nlop-20260630

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 June 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: 001-41812

Net Lease Office Properties

(Exact name of registrant as specified in its charter)


Maryland		92-0887849
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)

One Manhattan West, 395 9th Avenue, 58th Floor
New York,	New York	10001
(Address of principal executive offices)		(Zip Code)

Investor Relations (212) 492-1140

(844) 656-7348

(Registrant’s telephone numbers, including area code)

(Former name or former address, if changed since last report)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares of Beneficial Interest, par value $0.001 per share

NLOP

New York Stock Exchange

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

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

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

Large accelerated filer

☐

Accelerated filer

☑

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☑

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

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

Registrant has 14,814,075 common shares of beneficial interest, $0.001 par value, outstanding at July 31, 2026.

INDEX


		Page No.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
	Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025	3
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025	4
	Consolidated Statements of Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 2026 and 2025	5
	Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2026 and 2025	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025	8
	Notes to Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3. Quantitative and Qualitative Disclosures About Market Risk		30
Item 4. Controls and Procedures		32

PART II — OTHER INFORMATION
Item 6. Exhibits		33
Signatures		34

Net Lease Office Properties 6/30/2026 10-Q – 1

Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Report”), including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of Part I of this Report, contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements include, but are not limited to, statements regarding: our corporate strategy and estimated or future economic performance and results, including our expectations surrounding the impact of the broader macroeconomic environment and the ability of tenants to pay rent, financial condition, liquidity, results of operations, and prospects; our future capital expenditure and leverage levels, debt service obligations, and plans to fund our liquidity needs, including our ability to sell or dispose of properties; prospective statements regarding our access to the capital markets; statements that we make regarding our ability to remain qualified for taxation as a real estate investment trust (“REIT”); and the impact of recently issued accounting pronouncements and regulatory activity.

These statements are based on the current expectations of our management. It is important to note that our actual results could be materially different from those projected in such forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. Other unknown or unpredictable risks or uncertainties, like the risks related to fluctuating interest rates, the impact of inflation and tariffs on our tenants and us, the effects of pandemics and global outbreaks of contagious diseases, and domestic or geopolitical crises (such as terrorism, military conflict, war or the perception that hostilities may be imminent), political instability or civil unrest, or other conflict, could also have material adverse effects on our business, financial condition, liquidity, results of operations, and prospects. You should exercise caution in relying on forward-looking statements as they involve known and unknown risks, uncertainties, and other factors that may materially affect our future results, performance, achievements, or transactions. Information on factors that could impact actual results and cause them to differ from what is anticipated in the forward-looking statements contained herein is included in this Report, as well as in our other filings with the Securities and Exchange Commission (“SEC”), including but not limited to those described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 25, 2026 (the “2025 Annual Report”). Moreover, because we operate in a very competitive and rapidly changing environment, new risks are likely to emerge from time to time. Given these risks and uncertainties, potential investors are cautioned not to place undue reliance on these forward-looking statements as a prediction of future results, which speak only as of the date of this Report, unless noted otherwise. Except as required by federal securities laws and the rules and regulations of the SEC, we do not undertake to revise or update any forward-looking statements.

All references to “Notes” throughout the document refer to the footnotes to the consolidated financial statements of the registrant in Part I, Item 1. Financial Statements (Unaudited).

Net Lease Office Properties 6/30/2026 10-Q – 2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

NET LEASE OFFICE PROPERTIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share amounts)


	June 30, 2026		December 31, 2025
Assets
Investments in real estate:
Land, buildings and improvements	$	220,222	$	218,799
Net investments in finance leases	—		41,878
In-place lease intangible assets and other	40,158		45,160
Above-market rent intangible assets	7,314		10,760
Investments in real estate	267,694		316,597
Accumulated depreciation and amortization	(100,279)		(102,926)
Assets held for sale, net	—		96,269
Net investments in real estate	167,415		309,940
Cash and cash equivalents	23,663		119,621
Other assets, net	9,825		23,810
Total assets (a)	$	200,903	$	453,371
Liabilities and Equity
Non-recourse mortgage	$	21,900	$	21,900
Accounts payable, accrued expenses and other liabilities	9,968		56,104
Below-market rent intangible liabilities, net	1,307		1,990
Dividends payable	—		75,552
Total liabilities (a)	33,175		155,546
Commitments and contingencies (Note 9)

Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued	—		—
Common stock, $0.001 par value, 45,000,000 shares authorized; 14,814,075 shares issued and outstanding	15		15
Additional paid-in capital	855,813		855,813
Distributions in excess of accumulated earnings	(691,995)		(561,917)
Total shareholders’ equity	163,833		293,911
Noncontrolling interests	3,895		3,914
Total equity	167,728		297,825
Total liabilities and equity	$	200,903	$	453,371

__________

(a)See Note 2 for details related to variable interest entities (“VIEs”).

See Notes to Consolidated Financial Statements.

Net Lease Office Properties 6/30/2026 10-Q – 3

NET LEASE OFFICE PROPERTIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except share and per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Revenues
Lease revenues	$	6,358	$	27,508	$	13,699	$	54,900
Income from finance leases	—		—		637		—
Other lease-related income	—		1,666		1,047		3,487
	6,358		29,174		15,383		58,387
Operating Expenses
Impairment charges — real estate	7,093		81,817		7,093		82,737
Depreciation and amortization	2,741		9,687		5,021		19,412
General and administrative	1,892		2,144		3,825		3,951
Property expenses, excluding reimbursable tenant costs	488		2,244		1,191		4,699
Asset management fees	394		1,209		875		2,469
Reimbursable tenant costs	207		6,537		802		12,677
	12,815		103,638		18,807		125,945
Other Income and Expenses
Gain (loss) on sale of real estate, net	531		(3,251)		33,151		(4,259)
Interest expense	(390)		(4,400)		(776)		(10,146)
Other gains and (losses)	189		697		(10,020)		1,140
	330		(6,954)		22,355		(13,265)
(Loss) income before income taxes	(6,127)		(81,418)		18,931		(80,823)
Provision for income taxes	(23)		(100)		(40)		(182)
Net (Loss) Income	(6,150)		(81,518)		18,891		(81,005)
Net income attributable to noncontrolling interests	(44)		(22)		(87)		(43)
Net (Loss) Income Attributable to NLOP	$	(6,194)	$	(81,540)	$	18,804	$	(81,048)

Basic and Diluted (Loss) Earnings Per Share	$	(0.42)	$	(5.50)	$	1.27	$	(5.47)

Weighted-Average Shares Outstanding
Basic and Diluted	14,814,075		14,814,075		14,814,075		14,814,075

See Notes to Consolidated Financial Statements.

Net Lease Office Properties 6/30/2026 10-Q – 4

NET LEASE OFFICE PROPERTIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

(in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Net (Loss) Income	$	(6,150)	$	(81,518)	$	18,891	$	(81,005)
Other Comprehensive Loss
Foreign currency translation adjustments	—		(569)		—		(166)
	—		(569)		—		(166)
Comprehensive (Loss) Income	(6,150)		(82,087)		18,891		(81,171)

Amounts Attributable to Noncontrolling Interests
Net income	(44)		(22)		(87)		(43)
Comprehensive income attributable to noncontrolling interests	(44)		(22)		(87)		(43)
Comprehensive (Loss) Income Attributable to NLOP	$	(6,194)	$	(82,109)	$	18,804	$	(81,214)

See Notes to Consolidated Financial Statements.

Net Lease Office Properties 6/30/2026 10-Q – 5

NET LEASE OFFICE PROPERTIES

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(in thousands, except share and per share amounts)


	Common Stock			Additional Paid-In Capital		Distributions in Excess of Accumulated Earnings		Total Shareholders’ Equity		Noncontrolling Interests		Total Equity
	$0.001 Par Value
	Shares	Amount
Balance at April 1, 2026	14,814,075	$	15	$	855,813	$	(685,801)	$	170,027	$	3,957	$	173,984
Net loss						(6,194)		(6,194)		44		(6,150)
Distributions to noncontrolling interest								—		(106)		(106)
Balance at June 30, 2026	14,814,075	$	15	$	855,813	$	(691,995)	$	163,833	$	3,895	$	167,728


	Common Stock			Additional Paid-In Capital		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity		Noncontrolling Interests		Total Equity
	$0.001 Par Value
	Shares	Amount
Balance at April 1, 2025	14,814,075	$	15	$	855,813	$	(233,951)	$	(39,754)	$	582,123	$	4,106	$	586,229
Net loss						(81,540)				(81,540)		22		(81,518)
Distributions to noncontrolling interest										—		(91)		(91)
Other comprehensive loss:
Foreign currency translation adjustments								(569)		(569)				(569)
Balance at June 30, 2025	14,814,075	$	15	$	855,813	$	(315,491)	$	(40,323)	$	500,014	$	4,037	$	504,051

(Continued)

Net Lease Office Properties 6/30/2026 10-Q – 6

NET LEASE OFFICE PROPERTIES

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(Continued)

(in thousands, except share and per share amounts)


	Common Stock			Additional Paid-In Capital		Distributions in Excess of Accumulated Earnings		Total Shareholders’ Equity		Noncontrolling Interests		Total Equity
	$0.001 Par Value
	Shares	Amount
Balance at January 1, 2026	14,814,075	$	15	$	855,813	$	(561,917)	$	293,911	$	3,914	$	297,825
Net income						18,804		18,804		87		18,891
Distributions to noncontrolling interest								—		(106)		(106)
Distributions declared ($10.05 per share)						(148,882)		(148,882)				(148,882)
Balance at June 30, 2026	14,814,075	$	15	$	855,813	$	(691,995)	$	163,833	$	3,895	$	167,728


	Common Stock			Additional Paid-In Capital		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity		Noncontrolling Interests		Total Equity
	$0.001 Par Value
	Shares	Amount
Balance at January 1, 2025	14,814,075	$	15	$	855,813	$	(234,443)	$	(40,157)	$	581,228	$	4,175	$	585,403
Net loss						(81,048)				(81,048)		43		(81,005)
Distributions to noncontrolling interest										—		(181)		(181)
Other comprehensive loss:
Foreign currency translation adjustments								(166)		(166)				(166)
Balance at June 30, 2025	14,814,075	$	15	$	855,813	$	(315,491)	$	(40,323)	$	500,014	$	4,037	$	504,051

See Notes to Consolidated Financial Statements.

Net Lease Office Properties 6/30/2026 10-Q – 7

NET LEASE OFFICE PROPERTIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)


	Six Months Ended June 30,
	2026		2025
Cash Flows — Operating Activities
Net income (loss)	$	18,891	$	(81,005)
Adjustments to net income (loss):
(Gain) loss on sale of real estate, net	(33,151)		4,259
Allowance for credit losses	11,035		—
Impairment charges — real estate	7,093		82,737
Depreciation and amortization, including intangible assets and deferred financing costs	5,087		23,079
Amortization of rent-related intangibles and deferred rental revenue	331		(1,196)
Straight-line rent adjustments	316		1,249
Net realized and unrealized (gains) losses on extinguishment of debt, foreign currency exchange rate movements, and other	(2)		803
Proceeds from sales of net investments in sales-type leases	8,017		—
Net changes in other operating assets and liabilities	(7,690)		(4,098)
Net Cash Provided by Operating Activities	9,927		25,828
Cash Flows — Investing Activities
Proceeds from sales of real estate	119,994		25,427
Funding for capital expenditures on real estate	(677)		(2,684)
Value added taxes refunded in connection with sale of real estate	—		(37)
Net Cash Provided by Investing Activities	119,317		22,706
Cash Flows — Financing Activities
Distributions paid	(224,434)		—
Distributions to noncontrolling interest	(106)		(181)
Other financing activities, net	(4)		(8)
Payments of mortgage principal and other debt instruments	—		(61,307)
Net Cash Used in Financing Activities	(224,544)		(61,496)
Change in Cash and Cash Equivalents and Restricted Cash During the Period
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(17)		725
Net decrease in cash and cash equivalents and restricted cash	(95,317)		(12,237)
Cash and cash equivalents and restricted cash, beginning of period	122,632		68,426
Cash and cash equivalents and restricted cash, end of period	$	27,315	$	56,189

See Notes to Consolidated Financial Statements.

Net Lease Office Properties 6/30/2026 10-Q – 8

NET LEASE OFFICE PROPERTIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Business and Organization

Net Lease Office Properties (“NLOP” or the “Company”) is a publicly-traded REIT that owns a diversified portfolio of office properties that are primarily leased to corporate tenants on a single-tenant, net-lease basis. Our net leases generally specify a base rent with rent increases and require the tenant to pay substantially all costs associated with operating and maintaining the property. Certain wholly-owned affiliates of W. P. Carey Inc. (“WPC”) (our “Advisor”) externally manage NLOP pursuant to certain advisory agreements (the “NLOP Advisory Agreements”).

Our common shares are listed on the New York Stock Exchange under the ticker symbol “NLOP.”

NLOP was initially formed when, pursuant to the terms of a separation and distribution agreement, WPC spun off a portfolio of 59 office assets into a separate publicly-traded company (the “Spin-Off”). To accomplish this Spin-Off, WPC formed a Maryland real estate investment trust, NLOP, on October 21, 2022, to own the 59 office assets. On November 1, 2023, WPC completed the Spin-Off, contributing 59 office properties to NLOP. The Spin-Off was accomplished via a pro rata dividend of 1 NLOP common share for every 15 shares of WPC common stock outstanding.

We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code (the “Code”) effective as of November 1, 2023.

As of June 30, 2026, NLOP’s portfolio comprised full or partial ownership interests in 18 properties, net leased to 10 corporate tenants, totaling approximately 1.9 million leasable square feet, with a weighted-average lease term of 2.7 years.

NLOP operates as one segment, and through its subsidiaries, owns, operates, and finances office buildings. Our business is characterized as owning a diversified portfolio of office properties that are primarily leased to corporate tenants on a single-tenant, net-lease basis. These economic characteristics are similar across various geographic locations and industries in which our tenants operate and therefore considered one operating segment. Our consolidated operating results, including net income, are regularly reviewed, in the aggregate, by our chief operating decision maker (“CODM”) to evaluate performance and allocate resources, which can be found on our consolidated financial statements.

Our revenues are largely derived from the long-term leases that we execute with tenants. These revenues are classified as either Lease revenues (Note 4) or Income from finance leases (Note 5) in accordance with Accounting Standards Codification (“ASC”) 842, Leases.

Our operating expenses are regularly reviewed by our CODM. All expenses are reviewed, but our CODM is regularly provided with the following significant expenses, which are included in our consolidated financial statements and require no additional disaggregation: Property expenses, excluding reimbursable tenant costs, General and administrative expenses, Asset management fees, Interest expense, and Provision for income taxes.

Note 2. Basis of Presentation

Basis of Presentation

Our interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a complete statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States (“GAAP”). In the opinion of management, the unaudited financial information for the interim periods presented in this Report reflects all normal and recurring adjustments necessary for a fair presentation of financial position, results of operations, and cash flows. Our interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2025, which are included in the 2025 Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this Report. Operating results for interim periods are not necessarily indicative of operating results for an entire year.

Net Lease Office Properties 6/30/2026 10-Q – 9

Notes to Consolidated Financial Statements (Unaudited)

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

Basis of Consolidation

Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated.

When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a VIE and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. There have been no significant changes in our VIE policies from what was disclosed in the 2025 Annual Report.

At both June 30, 2026 and December 31, 2025, we considered one entity to be a VIE (given certain decision-making rights each partner has in accordance with the partnership agreement), which we consolidated, as we are considered the primary beneficiary. The following table presents a summary of selected financial data of the consolidated VIE included in our consolidated balance sheets (in thousands):


	June 30, 2026		December 31, 2025
Land, buildings and improvements	$	37,917	$	37,917
In-place lease intangible assets and other	9,685		9,685
Above-market rent intangible assets	4,338		4,338
Accumulated depreciation and amortization	(10,159)		(8,863)
Total assets	44,681		44,708