• Office Property Leasing: The company leases single-tenant office properties under net lease agreements to corporate tenants.

Net Lease Office Properties (NLOP) is a real estate investment trust (REIT) that owns and leases office properties under a net lease structure. As such, its major customers are the corporate entities that lease space in its portfolio of properties.

As of its latest public filings (e.g., Form 10-K for the fiscal year ended December 31, 2023), Net Lease Office Properties leases its 59 properties to a diverse group of 33 tenants. The company does not publicly disclose the specific names of its individual tenants, including its major customers, in its financial reports or investor presentations.

However, NLOP does provide aggregated information regarding its tenant concentration, identifying its major customers by their contribution to the company's annualized base rent (ABR):

• The top 10 tenants collectively account for approximately 49.3% of NLOP's ABR.
• The single largest tenant accounts for approximately 6.9% of ABR and is based in Finland.
• The second largest tenant accounts for approximately 6.5% of ABR and is based in Germany.
• The third largest tenant accounts for approximately 5.7% of ABR and is based in the U.S.

These tenants are other companies operating across various industries, utilizing the leased office spaces for their business operations.

Jason E. Fox, Chairman, Trustee and Chief Executive Officer

Jason E. Fox was appointed Chairman, Trustee and Chief Executive Officer of Net Lease Office Properties in 2023. In addition to his role at NLOP, Mr. Fox currently serves as Chief Executive Officer, President, and Board Member of W. P. Carey. He joined W. P. Carey in 2002, where he played a central role in building and leading the company's investment platform, holding senior leadership positions across the Investments Team, including Co-Head of Global Investments (2012) and Head of Global Investments (2015). In these roles, he was responsible for sourcing, negotiating, and structuring acquisitions across North America and Europe. Prior to joining W. P. Carey, Mr. Fox worked at the Spectrem Group, a consulting and M&A advisory firm in San Francisco, and also spent two years teaching mathematics and physics at The Hotchkiss School in Connecticut.

ToniAnn Sanzone, Chief Financial Officer

ToniAnn Sanzone was appointed Chief Financial Officer of Net Lease Office Properties in 2023. She also serves as Chief Financial Officer of W. P. Carey, a position she has held since 2017 (and on an interim basis from 2016-2017). Ms. Sanzone joined W. P. Carey in 2013 and is responsible for overseeing financial and risk functions, including accounting, reporting, corporate finance, IT, internal audit, tax, and treasury, across the U.S. and Europe. She is a Certified Public Accountant.

Brian H. Zander, Chief Accounting Officer

Brian H. Zander serves as the Chief Accounting Officer for Net Lease Office Properties.

1. Challenges in Property Disposition and Decreased Property Values: NLOP's core strategy relies on selling its real estate assets. A significant risk is the inability to sell properties at favorable prices or on acceptable terms due to the inherent illiquidity of real estate investments. Factors such as changes in general economic conditions, local market dynamics, supply and demand for office properties, and increased competition can adversely affect property values and the feasibility of timely dispositions. Weak sales realizations have already been observed for some properties. Delays in selling properties can also lead to increased interest expenses, further eroding liquidation value.
2. Lease Expirations and Vacancy Risk: A substantial portion of NLOP's annualized base rent (ABR) comes from leases set to expire in the near future. As of December 31, 2025, approximately 21.7% of the ABR was comprised of tenants with leases expiring within the next two years. If tenants opt not to renew their leases, terminate early, or default on their obligations, NLOP may experience difficulties and delays in re-leasing the vacant space or finding new buyers. The ongoing shift toward remote and hybrid work models further exacerbates this risk by potentially decreasing overall demand for office space, which can negatively impact occupancy rates and property values.
3. Interest Rate Risk: Fluctuations in interest rates pose a significant risk to NLOP's disposition strategy and property valuations. Higher interest rates can make it more challenging for potential buyers to secure financing for acquisitions, which could lead to lower sale prices for NLOP's properties. Furthermore, if NLOP experiences delays in selling its assets, the impact of its existing high-interest debt could be compounded, potentially affecting its financial condition if significant debt repayments cannot be made from asset sales.

Net Lease Office Properties (NLOP) is currently engaged in a strategic plan centered on asset dispositions and returning capital to shareholders, rather than expanding its portfolio. Despite an overall decline in revenue due to this strategy, certain aspects of their ongoing asset management for the remaining properties could be considered drivers for optimizing future revenue generation from their stabilized portfolio over the next 2-3 years.

Here are 3 expected drivers of future revenue generation for Net Lease Office Properties:

1. Optimized Lease Renewals and New Leasing on Remaining Properties: NLOP focuses on managing its existing portfolio, which includes securing new leases and renewing current leases. For example, the company has successfully signed new leases for 66,832 square feet with a weighted average term of 9.5 years. Additionally, lease renewals and extensions have covered 1.2 million square feet, achieving a 91.9% rent recapture and a 7-year weighted average incremental term. These efforts aim to stabilize and maximize rental income from the properties NLOP continues to hold, ensuring consistent cash flows from these assets.

2. Strategic Asset Management to Maintain Occupancy and Rental Rates: The company's strategy involves value realization through active asset management of its remaining properties. This includes efforts to maintain high occupancy rates and secure competitive rental rates for its diverse portfolio, which consists of 20 properties, 2 million square feet, and 13 tenants across various sectors including government, advertising, insurance, software, and cable. Effective asset management ensures the optimal performance and revenue generation from these retained properties.

3. Capital Expenditures to Enhance and Maintain Property Value: While the primary focus is on dispositions, NLOP also plans to reinvest in its properties through capital expenditures as needed. These investments are crucial for maintaining the quality and appeal of the remaining office assets. By enhancing property value and functionality, NLOP can support favorable rental rates, encourage tenant retention, and potentially attract new tenants, thereby optimizing the revenue stream from its core portfolio.

Net Lease Office Properties (NLOP) was spun off from Industrial Logistics Properties Trust (ILPT) on October 26, 2023, making its capital allocation decisions primarily from late 2023 onwards.

Share Repurchases

There is no information available regarding share repurchases made or authorized by Net Lease Office Properties over the last 3-5 years.

Share Issuance

• On November 1, 2023, Net Lease Office Properties was established through a spin-off from W. P. Carey Inc. (WPC), resulting in the issuance of one NLOP common share for every 15 shares of W. P. Carey common stock. This led to 14,261,721 NLOP shares outstanding as of November 1, 2023.
• In December 2023, NLOP authorized a common share dividend of $0.34 per share, giving shareholders the option to elect to receive their dividend in cash or additional NLOP shares.

Inbound Investments

There is no information available regarding large inbound investments made in Net Lease Office Properties by third-parties over the last 3-5 years. The company's business plan focuses on strategic asset disposition.

Outbound Investments

Net Lease Office Properties' business plan is centered on the strategic disposition of its office property portfolio, rather than making strategic investments in other companies.

Capital Expenditures

• Net Lease Office Properties plans to use proceeds generated from its property dispositions to reinvest in its properties through capital expenditures as needed.