underwritten public offering or through the 2021 ATM Program. These agreements may be physically settled in stock, settled in cash, or net share settled at the Company’s election. The Company evaluated the forward sale agreements and concluded they meet the conditions to be classified within stockholders’ equity. Prior to settlement, a forward sale agreement will be reflected in the diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of the Corporation’s common stock used in diluted earnings per share is deemed to be increased by the excess, if any, of the number of shares of the Corporation’s common stock that would be issued upon full physical settlement of such forward sale agreement over the number of shares of the Corporation’s common stock that could be purchased by the Company in the market (based on the average market price during the period) using the proceeds receivable upon full physical settlement (based on the adjusted forward sale price at the end of the reporting period). Consequently, prior to settlement of a forward sale agreement, there will be no dilutive effect on the Company’s earnings per share except during periods when the average market price of the Corporation’s common stock is above the adjusted forward sale price. However, upon settlement of a forward sales agreement, if the Corporation elects to physically settle or net share settle such forward sale agreement, delivery of the Corporation’s shares will result in dilution to the Company’s earnings per share.

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Investments (Tables)

9 Months Ended

Sep. 30, 2022

Real Estate [Abstract]

Summary of Real Estate Activity

During the nine months ended September 30, 2022, the Company had the following real estate activity (dollars in thousands)

	Number of Properties									Dollar Amount of Investments
	Held in Use			Held for Sale			Total			Held in Use			Held for Sale			Total
Gross balance, December 31, 2021		2,000			3			2,003		$	7,934,823		$	8,362		$	7,943,185
Acquisitions/improvements (1)		148			—			148			1,190,726			—			1,190,726
Dispositions of real estate (2) (3)		(22	)		(11	)		(33	)		(115,798	)		(17,471	)		(133,269	)
Transfers to Held for Sale		(23	)		23			—			(40,194	)		40,194			—
Impairments (4)		—			—			—			(10,969	)		—			(10,969	)
Reset of gross balances (5)		—			—			—			(16,224	)		—			(16,224	)
Gross balance, September 30, 2022		2,103			15			2,118			8,942,364			31,085			8,973,449
Accumulated depreciation and amortization											(1,357,152	)		(6,741	)		(1,363,893	)
Net balance, September 30, 2022 (6)										$	7,585,212		$	24,344		$	7,609,556

⁽¹⁾ Includes investments of $56.9 million in revenue producing capitalized expenditures, as well as $11.9 million of non-revenue producing capitalized expenditures during the nine months ended September 30, 2022.

⁽²⁾ For the nine months ended September 30, 2022, the net gains on disposal of properties held in use and held for sale were $60.3 million and $2.8 million, respectively.  

⁽³⁾ During the nine months ended September 30, 2022, the Company sold eight properties pursuant to a 1031 Exchange for $88.1 million. As of September 30, 2022, all the proceeds had been used to fund acquisitions.

⁽⁴⁾ Impairments on owned real estate is comprised of real estate and intangible asset impairment. For the nine months ended September 30, 2022, all of the impairments recorded were on properties held in use.

⁽⁵⁾ Represents write-off of gross investment balances against the related accumulated depreciation and amortization balances as a result of basis reset due to impairment or intangibles which have been fully amortized.

⁽⁶⁾ Reconciliation of total owned investments to the accompanying consolidated balance sheet at September 30, 2022 is as follows:

Real estate assets held for investment, net	$	7,258,538
Intangible lease assets, net		440,910
Real estate assets under direct financing leases, net		7,434
Real estate assets held for sale, net		24,344
Intangible lease liabilities, net		(121,670	)
Net balance	$	7,609,556

Schedule of Operating Lease Income

The following table summarizes the components of rental income recognized on these operating leases in the accompanying consolidated statements of operations (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Base Cash Rent (1)	$	162,467	$	137,234	$	471,052	$	400,215
Variable cash rent (including reimbursables)		6,479		4,753		19,713		12,078
Straight-line rent, net of uncollectible reserve (2)		10,875		8,840		28,465		35,941
Amortization of above- and below- market lease intangibles, net (3)		475		549		1,700		2,249
Total rental income	$	180,296	$	151,376	$	520,930	$	450,483

⁽¹⁾ Includes net impact of amounts (reserved)/recovered of $(0.6) million and $(0.5) million for the three and nine months ended September 30, 2022, respectively, and $(0.1) million and $5.6 million for the three and nine months ended September 30, 2021, respectively.

⁽²⁾ Includes net impact of amounts recovered/(reserved) of $1.2 million and $1.1 million for the three and nine months ended September 30, 2022, respectively, and $(0.1) million and $11.0 million for the three and nine months ended September 30, 2021, respectively.

⁽³⁾ Excludes amortization of in-place leases of $11.3 million and $32.6 million for the three and nine months ended September 30, 2022, respectively, and $9.8 million and $28.6 million for the three and nine months ended September 30, 2021, respectively, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations.

Schedule of Minimum Future Contractual Rent to be Received from Operating Lease

Scheduled minimum future rent to be received under the remaining non-cancellable term of these operating leases (including contractual fixed rent increases occurring on or after October 1, 2022) at September 30, 2022 are as follows (in thousands):

	September 30, 2022
Remainder of 2022	$	167,283
2023		664,151
2024		649,973
2025		638,168
2026		609,487
Thereafter		4,885,095
Total future minimum rentals	$	7,614,157

Schedule of Lease Intangible Assets and Liabilities, Net of Accumulated Amortization

The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):

	September 30, 2022			December 31, 2021
In-place leases	$	572,407		$	536,344
Above-market leases		101,195			100,837
Less: accumulated amortization		(232,692	)		(210,209	)
Intangible lease assets, net	$	440,910		$	426,972
Below-market leases	$	186,006		$	188,718
Less: accumulated amortization		(64,336	)		(60,641	)
Intangible lease liabilities, net	$	121,670		$	128,077

Summary of Impairment and Credit Losses Recognized

The following table summarizes total impairments recognized in the accompanying consolidated statements of operations (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022		2021
Real estate asset impairment	$	1,632		$	4,092	$	10,535	$	17,875
Intangible net (liability)/asset impairment		(61	)		343		434		1,090
Allowance for credit losses on loans receivable		—			—		127		—
Total impairment loss	$	1,571		$	4,435	$	11,096	$	18,965

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Debt (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Summary of Debt

The Company's debt is summarized below (dollars in thousands):

	Weighted Average Effective Interest Rates (1)	Weighted Average Stated Interest Rates (2)		Weighted Average Remaining Years to Maturity (3)		September 30, 2022			December 31, 2021
Debt:
Revolving credit facilities	2.53%		—		3.5	$	—		$	288,400
Term loans	4.09%	3.73%			4.1		800,000			—
Senior Unsecured Notes	3.42%	3.25%			6.7		2,750,000			2,750,000
Mortgages payable	4.87%	5.82%			8.2		4,959			5,350
Total debt	3.31%	3.36%			6.1		3,554,959			3,043,750
Debt discount, net							(9,877	)		(10,824	)
Deferred financing costs, net (4)							(26,627	)		(20,334	)
Total debt, net						$	3,518,455		$	3,012,592

⁽¹⁾ Includes amortization of debt discount/premium, amortization of deferred financing costs, facility fees, non-utilization fees and impact of cash flow hedges, where applicable, calculated for the nine months ended September 30, 2022 based on the average principal balance outstanding during the period.

⁽²⁾ Represents the weighted average stated interest rate based on the outstanding principal balance as of September 30, 2022, including the impact of cash flow hedges on term loans. The weighted average stated interest rate for the term loans excluding the impact of cash flow hedges was 4.03% as of September 30, 2022.

⁽³⁾ Represents the weighted average remaining years to maturity based on the outstanding principal balance as of September 30, 2022.

⁽⁴⁾ Excludes deferred financing costs for the revolving credit facilities.

Summary of Senior Unsecured Notes

The following is a summary of the Senior Unsecured Notes outstanding (dollars in thousands):

	Maturity Date	Interest Payment Dates	Stated Interest Rate	September 30, 2022		December 31, 2021
2026 Senior Notes	September 15, 2026	March 15 and September 15	4.45%	$	300,000	$	300,000
2027 Senior Notes	January 15, 2027	January 15 and July 15	3.20%		300,000		300,000
2028 Senior Notes	March 15, 2028	March 15 and September 15	2.10%		450,000		450,000
2029 Senior Notes	July 15, 2029	January 15 and July 15	4.00%		400,000		400,000
2030 Senior Notes	January 15, 2030	January 15 and July 15	3.40%		500,000		500,000
2031 Senior Notes	February 15, 2031	February 15 and August 15	3.20%		450,000		450,000
2032 Senior Notes	February 15, 2032	February 15 and August 15	2.70%		350,000		350,000
Total Senior Unsecured Notes			3.25%	$	2,750,000	$	2,750,000

Schedule of Debt Maturities

As of September 30, 2022, scheduled debt maturities, including balloon payments, were as follows (in thousands):

	Scheduled Principal		Balloon Payment		Total
Remainder of 2022	$	134	$	—	$	134
2023		556		—		556
2024		590		—		590
2025		610		300,016		300,626
2026		468		300,000		300,468
Thereafter		2,532		2,950,053		2,952,585
Total	$	4,890	$	3,550,069	$	3,554,959

Summary of Components of Interest Expense Related to Borrowings

The following table is a summary of the components of interest expense related to the Company's borrowings (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Revolving credit facilities (1)	$	3,550		$	765	$	8,520		$	2,118
Term loans (2)		2,940			—		2,940			24
Senior Unsecured Notes		22,313			22,313		66,939			63,683
Mortgages payable		73			81		225			2,427
Convertible Notes		—			—		—			2,658
Non-cash:
Amortization of deferred financing costs		1,475			910		3,637			3,026
Amortization of debt discount, net		318			307		947			1,830
Amortization of net losses related to interest rate swaps		702			702		2,106			2,106
Capitalized interest		(415	)		—		(741	)		—
Total interest expense	$	30,956		$	25,078	$	84,573		$	77,872

⁽¹⁾ Includes facility fees of approximately $0.5 million and $1.4 million for the three and nine months ended September 30, 2022, respectively, and $0.4 million and $1.3 million for the three and nine months ended September 30, 2021.

⁽²⁾ Includes impact of cash flow hedge.

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Summary of Activities Under 2021 ATM Program

The following details the activity under the 2021 ATM Program since its inception (in thousands):

2021 ATM	Forward Shares			Regular Shares			Total Shares			Net Proceeds on Issuances
Month ended 12/31/2021
Shares sold		2,268			438			2,706
Shares issued		(2,212	)		(438	)		(2,650	)		$	120,286
Unsettled shares sold as of 12/31/2021		56			—			56
Nine months ended 9/30/2022
Shares sold		1,234			1,161			2,395
Shares issued		(1,290	)		(1,161	)		(2,451	)		$	103,946
Unsettled shares sold as of 9/30/2022		—			—			—

Summary of Dividends Declared

For the nine months ended September 30, 2022, the Company's Board of Directors declared the following dividends:

Declaration Date	Dividend Per Share		Record Date	Total Amount (in thousands)		Payment Date
Common Stock
February 9, 2022	$	0.638	March 31, 2022	$	85,688	April 14, 2022
May 18, 2022	$	0.638	June 30, 2022	$	86,987	July 15, 2022
August 8, 2022	$	0.663	September 30, 2022	$	92,595	October 14, 2022
Preferred Stock
February 9, 2022	$	0.375	March 15, 2022	$	2,588	March 31, 2022
May 18, 2022	$	0.375	June 15, 2022	$	2,588	June 30, 2022
August 8, 2022	$	0.375	September 15, 2022	$	2,587	September 30, 2022

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Derivative and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule of Summary of Notional Amount and Fair Value of Instruments

The following table summarizes the key terms and fair value of these instruments (in thousands):

						Fair Value of Asset
Interest Rate Swap Notional Amount			Fixed Interest Rate	Effective Date	Maturity Date	September 30, 2022
	$	300,000	2.501%	September 15, 2022	August 22, 2027	$	17,070
	$	200,000	2.507%	September 15, 2022	August 22, 2027		11,200
	$	300,000	2.636%	September 15, 2022	August 22, 2025		11,232
						$	39,502

Summary of Amounts Recorded in AOCIL

The following table provides information about the amounts recorded in AOCIL, as well as any amounts reclassified to operations (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Cash flow hedge derivatives	$	39,606		$	—	$	39,606		$	—
Amount of gain reclassified from AOCIL to interest		(104	)		—		(104	)		—
Amount of loss reclassified from AOCIL to interest		702			702		2,106			2,106
Total	$	40,204		$	702	$	41,608		$	2,106

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring

The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis (in thousands):

			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
Derivatives held at September 30, 2022
Interest rate swaps	$	39,502	$	—	$	39,502	$	—

Fair Value Measurements, Nonrecurring

The following table sets forth the Company’s assets that were accounted for at fair value on a nonrecurring basis as of their respective measurement dates (in thousands):

			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
Assets held at September 30, 2022
Impaired at March 31, 2022	$	—	$	—	$	—	$	—
Impaired at June 30, 2022	$	8,006	$	—	$	—	$	8,006
Impaired at September 30, 2022	$	4,094	$	—	$	—	$	4,094
Assets held at December 31, 2021
Impaired at March 31, 2021	$	1,739	$	—	$	—	$	1,739
Impaired at June 30, 2021	$	9,655	$	—	$	—	$	9,655
Impaired at September 30, 2021	$	3,479	$	—	$	—	$	3,479
Impaired at December 31, 2021	$	11,656	$	—	$	—	$	11,656

Fair Value Inputs of Long-Lived Assets Held and Used and Held for Sale

For the remaining properties, the Company estimated property fair value using price per square foot from unobservable inputs. The unobservable inputs for the remaining properties are as follows:

Unobservable Input	Asset Type	Property Count		Price Per Square Foot Range	Weighted Average Price Per Square Foot		Square Footage
September 30, 2022
PSA, LOI or BOV	Retail		6	$41.46 - $105.63	$	89.13		45,931
PSA, LOI or BOV	Data Center		1	$24.94	$	24.94		188,475
Comparable Properties	Retail		1	$60.14 - $75.51	$	69.28		48,042
December 31, 2021
PSA, LOI or BOV	Retail		6	$63.83 - $418.57	$	102.35		39,603
PSA, LOI or BOV	Medical		2	$65.63 - $105.16	$	75.60		41,496
PSA, LOI or BOV	Data Center		1	$38.57	$	38.57		188,475
Comparable Properties	Retail		3	$29.35 - $483.09	$	67.48		42,357
Comparable Properties	Medical		1	$78.66 - $106.35	$	95.00		15,974

Schedule of Carrying Amount and Estimated Fair Value of Financial Instruments

The following table discloses fair value information for these financial instruments (in thousands):  

	September 30, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Loans receivable, net(1)	$	23,023	$	23,228	$	10,450	$	11,381
2019 Credit Facility		—		—		288,400		288,549
2022 Term Loans, net (2)		791,791		831,032		—		—
Senior Unsecured Notes, net (2)		2,721,534		2,263,756		2,718,641		2,865,187
Mortgages payable, net (2)		5,130		4,790		5,551		5,748

^{(1) The carrying value of the loans receivable are net of an allowance for credit losses.}

^{(2) The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums.}

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Incentive Award Plan (Tables)

9 Months Ended

Sep. 30, 2022

Compensation Related Costs [Abstract]

Summary of Remaining Unamortized Stock-based Compensation Expense

The following is a summary of remaining unamortized stock-based compensation expense (in thousands):

	September 30, 2022		December 31, 2021
Restricted share awards	$	6,121	$	4,787
Market-based awards		18,147		11,143
Total unamortized stock-based compensation expense	$	24,268	$	15,930

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Income Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Reconciliation of the Numerator and Denominator Used in the Computation of Basic and Diluted Income Per Share

The table below is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per share computed using the two-class method (dollars in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Basic and diluted income:
Income from continuing operations	$	76,640		$	40,878		$	215,436		$	127,333
Less: dividends paid to preferred stockholders		(2,587	)		(2,587	)		(7,763	)		(7,763	)
Less: dividends attributable to unvested restricted stock		(142	)		(147	)		(412	)		(433	)
Net income attributable to common stockholders used in basic and diluted income per share	$	73,911		$	38,144		$	207,261		$	119,137
Basic weighted average shares of common stock outstanding:
Weighted average shares of common stock outstanding		136,530,530			120,009,550			133,058,487			116,752,993
Less: unvested weighted average shares of restricted stock		(216,161	)		(233,679	)		(223,277	)		(249,359	)
Basic weighted average shares of common stock outstanding		136,314,369			119,775,871			132,835,210			116,503,634
Net income per share attributable to common stockholders - basic	$	0.54		$	0.32		$	1.56		$	1.02
Diluted weighted average shares of common stock outstanding: (1)
Plus: unvested market-based awards		—			523,432			130,087			365,843
Plus: unsettled shares under open forward equity contracts		—			2,855			—			952
Diluted weighted average shares of common stock outstanding		136,314,369			120,302,158			132,965,297			116,870,429
Net income per share attributable to common stockholders - diluted	$	0.54		$	0.32		$	1.56		$	1.02
Potentially dilutive shares of common stock related to:
Unvested restricted share awards		51,338			93,711			65,060			88,050

⁽¹⁾ Assumes the most dilutive issuance of potentially issuable shares between the two-class and treasury stock method unless the result would be anti-dilutive.

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Organization - Narrative (Details) - Operating Partnership	9 Months Ended
	Sep. 30, 2022
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
General partner ownership of operating partnership	1.00%
Limited partner ownership of operating partnership	99.00%

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Summary of Significant Accounting Policies - Narrative (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) segment	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Net assets	$ 8,341,510,000		$ 8,341,510,000		$ 7,330,870,000
Net liabilities	3,820,720,000		$ 3,820,720,000		3,331,071,000
Number of segments | segment			1
Deferred rent recognized related to COVID19 pandemic	0	$ 1,000,000.0	$ 400,000	$ 12,800,000
Accounts receivable	17,900,000		17,900,000		21,700,000
Accounts receivable, deemed not probable of collection	3,300,000		3,300,000		3,900,000
Deferred rental revenue receivables	161,800,000		161,800,000		137,600,000
Deferred rent receivables, deemed not probable of collection	300,000		300,000		2,600,000
Goodwill impairment			0
Special Purpose Entity
Summary Of Significant Accounting Policies [Line Items]
Net assets	11,800,000		11,800,000		12,300,000
Net liabilities	$ 5,100,000		$ 5,100,000		$ 5,500,000

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Investments - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) State Property	Sep. 30, 2021 USD ($) Property	Sep. 30, 2022 USD ($) State Property	Sep. 30, 2021 USD ($) Property	Dec. 31, 2021 Property
Real Estate Properties [Line Items]
Gross investment in owned real estate properties	$ 9,000,000		$ 9,000,000
Portfolio diversity, number of states | State	49		49
Minimum real estate investment in state for disclosure	10.00%		10.00%
Sales-type and direct financing leases minimum future payments to be received	$ 2,600		$ 2,600
Direct financing leases, net investment balance	7,500		7,500
Remaining reserve against net investment	100		100
Construction loan	12,700		12,700
Allowance (reversal) for credit losses	0	$ 0	127	$ 0
Loan receivable, with outstanding principal	23,700		23,700
Total allowance for credit losses	$ 700		$ 700
Texas
Real Estate Properties [Line Items]
Investment in real estate properties	14.30%		14.30%
Property Subject To Operating Lease
Real Estate Properties [Line Items]
Number of properties | Property	2,113	1,909	2,113	1,909	1,998
Property Subject To Direct Financing Lease
Real Estate Properties [Line Items]
Number of properties | Property	1		1

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Investments - Summary of Owned Real Estate Activity (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) Property	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) Property	Sep. 30, 2021 USD ($)
Real Estate Activity
Impairments	$ 1,571	$ 4,435	$ 11,096	$ 18,965
Ending balance	9,000,000		9,000,000
Net balance	$ 7,609,556		$ 7,609,556
Held in Use
Number of Properties
Beginning balance (in properties) | Property			2,000
Acquisitions/improvements (in properties) | Property			148
Dispositions of real estate (in properties) | Property			(22)
Transfers to Held for Sale (in properties) | Property			(23)
Impairments (in properties) | Property | Property			0
Reset of gross balances (in properties) | Property			0
Ending balance (in properties) | Property	2,103		2,103
Real Estate Activity
Beginning balance			$ 7,934,823
Acquisitions			1,190,726
Dispositions			(115,798)
Transfers to Held for Sale			(40,194)
Impairments			(10,969)
Reset of gross balances			(16,224)
Ending balance	$ 8,942,364		8,942,364
Accumulated depreciation and amortization	(1,357,152)		(1,357,152)
Net balance	$ 7,585,212		$ 7,585,212
Held for Sale
Number of Properties
Beginning balance (in properties) | Property			3
Acquisitions/improvements (in properties) | Property			0
Dispositions of real estate (in properties) | Property			(11)
Transfers to Held for Sale (in properties) | Property			23
Impairments (in properties) | Property | Property			0
Reset of gross balances (in properties) | Property			0
Ending balance (in properties) | Property	15		15
Real Estate Activity
Beginning balance			$ 8,362
Acquisitions			0
Dispositions			(17,471)
Transfers to Held for Sale			40,194
Impairments			0
Reset of gross balances			0
Ending balance	$ 31,085		31,085
Accumulated depreciation and amortization	(6,741)		(6,741)
Net balance	$ 24,344		$ 24,344
Total
Number of Properties
Beginning balance (in properties) | Property			2,003
Acquisitions/improvements (in properties) | Property			148
Dispositions of real estate (in properties) | Property			(33)
Transfers to Held for Sale (in properties) | Property			0
Impairments (in properties) | Property | Property			0
Reset of gross balances (in properties) | Property			0
Ending balance (in properties) | Property	2,118		2,118
Real Estate Activity
Beginning balance			$ 7,943,185
Acquisitions			1,190,726
Dispositions			(133,269)
Transfers to Held for Sale			0
Impairments			(10,969)
Reset of gross balances			(16,224)
Ending balance	$ 8,973,449		8,973,449
Accumulated depreciation and amortization	(1,363,893)		(1,363,893)
Net balance	$ 7,609,556		$ 7,609,556

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Investments - Summary of Owned Real Estate Activity (Footnote) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) Property	Dec. 31, 2021 USD ($)
Real Estate [Line Items]
Revenue producing capitalized expenditures	$ 56,900
Non-revenue producing capitalized expenditures	11,900
Real estate assets held for investment, net	7,258,538	$ 6,445,527
Intangible lease assets, net	440,910	426,972
Real estate assets under direct financing leases, net	7,434	7,442
Real estate assets held for sale, net	24,344	8,264
Intangible lease liabilities, net	(121,670)	$ (128,077)
Net balance	7,609,556
Held-in-use
Real Estate [Line Items]
Gains on disposal of properties	60,300
Held-for-sale
Real Estate [Line Items]
Gains on disposal of properties	$ 2,800
Disposal Group 1031 Exchange
Real Estate [Line Items]
Dispositions of real estate (in properties) | Property	8
Proceeds from sale of property	$ 88,100

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Investments - Operating Lease Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lessor, Lease, Description [Line Items]
Base Cash Rent	$ 162,467	$ 137,234	$ 471,052	$ 400,215
Variable cash rent (including reimbursables)	6,479	4,753	19,713	12,078
Straight-line rent, net of uncollectible reserve	10,875	8,840	28,465	35,941
Amortization of above- and below- market lease intangibles, net	475	549	1,700	2,249
Total rental income	180,296	151,376	520,930	450,483
Base cash rent amounts (reserved)/recovered	(600)	(100)	(500)	5,600
Straight-line rent amounts (reserved)/recovered	1,200	(100)	1,100	11,000
In-place leases
Lessor, Lease, Description [Line Items]
Leases amortization expenses	$ 11,300	$ 9,800	$ 32,600	$ 28,600

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Investments - Schedule of Minimum Future Rent to be Received from Operating Leases (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Operating Leases, Future Contractual Rent Receivable
Remainder of 2022	$ 167,283
2023	664,151
2024	649,973
2025	638,168
2026	609,487
Thereafter	4,885,095
Total future minimum rentals	$ 7,614,157

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Investments - Schedule of Lease Intangible Assets and Liabilities, Net of Accumulated Amortization (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Lessor, Lease, Description [Line Items]
Less: accumulated amortization	$ (232,692)	$ (210,209)
Intangible lease assets, net	440,910	426,972
Below-market leases	186,006	188,718
Less: accumulated amortization	(64,336)	(60,641)
Intangible lease liabilities, net	121,670	128,077
In-place leases
Lessor, Lease, Description [Line Items]
Intangible lease assets, gross	572,407	536,344
Above-market leases
Lessor, Lease, Description [Line Items]
Intangible lease assets, gross	$ 101,195	$ 100,837

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Investments - Summary of Impairment and Credit Losses Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Real Estate [Abstract]
Real estate asset impairment	$ 1,632	$ 4,092	$ 10,535	$ 17,875
Intangible net (liability)/asset impairment	(61)	343	434	1,090
Allowance for credit losses on loans receivable	0	0	127	0
Total impairment loss	$ 1,571	$ 4,435	$ 11,096	$ 18,965

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Debt - Summary of Debt (Details) - USD ($)	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Effective Interest Rates	3.31%
Stated Interest Rate	3.36%
Remaining Years to Maturity	6 years 1 month 6 days
Total debt, gross	$ 3,554,959,000	$ 3,043,750,000
Debt discount, net	(9,877,000)	(10,824,000)
Deferred financing costs, net	(26,627,000)	(20,334,000)
Total debt, net	$ 3,518,455,000	3,012,592,000
Revolving credit facilities
Debt Instrument [Line Items]
Effective Interest Rates	2.53%
Remaining Years to Maturity	3 years 6 months
Total debt, gross		288,400,000
Term loans
Debt Instrument [Line Items]
Effective Interest Rates	4.09%
Stated Interest Rate	3.73%
Remaining Years to Maturity	4 years 1 month 6 days
Total debt, gross	$ 800,000,000
Deferred financing costs, net	$ (8,200,000)
Senior Unsecured Notes
Debt Instrument [Line Items]
Effective Interest Rates	3.42%
Stated Interest Rate	3.25%
Remaining Years to Maturity	6 years 8 months 12 days
Total debt, gross	$ 2,750,000,000	2,750,000,000
Deferred financing costs, net	$ (18,400,000)	(20,300,000)
Mortgages Payable
Debt Instrument [Line Items]
Effective Interest Rates	4.87%
Stated Interest Rate	5.82%
Remaining Years to Maturity	8 years 2 months 12 days
Total debt, gross	$ 4,959,000	5,350,000
Deferred financing costs, net	$ 0	$ 0

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Debt - Summary of Debt (Footnote) (Details)	Sep. 30, 2022
Term Loan
Debt Instrument [Line Items]
Debt instrument interest rate stated percentage excluding the impact of cash flow hedges	4.03%

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Debt - Revolving Credit Facilities - Narrative (Details)		9 Months Ended	12 Months Ended
	Mar. 30, 2022 USD ($) ExtensionOption	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jan. 14, 2019 USD ($)
Line of Credit Facility [Line Items]
Unamortized deferred financing costs		$ 26,627,000	$ 20,334,000
Credit Facility 2019 | Revolving credit facilities | Unsecured Debt
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 1,200,000,000			$ 800,000,000.0
Number of extension options | ExtensionOption	2
Term of extension option	6 months
Increased borrowing capacity under accordion feature	$ 500,000,000.0
Credit facility maturity date	Mar. 31, 2026
Description of variable rate basis		1-month adjusted SOFR	1-month LIBOR
Facility fee percentage		0.15%	0.20%
Write off deferred financing costs		$ 200,000
Deferred financing costs incurred		8,600,000
Unamortized deferred financing costs		8,400,000	$ 1,400,000
Line of credit facility remaining borrowing capacity		1,200,000
Letters of credit outstanding		$ 0
Credit Facility 2019 | Revolving credit facilities | Unsecured Debt | SOFR
Line of Credit Facility [Line Items]
Basis spread on variable rate		0.775%
Credit Facility 2019 | Revolving credit facilities | Unsecured Debt | LIBOR
Line of Credit Facility [Line Items]
Basis spread on variable rate			0.90%

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Debt - Term Loans - Narrative (Details) - USD ($)			9 Months Ended
	Aug. 22, 2022	Jan. 04, 2021	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021
Line of Credit Facility [Line Items]
Repayments of long-term debt			$ 178,000,000
Unamortized deferred financing costs				$ 26,627,000	$ 20,334,000
Term Loan
Line of Credit Facility [Line Items]
Repayments of long-term debt		$ 178,000,000.0
Line of credit facility, current borrowing capacity	$ 800,000,000.0
Increased borrowing capacity under accordion feature	$ 200,000,000.0
Description of variable rate basis	1-month adjusted SOFR
Unamortized deferred financing costs				$ 8,200,000
Deferred financing costs	$ 8,400,000
Term Loan | Tranche One
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 300,000,000.0
Credit facility maturity date	Aug. 22, 2025
Term Loan | Tranche Two
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 500,000,000.0
Credit facility maturity date	Aug. 20, 2027
Term Loan | SOFR
Line of Credit Facility [Line Items]
Basis spread on variable rate	0.85%

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Debt - Summary of Senior Unsecured Notes (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Stated Interest Rate	3.36%
Total Debt	$ 3,554,959	$ 3,043,750
Senior Unsecured Notes
Debt Instrument [Line Items]
Stated Interest Rate	3.25%
Total Debt	$ 2,750,000	2,750,000
Senior Unsecured Notes | Weighted Average
Debt Instrument [Line Items]
Stated Interest Rate	3.25%
Senior Unsecured Notes | 2026 Senior Unsecured Notes
Debt Instrument [Line Items]
Maturity Date	Sep. 15, 2026
Interest Payment Dates	March 15 and September 15
Stated Interest Rate	4.45%
Total Debt	$ 300,000	300,000
Senior Unsecured Notes | 2027 Senior Unsecured Notes
Debt Instrument [Line Items]
Maturity Date	Jan. 15, 2027
Interest Payment Dates	January 15 and July 15
Stated Interest Rate	3.20%
Total Debt	$ 300,000	300,000
Senior Unsecured Notes | 2028 Senior Unsecured Notes
Debt Instrument [Line Items]
Maturity Date	Mar. 15, 2028
Interest Payment Dates	March 15 and September 15
Stated Interest Rate	2.10%
Total Debt	$ 450,000	450,000
Senior Unsecured Notes | 2029 Senior Unsecured Notes
Debt Instrument [Line Items]
Maturity Date	Jul. 15, 2029
Interest Payment Dates	January 15 and July 15
Stated Interest Rate	4.00%
Total Debt	$ 400,000	400,000
Senior Unsecured Notes | 2030 Senior Unsecured Notes
Debt Instrument [Line Items]
Maturity Date	Jan. 15, 2030
Interest Payment Dates	January 15 and July 15
Stated Interest Rate	3.40%
Total Debt	$ 500,000	500,000
Senior Unsecured Notes | 2031 Senior Unsecured Notes
Debt Instrument [Line Items]
Maturity Date	Feb. 15, 2031
Interest Payment Dates	February 15 and August 15
Stated Interest Rate	3.20%
Total Debt	$ 450,000	450,000
Senior Unsecured Notes | 2032 Senior Unsecured Notes
Debt Instrument [Line Items]
Maturity Date	Feb. 15, 2032
Interest Payment Dates	February 15 and August 15
Stated Interest Rate	2.70%
Total Debt	$ 350,000	$ 350,000

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Debt - Senior Unsecured Notes - Narrative (Details) - USD ($) $ in Thousands		9 Months Ended
	Mar. 03, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Proceeds from issuance of debt			$ 794,842
Unamortized deferred financing costs		$ 26,627		$ 20,334
Senior Unsecured Notes
Debt Instrument [Line Items]
Unamortized discount		$ 10,000		11,000
Redemption price, percent of principal amount		100.00%
Unamortized deferred financing costs		$ 18,400		$ 20,300
Senior Unsecured Notes | 2028 and 2032 Senior Unsecured Notes
Debt Instrument [Line Items]
Aggregate principal amount of debt	$ 800,000
Proceeds from issuance of debt	787,700
Deferred financing costs	7,100
Unamortized discount	$ 5,200

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Debt - Mortgages Payable - Narrative (Details)	Sep. 30, 2022 USD ($) Property loan	Dec. 31, 2021 USD ($)	Sep. 30, 2021 Property loan	Mar. 31, 2021 loan
Debt Instrument [Line Items]
Stated Interest Rate	3.36%
Unamortized deferred financing costs	$ 26,627,000	$ 20,334,000
Mortgages Payable
Debt Instrument [Line Items]
Number of loans secured by mortgage on leased properties and related assets | loan			3	3
Number of properties securing borrowings | Property			86
Mortgages Payable
Debt Instrument [Line Items]
Number of loans secured by mortgage on leased properties and related assets | loan	2
Stated Interest Rate	5.82%
Number of properties securing borrowings | Property	1
Unamortized deferred financing costs	$ 0	0
Unamortized net offering premium	$ 200,000	$ 200,000
Mortgages Payable | Minimum
Debt Instrument [Line Items]
Stated Interest Rate	5.80%
Mortgages Payable | Maximum
Debt Instrument [Line Items]
Stated Interest Rate	6.00%

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Debt - Convertible Notes - Narrative (Details) - USD ($)	1 Months Ended	9 Months Ended	12 Months Ended
	May 31, 2014	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2022
Debt Instrument [Line Items]
Stated Interest Rate				3.36%
Repurchase of convertible notes		$ 190,426,000
Convertible Senior Notes | Convertible Senior Notes Due 2021
Debt Instrument [Line Items]
Aggregate principal amount of debt	$ 345,000,000.0
Stated Interest Rate	3.75%
Repurchase of convertible notes			$ 154,600,000
Debt instrument, maturity date	May 15, 2021

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Debt - Debt Extinguishment - Narrative (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021 USD ($) Property loan	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($) Property loan	Mar. 31, 2021 loan
Debt Instrument [Line Items]
Gain (Loss) on extinguishment of debt	$ 1	$ (172)	$ (29,186)
Mortgages Payable
Debt Instrument [Line Items]
Gain (Loss) on extinguishment of debt			(28,500)
Debt extinguished			$ 207,400
Number of loans secured by mortgage on leased properties and related assets | loan	3		3	3
Number of properties securing borrowings | Property	86		86
Term Loan
Debt Instrument [Line Items]
Gain (Loss) on extinguishment of debt			$ (700)
Debt extinguished			178,000
Credit Facility 2019 | Revolving credit facilities | Unsecured Debt
Debt Instrument [Line Items]
Gain (Loss) on extinguishment of debt		$ (200)
Convertible Senior Notes Due 2021 | Convertible Senior Notes
Debt Instrument [Line Items]
Debt extinguished			$ 190,400

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Debt - Schedule of Debt Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Scheduled Debt Maturities
Remainder of 2022	$ 134
2023	556
2024	590
2025	300,626
2026	300,468
Thereafter	2,952,585
Total debt, net	3,554,959	$ 3,043,750
Scheduled Principal
Scheduled Debt Maturities
Remainder of 2022	134
2023	556
2024	590
2025	610
2026	468
Thereafter	2,532
Total debt, net	4,890
Balloon Payment
Scheduled Debt Maturities
2025	300,016
2026	300,000
Thereafter	2,950,053
Total debt, net	$ 3,550,069

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Debt - Summary of Components of Interest Expense Related to Borrowings (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Interest Expense
Amortization of deferred financing costs	$ 1,475	$ 910	$ 3,637	$ 3,026
Amortization of debt discount, net	318	307	947	1,830
Amortization of net losses related to interest rate swaps	702	702	2,106	2,106
Capitalized interest	(415)	0	(741)	0
Total interest expense	30,956	25,078	84,573	77,872
Revolving credit facilities
Schedule Of Interest Expenses [Line Items]
Facility fees	500	400	1,400	1,300
Interest expense	3,550	765	8,520	2,118
Term Loan
Schedule Of Interest Expenses [Line Items]
Interest expense	2,940	0	2,940	24
Senior Unsecured Notes
Schedule Of Interest Expenses [Line Items]
Interest expense	22,313	22,313	66,939	63,683
Mortgages payable
Schedule Of Interest Expenses [Line Items]
Interest expense	73	81	225	2,427
Convertible Notes
Schedule Of Interest Expenses [Line Items]
Interest expense	$ 0	$ 0	$ 0	$ 2,658

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Stockholders' Equity - Narrative (Details) - USD ($)	1 Months Ended		9 Months Ended		11 Months Ended	13 Months Ended
	Jan. 31, 2022	Dec. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Nov. 30, 2021
Class Of Stock [Line Items]
Proceeds from issuance of common stock, net of offering costs			$ 531,565,000	$ 336,602,000
Preferred stock, shares outstanding		6,900,000	6,900,000		6,900,000
Dividend rate			6.00%
Liquidation value (in USD per share)			$ 25.00		$ 25.00
Dividend rate, annual basis (in USD per share)			$ 1.50
Forward Sales Agreements
Class Of Stock [Line Items]
Forward sale agreements, shares of common stock	9,400,000
Forward sale agreements, price per share	$ 47.60
Proceeds from issuance of common stock, net of offering costs			$ 427,700,000
ATM Program, November 2020
Class Of Stock [Line Items]
Proceeds from issuance of common stock, net of offering costs						$ 391,400,000
Common stock authorized						$ 500,000,000.0
Common stock sold						9,300,000
ATM Program, November 2021
Class Of Stock [Line Items]
Proceeds from issuance of common stock, net of offering costs		$ 120,286,000	$ 103,946,000
Common stock authorized					$ 500,000,000.0
Common stock sold		2,706,000	2,395,000
Gross proceeds capacity remaining			$ 273,200,000		$ 273,200,000

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Stockholders' Equity - Summary of Activities Under 2021 ATM Program (Details) - USD ($) shares in Thousands, $ in Thousands	1 Months Ended	9 Months Ended
	Dec. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Class Of Stock [Line Items]
Net Proceeds on Issuances		$ 531,565	$ 336,602
ATM Program, November 2021
Class Of Stock [Line Items]
Shares sold	2,706	2,395
Shares issued	(2,650)	(2,451)
Unsettled shares sold	56
Net Proceeds on Issuances	$ 120,286	$ 103,946
ATM Program, November 2021 | Forward Shares
Class Of Stock [Line Items]
Shares sold	2,268	1,234
Shares issued	(2,212)	(1,290)
Unsettled shares sold	56
ATM Program, November 2021 | Regular Shares
Class Of Stock [Line Items]
Shares sold	438	1,161
Shares issued	(438)	(1,161)

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Stockholders' Equity - Summary of Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended						9 Months Ended
	Aug. 08, 2022	May 18, 2022	Feb. 09, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Equity [Abstract]
Common stock, dividend per share (in USD per share)	$ 0.663	$ 0.638	$ 0.638	$ 0.6630			$ 0.6380			$ 1.9390	$ 1.8880
Common stock, total amount	$ 92,595	$ 86,987	$ 85,688	$ 92,595	$ 86,987	$ 85,688	$ 78,674	$ 74,436	$ 71,837
Preferred stock, dividend per share (in USD per share)	$ 0.375	$ 0.375	$ 0.375
Preferred stock, total amount	$ 2,587	$ 2,588	$ 2,588	$ 2,587	$ 2,588	$ 2,588	$ 2,587	$ 2,588	$ 2,588

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Commitments and Contingencies - Narrative (Details)	9 Months Ended
	Sep. 30, 2022 USD ($) claim ground_lease	Dec. 31, 2021 USD ($) tenant
Commitments And Contingencies Disclosure [Abstract]
Contingently liable amount of debt owed by tenant		$ 5,700,000
Number of tenants indemnified by | tenant		1
Other income	$ 5,679,000
Accruals made for environmental remediation	$ 0
Outstanding claims | claim	0
Total commitments	$ 169,200,000
Total commitments relating to future acquisitions	27,400,000
Commitments expected to be funded in remainder of year	$ 56,400,000
Operating lease renewal option	two
Operating lease renewal term	5 years
Number of long-term non-cancelable ground leases | ground_lease	4
Operating lease, weighted average remaining lease term	5 years 3 months 18 days
Operating lease, right-of-use assets	$ 3,600,000	$ 3,700,000
Operating lease liabilities	$ 4,900,000	$ 5,100,000

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Derivative and Hedging Activities - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2022	Dec. 31, 2021
Derivative [Line Items]
Accumulated other comprehensive income (loss)		$ 35,761	$ (5,847)
2018 Interest Rate Swap
Derivative [Line Items]
Accumulated other comprehensive income (loss)		3,700
Amount reclassified as an increase or decrease to interest expense related to terminated hedges of within the next 12 months		2,800
2022 Interest Rate Swap
Derivative [Line Items]
Amount reclassified as an increase or decrease to interest expense related to terminated hedges of within the next 12 months		$ (12,700)
Designated as Hedging Instrument | 2018 Interest Rate Swap
Derivative [Line Items]
Termination of interest rate swaps	$ 12,500
Deferred loss on termination of interest rate swaps	$ 12,300

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Derivative and Hedging Activities - Summary of Notional Amount and Fair Value of Instruments (Details) - Designated as Hedging Instrument	9 Months Ended
	Sep. 30, 2022 USD ($)
Derivative Instruments Gain Loss [Line Items]
Derivatives Designated as Hedging Instruments, Fair Value of Asset	$ 39,502,000
Interest Rate Swap One
Derivative Instruments Gain Loss [Line Items]
Derivatives Designated as Hedging Instruments, Notional Amount	$ 300,000,000
Derivatives Designated as Hedging Instruments, Fixed Interest Rate	2.501%
Derivatives Designated as Hedging Instruments, Effective Date	Sep. 15, 2022
Derivatives Designated as Hedging Instruments, Maturity Date	Aug. 22, 2027
Derivatives Designated as Hedging Instruments, Fair Value of Asset	$ 17,070,000
Interest Rate Swap Two
Derivative Instruments Gain Loss [Line Items]
Derivatives Designated as Hedging Instruments, Notional Amount	$ 200,000,000
Derivatives Designated as Hedging Instruments, Fixed Interest Rate	2.507%
Derivatives Designated as Hedging Instruments, Effective Date	Sep. 15, 2022
Derivatives Designated as Hedging Instruments, Maturity Date	Aug. 22, 2027
Derivatives Designated as Hedging Instruments, Fair Value of Asset	$ 11,200,000
Interest Rate Swap Three
Derivative Instruments Gain Loss [Line Items]
Derivatives Designated as Hedging Instruments, Notional Amount	$ 300,000,000
Derivatives Designated as Hedging Instruments, Fixed Interest Rate	2.636%
Derivatives Designated as Hedging Instruments, Effective Date	Sep. 15, 2022
Derivatives Designated as Hedging Instruments, Maturity Date	Aug. 22, 2025
Derivatives Designated as Hedging Instruments, Fair Value of Asset	$ 11,232,000

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Derivative and Hedging Activities - Summary of Amounts Recorded in AOCIL and Loss Recorded in Operations when Reclassified out of AOCIL (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Cash flow hedge derivatives	$ 39,606		$ 39,606
Amount of gain reclassified from AOCIL to interest	(104)		(104)
Amount of loss reclassified from AOCIL to interest	702	$ 702	2,106	$ 2,106
Total	$ 40,204	$ 702	$ 41,608	$ 2,106

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Fair Value Measurements - Schedule of Assets at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - Interest Rate Swaps $ in Thousands	Sep. 30, 2022 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Fair Value Disclosure	$ 39,502
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Fair Value Disclosure	$ 39,502

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Fair Value Measurements - Narrative (Details) - Fair Value, Measurements, Nonrecurring - Property	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of lease, expiration period (or less)	60 days
Number of properties accounted for at fair value	8	14
Fair Value Estimated Using Capitalization Rate | Measurement Input Capitalization Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of properties accounted for at fair value		1
Fair value input, capitalization rate		14.00%

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Fair Value Measurements - Schedule of Assets at Fair Value on Nonrecurring Basis (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets Held Impaired At June 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure	$ 8,006
Assets Held Impaired At September 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure	4,094
Assets Held Impaired At March 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure		$ 1,739
Assets Held Impaired At June 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure		9,655
Assets Held Impaired At September 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure		3,479
Assets Held Impaired At December 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure		11,656
Level 3 | Assets Held Impaired At June 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure	8,006
Level 3 | Assets Held Impaired At September 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure	$ 4,094
Level 3 | Assets Held Impaired At March 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure		1,739
Level 3 | Assets Held Impaired At June 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure		9,655
Level 3 | Assets Held Impaired At September 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure		3,479
Level 3 | Assets Held Impaired At December 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Impaired Fair Value Disclosure		$ 11,656

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Fair Value Measurements - Fair Value Inputs of Long-Lived Assets Held and Used (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2022 ft² Property $ / ft²	Dec. 31, 2021 ft² Property $ / ft²
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Retail
Impaired Long Lived Assets Held And Used [Line Items]
Number of properties accounted for at fair value | Property	6	6
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Retail | Measurement Input, Price Per Square Foot | Minimum
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range	41.46	63.83
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Retail | Measurement Input, Price Per Square Foot | Maximum
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range	105.63	418.57
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Retail | Measurement Input, Price Per Square Foot | Weighted Average
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range	89.13	102.35
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Retail | Measurement Input Square Footage
Impaired Long Lived Assets Held And Used [Line Items]
Square Footage | ft²	45,931	39,603
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Data Center
Impaired Long Lived Assets Held And Used [Line Items]
Number of properties accounted for at fair value | Property	1	1
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Data Center | Measurement Input, Price Per Square Foot
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range	24.94	38.57
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Data Center | Measurement Input, Price Per Square Foot | Weighted Average
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range	24.94	38.57
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Data Center | Measurement Input Square Footage
Impaired Long Lived Assets Held And Used [Line Items]
Square Footage | ft²	188,475	188,475
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Medical
Impaired Long Lived Assets Held And Used [Line Items]
Number of properties accounted for at fair value | Property		2
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Medical | Measurement Input, Price Per Square Foot | Minimum
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range		65.63
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Medical | Measurement Input, Price Per Square Foot | Maximum
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range		105.16
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Medical | Measurement Input, Price Per Square Foot | Weighted Average
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range		75.60
Fair Value Estimated Using Listing Price Or Broker Opinion Of Value | Medical | Measurement Input Square Footage
Impaired Long Lived Assets Held And Used [Line Items]
Square Footage | ft²		41,496
Fair Value Estimated Using Comparable Properties | Retail
Impaired Long Lived Assets Held And Used [Line Items]
Number of properties accounted for at fair value | Property	1	3
Fair Value Estimated Using Comparable Properties | Retail | Measurement Input, Price Per Square Foot | Minimum
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range	60.14	29.35
Fair Value Estimated Using Comparable Properties | Retail | Measurement Input, Price Per Square Foot | Maximum
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range	75.51	483.09
Fair Value Estimated Using Comparable Properties | Retail | Measurement Input, Price Per Square Foot | Weighted Average
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range	69.28	67.48
Fair Value Estimated Using Comparable Properties | Retail | Measurement Input Square Footage
Impaired Long Lived Assets Held And Used [Line Items]
Square Footage | ft²	48,042	42,357
Fair Value Estimated Using Comparable Properties | Medical
Impaired Long Lived Assets Held And Used [Line Items]
Number of properties accounted for at fair value | Property		1
Fair Value Estimated Using Comparable Properties | Medical | Measurement Input, Price Per Square Foot | Minimum
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range		78.66
Fair Value Estimated Using Comparable Properties | Medical | Measurement Input, Price Per Square Foot | Maximum
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range		106.35
Fair Value Estimated Using Comparable Properties | Medical | Measurement Input, Price Per Square Foot | Weighted Average
Impaired Long Lived Assets Held And Used [Line Items]
Price Per Square Foot Range		95.00
Fair Value Estimated Using Comparable Properties | Medical | Measurement Input Square Footage
Impaired Long Lived Assets Held And Used [Line Items]
Square Footage | ft²		15,974

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Fair Value Measurements - Schedule of Carrying Amount and Estimated Fair Value Of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans receivable, net	$ 23,023	$ 10,450
Revolving credit facilities		288,400
Term loans	791,791
Senior Unsecured Notes, net	2,721,534	2,718,641
Mortgages payable, net	5,130	5,551
Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans receivable, net	23,228	11,381
2019 Credit Facility		288,549
2022 Term Loans, net	831,032
Senior Unsecured Notes, net	2,263,756	2,865,187
Mortgages payable, net	$ 4,790	$ 5,748

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Incentive Award Plan - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Value of shares surrendered for payment of federal and state with holding taxes		$ 17	$ 6,410		$ 549	$ 3,843	$ 6,400
General and Administrative Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 4,400			$ 3,500			$ 12,800	$ 10,500
Restricted Share Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in period (in shares)							122
Deferred compensation expense							$ 5,600
Outstanding unvested shares	216						216
Restricted Share Awards | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation expense over requisite service period							1 year
Restricted Share Awards | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation expense over requisite service period							3 years
Market-Based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in period (in shares)							166
Expected volatility							39.50%
Minimum required service period							3 years
Average volatility rate							35.70%
Risk free interest rate							1.59%
Market-based award, grant date fair value							$ 93.26
Accrued dividend rights	$ 2,400						$ 2,400		$ 3,300
Shares expected to be released							300
Market-Based Awards | Group of Industry Peers
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility rate, minimum							21.50%
Volatility rate, maximum							53.60%
Market-Based Awards | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent multiplier for shares granted							0.00%
Market-Based Awards | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent multiplier for shares granted							375.00%

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Incentive Award Plan - Summary of Remaining Unamortized Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unamortized stock-based compensation expense	$ 24,268	$ 15,930
Restricted Share Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unamortized stock-based compensation expense	6,121	4,787
Market-Based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unamortized stock-based compensation expense	$ 18,147	$ 11,143

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Income Per Share - Schedule of Reconciliation of the Numerator and Denominator Used in the Computation of Basic and Diluted Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Basic and diluted income:
Income from continuing operations	$ 76,640	$ 40,878	$ 215,436	$ 127,333
Dividends paid to preferred shareholders	(2,587)	(2,587)	(7,763)	(7,763)
Less: dividends attributable to unvested restricted stock	(142)	(147)	(412)	(433)
Net income attributable to common stockholders used in basic and diluted income per share	$ 73,911	$ 38,144	$ 207,261	$ 119,137
Basic weighted average shares of common stock outstanding:
Weighted average shares of common stock outstanding	136,530,530	120,009,550	133,058,487	116,752,993
Less: unvested weighted average shares of restricted stock	(216,161)	(233,679)	(223,277)	(249,359)
Basic weighted average shares of common stock outstanding	136,314,369	119,775,871	132,835,210	116,503,634
Net income per share attributable to common stockholders - basic	$ 0.54	$ 0.32	$ 1.56	$ 1.02
Diluted weighted average shares of common stock outstanding:
Plus: unvested market-based awards		523,432	130,087	365,843
Plus: unsettled shares under open forward equity contracts		2,855		952
Diluted weighted average shares of common stock outstanding	136,314,369	120,302,158	132,965,297	116,870,429
Net income per share attributable to common stockholders - diluted	$ 0.54	$ 0.32	$ 1.56	$ 1.02
Unvested restricted share awards
Potentially dilutive shares of common stock related to:
Dilutive shares	51,338	93,711	65,060	88,050