ExchangeRight Income Fund (0001771514) (Filer)

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, 2026


	☐ 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: 000-56543

EXCHANGERIGHT INCOME FUND

(Exact name of registrant as specified in its charter)


Maryland	36-7729360
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1055 E. Colorado Blvd, Suite 310
Pasadena, California	91106
(Address of principal executive offices)	(Zip Code)

(855) 317-4448

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

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	o	Accelerated filer	o

Non-accelerated filer	x	Smaller reporting company	x

		Emerging growth company	x

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 October 28, 2026, the issuer had the following shares of common stock outstanding: 9,776,674 Class A Common Shares, $0.01 par value per share; 5,591,708 Class I Common Shares, $0.01 par value per share; 329,485 Class D Common Shares, $0.01 par value per share; 939,251 Class ER-I Common Shares, $0.01 par value per share; 432,164 Class ER-A Common Shares, $0.01 par value per share; and 46,931 Class ER-D Common Shares, $0.01 par value per share.

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Quarterly Report on Form 10-Q

Quarter ended September 30, 2026

Table of Contents


		Page

Cautionary Note Regarding Forward-Looking Statements		i

Part I. Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets - September 30, 2026 (Unaudited) and December 31, 2025	1
	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income - Three and Nine Months ended September 30, 2026 and 2025 (Unaudited)	3
	Condensed Consolidated Statements of Equity - Nine Months ended September 30, 2026 and 2025 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows - Nine Months ended September 30, 2026 and 2025 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4.	Controls and Procedures	52

Part II. Other Information
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	56
Item 4.	Mine Safety Disclosures	56
Item 5.	Other Information	56
Item 6.	Exhibits	57

Signatures		58

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Current Report on Form 10-Q other than historical facts may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and, as such, may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of ExchangeRight Income Fund, d/b/a the ExchangeRight Essential Income REIT (the “Company”) to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. For these statements, the Company claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “may”, “will”, “should”, “estimates”, “projects”, “anticipates”, “believes”, “expects”, “intends”, “future”, and words of similar import, or the negative thereof. Forward-looking statements in this Current Report on Form 10-Q include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations, our strategic plans and objectives, occupancy, leasing rates and trends, liquidity and ability to meet future obligations, anticipated expenditures of capital and other matters. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Form 10-Q is filed with the Securities and Exchange Commission.

Any such forward-looking statements are subject to unknown risks, uncertainties, and other factors, which in some cases are beyond our control, and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations, provide distributions to shareholders, and maintain the value of our real estate properties, may be significantly hindered.

Factors that could cause actual results, performance or achievements to differ materially from current expectations include, but are not limited to:

•

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

•

general business and economic conditions;

•

changes in U.S trade policies, including the imposition of tariffs and retaliatory tariffs, and other restrictions on free trade;

•

changes within the domestic and international macroeconomic environment, including trade policy, monetary and fiscal policy, inflation levels, and conditions in the investment, credit, interest rate, and derivatives markets, and their impact on the Company and its tenants;

•

the accuracy of our assessment that certain businesses are e‑commerce resistant and recession‑resilient;

•

the accuracy of the tools we use to determine the creditworthiness of our tenants;

•

concentration of our business within certain tenant categories;

•

ability to renew leases, lease vacant space or re‑lease space as existing leases expire;

•

our ability to successfully execute our acquisition strategies;

•

the degree and nature of our competition;

•

inflation and interest rate fluctuations;

•

failure, weakness, interruption or breach in security of our information systems;

•

risks related to the development and use of artificial intelligence (AI);

•

our failure to generate sufficient cash flows to service our outstanding indebtedness;

•

continued volatility and uncertainty in the credit markets and broader financial markets;

•

our ability to maintain our qualification as a real estate investment trust (“REIT”) for federal income tax purposes;

•

current loans, or future loans, may be subject to certain unfavorable provisions or may not be able to be refinanced;

•

changes in, or the failure or inability to comply with, applicable laws or regulations; and

•

future sales or issuances of our common shares or other securities convertible into our common shares, or the perception thereof, could cause the value of our common shares to decline and could result in dilution.

The foregoing list is only a summary of the principal risks that may materially adversely affect our business, financial condition, results of operations and cash flows. The foregoing should be read in conjunction with the complete discussion of risk factors we face, which are set forth in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on February 26, 2026.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Condensed Consolidated Balance Sheets

(Unaudited)




	September 30, 2026			December 31, 2025
ASSETS
Real estate:
Land	$	317,552,000		$	224,081,000
Buildings and improvements		1,357,508,000			982,635,000
Real estate, gross		1,675,060,000			1,206,716,000
Less accumulated depreciation		(142,956,000	)		(115,945,000	)
Real estate, net		1,532,104,000			1,090,771,000
Intangible lease assets, net		91,228,000			57,670,000
RSLCA notes receivable from affiliates		25,619,000			21,007,000
Restricted cash		17,569,000			10,835,000
Cash and cash equivalents		13,852,000			10,664,000
Receivables		12,815,000			9,935,000
Notes receivable from affiliates		21,400,000			21,400,000
Right-of-use asset		4,790,000			4,750,000
Other assets		4,022,000			2,711,000
Due from affiliates		5,728,000			3,509,000
Real estate held for sale		2,113,000			6,399,000
TOTAL ASSETS	$	1,731,240,000		$	1,239,651,000

LIABILITIES AND EQUITY
Mortgage loans payable, net	$	654,869,000		$	514,758,000
Term loan facility, net		291,513,000			-
Revolving credit facility		-			157,403,000
Intangible lease liabilities, net		24,718,000			22,039,000
Accounts payable, accrued expenses and other liabilities		19,937,000			13,798,000
Right-of-use liability		5,558,000			5,397,000
Pending trade deposits		829,000			1,505,000
Distributions payable		4,902,000			3,777,000
Due to affiliates		1,646,000			180,000
Total liabilities		1,003,972,000			718,857,000

Commitments and contingencies		-			-

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Condensed Consolidated Balance Sheets

(Unaudited)

continued


Equity:
Class A common shares, $0.01 par value per share, 78,506,634 and 79,169,019 shares authorized, 9,918,759 and 9,994,066 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively	$	100,000		$	100,000
Class I common shares, $0.01 par value per share, 78,506,634 and 79,169,019 shares authorized, 5,709,656 and 5,759,806 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively		57,000			58,000
Class S common shares, $0.01 par value per share, 78,506,634 and 79,169,019 shares authorized, 0 and 0 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively		-			-
Class D common shares, $0.01 par value per share, 78,506,634 and 79,169,019 shares authorized, 296,458 and 68,911 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively		3,000			1,000
Class ER-A common shares, $0.01 par value per share, 3,619,254 and 3,663,004 shares authorized, 431,693 and 190,511 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively		4,000			2,000
Class ER-I common shares, $0.01 par value per share, 3,619,254 and 3,663,004 shares authorized, 939,251 and 843,290 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively		9,000			9,000
Class ER-S common shares, $0.01 par value per share, 3,619,254 and 3,663,004 shares authorized, 0 and 0 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively		-			-
Class ER-D common shares, $0.01 par value per share, 3,619,254 and 3,663,004 shares authorized, 46,931 and 39,991 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively		1,000			-
Additional paid-in capital		451,109,000			438,896,000
Cumulative distributions in excess of net income		(137,886,000	)		(110,795,000	)
Accumulated other comprehensive (loss)		77,000			(290,000	)
Total shareholders’ equity		313,474,000			327,981,000
Noncontrolling interests in operating partnership		413,794,000			192,813,000
Total equity		727,268,000			520,794,000
TOTAL LIABILITIES AND EQUITY	$	1,731,240,000		$	1,239,651,000

See accompanying notes to condensed consolidated financial statements.

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2026			2025			2026			2025
Revenues
Rental revenue	$	30,175,000		$	21,759,000		$	79,165,000		$	65,603,000
Interest income on notes receivable from affiliates		1,344,000			1,178,000			3,680,000			3,783,000
Other		88,000			55,000			256,000			111,000
Total revenues		31,607,000			22,992,000			83,101,000			69,497,000

Operating Expenses
Property operating expenses		3,583,000			2,519,000			9,928,000			8,329,000
Management fees to affiliates		886,000			40,000			2,201,000			560,000
General and administrative expenses		568,000			364,000			1,603,000			1,102,000
Depreciation and amortization		16,587,000			11,066,000			40,937,000			33,110,000
Provisions for impairment		-			-			1,890,000			-
Total operating expenses		21,624,000			13,989,000			56,559,000			43,101,000

(Loss) gain on sales of real estate, net		(902,000	)		-			(902,000	)		5,184,000

Income from Operations		9,081,000			9,003,000			25,640,000			31,580,000

Other Income (Expense)
Interest expense		(13,658,000	)		(9,450,000	)		(34,120,000	)		(27,990,000	)
Interest income		9,000			4,000			31,000			14,000
Total other income (expense)		(13,649,000	)		(9,446,000	)		(34,089,000	)		(27,976,000	)

Net (loss) income		(4,568,000	)		(443,000	)		(8,449,000	)		3,604,000

Net loss (income) attributable to noncontrolling interests		2,151,000			154,000			3,672,000			(1,281,000	)

Net (loss) income attributable to common shareholders	$	(2,417,000	)	$	(289,000	)	$	(4,777,000	)	$	2,323,000

Net (loss) income per common share attributable to common shareholders, basic	$	(0.14	)	$	(0.02	)	$	(0.28	)	$	0.14
Net (loss) income per common share attributable to common shareholders, diluted	$	(0.14	)	$	(0.02	)	$	(0.28	)	$	0.14

Weighted average number of common shares outstanding, basic		17,265,206			16,621,322			17,086,441			16,586,493
Weighted average number of common shares outstanding, diluted		26,435,734			25,878,464			26,288,700			25,738,888

Other comprehensive loss (income):
Net (loss) income	$	(4,568,000	)	$	(443,000	)	$	(8,449,000	)	$	3,604,000
Other comprehensive income (loss) - unrealized gain (loss) on change in fair value of cash flow hedges		205,000			11,000			608,000			(382,000	)
Comprehensive (loss) income		(4,363,000	)		(432,000	)		(7,841,000	)		3,222,000
Comprehensive loss (income) attributable to noncontrolling interests		2,047,000			150,000			3,431,000			(1,146,000	)
Comprehensive (loss) income attributable to common shareholders	$	(2,316,000	)	$	(282,000	)	$	(4,410,000	)	$	2,076,000

See accompanying notes to condensed consolidated financial statements.

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Condensed Consolidated Statements of Equity

Nine months ended September 30, 2026

(Unaudited)


																						Cumulative			Accumulated						Noncontrolling
	Par Value																		Additional			distributions			other			Total			interests
	Class			Class			Class		Class		Class		Class		Class		Class		paid-in			in excess			comprehensive			shareholders'			operating			Total
	A			I			S		D		ER-A		ER-I		ER-S		ER-D		capital			of net income			(loss) income			equity			partnership			equity
Balance, December 31, 2025	$	100,000		$	58,000		$	-	$	1,000	$	2,000	$	9,000	$	-	$	-	$	438,896,000		$	(110,795,000	)	$	(290,000	)	$	327,981,000		$	192,813,000		$	520,794,000
Net (loss)		-			-			-		-		-		-		-		-		-			(152,000	)		-			(152,000	)		(86,000	)		(238,000	)
Unrealized gain on change in fair value of cash flow hedges		-			-			-		-		-		-		-		-		-			-			135,000			135,000			50,000			185,000
Issuance of common shares		1,000			1,000			-		-		1,000		-		-		-		9,779,000			-			-			9,782,000			-			9,782,000
Issuance of common shares under DRIP		-			-			-		-		-		-		-		-		1,305,000			-			-			1,305,000			-			1,305,000
Repurchase of common shares		(1,000	)		(1,000	)		-		-		-		-		-		-		(6,069,000	)		-			-			(6,071,000	)		-			(6,071,000	)
Issuance of OP Units		-			-			-		-		-		-		-		-		-			-			-			-			71,387,000			71,387,000
Conversion of OP Units to common shares		-			-			-		-		-		-		-		-		635,000			-			-			635,000			(635,000	)		-
Offering costs		-			-			-		-		-		-		-		-		(460,000	)		-			-			(460,000	)		-			(460,000	)
Distributions		-			-			-		-		-		-		-		-		-			(7,368,000	)		-			(7,368,000	)		(4,065,000	)		(11,433,000	)
Balance, March 31, 2026	$	100,000		$	58,000		$	-	$	1,000	$	3,000	$	9,000	$	-	$	-	$	444,086,000		$	(118,315,000	)	$	(155,000	)	$	325,787,000		$	259,464,000		$	585,251,000
Net (loss)		-			-			-		-		-		-		-		-		-			(2,208,000	)		-			(2,208,000	)		(1,435,000	)		(3,643,000	)
Unrealized gain on change in fair value of cash flow hedges		-			-			-		-		-		-		-		-		-			-			131,000			131,000			87,000			218,000
Issuance of common shares		2,000			-			-		1,000		1,000		-		-		1,000		14,608,000			-			-			14,613,000			-			14,613,000
Issuance of common shares under DRIP		-			-			-		-		-		-		-		-		1,291,000			-			-			1,291,000			-			1,291,000
Repurchase of common shares		(2,000	)		(1,000	)		-		-		-		-		-		-		(9,220,000	)		-			-			(9,223,000	)		-			(9,223,000	)
Issuance of OP Units		-			-			-		-		-		-		-		-		-			-			-			-			90,524,000			90,524,000
Conversion of OP Units to common shares		-			-			-		-		-		-		-		-		1,005,000			-			-			1,005,000			(1,005,000	)		-
Offering costs		-			-			-		-		-		-		-		-		(687,000	)		-			-			(687,000	)		-			(687,000	)
Distributions		-			-			-		-		-		-		-		-		-			(7,436,000	)		-			(7,436,000	)		(5,060,000	)		(12,496,000	)
Balance, June 30, 2026	$	100,000		$	57,000		$	-	$	2,000	$	4,000	$	9,000	$	-	$	1,000	$	451,083,000		$	(127,959,000	)	$	(24,000	)	$	323,273,000		$	342,575,000		$	665,848,000
Net (loss)		-			-			-		-		-		-		-		-		-			(2,417,000	)		-			(2,417,000	)		(2,151,000	)		(4,568,000	)
Unrealized gain on change in fair value of cash flow hedges		-			-			-		-		-		-		-		-		-			-			101,000			101,000			104,000			205,000
Issuance of common shares		1,000			1,000			-		1,000		-		-		-		-		5,761,000			-			-			5,764,000			-			5,764,000
Issuance of common shares under DRIP		-			-			-		-		-		-		-		-		1,340,000			-			-			1,340,000			-			1,340,000
Repurchase of common shares		(1,000	)		(1,000	)		-		-		-		-		-		-		(7,686,000	)		-			-			(7,688,000	)		-			(7,688,000	)
Issuance of OP Units		-			-			-		-		-		-		-		-		-			-			-			-			80,872,000			80,872,000
Conversion of OP Units to common shares		-			-			-		-		-		-		-		-		807,000			-			-			807,000			(807,000	)		-
Offering costs		-			-			-		-		-		-		-		-		(196,000	)		-			-			(196,000	)		-			(196,000	)
Distributions		-			-			-		-		-		-		-		-		-			(7,510,000	)		-			(7,510,000	)		(6,799,000	)		(14,309,000	)
Balance, September 30, 2026	$	100,000		$	57,000		$	-	$	3,000	$	4,000	$	9,000	$	-	$	1,000	$	451,109,000		$	(137,886,000	)	$	77,000		$	313,474,000		$	413,794,000		$	727,268,000

See accompanying notes to condensed consolidated financial statements.

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Condensed Consolidated Statements of Equity

Nine months ended September 30, 2025

(Unaudited)



																						Cumulative			Accumulated						Noncontrolling
																			Additional			distributions			other			Total			interests
	Par Value																		paid-in			in excess			comprehensive			shareholders'			operating			Total
	Class A			Class I			Class S		Class D		Class ER-A		Class ER-I (a)		Class ER-S		Class ER-D		capital			of net income			(loss)			equity			partnership			equity
Balance, December 31, 2024	$	103,000		$	60,000		$	-	$	-	$	-	$	3,000	$	-	$	-	$	429,528,000		$	(83,740,000	)	$	(56,000	)	$	345,898,000		$	199,881,000		$	545,779,000
Net (loss)		-			-			-		-		-		-		-		-		-			(400,000	)		-			(400,000	)		(217,000	)		(617,000	)
Unrealized (loss) on change in fair value of cash flow hedges		-			-			-		-		-		-		-		-		-			-			(174,000	)		(174,000	)		(93,000	)		(267,000	)
Issuance of common shares		1,000			1,000			-		-		-		2,000		-		-		11,276,000			-			-			11,280,000			-			11,280,000
Issuance of common shares under DRIP		-			-			-		-		-		-		-		-		1,220,000			-			-			1,220,000			-			1,220,000
Repurchase of common shares		(1,000	)		(2,000	)		-		-		-		-		-		-		(10,260,000	)		-			-			(10,263,000	)		-			(10,263,000	)
Conversion of OP Units to common shares		-			-			-		-		-		-		-		-		604,000			-			-			604,000			(604,000	)		-
Offering costs		-			-			-		-		-		-		-		-		(582,000	)		-			-			(582,000	)		-			(582,000	)
Distributions		-			-			-		-		-		-		-		-		-			(7,183,000	)		-			(7,183,000	)		(3,862,000	)		(11,045,000	)
Balance, March 31, 2025	$	103,000		$	59,000		$	-	$	-	$	-	$	5,000	$	-	$	-	$	431,786,000		$	(91,323,000	)	$	(230,000	)	$	340,400,000		$	195,105,000		$	535,505,000
Net (loss)		-			-			-		-		-		-		-		-		-			3,012,000			-			3,012,000			1,652,000			4,664,000
Unrealized gain on change in fair value of cash flow hedges		-			-			-		-		-		-		-		-		-			-			(80,000	)		(80,000	)		(46,000	)		(126,000	)
Issuance of common shares		1,000			1,000			-		-		-		3,000		-		-		11,529,000			-			-			11,534,000			-			11,534,000
Issuance of common shares under DRIP		-			-			-		-		-		-		-				1,234,000			-						1,234,000			-			1,234,000
Repurchase of common shares		(2,000	)		(1,000	)		-		-		-		-		-		-		(8,947,000	)		-			-			(8,950,000	)		-			(8,950,000	)
Issuance of OP Units		-			-			-		-		-		-		-		-		-			-			-			-			9,455,000			9,455,000
Conversion of OP Units to common shares		-			-			-		-		-		-		-				182,000			-			-			182,000			(182,000	)		-
Offering costs		-			-			-		-		-		-		-		-		(628,000	)		-			-			(628,000	)		(94,000	)		(722,000	)
Distributions		-			-			-		-		-		-		-		-		-			(7,228,000	)		-			(7,228,000	)		(3,984,000	)		(11,212,000	)
Balance, June 30, 2025	$	102,000		$	59,000		$	-	$	-	$	-	$	8,000	$	-	$	-	$	435,156,000		$	(95,539,000	)	$	(310,000	)	$	339,476,000		$	201,906,000		$	541,382,000
Net (loss)		-			-			-		-		-		-		-		-		-			(289,000	)		-			(289,000	)		(154,000	)		(443,000	)
Unrealized gain on change in fair value of cash flow hedges		-			-			-		-		-		-		-		-		-			-			7,000			7,000			4,000			11,000
Issuance of common shares		-			1,000			-		-		1,000		-		-		-		8,505,000			-			-			8,507,000			-			8,507,000
Issuance of common shares under DRIP		-			-			-		-		-		-		-				1,245,000			-			-			1,245,000			-			1,245,000
Repurchase of common shares		(2,000	)		(2,000	)		-		-		-		-		-		-		(9,312,000	)		-			-			(9,316,000	)		-			(9,316,000	)
Conversion of OP Units to common shares		-			-			-		-		-		-		-		-		831,000			-			-			831,000			(831,000	)		-
Offering costs		-			-			-		-		-		-		-		-		(358,000	)		-			-			(358,000	)		-			(358,000	)
Distributions		-			-			-		-		-		-		-		-		-			(7,235,000	)		-			(7,235,000	)		(3,986,000	)		(11,221,000	)
Balance, September 30, 2025	$	100,000		$	58,000		$	-	$	-	$	1,000	$	8,000	$	-	$	-	$	436,067,000		$	(103,063,000	)	$	(303,000	)	$	332,868,000		$	196,939,000		$	529,807,000

(a) On June 10, 2025, pursuant to the Third Amended and Restated Declaration of Trust of the Company, the Company renamed the Class ER Common Shares as Class ER-I Common Shares.

See accompanying notes to condensed consolidated financial statements.

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(8,449,000	)	$	3,604,000
Adjustments to reconcile net loss (income) to net cash provided by operating activities:
Depreciation and amortization		40,937,000			33,110,000
Provisions for impairment		1,890,000			-
Loss (gain) on sales of real estate, net		902,000			(5,184,000	)
Amortization of deferred rent receivables/liabilities, net		(738,000	)		(653,000	)
Amortization of above/below-market lease intangibles, net		(1,892,000	)		(1,871,000	)
Amortization of assumed below/above-market debt discount/premium, net		4,276,000			3,650,000
Amortization of lease incentives		212,000			202,000
Amortization of deferred financing costs		1,011,000			528,000
Amortization of deferred ground rent		121,000			121,000
Changes in assets and liabilities, net of assets acquired and liabilities assumed:
Receivables		(2,142,000	)		254,000
Other assets		(619,000	)		(1,160,000	)
Due from affiliates		209,000			53,000
Accounts payable, accrued expenses and other liabilities		4,139,000			771,000
Due to affiliates		685,000			(691,000	)
Net cash provided by operating activities		40,542,000			32,734,000

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of real estate		(6,551,000	)		(39,730,000	)
Proceeds from sale of real estate		4,712,000			29,171,000
Improvements of real estate		(281,000	)		(668,000	)
Advances on RSLCA notes receivable from affiliated party		(94,853,000	)		(91,948,000	)
Repayments on RSLCA notes receivable from affiliated party		90,241,000			99,081,000
Net cash used in investing activities		(6,732,000	)		(4,094,000	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common shares		28,654,000			28,226,000
Offering costs from issuance of common shares		(1,343,000	)		(1,568,000	)
Repurchases of common shares		(22,982,000	)		(28,529,000	)
Proceeds from issuance of noncontrolling interests		9,084,000			-
Proceeds from reserves due to affiliates upon assumption of loans payable in conjunction with acquisition of real estate		3,390,000			-
Repayments of reserves due to affiliates upon assumption of loans payable in conjunction with acquisition of real estate		(2,610,000	)		-
Offering costs from issuance of noncontrolling interests		-			(94,000	)
Proceeds from pending trade deposits		829,000			795,000
Repayments of mortgage loans payable		(138,135,000	)		(49,939,000	)
Proceeds from revolving credit facilities		138,135,000			49,939,000
Payments of financing costs		(5,733,000	)		(394,000	)
Common shares distributions		(18,764,000	)		(18,332,000	)
Noncontrolling interests distributions		(14,413,000	)		(11,374,000	)
Net cash used in financing activities		(23,888,000	)		(31,270,000	)

Net increase / (decrease) in cash, cash equivalents and restricted cash		9,922,000			(2,630,000	)
Cash, cash equivalents and restricted cash at beginning of year		21,499,000			21,268,000
Cash, cash equivalents and restricted cash at end of period	$	31,421,000		$	18,638,000

See accompanying notes to condensed consolidated financial statements.

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
	2026		2025
Reconciliation to consolidated balance sheets:
Cash and cash equivalents	$	13,852,000	$	7,287,000
Restricted cash		17,569,000		11,351,000
Cash, cash equivalents and restricted cash at end of period	$	31,421,000	$	18,638,000

Supplemental disclosures of cash flow information:
Cash paid for interest	$	27,706,000	$	23,911,000
Supplemental disclosures of non-cash investing and financing activities:
Distributions payable	$	4,902,000	$	3,760,000
Distributions reinvested into common shares	$	3,936,000	$	3,699,000
Conversion of OP Units to common shares	$	2,447,000	$	1,617,000
Recognition of guaranty receivable and liability	$	2,428,000	$	2,378,000
Issuance of noncontrolling interests in conjunction with the acquisition of real estate	$	233,699,000	$	9,455,000
Assumption of mortgage loans payable in conjunction with the acquisition of real estate	$	282,024,000	$	-

See accompanying notes to condensed consolidated financial statements.

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

Note 1. Business and Organization

ExchangeRight Income Fund, doing business as ExchangeRight Essential Income REIT, a Maryland statutory trust (the “Trust” or the “Company”), is a self-administered real estate company, formed on January 11, 2019, focusing on investing in single-tenant, primarily investment-grade net-leased real estate. The Company, through its operating partnership, ExchangeRight Income Fund Operating Partnership, LP, a Delaware limited partnership of which the Company is the sole general partner (the “Operating Partnership”) owned 475 properties in 39 states (collectively, the “Trust Properties”) as of September 30, 2026. The Trust Properties are occupied by 44 different primarily national investment-grade necessity-based tenants and are additionally diversified by industry, geographic region and lease term.

Unless the context requires otherwise, references to (i) the “Company” or the “General Partner” refer to ExchangeRight Income Fund, d/b/a ExchangeRight Essential Income REIT, together with its subsidiaries, including ExchangeRight Income Fund Operating Partnership, LP, a Delaware limited partnership of which the Company is the sole general partner, together with its subsidiaries, (ii) “Operating Partnership” or the “Partnership” refers to ExchangeRight Income Fund Operating Partnership, LP, together with its subsidiaries, (iii) “Trustee” refers to a related party, ExchangeRight Income Fund Trustee, LLC, a Delaware limited liability company, which is the sole trustee of the Company, (iv) “ExchangeRight” or “Sponsor” refers to ExchangeRight Real Estate, LLC, a California limited liability company, which is the Company’s sponsor and the sole member and manager of the Trustee, together with its subsidiaries, (v) “ExchangeRight Income Fund GP, LLC” refers to a wholly-owned subsidiary of ExchangeRight which owns 600,000 of the Company’s Class I common shares and holds a special limited partnership interest in the Operating Partnership, which entitles ExchangeRight Income Fund GP, LLC to receive a promote interest in the profits of the Operating Partnership in accordance with the distribution waterfall set forth in the Operating Partnership’s limited partnership agreement, (vi) “Advisor” or “Advisors” refers to any person or persons, if any, appointed, employed or contracted with by the General Partner and responsible for directing or performing the day-to-day business affairs of the General Partner, including any person to whom the Advisor hereafter subcontracts substantially all of such functions, and (vii) “Advisory Agreement” refers to the agreement among the Partnership, the General Partner and any Advisor, pursuant to which any such Advisor will direct or perform the day-to-day business affairs of the General Partner and the Partnership.

The Company has elected and is qualified to be taxed as a real estate investment trust (“REIT”) for United States of America (“U.S.”) federal income tax purposes beginning with the taxable year ended December 31, 2019. The Company is the sole general partner and a limited partner of the Operating Partnership which was formed on January 9, 2019. Substantially all of the Company’s business is conducted through the Operating Partnership. The Trust Properties are owned and controlled by the Company and are managed by ER Net Leased Property Management, LLC (the “Property Manager”) and ER Net Leased Asset Management, LLC (the “Asset Manager”), which are both wholly-owned subsidiaries of ExchangeRight, pursuant to executed property management and asset management agreements with each respective entity.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and the instructions to Form 10-Q. These unaudited interim condensed consolidated financial statements, in the opinion of management, include all adjustments of a normal recurring nature necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows. The unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited annual consolidated financial statements and related notes included in Company's Form 10-K that was filed with the Securities and Exchange Commission on February 26, 2026. The consolidated results of operations for interim periods are not necessarily indicative of the results of operations to be expected for any subsequent interim period or for the fiscal year ending December 31, 2026.

Principles of Consolidation

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

The unaudited interim condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, its subsidiaries and any single member limited liability companies or other entities which are consolidated in accordance with GAAP. Intercompany transactions and balances have been eliminated upon consolidation.

Generally, a variable interest entities (“VIEs”) is an entity with one or more of the following characteristics: (1) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (2) as a group, the holders of the equity investment at risk (a) lack the power through voting or similar rights to make decisions about the entity’s activities that significantly impact the entity’s performance, (b) have no obligation to absorb the expected losses of the entity, or (c) have no right to receive the expected residual returns of the entity, or (3) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately fewer voting rights.

A VIE is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE has (1) the power to direct the activities that most significantly impact the entity’s economic performance, and (2) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. Significant judgments related to these determinations include estimates about the current values, performance of real estate held by these VIEs, and general market conditions.

The consolidated financial statements include the accounts of the Company, the Operating Partnership and its subsidiaries, all of which are consolidated in accordance with GAAP. The Operating Partnership meets the criteria of a VIE as its limited partners, as a group, lack the power to make decisions about the activities that significantly impact the performance of the Operating Partnership. ExchangeRight, its related party group, and the Company, as a whole, have the characteristics of the primary beneficiary as they collectively have the power and benefits of the Operating Partnership. Substantially all of the Company’s business is conducted through the Operating Partnership. The Company does not have any significant operations or, apart from our interest in the Operating Partnership, any significant assets. As such, the Operating Partnership is consolidated in the Company’s consolidated financial statements. The assets and liabilities of the Operating Partnership are reflected in the total assets and liabilities of the Company on the consolidated balance sheet as the Operating Partnership’s assets can only be used to settle the obligations of the Operating Partnership.

Use of Estimates

The preparation of the unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s most significant assumptions and estimates relate to the useful lives of real estate assets, real estate impairment assessments and allocation of fair value of purchase consideration. These estimates are based on historical experience and other assumptions which management believes are reasonable. The Company evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of cash in banks and short-term investments with original maturities when purchased of less than ninety days. The Company did not have any cash equivalents as of September 30, 2026.

The terms of mortgage loans payable may require the Company to deposit certain replacement and other reserves with its lenders. Restricted cash was $17.6 million as of September 30, 2026, and represents funds held in reserve by lenders to cover real estate taxes, insurance, repairs, tenant improvements, and leasing commissions of the underlying properties collateralized by the respective loan.

Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

(“ASU”) 2024-03 "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“Subtopic 220-40”). ASU 2024-03 was issued to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the type of expenses in commonly presented expense captions. This amendment requires that an entity disclose certain expenses, such as amounts of depreciation and intangible asset amortization, included in each relevant expense caption and to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. This standard is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The adoption of ASU 2024-03 is not expected to have a material impact on the Company’s consolidated financial statements.

Note 3. Investments in Real Estate

The Company acquires, owns, and manages primarily single-tenant, investment-grade net-leased real estate. The Company owned 475 properties in 39 states as of September 30, 2026. As of September 30, 2026, the Company’s portfolio was 98.4% leased and is occupied by 44 different primarily national investment-grade necessity-based tenants, and is additionally diversified by industry, geographic region, and lease term.

Real estate activity for the nine months ended September 30, 2026 is composed of the following:


Cost
Balance - beginning of year	$	1,206,716,000
Acquisitions (a)		471,536,000
Dispositions		(1,690,000	)
Improvements		281,000
Provisions for impairment		(1,783,000	)
Balance - end of period	$	1,675,060,000

Accumulated depreciation
Balance - beginning of year	$	(115,945,000	)
Depreciation expense		(27,250,000	)
Dispositions		239,000
Balance - end of period	$	(142,956,000	)

Net book value - end of period	$	1,532,104,000

(a)

Excludes amounts recorded as intangible lease assets and liabilities in connection with the allocation of the purchase price of acquired properties accounted for as asset acquisitions.

Acquisitions

During the nine months ended September 30, 2026, the Company, through the Operating Partnership, acquired the following properties via merger agreements with DSTs that were previously managed by the Sponsor on behalf of its investors:


				Mortgage assumption
Date	Properties Acquired	Acquisition relative fair value		Contractual amount			Fixed interest rate	Maturity date
March 20, 2026	16	$	68,364,000	$	38,457,000		4.20%	March 2028
March 26, 2026	23	$	90,886,000	$	51,435,000		4.42%	September 2028
June 11, 2026	12	$	55,740,000	$	20,000,000	(a)	2.90%	June 2026
June 25, 2026	28	$	118,217,000	$	68,800,000	(a)	3.52%	September 2026
July 30, 2026	21	$	91,688,000	$	52,282,000		4.63%	January 2029
August 5, 2026	18	$	90,828,000	$	51,050,000		4.34%	May 2029

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

(a) Upon assumption of the mortgages on the date of acquisition, the Company repaid these mortgage loans payable utilizing proceeds from borrowings on its revolving lines of credit.

There were no acquisition fees related to these property acquisitions.

During the nine months ended September 30, 2026, the Company acquired three properties from unaffiliated entities for a total purchase price of $6.6 million. Per the asset management agreement, the Company paid a 1.0% acquisition fee on each of these property acquisitions to ExchangeRight at the time of the acquisition totaling $66,000 (see Note 10. Related and Affiliated Party Transactions for further details).

An allocation of the acquisition purchase price relative fair value, including acquisition costs, for all acquisitions during the nine months ended September 30, 2026 is as follows:


Land	$	93,708,000
Building		352,733,000
Building and site improvements		25,095,000
Lease in-place intangible assets		44,679,000
Lease above-market intangible assets		2,988,000
Below-market debt		8,223,000
		527,426,000
Liabilities assumed:
Lease below-market intangible liabilities		(5,152,000	)
Purchase price relative fair value (including acquisition costs) (a)	$	522,274,000

(a) Includes the assumption of $282.0 million of contractual mortgage debt on certain properties that were acquired via merger agreements with DSTs that were previously managed by the Sponsor.

Dispositions

During the nine months ended September 30, 2026, the Company sold three properties for cash to unaffiliated entities for $5.1 million, recognizing a loss of $0.9 million which is included in loss on sale on the condensed consolidated statements of operations and comprehensive (loss) income. Two of these properties were previously included in the assets related to real estate held for sale on the Company’s consolidated balance sheet.

Properties Held for Sale

The Company previously entered into separate sales contracts with individual third-parties to sell four of its properties, two of which were sold during the nine months ended September 30, 2026. In connection with the execution of these contracts, the Company recorded the assets associated with these properties at the lower of (a) cost or (b) fair value less estimated costs to sell, which resulted in impairment charges during the year ended December 31, 2025, totaling $2.0 million related to three of the four properties. Further, upon the sale of one of the properties the Company recorded an additional impairment charge of $0.1 million during the nine months ended September 30, 2026 as the actual closing costs for this property were higher than estimated in December 2025. The carrying value of the fourth property in which the Company entered into a sales contract was below its fair value, therefore no impairment charge was recorded.

The estimated fair value of these properties was based upon the expected sales price from executed sales contracts and determined to be a Level 3 input within the fair value hierarchy. The estimation and evaluation of these impairment charges relies on judgments and assumptions made by management in determining the impairment charge to record. It is possible that such judgments and/or estimates will change; if this occurs, we may recognize additional impairment charges, or potential loss on sale, for these properties at the time the transaction closes.

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

Revenues

Substantially all of the Company’s tenants are subject to net-lease agreements where the tenant is generally responsible for minimum monthly rent and actual property operating expenses incurred, including property taxes, insurance, and maintenance. In addition, certain of the Company’s tenants are subject to future rent increases based on fixed amounts or, in limited cases, increases in the consumer price index. In addition, certain leases provide for additional rent calculated as a percentage of the tenants’ gross sales above a specified level. The Company recorded no percentage rent revenue for the three and nine months ended September 30, 2026 and 2025. Certain of the Company’s properties are subject to leases under which it retains responsibility for specific costs and expenses of the property. The Company’s leases typically provide the tenant one or more multi-year renewal options to extend their leases, subject to generally the same terms and conditions, including rent increases.

All lease-related income is reported as a single line item, rental revenue, in the condensed consolidated statements of operations and comprehensive (loss) income. Rental revenue for the three and nine months ended September 30, 2026 and September 30, 2025 is comprised of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Base rents	$	25,427,000	$	18,808,000	$	65,763,000	$	56,136,000
Tenant reimbursables		2,880,000		2,098,000		7,869,000		6,943,000
Straight-line rent adjustments		246,000		218,000		739,000		653,000
Above/below market lease amortization, net		697,000		635,000		1,892,000		1,871,000
Lease termination income		925,000		-		2,902,000		-
Total rental revenue	$	30,175,000	$	21,759,000	$	79,165,000	$	65,603,000

Concentration of Credit Risk

As of September 30, 2026, the Company’s portfolio is occupied by 44 different primarily national investment-grade necessity-based tenants, and is additionally diversified by industry, geographic region, and lease term. The following tenants contributed more than 10% of contractual base rents during the nine months ended September 30, 2026:


Tenant		% of total base rents
Walgreens		18.8%
Dollar General		15.1%

Note 4. Notes Receivable

RSLCA Notes Receivable From Affiliated Party

The Company has invested in a short-term mezzanine loan to ExchangeRight (“ExchangeRight Mezz Loans”) for ExchangeRight’s Delaware Statutory Trust (“DST”) programs under a Revolving Secured Line of Credit Agreement (“RSLCA”). The loan agreement, as amended, matures on April 4, 2027, with a maximum of $250.0 million outstanding at any time, and bears interest at a rate equal to 12.0% per annum, while outstanding. On September 18, 2024, the Company entered into the first amendment to the Restated and Uncommitted Senior Revolving Line of Credit Agreement (the “Amendment”) with ExchangeRight. Under the Amendment, the Company is due a 0.25% unused facility fees and a 0.25% annual access fee, both payable by ExchangeRight quarterly in arrears.

The ExchangeRight Mezz Loans are secured by interests in an affiliated party that indirectly owns net-leased necessity-based properties similar to the Company’s acquired properties, as well as a pledge agreement and subordination agreement provided by ExchangeRight. As a result, the risk profile of an investment in these notes is intended to be similar to ownership of the Company’s acquired properties while providing liquidity and an enhanced risk-adjusted return over investments with similar

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

liquidity. The Company’s investment in the RSLCA notes receivable are held at amortized cost and totaled $25.6 million as of September 30, 2026.

Notes Receivable from Affiliated Parties

Since November 2022, the Company, as lender, has entered into four real estate notes with various net-leased DSTs owned by ExchangeRight as of the issuance date. The below table details the issuance date, maturity date, interest rate, and the Company’s outstanding note receivable under each of these agreements as of September 30, 2026, which is included in notes receivable from affiliates in the condensed consolidated balance sheet:


Note receivable	Issuance	Maturity	Interest			September 30, 2026
from affiliated parties (a)	date	date	rate			September 30, 2026
Real estate note	8/25/2022	8/25/2027		6.00	%	$	3,610,000
Junior unsecured line of credit	11/18/2022	11/18/2027		7.25	%		2,410,000
Real estate note	11/7/2024	12/1/2028		5.80	%		14,234,000
Real estate note	11/8/2024	12/1/2026		5.16	%		1,146,000
						$	21,400,000

(a) Each note receivable is secured by properties in net-leased DSTs managed by ExchangeRight.

Under these real estate notes, the Company earned $0.3 million and $0.9 million in interest income during the three and nine months ended September 30, 2026, respectively. The Company earned $0.3 million and $0.9 million during the three and nine months ended September 30, 2025, respectively. Additionally, the Company had $0.1 million in interest income receivable in relation to these real estate notes as of September 30, 2026.

Note 5. Intangible Assets and Liabilities

Intangible assets and liabilities consisted of the following as of September 30, 2026:


	September 30, 2026
								Weighted average
	Gross carrying		Accumulated			Net carrying		amortization
	amount		amortization			amount		period (years)
In-place leases	$	151,318,000	$	(65,043,000	)	$	86,275,000		6.1
Above-market leases		7,577,000		(2,624,000	)		4,953,000		6.6
Total intangible lease assets, net	$	158,895,000	$	(67,667,000	)	$	91,228,000

Below-market leases	$	40,358,000	$	(15,640,000	)	$	24,718,000		10.2

The Company records net amortization of above-market and below-market lease intangibles to rental revenue and records amortization of in-place lease assets to depreciation and amortization expense. Amortization of intangible assets and liabilities for the three and nine months ended September 30, 2026 and 2025 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Net adjustment to rental revenue	$	697,000	$	635,000	$	1,892,000	$	1,871,000

Amortization of in-place leases	$	6,027,000	$	3,185,000	$	13,558,000	$	9,654,000

The estimated future amortization of lease assets to amortization expense and the amortization of above-market and below-market lease intangibles to rental revenue as of September 30, 2026 are as follows:

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026


	Amortization		Rental revenue
	In-place		Above-market			Below-market
	lease assets		leases			leases		Total
Remainder of 2026	$	6,000,000	$	(278,000	)	$	930,000	$	652,000
2027		21,574,000		(1,033,000	)		3,351,000		2,318,000
2028		16,903,000		(899,000	)		3,080,000		2,181,000
2029		12,343,000		(760,000	)		2,831,000		2,071,000
2030		8,053,000		(597,000	)		2,602,000		2,005,000
Thereafter		21,402,000		(1,386,000	)		11,924,000		10,538,000
Total	$	86,275,000	$	(4,953,000	)	$	24,718,000	$	19,765,000

Note 6. Fair Value Measurements

The carrying amounts of cash and cash equivalents, restricted cash, receivables, certain other assets, accounts payable, accrued expenses and other liabilities approximate their fair value due to their terms and/or short-term nature.

The fair value of the Company’s fixed-rate mortgage loans payable, delayed draw term loan facility, and revolving credit facility, which were determined to be Level 3 within the valuation hierarchy, were estimated using available market information and discounted cash flow analyses based on borrowing rates the Company believes it could obtain with similar terms and maturities. As of September 30, 2026, the aggregate fair value of the Company’s fixed-rate mortgage loans payable were $640.1 million and the aggregate carrying value of the Company’s fixed-rate mortgage loans payable were $654.9 million. As of September 30, 2026, the aggregate fair value of the Company’s delayed draw term loan facility and revolving credit facility approximated its carrying value.

Under GAAP, transactions involving related and affiliated parties cannot be presumed to be carried out on an arm’s length-basis, as the requisite conditions of competitive, free-market dealings may not exist. Therefore, in the opinion of management, the fair value of the RSLCA notes receivable from affiliated party, notes receivable from affiliates, guaranty receivable, and guaranty liability cannot be readily estimated, as these transactions are with related and affiliated parties. Other information about related and affiliated party transactions are provided, where applicable, elsewhere in these notes to the unaudited interim condensed consolidated financial statements.

Derivative Financial Instrument

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Charges and/or credits relating to the changes in the fair value of the interest rate swaps are made to accumulated other comprehensive (loss) income, noncontrolling interests or operations (included in interest expense), as applicable. Over time, the unrealized gains and losses recorded in accumulated other comprehensive (loss) income will be reclassified into earnings as an increase or reduction to interest expense in the same periods in which the hedged interest payments affect earnings. During the next twelve months, the Company estimates that an additional $76,000 will be reclassified as a reduction to interest expense.

The Company, through the Operating Partnership, entered into a five-year swap agreement on February 8, 2023 to fix Secured Overnight Financing Rate (“SOFR”) debt, resulting in an all-in fixed rate of 5.80% relating to a $26.9 million mortgage loan, effective as of February 9, 2023. The Company designated the pay-fixed, receive-floating interest rate swap with the terms described in the table below as of the acquisition date as a cash flow hedge. The swap agreement matures on February 1, 2028. The derivative instrument qualified as a cash flow hedge for the nine months ended September 30, 2026.

The following is a summary of the derivative financial instrument attributes held by the Company at September 30, 2026:

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

Designation/

Notional

Fair

Maturity

Balance sheet

Cash flow

Derivative

Count

amount

value

date

location

Qualifying

Interest rate swap

26,900,000

159,000

February 2028

Other assets

The valuation of the asset for the Company’s interest rate swap, which is measured on a recurring basis, was determined to be Level 2 within the valuation hierarchy and was based on independent values provided by a financial instrument valuation specialist. Such valuation was determined using widely accepted valuation techniques, including discounted cash flow analyses on the expected cash flows of the derivative. The analysis reflects the contractual term of the swap, including the period to maturity, and user-observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded that, as of September 30, 2026, the fair value associated with the “significant unobservable inputs” relating to the Company’s risk of non-performance was insignificant to the overall fair value of the interest rate swap agreement and, as a result, the relevant inputs for purposes of calculating the fair value of the interest rate swap agreements, in their entirety, were based upon “significant other observable inputs”.

Note 7. Debt

Mortgage Loans Payable

Mortgage loans payable are secured by the properties on which the debt was placed and were considered nonrecourse debt with limited customary exceptions at the time of loan origination. The Company was in compliance with all of its debt covenants related to its mortgage loans payable as of September 30, 2026. Fixed-rate mortgage loans payable are composed of the following as of September 30, 2026:


			September 30, 2026
		Maturity	Balance			Contractual
Description (a)	Amortization	date	outstanding			interest rate
Fixed-rate mortgage	Interest-only	12/2026	$	28,110,000			4.06	%
Fixed-rate mortgage (b)	Interest-only	4/2027		31,200,000			4.38	%
Fixed-rate mortgage	Interest-only	6/2027		32,722,000			3.98	%
Fixed-rate mortgage	Interest-only	9/2027		36,860,000			3.99	%
Fixed-rate mortgage	Interest-only	12/2027		33,441,000			4.09	%
Fixed-rate mortgage	Interest-only	1/2028		35,840,000			4.05	%
Fixed-rate mortgage	Interest-only	2/2028		38,530,000			6.12	%
Fixed-rate mortgage (c)	Interest-only	2/2028		26,900,000			5.80	%
Fixed-rate mortgage	Interest-only	3/2028		38,457,000			4.20	%
Fixed-rate mortgage	Interest-only	4/2028		37,795,000			4.27	%
Fixed-rate mortgage	Interest-only	7/2028		43,522,000			4.32	%
Fixed-rate mortgage	Interest-only	9/2028		51,435,000			4.42	%
Fixed-rate mortgage	Interest-only	1/2029		52,282,000			4.63	%
Fixed-rate mortgage	Interest-only	5/2029		51,050,000			4.34	%
Fixed-rate mortgage	Interest-only	8/2029		63,943,000			4.03	%
Fixed-rate mortgage	Interest-only	10/2029		30,231,000			3.13	%
Fixed-rate mortgage	Interest-only	1/2031		37,564,000			3.45	%
			$	669,882,000			4.31	%	(d)
Unamortized issuance costs, net				(475,000	)
Unamortized below market debt discount, net				(14,538,000	)
			$	654,869,000

(a)

Fixed-rate mortgages are now recourse loans pursuant to their pre-defined loan terms, unless otherwise noted.

(b)

Fixed-rate mortgage is a nonrecourse loan pursuant to its pre-defined loan terms.

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

(c)

Mortgage bears interest at a variable-rate of 1.70% in excess of SOFR and concurrent with the closing of the mortgage, the Company entered into an interest rate swap agreement which effectively converted the variable-rate mortgage to a fixed-rate mortgage. Accordingly, this mortgage has been presented as a fixed-rate mortgage.

(d)

The weighted average effective interest rate on mortgage loans payable was 5.20% as of September 30, 2026.

During the nine months ended September 30, 2026, the Company repaid the following mortgage loans by their contractual maturity dates:


Mortgage		Contractual
Loan Repaid		Maturity Date
$	24,850,000	May 2026
$	20,000,000	June 2026
$	68,800,000	June 2026
$	24,485,000	September 2026

Revolving Lines of Credit and Delayed Draw Term Loan Facility

On April 15, 2026, the Operating Partnership (as the borrower) and the Company entered into an Amended and Restated Credit Agreement which provides the Company with senior secured credit facilities consisting of a revolving credit facility (the “Revolving Credit Facility”) in the initial maximum principal amount of $200,000,000 until April 15, 2029 and a delayed draw term loan facility (the “DDTL Facility,” and collectively with the Revolving Credit Facility, the “Facilities”) in the initial maximum principal amount of $400,000,000 pursuant to which delayed draw term loans may be borrowed through October 15, 2026. The Facilities may be increased up to a maximum principal amount of $1,000,000,000 through additional revolver loans or term loans, upon request of the Borrower, subject to, among other things, the receipt of commitments for the increased amount. The Amended and Restated Credit Agreement replaces, in its entirety, the prior revolving credit facility which was entered into on May 30, 2024.

The Operating Partnership has the option to select loans under the Revolving Credit Facility and DDTL Facility as either a (i) base rate loan, (ii) term Secured Overnight Financing Rate (“SOFR”) loan (with a one, three or six months tenor), or (iii) daily simple SOFR loan (as in effect from time to time), each of which is subject to an applicable margin that varies based on a ratio of the total indebtedness and total asset value of the Company as defined in the agreement. Interest on base rate loans and daily simple SOFR loans shall be payable monthly in arrears on the first day of each month. Interest on term SOFR loans will be payable at the end of each interest period, and in the case of interest periods longer than three months, quarterly. The entire outstanding principal indebtedness of the Operating Partnership under the Amended and Restated Credit Agreement and any accrued interest thereon will be due and payable on April 15, 2029. The Operating Partnership is also required to pay an unused commitment fee on the difference between committed amounts under the Revolving Credit Facility and the amounts actually used under the Revolving Credit Facility, which is (i) 0.25% per annum when usage of the Revolving Credit Facility is less than or equal to 50%, and (ii) 0.15% per annum when usage of the Revolving Credit Facility is greater than 50%. The credit facility contains financial covenants including, but not limited to, maximum debt leverage, maximum secured debt, minimum fixed charge coverage, and minimum net worth. In addition, the facility contains restrictions including, but not limited to, limits on indebtedness, certain investments and distributions. The Company is in compliance with all financial covenants. As of September 30, 2026, the Company has borrowed $295.5 million under the DDTL Facility with an interest rate of 5.97% and the Company had not drawn any amount under the Revolving Credit Facility. As of September 30, 2026, the Company had $4.0 million of unamortized deferred financing costs associated with the DDTL facility, which is included in term loan facility, net on the Company’s Condensed Consolidated Balance Sheet and $1.8 million in unamortized deferred financing costs associated with the Revolving Credit Facility, which is included in other assets on the Company’s Condensed Consolidated Balance Sheet.

Scheduled Principal Payments

Scheduled principal payments on the Company’s outstanding mortgage loans payable, term loans, and revolving credit facility as of September 30, 2026 are as follows:

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026


	Mortgage loans payable		Delayed draw
Year	balloon payments		term loan facility		Total
Remainder of 2026	$	28,110,000	$	-	$	28,110,000
2027		134,223,000		-		134,223,000
2028		272,479,000		-		272,479,000
2029		197,506,000		295,538,000		493,044,000
2030		-		-		-
Thereafter		37,564,000		-		37,564,000
	$	669,882,000	$	295,538,000	$	965,420,000

Note 8. Commitments and Contingencies

Litigation and Regulatory Matters

The Company is a party to certain legal actions arising in the normal course of business. Management does not expect there to be adverse consequences from these actions that would be material to the Company’s unaudited interim condensed consolidated financial statements.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances, or petroleum product releases, at its properties. The owner may be liable to governmental entities or to third parties for property damage, and for investigation and cleanup costs incurred by such parties in connection with any contamination. Generally, the Company’s tenants must comply with environmental laws and meet any remediation requirements. In addition, leases typically impose obligations on tenants to indemnify the Company from any compliance costs the Company may incur as a result of environmental conditions on the property caused by the tenant. However, if a lease does not require compliance, or if a tenant fails to or cannot comply, the Company could be forced to pay these costs. Management is unaware of any environmental matters that would have a material impact on the Company’s unaudited interim condensed consolidated financial statements.

Note 9. Equity and Noncontrolling Interests

Common Shares Detail

The Company’s common shares consist of Class I Common Shares, Class A Common Shares, Class D Common Shares, Class S Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, Class ER-D Common Shares, and Class ER-S Common Shares. Following is a description of these classes of common shares. For purposes of this description, the Class ER-I Common Shares, Class ER-A Common Shares, Class ER-D Common Shares, and Class ER-S Common Shares are collectively referred to as the “Class ER Common Shares”.

Class I Common Shares, Class A Common Shares, Class D Common Shares, and Class S Common Shares

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

any action on the part of the shareholder thereof convert into a number of Class I Common Shares equal to the Class D Conversion Rate (as defined below) upon a Conversion Event, unless, at least five days before the effective date of such Conversion Event, the Trustee determines, in its sole and absolute discretion, that such conversion shall not occur in connection with such Conversion Event, but any such determination will not preclude the conversion of Class D Common Shares into Class I Common Shares in connection with the occurrence of any successive Conversion Event. The “Class D Conversion Rate” means a fraction, the numerator of which is the net asset value (“NAV”) of the Company allocable to the Class D Common Shares, divided by the number of outstanding Class D Common Shares, and the denominator of which is the NAV of the Company allocable to the Class I Common Shares, divided by the number of outstanding Class I Common Shares immediately prior to the Conversion Event. Otherwise, the Class D Common Shares have the same preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions as the Class A Common Shares, Class I Common Shares, and Class S Common Shares.

Class ER-I Common Shares, Class ER-A Common Shares, Class ER-D Common Shares, and Class ER-S Common Shares

The terms, conditions, rights, preferences, and obligations of the Class ER Common Shares are substantially similar to each other, but are substantially dissimilar to the other classes of Common Shares of the Company. Each of the Class ER Common Shares are subject to mandatory conversion upon the occurrence of certain events. In this regard, each Class ER Common Share will automatically and without any action on the part of the shareholder convert into an equal number of Class I Common Shares, Class A Common Shares, Class S Common Shares, or Class D Common Shares of the Company, as applicable, on a 1:1 basis, upon a Conversion Event, unless, at least five days before the effective date of such Conversion Event, the Trustee determines, in its sole and absolute discretion, that such conversion shall not occur in connection with such Conversion Event. Each of the Class ER Common Shares are also subject to the optional conversion rights of the Company. In this regard, from and after the fifth anniversary of the closing date of a Class ER Common shareholder’s purchase of the applicable class of such common shares, the Trustee, on behalf of the Company, will have the right to cause each Class ER Common Shareholder, without any action on the part of the shareholder, to convert any or all of such holder’s Class ER Common Shares, as applicable, into an equal number of the respective Class I Common Shares, Class A Common Shares, Class S Common Shares, or Class D Common Shares, on a 1:1 basis. Each Class ER Common Shareholder will have the right, upon the seventh anniversary of the closing date of a shareholder’s purchase of Class ER Common Shares (subject to three one-year extensions in the Trustee’s discretion), to require the Company to redeem the Class ER Common Shares, in whole or in part, held by such shareholder, as well as the right to convert such Class ER Common Shares to the respective Class I Common Share, Class A Common Share, Class S Common Share, or Class D Common Shares on a 1:1 basis. The Class ER Common Shares have no other redemption rights and are not eligible for repurchase or redemption under the Company’s share repurchase program. Otherwise, the Class ER Common Shares have the same preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions as the Class A Common Shares, Class I Common Shares, and Class S Common Shares.

Private Offering

The Company is currently conducting a private placement offering on a continuous basis of up to $2.165 billion of Class I Common Shares, Class A Common Shares, Class S Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, Class ER-S Common Shares, and Class ER-D Common Shares (the “Private Offering”). The Trustee may increase the maximum offering amount of the Private Offering as long as it is anticipated to be accretive to the Company’s shareholders, in the Trustee’s sole discretion. A wholly-owned subsidiary of the Sponsor, ExchangeRight Income Fund GP, LLC, owned 600,000 Class I Common Shares as of September 30, 2026 and December 31, 2025, which were purchased on the same terms as those available to the other investors at acquisition. The following table provides a summary of the Class I Common Shares, Class A Common Shares, Class S Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, Class ER-S Common Shares, and Class ER-D Common Shares offering prices in effect for the nine months ended September 30, 2026:

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026


	Offering price
Effective date	Class I		Class A		Class D		Class S		Class ER-I		Class ER-A		Class ER-D		Class ER-S
January 1, 2026 through February 3, 2026	$	27.30	$	29.03	$	27.30	$	28.29	$	27.30	$	29.03	$	27.30	$	28.29
February 4, 2026 through April 27, 2026	$	27.46	$	29.20	$	27.46	$	28.46	$	27.46	$	29.20	$	27.46	$	28.46
April 28, 2026 through July 21, 2026	$	27.58	$	29.32	$	27.58	$	28.58	$	27.58	$	29.32	$	27.58	$	28.58
July 22, 2026 through September 30, 2026	$	27.63	$	29.38	$	27.63	$	28.63	$	27.63	$	29.38	$	27.63	$	28.63

The following table provides a reconciliation of the Class I Common Share, Class A Common Share, Class S Common Share, Class D Common Share, Class ER-I Common Share, Class ER-A Common Share, Class ER-S Common Share, and Class ER-D Common Share activity for the nine months ended September 30, 2026:


	Class I			Class A			Class D		Class S		Class ER-I		Class ER-A		Class ER-D		Class ER-S
December 31, 2025		5,759,806			9,994,066			68,911		-		843,290		190,511		39,991		-
Issuance of common shares		40,261			131,360			48,414		-		40,251		79,968		3,663		-
Issuance of common shares under DRIP		25,135			22,473			491		-		-		-		-		-
Repurchase of common shares		(114,002	)		(109,698	)		-		-		-		-		-		-
Conversion of OP Units to common shares		23,399			-			-		-		-		-		-		-
March 31, 2026		5,734,599			10,038,201			117,816		-		883,541		270,479		43,654		-
Issuance of common shares		40,445			173,168			97,435		-		55,710		140,609		3,277		-
Issuance of common shares under DRIP		25,263			21,508			577		-		-		-		-		-
Repurchase of common shares		(135,602	)		(204,906	)		-		-		-		-		-		-
Conversion of OP Units to common shares		37,040			-			-		-		-		-		-		-
June 30, 2026		5,701,745			10,027,971			215,828		-		939,251		411,088		46,931		-
Issuance of common shares		44,235			59,199			79,686		-		-		20,605		-		-
Issuance of common shares under DRIP		25,991			22,096			944		-		-		-		-		-
Repurchase of common shares		(91,627	)		(190,507	)		-		-		-		-		-		-
Conversion of OP Units to common shares		29,312			-			-		-		-		-		-		-
September 30, 2026		5,709,656			9,918,759			296,458		-		939,251		431,693		46,931		-

The following table provides a reconciliation of the Class I Common Share, Class A Common Share, Class S Common Share, and Class ER Common Share activity for the nine months ended September 30, 2025:

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026


	Class I			Class A			Class D		Class S		Class ER-I (a)		Class ER-A		Class ER-D		Class ER-S
December 31, 2024		5,981,146			10,322,475			-		-		258,454		-		-		-
Issuance of common shares		107,906			27,601			-		-		259,866		-		-		-
Issuance of common shares under DRIP		23,722			21,365			-		-		-		-		-		-
Repurchase of common shares		(267,003	)		(118,678	)		-		-		-		-		-		-
Conversion of OP Units to common shares		22,718			-			-		-		-		-		-		-
March 31, 2025		5,868,489			10,252,763			-		-		518,320		-		-		-
Issuance of common shares		85,272			80,596			-		-		236,597		-		-		-
Issuance of common shares under DRIP		24,437			21,112			-		-		-		-		-		-
Repurchase of common shares		(129,331	)		(200,897	)		-		-		-		-		-		-
Conversion of OP Units to common shares		6,848			-			-		-		-		-		-		-
June 30, 2025		5,855,715			10,153,574			-		-		754,917		-		-		-
Issuance of common shares		63,425			21,141			26,684		-		69,989		100,665		-		20,504
Issuance of common shares under DRIP		25,029			21,150			-		-		-		-		-		-
Repurchase of common shares		(162,590	)		(184,113	)		-		-		-		-		-		-
Conversion of OP Units to common shares		30,859			-			-		-		-		-		-		-
September 30, 2025		5,812,438			10,011,752			26,684		-		824,906		100,665		-		20,504

(a) On June 10, 2025, pursuant to the Third Amended and Restated Declaration of Trust of the Company, the Company renamed the Class ER Common Shares as Class ER-I Common Shares.

Common Share Repurchase Program

The Company has adopted a share repurchase program whereby, subject to certain limitations, holders of the Class I Common Shares, Class A Common Shares, Class D Common Shares, and Class S Common Shares may request on a quarterly basis that the Company repurchases all or any portion of their shares. The Class ER-I Common Shares, Class ER-A Common Shares, Class ER-S Common Shares, and Class ER-D Common Shares are not eligible for repurchase under the share repurchase program. Shareholders are eligible to have their shares repurchased by the Company pursuant to the share repurchase program and the authorization of the Trustee. Holders of shares may request that the Company repurchase shares in an amount not to exceed five percent (5.0%) per fiscal year of the Company’s issued and outstanding shares, or as approved by the Trustee. The Company may repurchase fewer shares than have been requested in any particular quarter to be repurchased under its share repurchase program, or none at all, at the Company’s full discretion. The Company also has no obligation to repurchase shares if the redemption would violate the applicable restrictions on distributions under Maryland law, which prohibits distributions that would cause the Company to fail to meet statutory tests of solvency. The Trustee may modify, suspend or terminate the share repurchase program if it deems such action to be in the Company’s best interest and the best interest of the Company’s shareholders. The 600,000 Class I Common Shares owned by ExchangeRight Income Fund GP, LLC are restricted to redemption and therefore not subject to the share repurchase program. During the three months ended September 30, 2026, the Company repurchased 91,627 Class I Common Shares and 190,507 Class A Common Shares totaling $7.7 million under the share repurchase program. During the nine months ended September 30, 2026, the Company repurchased 341,231 Class I Common Shares and 505,111 Class A Common Shares totaling $23.0 million under the share repurchase program. All redemption requests since inception have been fully satisfied.

Distributions

The amount of distributions payable to the Company’s shareholders is determined by the Trustee and is dependent on a number of factors, including funds available for distribution, the Company’s financial condition, capital expenditure requirements, requirements of Maryland law and annual distribution requirements needed to qualify and maintain the Company’s status as a REIT. The Trustee has authorized, and the Company has declared, distributions through September 30, 2026. The distributions are payable on or around the 15th day following each month end to shareholders of record at the close of business on the last day of the prior month.

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

The following table provides a summary of the monthly distributions declared per share for the nine months ended September 30, 2026:


	Class I		Class A		Class D		Class ER-I		Class ER-A		Class ER-D
January	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
February	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
March	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
April	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
May	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
June	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
July	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
August	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
September	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
	$	1.3041	$	1.3041	$	1.3041	$	1.3041	$	1.3041	$	1.3041

Cumulative distributions relating to Class I Common Shares, Class A Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, Class ER-D Common Shares, and Operating Partnership units (“OP Units”) totaling $4.9 million were declared but not yet paid as of September 30, 2026 and have been included in distributions payable in the accompanying condensed consolidated balance sheet. The unpaid distributions as of September 30, 2026 were paid in cash or reinvested in the Company’s common shares in October 2026.

Noncontrolling Interests

The Operating Partnership had 18,514,768 OP Units outstanding as of September 30, 2026. The holders of Class I OP Units, Class A 721 Common Units, and Class D Common Units have the right to cause their OP Units to be redeemed by the Operating Partnership for cash, unless the Company, in its sole discretion, elects to purchase such OP Units in exchange for Class I Common Shares (in the case of Class I and Class A 721 Common Units Units) or Class D Common Shares (in the case of Class D) of the Company, respectively, issuable on a 1:1 basis, subject to adjustment under certain circumstances. The Company currently intends to elect to pay the redemption price for all the Class I , Class A 721, and Class D Common Units tendered for redemption in the form of Class I Common Shares (in the case of Class I and Class A 721 Common Units) and Class D Common Shares (in the case of Class D Common Units), respectively. The holders of NLP Common Units do not have any current rights to convert their units into units of any other class or series of units of, or any other securities or partnership interests in, the Operating Partnership. Class I and Class A 721 OP Units totaling 29,312 and 89,751 were exchanged for the same number of Class I Common Shares during the three and nine months ended September 30, 2026, respectively. No Class D Common Units were exchanged for Class D Common Shares during the three and nine months ended September 30, 2026.

During the nine months ended September 30, 2026, the Company, through the Operating Partnership, acquired 118 properties via six merger agreements with DSTs that were previously managed by the Sponsor on behalf of its investors and issued 9,344,239 OP units in conjunction with these acquisitions.

Note 10. Related and Affiliated Party Transactions

Revolving Line of Credit

On May 19, 2021, ExchangeRight entered into a secured revolving line of credit in which the Company has access to utilize available capacity under this secured revolving line of credit. The Company is legally responsible for the specific borrowings related to the Company, whereas ExchangeRight is the guarantor on all outstanding borrowings in relation to this secured revolving line of credit. The revolving line of credit agreement, as amended in March 2025, has a maturity date of March 27, 2028, with a maximum aggregate amount being borrowed by the Company and ExchangeRight totaling $100.0 million outstanding at any time and requires monthly payments. As of September 30, 2026, the Company had no borrowings outstanding under this revolving line of credit and ExchangeRight had $45.2 million outstanding under this revolving line of credit, resulting in $54.8 million available for borrowing by the Company and ExchangeRight as of September 30, 2026.

Acquisition Fee

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

Per the asset management agreement, the Company paid acquisition fees of 1.0% on property acquisitions during the nine months ended September 30, 2026 totaling $66,000 to ExchangeRight.

Organization and Offering Costs

The Sponsor incurs certain organization and offering costs in connection with the offerings of Class I Common Shares, Class A Common Shares, Class S Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, Class ER-S Common Shares, Class ER-D Common Shares, and OP Units and the organization of the Company. These costs include, but are not limited to, fees related to special purpose entity formation, legal and accounting fees, marketing expenses and other costs and expenses directly related to the offering and organization of the Company. All of these expenses are paid by the Sponsor or its affiliates. The Sponsor earns an amount equal to 1.00% of the net transaction price of sales of Class I Common Shares, Class A Common Shares, Class S Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, Class ER-S Common Shares, and Class ER-D Common Shares, which is expected to offset the organizational and offering costs incurred described above.

Offering costs of $0.1 million and $0.3 million were included in total equity for the three and nine months ended September 30, 2026, respectively, for which the Company was obligated to pay the Sponsor. In addition, Class A Common Shares, Class ER-I Common Shares, and Class ER-A Common Shares incur broker-dealer commissions as an offering cost, a portion of which could be eligible to be earned by an affiliate of the Company. These net commissions totaled $0.1 million and $1.0 million for the three and nine months ended September 30, 2026, respectively, and were included in total equity.

Class I Common Share and Noncontrolling Interest Ownership Interests

ExchangeRight Income Fund GP, LLC, owned 600,000 Class I Common Shares as of September 30, 2026, which were purchased on the same terms as other investors at acquisition.

In addition, ExchangeRight has made a $2.0 million investment into OP Units on the same terms offered to OP Unit holders. ExchangeRight owns 77,308 OP Units as of September 30, 2026.

Performance Participation

In addition to distributions payable on the 600,000 Class I Common Shares that ExchangeRight Income Fund GP, LLC holds, ExchangeRight Income Fund GP, LLC also holds a special limited partnership interest in our Operating Partnership, which entitles it to receive an incentive fee in accordance with the following waterfall:

(1) First, 100% to the holders of OP Units (including OP Units held by the Company, with respect to common shares issued by the Company) until they have received distributions, in cash, equal to a seven percent (7.0%) cumulative, non-compounding annual return on all capital contributions made, or deemed to have been made, to the Operating Partnership;

(2) Second, 100% to the holders of OP Units, pro rata in accordance with their respective capital accounts, until all of the holders of OP Units have received cumulative distributions, in cash, equal to their respective capital contributions made, or deemed to have been made, to the Operating Partnership; and

(3) Third, (i) 80% to the holders of OP Units, pro rata in accordance with their respective capital accounts, and (ii) 20% to the special limited partner.

There was no performance participation earned or paid during the nine months ended September 30, 2026.

Asset Management and Property Management Fees

An annual asset management fee is payable by the Operating Partnership to the Asset Manager, pursuant to an asset management agreement between the Asset Manager and the Operating Partnership. The asset management fee is an amount equal to fifteen basis points (0.15%) of the Company’s assets under management. The asset management fee is payable quarterly

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

(0.0375% each quarter) and in arrears. The asset management agreement had an initial term of five years and was automatically renewed at the expiration of the initial term. This agreement will automatically renew at any subsequent five-year term for an additional five-year term.

An annual property management fee is payable by the Operating Partnership to the Property Manager pursuant to a property management agreement between the Operating Partnership and the Property Manager. The property management fee is equal to 1.10% of the gross revenues received by the Company from the Trust Properties and any other assets acquired by the Company, but excluding reimbursements relating to real estate taxes, insurance and common area maintenance charges and the fees earned by the Company from the RSLCA and notes receivable from affiliates. The current term of the property management agreement expires on February 29, 2028, and will automatically renew at the expiration of the term and any subsequent three-year term for an additional three-year term.

Asset management and property management fees for the three and nine months ended September 30, 2026 and 2025 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Asset management fees (a)	$	605,000	$	24,000	$	1,474,000	$	305,000
Property management fees (b)	$	281,000	$	16,000	$	727,000	$	255,000

(a)

Asset management fees are net of $0.1 million and $0.5 million for the three and nine months ended September 30, 2026, respectively and $0.5 million and $1.3 million for the three and nine months ended September 30, 2025, respectively in fees which were irrevocably waived by the asset manager.

(b)

Property management fees are net of $0.2 million and $0.4 million for the three and nine months ended September 30, 2025, respectively, in fees which were irrevocably waived by the property manager. No property management fees were waived for the three and nine months ended September 30, 2026.

Guaranties

The Operating Partnership has entered into agreements with certain DSTs of which ExchangeRight serves as the master lessee via a master lease agreement. In these guaranty agreements, the Operating Partnership is the guarantor on the master lease agreements entered into between these DSTs and ExchangeRight as the master lessee. The guaranties are for the full term of the master leases, which range from 15 and 20 years. Under these guaranties, the Operating Partnership guarantees the payment of all obligations and liabilities of the master lessee as outlined in the respective master lease agreements. As of September 30, 2026, the maximum remaining contractual payments under these lease agreements totaled $1,672.7 million, although the master lease rental obligation will be terminated or eliminated in consolidation upon a sale or merger of the DST. The Company has not been obligated to make any payments under these guaranties as of September 30, 2026.

In consideration for entering into each of these guaranties, the Operating Partnership will receive quarterly payments of $2,500 for each guaranty while the master lease is outstanding and the guaranty is in effect at any point during the quarter. The Company earned $0.1 million and $30,000 under these guaranties during the three months ended September 30, 2026 and 2025, respectively, and $0.2 million and $0.1 million under these guaranties during the nine months ended September 30, 2026 and 2025, respectively, which was included in other income on the condensed consolidated statements of operations and comprehensive (loss) income. Furthermore, as potential additional consideration under the guaranty agreements, the Operating Partnership is entitled to 25% to 50% of the net disposition fee earned by ExchangeRight (as defined in the agreement) if the DST for which the Operating Partnership is providing the guaranty is sold. The Company recorded a noncontingent guaranty receivable related to the full payment of the guaranty fees of $5.7 million as of September 30, 2026, which is included in due from affiliates on the condensed consolidated balance sheet and an offsetting noncontingent guaranty liability, which is included in accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheet.

Note 11. Income (Loss) Per Share

Basic income (loss) earnings per share (“EPS”) is calculated by dividing net loss or earnings, as applicable, attributable to the Company’s common shareholders by the weighted average number of common shares outstanding for the period including

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

participating securities, if applicable. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares and then shared in the earnings of the Company. OP Units are allocated income on the same basis as common shares of the Company. Class I OP Units and Class A 721 Common Units are convertible into Class I Common Shares of the Company on a 1:1 basis and Class NLP OP Units do not have any current rights to convert their units into units of any other class or series of units of, or any other securities or partnership interests in, the Company. Therefore, the result of an assumed conversion of the Class I OP Units and Class A 721 Common Units would have neither a dilutive nor anti-dilutive effect on earnings per share. Accordingly, basic income (loss) EPS is the same as diluted income (loss) EPS for the three and nine months ended September 30, 2026 and 2025. The following table provides a reconciliation of the numerator and denominator of the EPS calculations for the three and nine months ended September 30, 2026 and 2025, respectively:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2026			2025			2026			2025
Numerator
Net (loss) income attributable to common shareholders, basic	$	(2,417,000	)	$	(289,000	)	$	(4,777,000	)	$	2,323,000
Net (loss) income attributable to Class I OP Units and Class A 721 Common Units		(1,292,000	)		(154,000	)		(2,572,000	)		1,281,000
Net (loss) income attributable to common shareholders, diluted	$	(3,709,000	)	$	(443,000	)	$	(7,349,000	)	$	3,604,000

Denominator
Weighted average number of common shares outstanding, basic		17,265,206			16,621,322			17,086,441			16,586,493
Weighted average number of common shares outstanding, diluted		26,435,734			25,878,464			26,288,700			25,738,888

Net (loss) income per common share attributable to common shareholders, basic	$	(0.14	)	$	(0.02	)	$	(0.28	)	$	0.14
Net (loss) income per common share attributable to common shareholders, diluted	$	(0.14	)	$	(0.02	)	$	(0.28	)	$	0.14

Note 12. Subsequent Events

Management has evaluated subsequent events through the date the unaudited interim condensed consolidated financial statements were available to be issued. Management has determined that there are no material events that would require adjustment to, or additional disclosure in, the Company’s unaudited interim condensed consolidated financial statements, other than those disclosed throughout this report and below.

Common Share Activity

The Company issued the following shares from October 1, 2026 through the date of issuance of this report:


Share Class	Shares Issued
Class I (a)		18,443
Class A		53,201
Class D		33,027
Class ER-I		-
Class ER-A		471
Class ER-D		-

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

(a) Excludes the issuance of 50,438 OP Units that were exchanged for same number of Class I Common Shares discussed below.

The Company received gross proceeds totaling $2.8 million from the issuance of these common shares.

The Company repurchased 136,391 Class I Common Shares totaling $3.7 million and 195,286 Class A Common Shares totaling $5.4 million from October 1, 2026 through the date of this report. Additionally, 50,438 OP Units were exchanged for the same number of Class I Common Shares from October 1, 2026 through the issuance of this report.

The Company adjusted the offering price of its Class I Common Shares, Class A Common Shares, Class S Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, Class ER-S Common Shares and Class ER-D Common Shares effective October 22, 2026, as set forth in the table below.


	Offering price
Effective date	Class I		Class A		Class S		Class D		Class ER-I		Class ER-A		Class ER-S		Class ER-D
October 22, 2026	$	27.72	$	29.47	$	28.73	$	27.72	$	27.72	$	29.47	$	28.73	$	27.72

Noncontrolling Interests

On October 2, 2026, the Company entered into an amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership dated as of April 4, 2022 (as so amended, the “Partnership Agreement”), to classify and designate a new class of OP Units designated as Class T Common Units (the “Class T Common Units”). The Class T Common Units were created to facilitate the acquisition by the Operating Partnership of a net-leased property through the issuance of Class T Common Units as consideration for the acquisition of such property. The Class T Common Units entitle the holder to the rights of a common unit as provided in the Partnership Agreement and which corresponds to a Class D Common Share of beneficial interest, $0.01 par value per share of the Company. The holders of Class T OP Units have the right to cause their Class T OP Units to be redeemed by the Operating Partnership for cash, unless the Company, in its sole discretion, elects to purchase such OP Units in exchange for Class D Common Shares of the Company issuable on a 1:1 basis, subject to adjustment under certain circumstances. On October 2, 2026, the Company issued 1,817,421 Class T OP Units.

Real Estate Activity

On October 2, 2026, the Company, through the Operating Partnership, acquired one property from an unrelated third party. In connection with this acquisition, the Operating Partnership issued 1,817,421 OP Units and assumed a $136.8 million mortgage loan at a fixed rate of 4.04% which matures in October 2036. Per the asset management agreement, the Company paid an acquisition fee on this property acquisition totaling $1.9 million to ExchangeRight at the time of the acquisition.

On October 6, 2026, the Company, through the Operating Partnership, acquired 25 properties via a merger agreement with a DST that was previously managed by the Sponsor on behalf of its investors. There were no acquisition fees related to this portfolio acquisition. In connection with this acquisition, the Operating Partnership issued 3,269,453 OP Units and assumed a $86.0 million interest-only mortgage loan at a fixed rate of 3.453% which matures in January 2027. Upon the assumption of this mortgage loan, the Company repaid the $86.0 million with proceeds from its Revolving Credit Facility.

On October 8, 2026, the Company, through the Operating Partnership, acquired 27 properties via a merger agreement with a DST that was previously managed by the Sponsor on behalf of its investors. There were no acquisition fees related to this portfolio acquisition. In connection with this acquisition, the Operating Partnership issued 1,691,278 OP Units and assumed a $44.5 million interest-only mortgage loan at a fixed rate of 3.56% which matures in November 2026.Upon the assumption of this mortgage loan, the Company repaid the $44.5 million with proceeds from its Revolving Credit Facility.

From October 1, 2026 through the date of issuance of this report, the Operating Partnership has entered into an agreement with a certain DST of which ExchangeRight serves as the master lessee via a master lease agreement. In this guaranty agreement, the Operating Partnership is the guarantor on the master lease agreement entered into between the DST and ExchangeRight as the master lessee. The guaranty is for the full term of the master lease, which is 20 years. Under this guaranty, the Operating

ExchangeRight Income Fund

(d/b/a ExchangeRight Essential Income REIT)

Notes to Condensed Consolidated Financial Statements

Quarter Ended September 30, 2026

Partnership guarantees the payment of all obligations and liabilities of the master lessee as outlined in the master lease agreement. The maximum remaining contractual payments under this lease agreement totaled $164.8 million as of the date of this report, although the master lease rental obligations will be terminated upon a sale or merger of the DST. The Company has not been obligated to make any payments under this guaranty as of the date of issuance of this report.

Debt Activity

From October 1, 2026 through the date of this filing, the Company borrowed $130.5 million under its Facilities, which resulted in the Company borrowing the maximum capacity of $400.0 million under the DDTL Facility and net borrowings of $26.0 million under its Revolving Credit Facility. The $130.5 million of proceeds were used to repay (1) an $86.0 million mortgage loan assumed in connection with a portfolio acquisition on October 6, 2026 and (2) a $44.5 million mortgage loan assumed in connection with a portfolio acquisition on October 8, 2026.

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with the unaudited interim condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2025 and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” related thereto included in the Company's Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on February 26, 2026. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategies for our business, includes forward-looking statements that involve risks and uncertainties. You should read “Item 1A. Risk Factors” of our Form 10-K that was filed with the Securities and Exchange Commission on February 26, 2026 and the “Cautionary Note Regarding Forward-Looking Statements” section of this Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by these forward-looking statements.

Company Overview

ExchangeRight Income Fund, doing business as ExchangeRight Essential Income REIT, a Maryland statutory trust, is a self-administered real estate company, formed on January 11, 2019, focusing on investing in single-tenant, primarily investment-grade net-leased real estate. The Company, through the Operating Partnership, owned 475 properties in 39 states as of September 30, 2026. These properties were 98.4% leased as of September 30, 2026 and are occupied by 44 different primarily national investment-grade necessity-based tenants and are additionally diversified by industry, geographic region and lease term.

The Company has elected and is qualified to be taxed as a REIT for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2019. The Company is the sole general partner and a limited partner of the Operating Partnership, a Delaware limited partnership formed on January 9, 2019. Substantially all of the Company’s business is conducted through the Operating Partnership. The Trust Properties are owned and controlled by the Company and are managed by the Property Manager and the Asset Manager, which are both wholly-owned subsidiaries of ExchangeRight, pursuant to executed management agreements with each respective entity.

Recent Developments

During the nine months ended September 30, 2026, uncertainty in the global macroeconomic environment continued, driven by the conflict with Iran and the resulting general geopolitical instability in the Middle East, the effect these geopolitical conflicts and events have had on energy and commodity prices, inflationary expectations, and interest rates, continued elevated interest rate levels in certain sectors (including mortgage rates), and uneven global economic growth. While overall inflation rates moderated on a year-over-year basis during 2024 and 2025, consumer and producer inflation rates began to rise once again in March through May 2026, with the consumer price index peaking at 4.2% on a year-over-year basis, driven principally by increasing energy prices. During the third quarter of 2026, the CPI fell to 3.7% on a year-over-year basis as of September 2026, but persistently elevated energy prices continue to be the principal contributor to inflationary pressures, with energy prices rising 20.4% on a year-over-year basis as of September 30, 2026. This has resulted in debt yields and benchmark interest rate levels remaining at elevated levels during the third quarter of 2026, including the benchmark 10-year U.S. Treasury Note yield hovering around 5% and mortgage rates which remain at 15-year highs. In this regard, the Federal Reserve raised the federal funds rate 25 basis points to 4.0% in September 2026, with many market analysts expecting one additional 25 basis point increase before year-end. Current analyst expectations regarding the pace of future rate increases moderate markedly in 2027.

Substantially all of the Company’s tenant leases contain provisions designed to partially mitigate the negative impact of inflation in the near term. Such lease provisions include clauses that require tenants to reimburse the Company for inflation-sensitive costs such as real estate taxes or insurance and many of the operating expenses it incurs. The Company has been able to mitigate a significant portion of interest rate increases in the current period as all of its mortgage debt is currently effectively fixed-rate financing as of September 30, 2026. The Company has borrowed $295.5 million under its delayed draw term loan facility as of September 30, 2026, which is impacted by fluctuating interest rates as the interest on the term loan facility is not fixed long-term. Further inflation rate increases or elevated interest rates over a prolonged period of time may have a material adverse impact on the Company’s business. It remains difficult to predict the full impact of recent events and any future changes in interest rates or inflation.

Highlights for the Nine Months Ended September 30, 2026

Operating Results

The September 2026 distribution marked the 91st consecutive month of providing stable distributions to our investors. We have increased the distribution we pay five times since our inception. The Company declared distributions totaling $38.2 million for the nine months ended September 30, 2026. As of September 30, 2026, the Company’s cumulative inception-to-date cash flows from operating activities have funded 100% of our cumulative inception-to-date declared distributions. The Company’s current distributions represent a 6.27% annualized distribution rate, based on the $0.1449 per share distribution rate and $27.72 NAV per share as of September 30, 2026. The following table details the annualized distribution rate based on the $0.1449 per share distribution rate in effect as of September 30, 2026 and current offering price of the Company’s common shares:


	Class I			Class A			Class S			Class D			Class ER-I			Class ER-A			Class ER-S			Class ER-D
Offering price (effective October 22, 2026)	$	27.72		$	29.47		$	28.73		$	27.72		$	27.72		$	29.47		$	28.73		$	27.72
Annualized distribution rate (a)		6.27	%		5.90	%		5.20	%		6.02	%		6.27	%		5.90	%		5.20	%		6.02	%
Trailing 12 month total return (b)		8.42	%		1.97	%	n/a				8.17	%	n/a			n/a			n/a			n/a
Three-year total annual return (b)		6.81	%		4.42	%	n/a			n/a			n/a			n/a			n/a			n/a
Inception-to-date total annual return (b)		8.46	%		7.15	%	n/a			n/a			n/a			n/a			n/a			n/a

(a)

The annualized distribution rate is calculated by the September 30, 2026 distribution rate in effect of $0.1449 per share divided by the offering price per share in connection with the Company’s September 30, 2026 NAV declaration less any dealer manager fees. The Company believes the annualized distribution rate is a useful measure of our overall investment performance.

(b)

Total return is calculated as the change in NAV per share at the end of the respective period versus the respective share class offering price per share at the beginning of the respective period plus any distributions per share declared during the period. The Company believes total return is a useful measure of the overall investment performance of our shares.

Leasing

The Company’s portfolio is 98.4% leased and its weighted average lease term as of September 30, 2026 is 5.3 years. The Company executed 38 lease renewals with 13 different tenants during the nine months ended September 30, 2026 with average new rents over rents prior to the renewal of 4.7% for the period.

Capital

The Company has been able to mitigate a larger immediate impact from the current elevated interest rate environment as all of its outstanding mortgage loans payable are effectively fixed as of September 30, 2026. The Company has also experienced regular net inflows of capital since its inception. All redemption requests since inception have been fully satisfied.

Real Estate Investments

The following table details information about our tenants as of September 30, 2026:


																Weighted
	Number of leases								Annualized base rents							average lease
Tenant	NN (a)		NNN (b)		Total		GLA (c)		Total		% of total			Per sq. ft (d)		term (yrs) (e)
Walgreens		34		31		65		937,300	$	21,063,400		19.9	%	$	22.47		3.1
Dollar General		31		121		152		1,428,800		15,729,100		14.9	%	$	11.01		4.6
Tractor Supply		27		6		33		713,400		9,595,500		9.1	%	$	13.45		8.2
Hobby Lobby		13		1		14		814,500		6,481,300		6.1	%	$	7.96		4.0
Pick ’n Save		6		1		7		427,400		6,099,300		5.8	%	$	14.27		3.2
BioLife Plasma Services		-		8		8		125,800		4,651,600		4.4	%	$	36.98		7.5
Fresenius Medical Care		14		2		16		140,700		4,168,500		3.9	%	$	29.63		4.8
Hy-Vee		-		3		3		280,100		3,776,500		3.6	%	$	13.48		12.3
Family Dollar		20		13		33		287,100		3,767,100		3.6	%	$	13.12		3.9
Advance Auto Parts		26		4		30		215,000		3,341,200		3.2	%	$	15.54		4.3
Stop & Shop		-		1		1		102,100		2,940,000		2.8	%	$	28.80		10.2
Kroger		4		-		4		261,900		2,162,600		2.0	%	$	8.26		5.7
CVS Pharmacy		7		1		8		93,200		2,120,500		2.0	%	$	22.75		5.1
Napa Auto Parts		-		19		19		164,300		1,990,700		1.9	%	$	12.12		9.8
Dollar Tree		16		-		16		155,600		1,603,700		1.5	%	$	10.31		3.5
Publix		2		-		2		96,800		1,548,400		1.5	%	$	16.00		13.7
Giant Eagle		3		-		3		150,600		1,459,000		1.4	%	$	9.69		4.9
Old National Bank		-		3		3		41,600		1,381,900		1.3	%	$	33.22		3.3
Verizon Wireless		5		-		5		27,400		1,304,800		1.2	%	$	47.62		1.2
GIANT Food Store		-		1		1		51,400		1,110,900		1.1	%	$	21.61		3.9
Valspar		-		1		1		167,200		1,068,400		1.0	%	$	6.39		7.6
AutoZone		5		2		7		59,200		886,300		0.8	%	$	14.97		5.4
O'Reilly		8		1		9		63,000		884,100		0.8	%	$	14.03		5.3
Walmart Supercenter		-		1		1		222,700		765,000		0.7	%	$	3.44		5.3
Walmart Neighborhood Market		-		1		1		41,800		738,600		0.7	%	$	17.67		5.0
Sherwin-Williams		7		-		7		46,500		699,100		0.7	%	$	15.03		4.9
FedEx		1		-		1		124,700		681,600		0.6	%	$	5.47		9.8
Goodwill		2		-		2		42,800		653,200		0.6	%	$	15.26		3.6
Ross Stores		1		-		1		25,800		354,800		0.3	%	$	13.75		2.3
Food Lion		1		-		1		41,300		351,400		0.3	%	$	8.51		7.1
PNC Bank, N.A.		-		1		1		6,100		277,600		0.3	%	$	45.51		12.0
HomeGoods		1		-		1		22,200		266,900		0.3	%	$	12.02		4.5
Epic Health & Fitness		-		1		1		14,200		222,000		0.2	%	$	15.63		14.2
MedSpring		1		-		1		4,600		193,100		0.2	%	$	41.98		0.4
The Christ Hospital		-		1		1		9,300		188,700		0.2	%	$	20.29		1.3
A Plus Childcare and Learning Academy		1		-		1		11,500		183,100		0.2	%	$	15.92		6.2
Truist Bank		-		1		1		3,200		183,000		0.2	%	$	57.19		2.1
Octapharma Plasma		1		-		1		11,300		152,700		0.1	%	$	13.51		3.5
Five Below		1		-		1		8,500		142,000		0.1	%	$	16.71		4.3
Huntington National Bank		-		1		1		4,500		116,700		0.1	%	$	25.93		5.3
Adult and Child Health		-		1		1		6,000		116,300		0.1	%	$	19.38		3.3
Dollar General Market		-		1		1		10,700		109,300		0.1	%	$	10.21		12.7
Athletico Physical Therapy		1		-		1		3,400		77,000		0.1	%	$	22.65		5.0
Archana Grocery		1		-		1		9,300		74,600		0.1	%	$	8.02		6.8
Total Occupied Portfolio		240		228		468		7,474,800	$	105,681,500		100.0	%	$	14.14		5.3
Vacant								117,700
Total Portfolio								7,592,500

(a)

“NN” or “Double Net” means leases where landlord will have some obligations for roof, parking lot, and/or building structure but where the tenant remains obligated for operating costs of property taxes, insurance, and property maintenance.

(b)

“NNN” or “Triple Net” means leases where the tenant is obligated pursuant to its lease for the costs of property taxes, insurance, and property maintenance, often including both repairs and replacements.

(c)

“GLA” means gross leasable area.

(d)

Annualized base rent per square foot is calculated as the aggregate, annualized contractual minimum rent for all occupied spaces divided by the aggregate GLA of all occupied spaces as of September 30, 2026. Tenant concessions and abatements are reflected in this measure. Furthermore, from time to time, a limited number of short-term (generally one to three months) free rent concessions may be provided to tenants prior to initial occupancy or upon a renewal extension. As of September 30, 2026, no tenants were in a free rent concession period.

(e)

Weighted based on annualized base rents.

The following table details the industries in which our tenants operate as of September 30, 2026:


	Number		GLA					Annualized base rents
Industry	of leases		Square feet		% of total			Dollars (a)		% of total
Healthcare and Pharmacy Retail		73		1,030,500		13.6	%	$	23,183,900		21.9	%
Discount Necessity Retail		202		1,882,200		24.8	%		21,209,200		20.1	%
Grocery		25		1,685,400		22.2	%		21,026,300		19.9	%
Farm and Rural Supply		33		713,400		9.4	%		9,595,500		9.1	%
Discount Specialty Retail		18		888,000		11.7	%		7,543,400		7.1	%
Discount Automotive		65		501,500		6.6	%		7,102,300		6.7	%
Healthcare Providers		13		170,000		2.2	%		5,408,300		5.1	%
Medical Care		17		145,300		1.9	%		4,361,600		4.1	%
Banking Services		6		55,400		0.7	%		1,959,200		1.9	%
Paint and Supplies		8		213,700		2.8	%		1,767,500		1.7	%
Other		8		189,400		2.5	%		2,524,300		2.4	%
Total		468		7,474,800		98.4	%	$	105,681,500		100.0	%
Vacant				117,700		1.6	%
Total Portfolio				7,592,500		100.0	%

(a)

Annualized base rents are calculated as the aggregate, annualized contractual minimum rent for all the space as of September 30, 2026. Tenant concessions and abatements are reflected in this amount. Furthermore, from time to time, a limited number of short-term (generally one to three months) free rent concessions may be provided to tenants prior to initial occupancy or upon a renewal extension. As of September 30, 2026, no tenants were in a free rent concession period.

The following table details our contractual lease expirations as of September 30, 2026 (assuming no exercise of contractual extension options):


	Number		GLA					Annualized base rents
Year	of leases		Square feet		% of total			Dollars		% of total			Per sq. ft. (a)
Remainder of 2026		1		6,800		0.1	%	$	119,800		0.1	%	$	17.62
2027		23		252,500		3.4	%		4,767,400		4.5	%	$	18.88
2028		61		825,300		11.0	%		13,002,300		12.3	%	$	15.75
2029		67		982,600		13.1	%		12,598,200		11.9	%	$	12.82
2030		61		993,400		13.3	%		15,958,800		15.1	%	$	16.06
2031		81		1,080,200		14.5	%		15,363,100		14.5	%	$	14.22
2032		67		1,238,000		16.6	%		14,191,300		13.4	%	$	11.46
2033		37		477,200		6.4	%		7,426,900		7.0	%	$	15.56
2034		19		451,100		6.0	%		5,105,000		4.8	%	$	11.32
2035		9		76,000		1.0	%		1,536,400		1.5	%	$	20.22
2036		8		273,800		3.7	%		4,297,200		4.1	%	$	15.69
2037		7		82,800		1.1	%		1,018,000		1.0	%	$	12.29
2038		9		159,600		2.1	%		2,062,300		2.0	%	$	12.92
2039		6		281,500		3.8	%		4,455,100		4.2	%	$	15.83
2040		7		150,200		2.0	%		2,204,200		2.1	%	$	14.68
Thereafter		5		143,800		1.9	%		1,575,500		1.5	%	$	10.96
Total		468		7,474,800		100.0	%	$	105,681,500		100.0	%	$	14.14

(a)

The following table details leasable area for the Company’s owned properties and annualized base rents for occupied properties by state for our portfolio as of September 30, 2026:


	Number		GLA					Annualized base rents
State	of leases		Square feet		% of total			Dollars (a)		% of total
Ohio		53		1,295,700		17.1	%	$	11,231,600		10.6	%
Wisconsin		28		751,600		9.9	%		10,284,100		9.8	%
Illinois		47		505,300		6.7	%		9,840,400		9.3	%
Texas		50		562,500		7.4	%		8,037,800		7.6	%
Louisiana		48		503,300		6.6	%		6,487,700		6.1	%
Florida		24		291,100		3.8	%		5,525,400		5.2	%
Tennessee		22		332,700		4.4	%		4,779,900		4.5	%
Georgia		17		311,600		4.1	%		4,493,800		4.3	%
Virginia		16		292,800		3.9	%		4,321,000		4.1	%
Pennsylvania		19		245,200		3.2	%		4,179,700		4.0	%
Alabama		16		302,900		4.0	%		4,120,600		3.9	%
Indiana		16		319,800		4.2	%		3,991,700		3.8	%
Minnesota		3		280,100		3.7	%		3,776,500		3.6	%
Michigan		21		266,800		3.5	%		3,762,500		3.6	%
South Carolina		17		206,200		2.7	%		3,325,200		3.1	%
Massachusetts		1		102,100		1.4	%		2,940,000		2.8	%
North Carolina		15		216,800		2.9	%		2,747,800		2.6	%
Missouri		12		125,100		1.6	%		2,514,800		2.4	%
California		4		58,600		0.8	%		1,031,100		1.0	%
Arkansas		4		154,100		2.0	%		943,500		0.9	%
Arizona		2		23,700		0.3	%		894,900		0.8	%
Oklahoma		5		68,600		0.9	%		851,400		0.8	%
New Jersey		4		49,300		0.7	%		841,900		0.8	%
Connecticut		4		47,600		0.6	%		702,800		0.7	%
Nevada		1		31,100		0.4	%		692,800		0.7	%
Utah		2		44,700		0.6	%		680,100		0.6	%
Maine		2		25,700		0.3	%		390,200		0.4	%
Idaho		2		34,100		0.5	%		355,300		0.3	%
Maryland		1		20,000		0.3	%		321,900		0.3	%
Iowa		3		29,300		0.4	%		309,300		0.3	%
Kansas		1		26,200		0.3	%		248,300		0.2	%
Kentucky		1		8,400		0.1	%		180,800		0.2	%
New Mexico		1		10,600		0.1	%		141,700		0.1	%
Wyoming		1		7,000		0.1	%		132,200		0.1	%
Washington		1		6,900		0.1	%		131,500		0.1	%
Rhode Island		1		8,400		0.1	%		131,400		0.1	%
Colorado		1		8,000		0.1	%		119,400		0.1	%
Mississippi		1		9,300		0.1	%		115,800		0.1	%
South Dakota		1		9,300		0.1	%		104,700		0.1	%
Total Portfolio		468		7,592,500		100.0	%	$	105,681,500		100.0	%

(a)

Activity for the Nine Months Ended September 30, 2026

Acquisitions


				Mortgage assumption
Date	Properties Acquired	Acquisition relative fair value		Contractual amount			Fixed interest rate	Maturity date
March 20, 2026	16	$	68,364,000	$	38,457,000		4.20%	March 2028
March 26, 2026	23	$	90,886,000	$	51,435,000		4.42%	September 2028
June 11, 2026	12	$	55,740,000	$	20,000,000	(a)	2.90%	June 2026
June 25, 2026	28	$	118,217,000	$	68,800,000	(a)	3.52%	September 2026
July 30, 2026	21	$	91,688,000	$	52,282,000		4.63%	January 2029
August 5, 2026	18	$	90,828,000	$	51,050,000		4.34%	May 2029

(a) Upon assumption of the mortgages on the date of acquisition, the Company repaid these mortgage loans payable utilizing proceeds from borrowings on its revolving lines of credit.

There were no acquisition fees related to these property acquisitions.

All acquisitions during the nine months ended September 30, 2026 were accounted for as asset acquisitions and the related purchase prices were allocated to the acquired tangible and identifiable intangible assets or assumed liabilities based on their relative fair value.

Dispositions

During the nine months ended September 30, 2026, the Company sold three properties for cash to unaffiliated entities for $5.1 million, recognizing a loss of $0.9 million which is included in loss on sale of real estate, net on the condensed consolidated statements of operations and comprehensive (loss) income. Two of these properties were previously included in the assets related to real estate held for sale on the Company’s consolidated balance sheet.

Properties Held for Sale

Guaranties

rental obligation will be terminated or eliminated in consolidation upon a sale or merger of the DST. The Company has not been obligated to make any payments under these guaranties as of September 30, 2026.

RSLCA Notes Receivable from Affiliates

The Company has invested in the ExchangeRight Mezz Loans for the DST programs under the RSLCA. The loan agreement, as amended, matures on April 4, 2027 and bears interest at a rate equal to 12.0% per annum, while outstanding. On September 18, 2024, the Company entered into the first amendment to the Restated and Uncommitted Senior Revolving Line of Credit Agreement (the “Amendment”) with ExchangeRight. Under the Amendment, the Company is due a one quarter percent (0.25%) unused facility fees and a one quarter percent (0.25%) annual access fee, both payable by ExchangeRight quarterly in arrears.

ExchangeRight structured the RSLCA, including the 12.0% interest rate, as a way to provide an enhanced risk-adjusted return to the Company. The current capacity under the RSLCA is a maximum of $250.0 million outstanding at any time. ExchangeRight had net advances of $4.6 million during the nine months ended September 30, 2026 increasing the balance of the RSLCA notes receivable to $25.6 million at September 30, 2026.

Revolving Lines of Credit

On April 15, 2026, the Operating Partnership (as the borrower) and the Company entered into an Amended and Restated Credit Agreement which provides the Company with the Revolving Credit Facility in the initial maximum principal amount of $200,000,000 until April 15, 2029 and the DDTL Facility, in the initial maximum principal amount of $400,000,000 pursuant to which delayed draw term loans may be borrowed through October 15, 2026. The Facilities may be increased up to a maximum principal amount of $1,000,000,000 through additional revolver loans or term loans, upon request of the Borrower, subject to, among other things, the receipt of commitments for the increased amount. As of September 30, 2026, the Company had $295.5 million under the DDTL Facility with an interest rate of 5.97% and the Company had not drawn any amount under the Revolving Credit Facility. See “Capital” above.

On May 19, 2021, ExchangeRight entered into a revolving line of credit in which the Company has access to utilize available capacity under this revolving line of credit. The Company is legally responsible for the specific borrowings related to the Company, whereas ExchangeRight is the guarantor on all outstanding borrowings in relation to this secured revolving line of credit. The revolving line of credit agreement, as amended in March 2025, now has a maturity date of March 27, 2028, with a maximum aggregate amount being borrowed by the Company and ExchangeRight totaling $100.0 million outstanding at any time and requires monthly payments. As of September 30, 2026, the Company had no borrowings outstanding under this revolving line of credit and ExchangeRight had $45.2 million outstanding under this revolving line of credit, resulting in $54.8 million available for borrowing by the Company and ExchangeRight as of September 30, 2026.

Common Shares and Noncontrolling Interests

Class I Common Shares, Class A Common Shares, Class D Common Shares, and Class S Common Shares

The Class I Common Shares, Class A Common Shares, Class D Common Shares, and Class S Common Shares have identical rights and privileges, including identical voting rights, but have different upfront selling commissions and related fees. Each Class A Common Share and each Class S Common Share shall automatically and without any action on the part of the shareholder thereof convert into the same number of Class I Common Shares upon a “Conversion Event”. For these purposes, a “Conversion Event” is defined in the Company’s Third Amended and Restated Declaration of Trust, dated June 10, 2025 (the “Amended Declaration of Trust”) to generally mean (i) the listing of any class of the Company’s shares on a national securities exchange pursuant to an effective registration statement filed with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, or (ii) any merger, consolidation, transfer of all or substantially all of the assets or other business combination of the Operating Partnership or the Company, as a result of which all outstanding Company shares are cancelled in exchange for the right to receive cash or securities that have been, as of the closing date of such transaction, listed on a national securities exchange for at least 180 days, or a combination thereof. Each Class D Common Share shall automatically and without any action on the part of the shareholder thereof convert into a number of Class I Common Shares equal to the Class D Conversion Rate (as defined below) upon a Conversion Event, unless, at least five days before the effective date of such Conversion Event, the Trustee determines, in its sole and absolute discretion, that such conversion shall not occur in connection with such Conversion Event, but any such determination will not preclude the conversion of Class D Common Shares into Class I Common Shares in connection with the occurrence of any successive Conversion Event. The “Class D Conversion Rate” means a fraction, the numerator of which is the net asset value (“NAV”) of the Company allocable to the Class D Common Shares, divided by the number of outstanding Class D Common Shares, and the denominator of which is the NAV of the Company allocable to the Class I Common Shares, divided by the number of outstanding Class I Common Shares immediately prior to the Conversion Event. Otherwise, the Class D Common Shares have the same preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions as the Class A Common Shares, Class I Common Shares, and Class S Common Shares.

Class ER-I Common Shares, Class ER-A Common Shares, Class ER-D Common Shares, and Class ER-S Common Shares

The following table provides a summary of certain Class I, Class A, Class S, Class D, Class ER-I, Class ER-A, Class ER-S and Class ER-D Common Shares attributes during the nine months ended September 30, 2026:


	Offering price
Effective date	Class I		Class A		Class D		Class S		Class ER-I		Class ER-A		Class ER-D		Class ER-S
January 1, 2026 through February 3, 2026	$	27.30	$	29.03	$	27.30	$	28.29	$	27.30	$	29.03	$	27.30	$	28.29
February 4, 2026 through April 27, 2026	$	27.46	$	29.20	$	27.46	$	28.46	$	27.46	$	29.20	$	27.46	$	28.46
April 28, 2026 through July 21, 2026	$	27.58	$	29.32	$	27.58	$	28.58	$	27.58	$	29.32	$	27.58	$	28.58
July 22, 2026 through September 30, 2026	$	27.63	$	29.38	$	27.63	$	28.63	$	27.63	$	29.38	$	27.63	$	28.63

The Company issued the following shares during the three and nine months ended September 30, 2026:


	Three Months Ended September 30, 2026 (a)		Nine Months Ended September 30, 2026 (a)
Class I		70,226		201,330
Class A		81,295		429,804
Class D		80,630		227,547
Class ER-I		-		95,961
Class ER-A		20,605		241,182
Class ER-D		-		6,940

(a)

No Class S or Class ER-S Common Shares were sold during the three and nine months ended September 30, 2026.

The Company received an aggregate of $7.1 million and $34.1 million in proceeds during the three and nine months ended September 30, 2026, respectively, as a result of these share issuances.

The Company redeemed 91,627 Class I Common Shares and 190,507 Class A Common Shares totaling $7.7 million during the three months ended September 30, 2026. The Company redeemed 341,231 Class I Common Shares and 505,111 Class A Common Shares totaling $23.0 million during the nine months ended September 30, 2026.

Results of Operations

Comparison of the Three Months Ended September 30, 2026 and 2025

As of September 30, 2026, the Company owned 475 properties that were 98.4% leased. As of September 30, 2025, the Company owned 361 properties that were 98.6% leased. The following table details the Company’s results of operations for the three months ended September 30, 2026 and 2025, respectively:


	Three Months Ended September 30,
	2026			2025			Change
Rental revenue	$	30,175,000		$	21,759,000		$	8,416,000
Interest income on notes receivable from affiliates		1,344,000			1,178,000			166,000
Other		88,000			55,000			33,000
Property operating expenses		(3,583,000	)		(2,519,000	)		(1,064,000	)
Management fees to affiliates		(886,000	)		(40,000	)		(846,000	)
General and administrative expenses		(568,000	)		(364,000	)		(204,000	)
Depreciation and amortization		(16,587,000	)		(11,066,000	)		(5,521,000	)
Loss on sale of real estate, net		(902,000	)		-			(902,000	)
Interest expense		(13,658,000	)		(9,450,000	)		(4,208,000	)
Interest income		9,000			4,000			5,000
Net (loss)	$	(4,568,000	)	$	(443,000	)	$	(4,125,000	)

Rental revenues consist of base rents, tenant reimbursables, straight-line rent adjustments, and above and below market lease amortization. Rental revenues increased $8.4 million, or 38.7%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 primarily due to the acquisition of 127 properties at various dates from August 2025 through August 2026. The rental revenues associated with these acquired properties were $8.1 million and $0.0 million for the three months ended September 30, 2026 and 2025, respectively. This increase was also driven by an increase in lease termination income of $0.9 million as a result of consideration received for permitting certain tenants to terminate their lease prior to the contractual expiration during the three months ended September 30, 2026. These increases were offset by a decrease in rental revenues for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 of $0.3 million related to the 11 properties sold between December 2025 and July 2026 as well as decrease in rental revenues due to an increase in vacant properties.

Interest income on notes receivable from affiliates includes interest earned from (1) outstanding advances under the RSLCA which bears interest at a rate equal to 12.0% per annum in addition to an Unused Facility Fee and an Annual Access Fee, (2) a $3.6 million real estate note receivable from an affiliated party, (3) a $2.4 million note receivable from an affiliated party, (4) a $14.2 million note receivable from an affiliated party, and (5) a $1.1 million note receivable from an affiliated party. Interest income on notes receivable from affiliates increased $0.2 million, or 14.1%, for the three months ended September 30, 2026 due to an increase in interest earned on the RSLCA of $0.2 million, which was the result of an approximate $5.6 million increase in the average daily outstanding balance of the RSLCA during the three months ended September 30, 2026 versus the three months ended September 30, 2025.

Property operating expenses increased $1.1 million, or 42.2% for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase in property operating expenses for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was primarily due to the acquisition of 127 properties at various dates from August 2025 through August 2026. The property operating expenses associated with these properties acquired were $1.0 million and $0.0 million for the three months ended September 30, 2026 and 2025, respectively.

Management fees to affiliates increased $0.8 million, or 2115.0%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Asset management fees increased $0.6 million during the three months ended September 30, 2026 compared to the three months ended September 30, 2025 and property management fees increased $0.2 million during the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Asset management fees for the three months ended September 30, 2026 consisted of $0.6 million of earned fees per the management agreement, net of $0.1 million of fees which were irrevocably waived by the asset manager. Asset management fees for the three months ended September 30, 2025 consisted of $0.5 million of earned fees per the management agreement, net of $0.5 million of fees which were irrevocably waived by the asset manager. Property management fees consisted of $0.3 million of earned fees per the management agreement for the three months ended September 30, 2026. Property management fees consisted of $0.2 million of earned fees per the management agreement, net of $0.2 million of fees which were irrevocably waived by the property manager for the three months ended September 30, 2025.

General and administrative expenses increased $0.2 million, or 56.0%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase in general and administrative expenses for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was primarily due to an increase in professional fees, including audit and tax related professional fees, which is primarily attributable to the property acquisitions.

Depreciation and amortization increased $5.5 million, or 49.9%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Depreciation and amortization during the three months ended September 30, 2026 was impacted by the acquisition of 127 properties at various dates from August 2025 through August 2026. Depreciation and amortization expense associated with these properties totaled $6.1 million and $0.0 million for the three months ended September 30, 2026 and 2025, respectively, which was offset by a decrease in depreciation and amortization expense of $0.2 million related to the 11 properties sold between December 2025 and July 2026, as well as a decrease as a result of certain intangible assets being fully depreciated.

Loss on sale of real estate, net during the three months ended September 30, 2026 related to loss on the sale of one property in July 2026. There was no gain or loss on sale of real estate recognized during the three months ended September 30, 2025.

Interest expense increased $4.2 million, or 44.5%, during the three months ended September 30, 2026 compared to the three months ended September 30, 2025 as a result of (1) an increase in interest expense of $2.4 million related to the Company’s borrowings under its revolving line of credit facility, (2) the assumption of a $38.5 million mortgage loan payable in connection

with the acquisition of 16 properties via a merger agreement with one former 1031-exchangeable portfolio in March 2026, (3) the assumption of a $51.4 million mortgage loan payable in connection with the acquisition of 23 properties via a merger agreement with one former 1031-exchangeable portfolio in March 2026, (4) the assumption of a $52.3 million mortgage loan payable in connection with the acquisition of 21 properties via a merger agreement with one former 1031-exchangeable portfolio in July 2026, (5) the assumption of a $51.1 million mortgage loan payable in connection with the acquisition of 18 properties via a merger agreement with one former 1031-exchangeable portfolio in August 2026, and (6) an increase of $0.3 million in amortization of deferred financing costs associated with the Company's revolving line of credit. These increases were offset by a $0.8 million decrease in interest expense on certain mortgage debts that were paid off upon maturity between May 2025 and September 2026.

Comparison of the Nine Months Ended September 30, 2026 and 2025

As of September 30, 2026, the Company owned 475 properties that were 98.4% leased. As of September 30, 2025, the Company owned 361 properties that were 98.6% leased. The following table details the Company’s results of operations for the nine months ended September 30, 2026 and 2025, respectively:


	Nine Months Ended September 30,
	2026			2025			Change
Rental revenue	$	79,165,000		$	65,603,000		$	13,562,000
Interest income on notes receivable from affiliates		3,680,000			3,783,000			(103,000	)
Other		256,000			111,000			145,000
Property operating expenses		(9,928,000	)		(8,329,000	)		(1,599,000	)
Management fees to affiliates		(2,201,000	)		(560,000	)		(1,641,000	)
General and administrative expenses		(1,603,000	)		(1,102,000	)		(501,000	)
Depreciation and amortization		(40,937,000	)		(33,110,000	)		(7,827,000	)
Provisions for impairment		(1,890,000	)		-			(1,890,000	)
Loss (gain) on sales of real estate, net		(902,000	)		5,184,000			(6,086,000	)
Interest expense		(34,120,000	)		(27,990,000	)		(6,130,000	)
Interest income		31,000			14,000			17,000
Net (loss) income	$	(8,449,000	)	$	3,604,000		$	(12,053,000	)

Rental revenues consist of base rents, tenant reimbursables, straight-line rent adjustments, and above and below market lease amortization. Rental revenues increased $13.6 million, or 20.7%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to the acquisition of 138 properties at various dates from March 2025 through August 2026. The rental revenues associated with these acquired properties were $15.0 million and $1.4 million for the nine months ended September 30, 2026 and 2025, respectively. This increase was also driven by an increase in lease termination income of $2.9 million as a result of consideration received for permitting certain tenants to terminate their lease prior to the contractual expiration during the nine months ended September 30, 2026. These increases were offset by a decrease in rental revenues for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 of $1.8 million related to the 25 properties sold between April 2025 and July 2026 as well as decrease in rental revenues due to an increase in vacant properties.

Interest income on notes receivable from affiliates includes interest earned from (1) outstanding advances under the RSLCA which bears interest at a rate equal to 12.0% per annum in addition to an Unused Facility Fee and an Annual Access Fee, (2) a $3.6 million real estate note receivable from an affiliated party, (3) a $2.4 million note receivable from an affiliated party, (4) a $14.2 million note receivable from an affiliated party, and (5) a $1.1 million note receivable from an affiliated party. Interest income on notes receivable from affiliates decreased $0.1 million, or 2.7%, for the nine months ended September 30, 2026 due to a decrease in interest earned on the RSLCA of $0.1 million, which was a result of an approximate $1.2 million decrease in the average daily outstanding balance of the RSLCA during the nine months ended September 30, 2026 versus the nine months ended September 30, 2025.

Property operating expenses increased $1.6 million, or 19.2% for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase in property operating expenses for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily due to the acquisition of 138 properties at various dates from March 2025 through August 2026. The property operating expenses associated with these properties acquired were $1.6 million and $0.1 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in property operating expenses was also due to an increase in expenses incurred at vacant properties during the nine months ended September

30, 2026 compared to the nine months ended September 30, 2025. This increase was offset by a decrease in operating expenses of $0.3 million related to the 25 properties sold between April 2025 and July 2026.

Management fees to affiliates increased $1.6 million, or 293.0%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Asset management fees increased $1.1 million during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 and property management fees increased $0.5 million during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Asset management fees for the nine months ended September 30, 2026 consisted of $1.5 million of earned fees per the management agreement, net of $0.5 million of fees which were irrevocably waived by the asset manager. Asset management fees for the nine months ended September 30, 2025 consisted of $1.6 million of earned fees per the management agreement, net of $1.3 million of fees which were irrevocably waived by the asset manager. Property management fees consisted of $0.7 million of earned fees per the management agreement for the nine months ended September 30, 2026. Property management fees consisted of $0.6 million of earned fees per the management agreement, net of $0.4 million of fees which were irrevocably waived by the property manager for the nine months ended September 30, 2025.

General and administrative expenses increased $0.5 million, or 45.5%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase in general and administrative expenses for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily due to an increase in professional fees, including audit and tax related professional fees, which is primarily attributable to the property acquisitions, as well as administrative fees associated with the certain of the Company's mortgage loans.

Depreciation and amortization increased $7.8 million, or 23.6%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Depreciation and amortization during the nine months ended September 30, 2026 was impacted by the acquisition of 138 properties at various dates from March 2025 through July 2026. Depreciation and amortization expense associated with these properties totaled $10.4 million and $0.7 million for the nine months ended September 30, 2026 and 2025, respectively, which was offset by a decrease in depreciation and amortization expense of $1.0 million related to the 25 properties sold between April 2025 and July 2026, as well as a decrease as a result of certain intangible assets being fully depreciated.

Provisions for impairment for the nine months ended September 30, 2026 related to the impairment of three properties, one of which was considered held for sale as of September 30, 2026. The estimation and evaluation of these impairment charges relies on judgments and assumptions made by management in determining the impairment charges to record. It is possible that such judgments and/or estimates will change; if this occurs, we may recognize additional impairment charges for these properties or other properties owned by the Company.

Loss/(gain) on sales of real estate, net during the nine months ended September 30, 2026 related to loss on the sale of one property in July 2026. Gain on sales of real estate, net during the nine months ended September 30, 2025 related to gains on the sale of six properties in April 2025 and the sale of seven properties in June 2025. These gains on sale of real estate were offset by a loss on the sale of one property in June 2025.

Interest expense increased $6.1 million, or 21.9%, during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 as a result of (1) an increase in interest expense of $4.7 million related to the Company’s borrowings under its revolving line of credit, (2) the assumption of a $38.5 million mortgage loan payable in connection with the acquisition of 16 properties via a merger agreement with one former 1031-exchangeable portfolio in March 2026, (3) the assumption of a $51.4 million mortgage loan payable in connection with the acquisition of 23 properties via a merger agreement with one former 1031-exchangeable portfolio in March 2026, (4) the assumption of a $52.3 million mortgage loan payable in connection with the acquisition of 21 properties via a merger agreement with one former 1031-exchangeable portfolio in July 2026, (5) the assumption of a $51.1 million mortgage loan payable in connection with the acquisition of 18 properties via a merger agreement with one former 1031-exchangeable portfolio in August 2026, and (6) an increase of $0.5 million in amortization of deferred financing costs associated with the Company's revolving line of credit. These increases were offset by a $2.5 million decrease in interest expense on certain mortgage debts that were paid off upon maturity between May 2025 and September 2026.

Liquidity and Capital Resources

The Company has historically funded, and expects to continue to fund, short-term liquidity requirements, including debt service and distributions to our shareholders and distributions to holders of noncontrolling interests, from its operations. The Company funds acquisitions and certain capital expenditures primarily from the sale of shares of its Common Shares, the issuance

of additional OP Units, and through the assumption or incurrence of debt. The Company believes that its current liquidity position is sufficient to meet its expected acquisition activity. We expect to fund our current liquidity requirements from a combination of cash on hand, cash flow generated from operations, secured financings, or a line of credit.

The Company’s strategy targets properties with net leases to insulate our shareholders from rising costs and surprise repair costs that affect other types of real estate investments. Longer lease terms primarily with investment-grade national tenants successfully operating in historically recession-resilient sectors are also intended to provide stable income that can help bridge economic cycles.

The Company has invested in the ExchangeRight Mezz Loans for the DST programs under the RSLCA. The loan agreement, as amended, matures on April 4, 2027 and bears interest at a rate equal to 12.0% per annum, while outstanding. On September 18, 2024, the Company entered into the Amendment to the Restated and Uncommitted Senior Revolving Line of Credit Agreement with ExchangeRight. For a description of the Amendment, see “RSLCA Notes Receivable from Related Party” above.

The Company’s notes receivable under the RSLCA are secured by interests in an entity that indirectly owns net-leased necessity-based properties similar to the Company’s acquired properties, as well as a pledge agreement and subordination agreement provided by ExchangeRight. As a result, the risk profile of an investment in this program is intended to be similar to ownership of the Company’s acquired properties while providing liquidity and an enhanced risk-adjusted return over investments with similar liquidity.

In order to continue qualifying as a REIT, the Company is required to distribute at least 90% of its “REIT taxable income”, as defined in the Code. The Company paid monthly distributions relating to its common shares during the nine months ended September 30, 2026. While the Company intends to continue paying regular monthly distributions, future distribution declarations will continue to be at the discretion of the Trustee, and will depend on the cash flow and financial condition of the Company, capital requirements, annual distribution requirements under the REIT provisions of the Code and such other factors as the Trustee may deem relevant.

The Operating Partnership (as the borrower) and the Company entered into an Amended and Restated Credit Agreement which, as of September 30, 2026, provides the Company with a Revolving Credit Facility of up to a maximum amount of $200.0 million with a maturity date of April 15, 2029 and a DDTL Facility of up to a maximum of $400.0 million, which delayed draw term loans may be borrowed through October 15, 2026. As of September 30, 2026, the Company did not have any outstanding borrowings under the Revolving Credit Facility and had borrowed $295.5 million under the DDTL Facility. For a description of the material terms of the Amended and Restated Credit Agreement thereunder, see “Capital” above.

On May 19, 2021, ExchangeRight entered into a revolving line of credit in which the Company has access to utilize available capacity under this revolving line of credit. The Company is legally responsible for the specific borrowings related to the Company, whereas ExchangeRight is the guarantor on all outstanding borrowings in relation to this revolving line of credit. The revolving line of credit agreement, as amended in March 2025, now has a maturity date of March 27, 2028, with a maximum aggregate amount being borrowed by the Company and ExchangeRight totaling $100.0 million outstanding at any time and requires monthly payments. As of September 30, 2026, the Company had no borrowings outstanding under this revolving line of credit and ExchangeRight had $45.2 million outstanding under this revolving line of credit, resulting in $54.8 million available for borrowing by the Company and ExchangeRight as of September 30, 2026.

Fixed-rate mortgage loans payable were composed of the following as of September 30, 2026:


			September 30, 2026
		Maturity	Balance			Contractual
Description (a)	Amortization	date	outstanding			interest rate
Fixed-rate mortgage	Interest-only	12/2026	$	28,110,000			4.06	%
Fixed-rate mortgage (b)	Interest-only	4/2027		31,200,000			4.38	%
Fixed-rate mortgage	Interest-only	6/2027		32,722,000			3.98	%
Fixed-rate mortgage	Interest-only	9/2027		36,860,000			3.99	%
Fixed-rate mortgage	Interest-only	12/2027		33,441,000			4.09	%
Fixed-rate mortgage	Interest-only	1/2028		35,840,000			4.05	%
Fixed-rate mortgage	Interest-only	2/2028		38,530,000			6.12	%
Fixed-rate mortgage (c)	Interest-only	2/2028		26,900,000			5.80	%
Fixed-rate mortgage	Interest-only	3/2028		38,457,000			4.20	%
Fixed-rate mortgage	Interest-only	4/2028		37,795,000			4.27	%
Fixed-rate mortgage	Interest-only	7/2028		43,522,000			4.32	%
Fixed-rate mortgage	Interest-only	9/2028		51,435,000			4.42	%
Fixed-rate mortgage	Interest-only	1/2029		52,282,000			4.63	%
Fixed-rate mortgage	Interest-only	5/2029		51,050,000			4.34	%
Fixed-rate mortgage	Interest-only	8/2029		63,943,000			4.03	%
Fixed-rate mortgage	Interest-only	10/2029		30,231,000			3.13	%
Fixed-rate mortgage	Interest-only	1/2031		37,564,000			3.45	%
			$	669,882,000			4.31	%	(d)
Unamortized issuance costs, net				(475,000	)
Unamortized below market debt discount, net				(14,538,000	)
			$	654,869,000

(a)

Fixed-rate mortgages are now recourse loans pursuant to their pre-defined loan terms, unless otherwise noted.

(b)

Fixed-rate mortgage is a nonrecourse loan pursuant to its pre-defined loan terms.

(c)

(d)

The weighted average effective interest rate on mortgage loans payable was 5.20% as of September 30, 2026.

The following table details the Company’s scheduled debt maturities as of September 30, 2026:


	Mortgage loans payable		Delayed draw
Year	balloon payments		term loan facility		Total
Remainder of 2026	$	28,110,000	$	-	$	28,110,000
2027		134,223,000		-		134,223,000
2028		272,479,000		-		272,479,000
2029		197,506,000		295,538,000		493,044,000
2030		-		-		-
Thereafter		37,564,000		-		37,564,000
	$	669,882,000	$	295,538,000	$	965,420,000

The mortgage loans payable mature at various dates from December 2026 through January 2031. The Company intends to repay the mortgage debt maturing in 2026 and 2027 with either available cash, proceeds from repayments under the RSLCA, secured debt financing, unsecured debt financing, or a combination of these options. Mortgage loans payable may require the Company to deposit certain replacement and other reserves with its lenders. Such “restricted cash” is generally available only for property-level requirements for which the reserves have been established and is not available to fund other property-level or Company-level obligations. The Company had $17.6 million in restricted cash as of September 30, 2026.

Cash Flows

The sources and uses of cash reflected in the Company's consolidated statements of cash flows for the nine months ended September 30, 2026 and 2025 are summarized below:


	Nine Months Ended September 30,
	2026			2025
Cash flows provided by (used in):
Operating activities	$	40,542,000		$	32,734,000
Investing activities	$	(6,732,000	)	$	(4,094,000	)
Financing activities	$	(23,888,000	)	$	(31,270,000	)

Operating Activities

Net cash from operating activities was $40.5 million and $32.7 million for the nine months ended September 30, 2026 and 2025, respectively. Cash flows from operations increased $7.8 million, or 23.9%, during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to an increase in the results for the 138 properties acquired at various dates from March 2025 through August 2026. This increase was offset by a decrease in results for the 25 properties sold between April 2025 and July 2026 and an increase in cash paid for interest of $3.8 million.

Investing Activities

Net cash flows used in investing activities were primarily the result of the advances and repayments on the RLSCA, dispositions of real estate, and property acquisitions. During the nine months ended September 30, 2026, the Company acquired 121 properties for a total cash outlay of $6.6 million, had $4.6 million in net advances under the RSLCA, and incurred expenditures of $0.3 million for improvements of real estate. These cash outflows were offset by $4.7 million in proceeds from the sale of three properties from June 2026 through July 2026. During the nine months ended September 30, 2025, the Company acquired 13 properties for a total cash outlay of $39.7 million and incurred expenditures of $0.7 million for improvements of real estate. These cash outflows were offset by $29.2 million in proceeds from the sale of 14 properties at various dates and $7.1 million in net repayments under the RSLCA.

Financing Activities

During the nine months ended September 30, 2026, the Company had mortgage loan repayments of $138.1 million, redemptions of $23.0 million of Class I Common Shares and Class A Common Shares, distributions of $18.8 million to the holders of Class I Common Shares, Class A Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, and Class ER-D Common Shares, distributions of $14.4 million to the holders of OP Units, and payments of deferred financing costs of $5.7 million. These cash outflows were offset by borrowings from its revolving credit facility of $138.1 million, net proceeds of $27.3 million from the issuance of Class I Common Shares, Class A Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, and Class ER-D Common Shares, proceeds from the issuance of noncontrolling interests of $9.1 million, net proceeds from reserves upon the assumption of loans payable which were due back to certain DSTs previously managed by ExchangeRight of $0.8 million, and pending trade deposits of $0.8 million.

During the nine months ended September 30, 2025, the Company had balloon mortgage loan repayments of $49.9 million, redemptions of $28.5 million of Class I and Class A Common Shares, distributions of $18.3 million to the holders of Class I Common Shares, Class A Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, and Class ER-D Common Shares, distributions of $11.4 million to the holders of OP Units, financing costs of $0.4 million related to the expansion of the Company's line of credit, and offering costs of $0.1 million in relation to the issuance of noncontrolling interests, which was offset by borrowings from its revolving credit facilities of $49.9 million, net proceeds of $26.7 million from the issuance of Class I Common Shares, Class A Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, and Class ER-D Common Shares, and pending trade deposits of $0.8 million.

Distributions

The amount of distributions payable to the Company’s shareholders is determined by the Trustee and is dependent on a number of factors, including funds available for distribution, the Company’s financial condition, capital expenditure requirements, requirements of Maryland law and annual distribution requirements needed to qualify and maintain its status as a REIT. Our distribution policy is for our inception-to-date cash flow from operations to always exceed our distributions that have

been declared or paid, rather than making distributions out of investor equity or financing, subject only to REIT qualification requirements or to avoid incurring federal income tax. The Trustee has authorized, and the Company has declared, distributions through September 30, 2026. The distributions are payable on approximately the 15th day following each month end to shareholders of record at the close of business on the last day of the prior month. Distributions in the aggregate amount of $4.9 million were declared but not yet paid as of September 30, 2026. The unpaid distributions as of September 30, 2026 were paid in cash or settled in common shares under the Company’s Dividend Reinvestment and Direct Share Purchase Plan (“DRIP”) during October 2026.

The following table provides a summary of the monthly distributions declared and paid per Class I Common Share, Class A Common Share, Class D Common Share, Class ER-I Common Share, Class ER-A Common Share, and Class ER-D Common Share for the nine months ended September 30, 2026:


	September 30, 2026
	Class I		Class A		Class D		Class ER-I		Class ER-A		Class ER-D
January	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
February	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
March	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
April	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
May	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
June	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
July	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
August	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
September	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
	$	1.3041	$	1.3041	$	1.3041	$	1.3041	$	1.3041	$	1.3041

The following table provides a summary of the monthly distributions declared and paid per Class I Common Share, Class A Common Share, and Class ER-I Common Share for the nine months ended September 30, 2025:


	September 30, 2025
	Class I		Class A		Class D		Class ER-I (a)		Class ER-A		Class ER-D
January	$	0.1449	$	0.1449	n/a		$	0.1449	n/a		n/a
February	$	0.1449	$	0.1449	n/a		$	0.1449	n/a		n/a
March	$	0.1449	$	0.1449	n/a		$	0.1449	n/a		n/a
April	$	0.1449	$	0.1449	n/a		$	0.1449	n/a		n/a
May	$	0.1449	$	0.1449	n/a		$	0.1449	n/a		n/a
June	$	0.1449	$	0.1449	n/a		$	0.1449	n/a		n/a
July	$	0.1449	$	0.1449	n/a		$	0.1449	n/a		n/a
August	$	0.1449	$	0.1449	n/a		$	0.1449	n/a		n/a
September	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449	$	0.1449
	$	1.3041	$	1.3041	$	0.1449	$	1.3041	$	0.1449	$	0.1449

(a) On June 10, 2025, pursuant to the Third Amended and Restated Declaration of Trust of the Company, the Company renamed the Class ER Common Shares as Class ER-I Common Shares.

The Trustee approved the DRIP. The following table lists the Common Shares issued and total distributions reinvested under the DRIP during the nine months ended September 30, 2026 and 2025:


	Nine months ended September 30, 2026						Nine months ended September 30, 2025
	Common Shares			Total			Common Shares			Total
Share Class	Issued			Reinvestment			Issued			Reinvestment
Class I		76,389	(a)	$	2,081,000	(a)		73,188	(c)	$	1,979,000	(c)
Class A		66,077	(b)		1,801,000	(b)		63,627			1,720,000
Class S		-			-			-			-
Class D		2,012			54,000			-			-
Total		144,478		$	3,936,000			136,815		$	3,699,000

(a) Includes the issuance of 23,621 Class I Common Shares totaling $644,000 in connection with OP Unitholder and Class ER-I Common Share distributions being reinvested back into the Company's Class I Common Shares based on OP Unitholders’ or Class ER-I Common Shareholders’ election.

(b) Includes the issuance of 4,737 Class A Common Shares totaling $129,000 in connection with Class ER-A Common Share distributions being reinvested back into the Company's Class A Common Shares based on Class ER-A Common Shareholders’ election.

(c) Includes the issuance of 24,196 Class I Common Shares totaling $654,000 in connection with OP Unitholder and Class ER-I Common Share distributions being reinvested back into the Company's Class I Common Shares based on OP Unitholders’ or Class ER-I Common Shareholders’ election.

The following table details the sources of our cash distributions during the nine months ended September 30, 2026 and 2025:


	Nine Months Ended September 30,
	2026		2025
Cash Distributions
Common Shares	$	18,764,000	$	18,332,000
Noncontrolling interests		14,413,000		11,374,000
Total cash distributions	$	33,177,000	$	29,706,000

Sources of Distributions
Cash flows from operating activities (a)	$	33,177,000	$	29,706,000

Cash flows from operating activities	$	40,542,000	$	32,734,000
Funds from Operations (“FFO”) (b)	$	35,405,000	$	31,644,000
Adjusted FFO (b)	$	38,269,000	$	33,506,000

(a)

As of September 30, 2026, the Company’s cumulative inception-to-date cash flows from operating activities funded 100% of the Company's cumulative inception-to-date cash distributions.

(b)

A reconciliation of net (loss) income attributable to common shareholders’ to FFO and Adjusted FFO (both non-GAAP measures) for the nine months ended September 30, 2026 and 2025, respectively, is provided below.

Contractual Obligations

The following table sets forth the Company’s significant debt repayments, interest payments, and operating lease obligations at September 30, 2026:


	Mortgage loans		Delayed draw		Interest		Operating ground
Year	payable		term loan facility		payments (a)		lease obligation		Total
Remainder of 2026	$	28,110,000	$	-	$	11,759,000	$	71,000	$	39,940,000
2027		134,223,000		-		43,735,000		285,000		178,243,000
2028		272,479,000		-		29,772,000		285,000		302,536,000
2029		197,506,000		295,538,000		8,589,000		285,000		501,918,000
2030		-		-		1,296,000		287,000		1,583,000
Thereafter		37,564,000		-		-		28,173,000		65,737,000
Total	$	669,882,000	$	295,538,000	$	95,151,000	$	29,386,000	$	1,089,957,000

(a)

The interest rates used in this calculation are the rates in effect for all debt obligations as of September 30, 2026.

Related and Affiliated Party Transactions and Agreements

The Company has entered into agreements with ExchangeRight and its affiliates whereby we have paid, and may continue to pay, certain fees to, or reimburse certain expenses of, ExchangeRight or its affiliates for acquisition fees and actual incurred out-of-pocket expenses, but specifically excluding reimbursement related to employee compensation. The Company is also subject to a fee arrangement with ExchangeRight and its affiliates for organization and offering costs and asset and property management fees.

ExchangeRight incurs certain organization and offering costs in connection with the Company’s current private securities offering of its common shares and the organization of the Company. These costs include, but are not limited to, fees related to special purpose entity formation, legal and accounting fees, valuation fees related to any expansion of the offering, marketing expenses and other costs and expenses directly related to the offering and organization of the Company. All of these

expenses are paid by ExchangeRight or its affiliates. ExchangeRight earns a percentage of the gross proceeds from the offering which is expected to offset the organizational and offering costs incurred described above. This amount is equal to 1.00% of the net transaction price of sales of common shares. Offering costs of $0.1 million and $0.3 million were included in total equity for the three and nine months ended September 30, 2026, for which the Company was obligated to reimburse ExchangeRight.

The Operating Partnership has entered into guaranty agreements with certain DSTs of which ExchangeRight serves as the master lessee via a master lease agreement. In these guaranty agreements, the Operating Partnership is the guarantor on the master lease agreements entered into between these DSTs and ExchangeRight as the master lessee. The guaranties are for the full term of the master leases, which range from 15 and 20 years. Under these guaranties, the Operating Partnership guarantees the payment of all obligations and liabilities of the master lessee as outlined in the respective master lease agreements. As of September 30, 2026, the maximum remaining contractual payments under these lease agreements totaled $1,672.7 million, although the master lease rental obligation will be terminated or eliminated in consolidation upon a sale or merger of the DST. The Company has not been obligated to make any payments under these guaranties as of September 30, 2026.

Off-Balance Sheet Arrangements

The Operating Partnership has entered into guaranty agreements with certain DSTs of which ExchangeRight serves as the master lessee via a master lease agreement. In these guaranty agreements, the Operating Partnership is the guarantor on the master lease agreements entered into between these DSTs and ExchangeRight as the master lessee. The guaranties are for the full term of the master leases, which are for 15 and 20 years, respectively. Under these guaranties, the Operating Partnership guarantees the payment of all obligations and liabilities of the master lessee as outlined in the respective master lease agreements. As of September 30, 2026, the maximum remaining contractual payments under these lease agreements totaled $1,672.7 million, although the master lease rental obligation will be terminated or eliminated in consolidation upon a sale or merger of the DST. The Company has not been obligated to make any payments under these guaranties as of September 30, 2026.

Other than these guaranties and the items disclosed in the Contractual Obligations section above, the Company had no off-balance sheet arrangements as of September 30, 2026 that are reasonably likely to have a current or future material effect on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

The Company’s most critical accounting policies are summarized below. Other accounting policies are summarized in Note 2, “Summary of Significant Accounting Policies,” to the Company’s consolidated financial statements as of and for the year ended December 31, 2025 included in the Company's Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on February 26, 2026. There have been no material changes in such critical accounting policies during the nine months ended September 30, 2026.

Principles of Consolidation

decisions about the entity’s activities that significantly impact the entity’s performance, (b) have no obligation to absorb the expected losses of the entity, or (c) have no right to receive the expected residual returns of the entity, or (3) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately fewer voting rights.

Use of Estimates

The preparation of the unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s most significant assumptions and estimates relate to the useful lives of real estate assets, lease accounting, real estate impairment assessments and allocation of fair value of purchase consideration. These estimates are based on historical experience and other assumptions which management believes are reasonable. The Company evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from those estimates.

Investment in Real Estate

Real estate assets are stated at cost, less accumulated depreciation and amortization. Assets are recognized at fair value at acquisition date.

The Company evaluates each acquisition transaction to determine whether the acquired asset meets the definition of a business and therefore accounted for as a business combination or if the acquisition transaction should be accounted for as an asset acquisition. Under Accounting Standards Update (“ASU”) 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”), an acquisition does not qualify as a business when substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets or the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. Transaction costs related to acquisitions that qualify as asset acquisitions are capitalized as part of the cost basis of the acquired assets, while transaction costs for acquisitions that are deemed to be acquisitions of a business are expensed as incurred.

The Company allocates the purchase price of acquired properties accounted for as asset acquisitions to tangible and identifiable intangible assets or liabilities based on their relative fair values. Tangible assets may include land, buildings, site improvements and tenant improvements. Intangible assets include the value of in-place leases and above-market leases and intangible liabilities include below-market leases. The fair value of the tangible assets of an acquired property with an in-place operating lease is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to the tangible assets based on the relative fair value of the tangible assets. The fair value of in-place leases is determined by considering estimates of carrying costs during the expected lease-up periods, current market conditions as well as costs to execute similar leases based on the specific characteristics of each tenant’s lease. The Company estimates the cost to execute leases with terms similar to the remaining lease terms of the in-place leases, including tenant improvements, leasing commissions, legal and other related expenses.

The values of acquired above-market and below-market leases are recorded based on the present values (using discount rates which reflect the risks associated with the leases acquired) of the differences between the contractual amounts to be received and management’s estimate of market lease rates, measured over the terms of the respective leases that management deemed appropriate at the time of the acquisitions. Such valuations include consideration of the noncancelable terms of the respective leases as well as any applicable renewal periods. The fair values associated with below-market rental renewal options are determined based on the Company’s experience and the relevant facts and circumstances that existed at the time of the acquisitions. The values of the above-market and below-market leases are amortized over the term of the respective leases, including certain renewal options (as applicable), as an adjustment to rental revenue on the Company’s consolidated statements of operations and comprehensive (loss) income. The value of other intangible assets (including leasing commissions, tenant improvements, etc.) is amortized to expense over the applicable terms of the respective leases. If a lease were to be terminated prior to its stated expiration or not renewed, all unamortized amounts relating to that lease would be recognized in operations at that time. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources and also considers information and other factors including market conditions, the industry that the tenant operates in, characteristics of the real estate; e.g., location, size, demographics, value and comparative rental rates; tenant credit profile and the importance of the location of the real estate to the operations of the tenant’s business. Additionally, the Company considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible and intangible assets and liabilities acquired. The Company’s methodology for measuring and allocating the fair value of real estate acquisitions includes both observable market data (categorized as level 2 on the three-level valuation hierarchy of Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement), and unobservable inputs that reflect the Company’s own internal assumptions (categorized as level 3 under ASC Topic 820). Given the significance of the unobservable inputs the Company believes the allocations of fair value of real estate acquisitions should be categorized as level 3 under ASC Topic 820.

Management reviews each real estate investment for impairment whenever events or circumstances indicate that the carrying value of a real estate investment may not be recoverable. The review of recoverability of real estate investments held for use is based on an estimate of the future cash flows that are expected to result from the real estate investment’s use and eventual disposition. These cash flows consider factors such as expected future operating income, trends and prospects, as well as the effects of leasing demand, capital expenditures, competition and other factors. If an impairment event exists due to the projected inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds estimated fair value.

Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. The Company considers the period of future benefit of each respective asset to determine its appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows:


Description		Depreciable life
Buildings		39 years
Building and site improvements		Ranging from 5 to 28 years
Tenant improvements		Shorter of the term of the related lease or useful life
Intangible lease assets and liabilities		Term of the related lease

Expenditures for improvements that substantially extend the useful lives of the assets are capitalized. Expenditures for maintenance, repairs, and betterments that do not substantially prolong the normal useful life of an asset are expensed as incurred.

Revenue Recognition and Receivables

Management has determined that predominantly all of the Company’s leases with its various tenants are operating leases. The Company recognizes minimum rent, including rental abatements, lease incentives, and contractual fixed increases attributable to operating leases on a straight-line basis over the term of the related leases when collectability is reasonably assured and records amounts expected to be received in later years as deferred rent receivable. Deferred rent receivable represents rent earned in excess of rent received as a result of straight-lining rents over the terms of the leases, in accordance with the guidance and is included in receivables on the accompanying condensed consolidated balance sheets. Deferred rent liability represents rent received in excess of rent earned as a result of straight-lining rents over the terms of the leases. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred.

A limited number of operating leases contain contingent rent provisions under which tenants are required to pay, as additional rent, a percentage of their sales in excess of a specified amount. The Company defers recognition of contingent rental income until those specified sales targets are met. Revenues also may include items such as lease termination fees, which tend to fluctuate more than rents from year to year. Termination fees are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration. The Company recognizes lease termination income when the following conditions are met: (1) the lease termination agreement has been executed, (2) the lease termination fee is determinable, (3) all the Company’s landlord services pursuant to the terminated lease have been rendered, and (4) collectability of the lease termination fee is assured.

If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or by the Company. When the Company is the owner of the tenant improvements, the tenant is typically not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed.

When the tenant is the owner of the tenant improvements, any tenant improvement allowance that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to:

•

whether the lease stipulates how a tenant improvement allowance may be spent;

•

whether the amount of a tenant improvement allowance is in excess of market rates;

•

whether the tenant or landlord retains legal title to the improvements at the end of the lease term;

•

whether the tenant improvements are unique to the tenant or general-purpose in nature; and

•

whether the tenant improvements are expected to have any residual value at the end of the lease.

Noncontrolling Interests

The Company presents noncontrolling interests, which represents OP Units, and classifies such interests as a component of equity, separate from the Company’s shareholders’ equity. Noncontrolling interests were created as part of contribution and merger agreements with former 1031-exchangeable portfolios that were previously managed by ExchangeRight on behalf of investors and recognized at fair value as of the date of the transaction.

Income Taxes

The Company has elected and is qualified to be taxed as a REIT, as it complies with the related provisions under the Internal Revenue Code of 1986, as amended. Accordingly, the Company generally is not and will not be subject to U.S. federal income tax to the extent of its distributions to shareholders and as long as certain asset, income and share ownership tests are met. To qualify as a REIT, the Company must annually distribute at least 90% of its REIT taxable income to its shareholders and meet certain other requirements. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. The Company may also be subject to certain state, local and franchise taxes. If the Company fails to meet these requirements, it will be subject to U.S. federal income tax, which could have a material adverse impact on its results of operations and amounts available for distributions to its shareholders. Application of tax laws and regulations to various types of transactions is susceptible to varying interpretations. Therefore, amounts reported in the consolidated financial statements could be changed at a later date upon examination and final determination by the taxing authorities. No such examinations by taxing authorities are presently in process.

The Company provides for uncertain tax positions based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. Management is required to determine whether a tax position is more likely than not to be sustained upon examination by tax authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Because assumptions are used in determining whether a tax benefit is more likely than not to be sustained upon examination by tax authorities, actual results may differ from the Company’s estimates under different assumptions or conditions.

Inflation

moderated on a year-over-year basis during 2024 and 2025, consumer and producer inflation rates began to rise once again in March through May 2026, with the consumer price index peaking at 4.2% on a year-over-year basis, driven principally by increasing energy prices. During the third quarter of 2026, the CPI fell to 3.7% on a year-over-year basis as of September 20, 2026, but persistently elevated energy prices continue to be the principal contributor to inflationary pressures, with energy prices rising 20.4% on a year-over-year basis as of September 30, 2026. This has resulted in debt yields and benchmark interest rate levels remaining at elevated levels during the third quarter of 2026, including the benchmark 10-year U.S. Treasury Note yield hovering around 5% and mortgage rates which remain at 15-year highs. In this regard, the Federal Reserve raised the federal funds rate 25 basis points to 4.0% in September 2026, with many market analysts expecting one additional 25 basis point increase before year-end. Current analyst expectations regarding the pace of future rate increases moderate markedly in 2027.

Substantially all of the Company’s tenant leases contain provisions designed to partially mitigate the negative impact of inflation in the near term. Such lease provisions include clauses that require tenants to reimburse the Company for inflation-sensitive costs such as real estate taxes or insurance and many of the operating expenses it incurs. The Company has been able to mitigate a significant portion of interest rate increases in the current period as all of its mortgage debt is currently effectively fixed-rate financing as of September 30, 2026. The Company has borrowed $295.5 million under its DDTL Facility as of September 30, 2026, which is impacted by fluctuating interest rates as the interest on the DDTL Facility is not fixed long-term. Further inflation rate increases or elevated interest rates over a prolonged period of time may have a material adverse impact on the Company’s business. It remains difficult to predict the full impact of recent events and any future changes in interest rates or inflation.

Non-GAAP Financial Measures

FFO and Adjusted FFO

FFO is a widely recognized supplemental non-GAAP measure utilized to evaluate the financial performance of a REIT. The Company presents FFO in accordance with the definition adopted by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT generally defines FFO as net income (determined in accordance with GAAP), excluding gains (losses) from sales of real estate properties, impairment write-downs on real estate properties directly attributable to decreases in the value of depreciable real estate, plus real estate related depreciation and amortization, and adjustments for partnerships and joint ventures to reflect FFO on the same basis. The Company considers FFO to be an appropriate measure of its financial performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than other depreciable assets.

The Company also considers Adjusted Funds From Operations (“Adjusted FFO”) to be an additional meaningful financial measure of financial performance as it provides supplemental information concerning our operating performance, exclusive of certain non-cash items and other costs. The Company believes Adjusted FFO further assists in comparing the Company’s performance across reporting periods on a consistent basis by excluding such items.

FFO and Adjusted FFO should be reviewed with net income (loss) attributable to common shareholders, the most directly comparable GAAP financial measure, when trying to understand the Company’s operating performance. FFO and Adjusted FFO do not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) income attributable to common shareholders or to cash flow from operating activities. The Company’s computations of FFO and Adjusted FFO may differ from the computations utilized by other REITs and, accordingly, may not be comparable to such REITs.

A reconciliation of net (loss) income attributable to common shareholders to FFO and Adjusted FFO for the three and nine months ended September 30, 2026 and 2025, is as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2026			2025			2026			2025
Net (loss) income attributable to common shareholders	$	(2,417,000	)	$	(289,000	)	$	(4,777,000	)	$	2,323,000
Depreciation and amortization		16,635,000			11,114,000			41,062,000			33,224,000
Loss (gain) on sales of real estate, net		902,000			-			902,000			(5,184,000	)
Provisions for impairment		-			-			1,890,000			-
Net loss (income) attributable to noncontrolling interests		(2,151,000	)		(154,000	)		(3,672,000	)		1,281,000
FFO applicable to diluted common shares (a)		12,969,000			10,671,000			35,405,000			31,644,000
Adjustments:
Straight-line rent adjustments		(246,000	)		(218,000	)		(739,000	)		(653,000	)
Above/below market lease amortization, net		(697,000	)		(635,000	)		(1,892,000	)		(1,871,000	)
Amortization of deferred financing costs		475,000			197,000			1,011,000			527,000
Above/below market debt amortization, net		1,751,000			1,146,000			4,276,000			3,650,000
Straight-line ground rent adjustments		40,000			40,000			121,000			121,000
Amortization of tax incentive financing arrangement		28,000			29,000			87,000			88,000
Adjusted FFO applicable to diluted common shares (a)	$	14,320,000		$	11,230,000		$	38,269,000		$	33,506,000

FFO per diluted common shares	$	0.37		$	0.41		$	1.17		$	1.23
Adjusted FFO per diluted common shares	$	0.41		$	0.43		$	1.27		$	1.30

Weighted average number of diluted common shares (a):
Common shares		17,265,206			16,621,322			17,086,441			16,586,493
OP Units		17,435,223			9,257,142			13,137,550			9,152,395
		34,700,429			25,878,464			30,223,992			25,738,888

(a)

FFO applicable to diluted common shares and Adjusted FFO applicable to diluted common shares includes FFO and Adjusted FFO for the three and nine months ended September 30, 2026 that is attributable to Class NLP OP Units as income (losses) attributable to noncontrolling interest associated with the Operating Partnership as income (losses) is allocated proportionately amongst all classes. Weighted average number of diluted common shares used to compute FFO and Adjusted FFO applicable to diluted common shares includes 8,264,695 and 3,935,292 Class NLP OP Units for the three and nine months ended September 30, 2026, respectively, which are excluded from the computation of net (loss) income per common share attributable to common shareholders for the three and nine months ended September 30, 2026 as they do not have any current rights to convert their units into units of any other class or series of units of, or any other securities or partnership interests in, the Company. There were no Class NLP OP Units issued or outstanding during the three and nine months ended September 30, 2025 and thus had no effect on FFO, Adjusted FFO and weighted average number of diluted common shares for those periods.

Net Asset Value

The Company calculates NAV per share in accordance with the valuation guidelines that have been approved by our Trustee. Our Trustee has adopted valuation procedures, as amended from time to time, that contain a comprehensive set of methodologies to be used in connection with the calculation of our NAV. To calculate our NAV for the purpose of establishing a purchase and redemption price for our shares, our Trustee has adopted a model which adjusts the value of certain of our investments in real estate assets from historical cost to fair value. Our Trustee oversees the process of determining our estimated NAV per share, which includes considering estimated values of our commercial real estate assets and investments, including related liabilities, based upon, in certain instances, reports of the discounted cash flows generated by the underlying real estate provided by an independent valuation firm. The Trustee, upon its receipt and review of such valuation report, will determine a reasonable range for our estimated NAV per share and an estimated NAV per share. The independent valuation firm is not responsible for, and does not prepare, our NAV per share. The final determination of our NAV per share is made by our Trustee. The estimated NAV per share will represent approximately the mid-point of the range of values reflecting the effect of using different discount rates and terminal capitalization rates in the sensitivity analysis. Such NAV may be declared prior to the finalization, and ultimate issuance, of our quarterly or annual financial statements which may result in an immaterial variance in the declared NAV per share to the final reconciliation of NAV per share after the review and issuance of such financial statements

is completed. If any such variance was ever determined to be material, our Trustee would declare a revised NAV per share for the quarter. Our Trustee has used the mid-point of the independent valuation firm’s real estate value range in setting the NAV per share since our formation.

We will cause our real property portfolio to be valued quarterly by an independent valuation firm, which will apply the fair value methodologies detailed within the Financial Accounting Standards Board ASC Topic 820, Fair Value Measurements and Disclosures. An independent valuation firm will review information provided by our Trustee regarding the properties we own as of the end of the quarter including location, building size, tenancy, lease rates, lease term and various other relevant metrics. The independent valuation firm will also research and analyze market data and valuation benchmarks in connection with each quarterly valuation. The independent valuation firm will utilize the income approach (i.e., discounted cash flow) to value and may perform the following actions in connection with its quarterly valuations:

•

Hold interviews with the employees of our Trustee regarding historical valuation methodology, expertise of the portfolio, and industry expertise;

•

Independently research comparable portfolio transactions and individual property transactions;

•

Review third-party market reports; and

•

Independently review tenant leases for the subject properties.

In performing each quarterly valuation, our Trustee will provide the independent valuation firm with certain data, including but not limited to the following:

•

Real property listing: a master list of all leased properties including all relevant details of each such property including location, lease terms, and other relevant factors.

•

Leases and lease amendments: the lease files provide data such as property type, address, lease terms and rent details for the leased real property.

•

Estoppels and move-in notices: the documents utilized to verify commencement of leases for build-to-suit properties.

•

Property surveys: the documents that verify the size of each leased premise.

The Company’s total NAV presented in the following tables includes the NAV of our Class I, Class A, Class S and Class D Common Shares, as well as the OP Units as of September 30, 2026 and December 31, 2025, respectively, and per share/unit is identical for Class I, Class A, Class S and Class D Common Shares and OP Units. The following table provides a breakdown of the major components of the Company’s NAV as of September 30, 2026 and December 31, 2025:


Components	September 30, 2026			December 31, 2025
Investments in real estate	$	1,873,150,000		$	1,334,550,000
RSLCA notes receivable from affiliates		25,619,000			21,007,000
Notes receivable from affiliates		21,400,000			21,400,000
Restricted cash		17,569,000			10,835,000
Cash and cash equivalents		13,852,000			10,664,000
Receivables		8,244,000			6,118,000
Other assets		2,131,000			1,237,000
Mortgage loans payable		(654,869,000	)		(514,758,000	)
Term loan		(291,513,000	)		-
Revolving credit facility		-			(157,403,000	)
Accounts payable, accrued expenses and other liabilities		(14,208,000	)		(9,853,000	)
Distributions payable		(4,902,000	)		(3,777,000	)
Pending trade deposits		(829,000	)		(1,505,000	)
Due to affiliates, net		(1,646,000	)		(180,000	)
NAV	$	993,998,000		$	718,335,000

Class I Common Shares		5,709,656			5,759,806
Class A Common Shares		9,918,759			9,994,066
Class S Common Shares		-			-
Class D Common Shares		296,458			68,911
Class ER-I Common Shares		939,251			843,290
Class ER-A Common Shares		431,693			190,511
Class ER-S Common Shares		-			-
Class ER-D Common Shares		46,931			39,991
OP Units		18,514,768			9,260,279
Total outstanding Common Shares/OP Units		35,857,516			26,156,854

NAV per share/unit	$	27.72		$	27.46

The following table reconciles shareholders’ equity per the Company’s condensed consolidated balance sheet to the Company’s NAV as of September 30, 2026 and December 31, 2025:


Reconciliation of Shareholders’ Equity to NAV	September 30, 2026		December 31, 2025
Total shareholders’ equity	$	313,474,000	$	327,981,000
Noncontrolling interests in operating partnership		413,794,000		192,813,000
Total equity per GAAP		727,268,000		520,794,000
Adjustment:
Fair value adjustment of real estate investments		266,730,000		197,541,000
NAV	$	993,998,000	$	718,335,000

The Company’s investments in real estate are presented under historical cost in our consolidated financial statements. As such, any increases or decreases in the fair market value of the Company’s investments in real estate are not recorded in the Company’s GAAP results other than in the event of an impairment or upon a sale. The Company’s mortgage loans payable, DDTL Facility, and Revolving Credit Facility are valued at GAAP carrying value in the Company’s NAV calculation for any financings that are anticipated to be held to maturity. In addition, because the Company plans to utilize interest rate hedges to stabilize interest payments (i.e. to fix all-in interest rates through interest rate swaps or to limit interest rate exposure through interest rate caps) on individual loans and intends to hold each interest rate hedge until maturity, each interest rate hedge will be valued at par and thus its market value in accordance with GAAP will be excluded from the calculation of NAV. The Company entered into an interest rate swap agreement concurrent with the closing of the $26.9 million mortgage entered into in February 2023. At September 30, 2026, $159,000 is included in other assets relating to the fair value of this interest rate swap agreement, which was not included for the calculation of NAV.

While the Company believes that the independent valuation firm’s assumptions and inputs are reasonable, a change in these assumptions and inputs may significantly impact the fair value of the real estate properties and the Company’s estimated NAV per share. For purposes of determining the Company’s NAV, the Company’s investments in real estate as of (1) September 30, 2026 are recorded at fair value using a weighted average discount rate of 6.35% with a range of 6.25% to 6.45% and weighted average exit capitalization rate of 5.75% with a range of 5.65% to 5.85% and (2) December 31, 2025 are recorded at fair value

using a weighted average discount rate of 6.40% with a range of 6.30% to 6.50% and weighted average exit capitalization rate of 5.75% with a range of 5.65% to 5.85%. Assuming all other factors remain unchanged, the tables below present the estimated increase or decrease to the Company’s September 30, 2026 and December 31, 2025 NAV for the changes in the weighted average discount and exit capitalization rate.


		NAV per share/unit
Input	Hypothetical change	September 30, 2026		December 31, 2025
Discount rate (weighted average)	25 bps decrease	$	28.71	$	28.42
Discount rate (weighted average)	25 bps increase	$	26.75	$	26.50
Exit capitalization rate (weighted average)	25 bps decrease	$	29.10	$	28.80
Exit capitalization rate (weighted average)	25 bps increase	$	26.44	$	26.20

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules, forms and regulations and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

Our management carries out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer regarding the effectiveness of our disclosure controls and procedures as of the end of each fiscal quarter. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2026.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings

We and our Trustee may from time to time be a party to legal proceedings which arise in the ordinary course of our business. The Company’s management is not aware of any current or pending legal proceedings to which we or any of our subsidiaries, or the Trustee, are a party or to which any of our property is subject, the outcome of which would, in management’s judgment based on information currently available, have a material adverse effect on our results of operations or financial condition, nor is management aware of any such legal proceedings contemplated by governmental authorities.

ITEM 1A. Risk Factors

The risk factors affecting the Company are described in Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2026. There have been no material changes from these previously disclosed risk factors for three months ended September 30, 2026.

ITEM 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Unregistered Sales of Equity Securities

Private Offering of Class I, Class A, Class S, Class D, Class ER-I, Class ER-A, Class ER-S and Class ER-D Common Shares

On February 28, 2019, we commenced private placement offerings of our Class I and Class A Common Shares, the terms of which have been updated from time to time, including the addition of Class S, Class D, Class ER-A, Class ER-I, Class ER-S and Class ER-D Common Shares to the offering (as so updated, the “Private Offering”). Upon the receipt of investment proceeds from the offering of our common shares, we transfer the net investment proceeds to our Operating Partnership in exchange for OP Units to be held by the Company. The offerings had an initial aggregate offering amount of $100,000,000, which has since been increased by the Trustee to the current aggregate offering amount of $2.165 billion. The common shares are being sold only for cash. The offering does not have a defined expiration date and will be left open to investors until the Trustee determines to terminate the offering. We also have offered the common shares at various offering prices, as determined by the Trustee, effective at various intervals. From the inception of the Private Offering until July 5, 2023, we offered the common shares in the Private Offering in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder. Commencing on July 6, 2023, we began conducting the Private Offering under Rule 506(c) of Regulation D and began accepting subscriptions for investments under those terms for purchases closing on or after August 1, 2023. As of that date, subscriptions will be accepted solely from “accredited investors,” as defined in Rule 501(a) of Regulation D, whose accredited investor status has been verified by us. Under Rule 506(c), general solicitation and advertisement of offerings is permitted, however all purchasers in the offering must be accredited investors and the Company must take reasonable steps to verify the accredited investor status of each purchaser, among other requirements.

During the three months ended September 30, 2026, we sold common shares in the Private Offering, as set forth in the following table:


Class	Shares Sold		Average Price Per Share		Aggregate Offering Price
Class I Common Shares		44,235	$	27.58	$	1,220,000
Class A Common Shares		59,199	$	29.36		1,738,000
Class S Common Shares		-	$	-		-
Class D Common Shares		79,686	$	27.61		2,200,000
Class ER-I Common Shares		-	$	-		-
Class ER-A Common Shares		20,605	$	29.34		606,000
Class ER-S Common Shares		-	$	-		-
Class ER-D Common Shares		-	$	-		-
Total		203,725			$	5,764,000

We have engaged broker-dealers who are registered with the SEC and members of the FINRA to act as our exclusive placement agents in connection with the Private Offering. During the three months ended September 30, 2026, we paid aggregate selling commissions to these placement agents in connection with the Private Offering of $140,000 allocable among the various classes of our common shares as follows: $104,000 with respect to the Class A Common Shares and $36,000 with respect to the Class ER-A Common Shares.

Dividend Reinvestment and Direct Share Purchase Plan

On October 19, 2023, the Trustee approved the DRIP, which generally permits shareholders of the Company to elect to have some or all of their cash distributions in respect of the shareholder’s common shares to be automatically reinvested in additional common shares. Any cash dividends attributable to the class of common shares owned by participants in the DRIP will be reinvested in common shares on behalf of the participant on the business day such dividend would have been paid to such investor. In addition, holders of the Class I, Class A 721, Class D, and Class NLP OP Units in the Operating Partnership and the Class ER Common Shares of the Company may elect to reinvest their cash distributions from the Operating Partnership and Company, as applicable, and make optional cash purchases of our Class I Common Shares (except holders of the Class D OP Units, who may make purchases of our Class D Common Shares). Participants may elect to have their cash dividends or distributions reinvested in additional common shares at a 1% discount to the NAV per common share applicable to the class of shares being purchased on the distribution date. The Company will not pay selling commissions on shares purchased pursuant to the DRIP. In addition, ExchangeRight Real Estate, LLC, the sponsor of the Company, will not charge participants for organizational and offering costs in connection with the DRIP. Shares offered under the DRIP have the same rights as the corresponding class of common shares offered to prospective investors in the Company’s Private Offering. The offering of the

common shares under the DRIP is being conducted in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D, Rule 506(b), thereunder.

During the three months ended September 30, 2026, we issued common shares under the DRIP, as set forth in the following table:


Class	Shares Issued under DRIP		Average Price Per Share		Aggregate Offering Price
Class I Common Shares (a)		25,991	$	27.34	$	711,000
Class A Common Shares (b)		22,096	$	27.34		603,000
Class D Common Shares		944	$	27.34		26,000
Class S Common Shares		-	$	-		-
Total		49,031			$	1,340,000

(a)

Includes the issuance of 8,978 Class I Common Shares totaling $245,000 in connection with OP Unitholder and Class ER-I Common Share distributions being reinvested back into the Company's Class I Common Shares based on those investors’ election.

(b)

Includes the issuance of 1,822 Class A Common Shares totaling $50,000 in connection with Class ER-A Common Share distributions being reinvested back into the Company's Class A Common Shares based on those investors’ election.

Issuance of Common Shares to OP Unitholders

The holders of the Operating Partnership’s Class I, Class ER-I, Class ER-A, Class ER-S, Class ER-D, Class A 721, and Class D Common Units have the right to cause their units to be redeemed by the Operating Partnership for cash, unless the Company, in its sole discretion, elects to purchase such units in exchange for Class I, Class ER-I, Class ER-A, Class ER-S, Class ER-D, Class A, or Class D Common Shares of the Company, as applicable and corresponding to the class of OP units being redeemed, issuable on a 1:1 basis, subject to adjustment under certain circumstances. The Company currently intends to elect to pay the redemption price for all Class I, Class ER-I, Class ER-A, Class ER-S, Class ER-D, Class A 721, and Class D OP units tendered for redemption in the form of Common Shares of the Company corresponding to the class of OP units being redeemed.

During the three months ended September 30, 2026, holders of 29,312 Class I and Class A 721 Common Units elected to cause the Operating Partnership to redeem their Class I or Class A 721 Common Units, and the Company elected to purchase those units in exchange for the issuance of 29,312 Class I Common Shares. The Company did not pay any selling commissions in connection with the issuance of those common shares during the three months ended September 30, 2026.

Share Repurchases

The Company has a share repurchase program to provide eligible shareholders with limited, interim liquidity by enabling them to sell shares back to the Company, subject to restrictions and applicable law, if such repurchases do not impair the capital or operations of the Company. The Company is structured to provide partial liquidity to investors through redemptions on a quarterly basis of up to 5%, or as approved by the Trustee, of the Company’s issued and outstanding shares per fiscal year pursuant to the share repurchase program. Affiliates may seek to have their shares repurchased on the same terms and limitations as the common shareholders. However, notwithstanding the foregoing, ExchangeRight’s $15.0 million investment in Class I Common Shares is not eligible for redemption pursuant to the share repurchase program. All shareholder requests to the Company for repurchases have been honored since the inception of the Company. The Class ER-I, Class ER-A, Class ER-S, and Class ER-D Common Shares are not eligible for repurchase under the share repurchase program.

During the three months ended September 30, 2026, the Company repurchased common shares in the following amounts:


	Total Number of Shares Repurchased				Average Price Paid Per Share				Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs(1)				Maximum Number of Shares That May Yet Be Repurchased Under the Plans or Programs(2)
Period	Class I		Class A		Class I		Class A		Class I		Class A		Class I	Class A
July 2026		91,627		190,507	$	27.38	$	27.19		91,627		190,507	N/A	N/A
August 2026		-		-	$	-	$	-		-		-	N/A	N/A
September 2026		-		-	$	-	$	-		-		-	N/A	N/A
Total		91,627		190,507						91,627		190,507

(1)

The Company established its share repurchase program upon the Company’s formation in January 2019. There is no expressed expiration date for the program.

(2)

There is no maximum number of shares or dollar amount of shares that may be repurchased under the Company’s share repurchase program, subject to the 5% annual limit or as approved by the Trustee.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

Trading Plans

During the quarter ended September 30, 2026, no manager of the Trustee or executive officer of the Company (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. Exhibits


Exhibit Number		Exhibit Description
31.1*		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



101.INS		Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*		Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		EXCHANGERIGHT INCOME FUND

October 29, 2026		/s/ David Fisher
Date		David Fisher
		Executive Managing Principal
		(Principal Executive Officer)

October 29, 2026		/s/ David Van Steenis
Date		David Van Steenis
		Chief Financial Officer and Chief Investment Officer
		(Principal Financial Officer)