NOTE 3. — LEASES

As Lessor

As of June 30, 2026, we owned 1,198 properties and leased 26 properties from third-party landlords. These 1,224 properties are located in 46 states across the United States and Washington, D.C. Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum distributors, express tunnel car wash operators and other automotive-related and retail tenants. Our tenants either operate their business at our properties directly or, in the case of certain convenience stores and gasoline and repair stations, sublet our properties and supply fuel to third parties that operate the business. Our triple-net lease tenants are responsible for the payment of all taxes, maintenance, repairs, insurance and other operating expenses relating to our properties, and are also responsible for environmental contamination occurring during the terms of their leases and in certain cases also for environmental contamination that existed before their leases commenced. For additional information regarding our environmental obligations, see Note 7 – Environmental Obligations.

The majority of our tenants’ financial results depend on convenience store sales, the sale of refined petroleum products and/or the sale of automotive services and parts. During the terms of our leases, we monitor the credit quality of our triple-net lease tenants by reviewing their published credit rating, if available, reviewing publicly available financial statements, or reviewing financial or other operating statements which are delivered to us pursuant to applicable lease agreements, monitoring news reports regarding our tenants and their respective businesses, and monitoring the timeliness of lease payments and the performance of other financial covenants under their leases.

Pursuant to ASU 2016-02, for leases in which we are the lessor, we are (i) retaining classification of our historical leases as we were not required to reassess classification upon adoption of the new standard, (ii) expensing indirect leasing costs in connection with new or extended tenant leases, the recognition of which would have been deferred under prior accounting guidance and (iii) aggregating revenue from our lease components and non-lease components (comprised of tenant reimbursements) into revenue from rental properties.

Revenues from Rental Properties

Revenues from rental properties for the three and six months ended June 30, 2026, were $58.6 million and $115.9 million, respectively, including base rental income of $56.7 million and $112.7 million, respectively. Revenues from rental properties for the three and six months ended June 30, 2025, were $52.7 million and $104.4 million, respectively, including base rental income of $50.2 million and $100.0 million, respectively.

In accordance with GAAP, we recognize rental revenue in amounts which vary from the amount of rent contractually due during the periods presented. As a result, revenues from rental properties include non-cash adjustments recorded for (i) deferred rental revenue due to the recognition of rental income on a straight-line basis over the current lease term, (ii) the net amortization of intangible market lease assets and liabilities, (iii) rental income recorded under direct financing leases using the effective interest method which produces a constant periodic rate of return on the net investments in the leased properties, and (iv) the amortization of deferred lease incentives. Non-cash adjustments included in revenues from rental properties were $0.7 million and $1.0 million for the three and six months ended June 30, 2026, respectively, and $1.1 million and $1.9 million for the three and six months ended June 30, 2025, respectively.

Tenant reimbursements, which are included in revenues from rental properties and consist of real estate taxes and other municipal charges paid by us and reimbursed by our tenants pursuant to the terms of triple-net lease agreements, were $1.1 million and $2.2 million for the three and six months ended June 30, 2026, respectively, and $1.4 million and $2.5 million for the three and six months ended June 30, 2025, respectively.

Investment in Direct Financing Leases

In accordance with ASU 2016-13, as of June 30, 2026 and December 31, 2025, we had recorded an allowance for credit losses of $0.4 million on investment in direct financing leases.

We evaluate the credit quality of our investment in direct financing leases utilizing internal underwriting and credit analysis. Substantially all of our tenants under direct financing leases are required to provide us with specified unit-level and/or corporate-level financial information. As of June 30, 2026 and December 31, 2025, no material balances of our investments in direct financing leases were past due.

Minimum Rents Due

As Lessee

For leases in which we are the lessee, lease accounting standards require leases with durations greater than twelve months to be recognized on our consolidated balance sheets. We elected the package of transition provisions available for expired or existing contracts, which allowed us to carry forward our historical assessments of (i) whether contracts are or contain leases, (ii) lease classification and (iii) initial direct costs.

As of January 1, 2019, we recognized operating lease right-of-use assets of $25.6 million (net of deferred rent expense) and operating lease liabilities of $26.1 million, which were presented on our consolidated financial statements. The right-of-use assets and lease liabilities are carried at the present value of the remaining expected future lease payments. When available, we use the rate implicit in the lease to discount lease payments to present value; however, our current leases did not provide a readily determinable implicit rate. Therefore, we estimated our incremental borrowing rate to discount the lease payments based on information available and considered factors such as interest rates available to us on a fully collateralized basis and terms of the leases. ASU 2016-02 did not have a material impact on our consolidated balance sheets or on our consolidated statements of operations. The most significant impact was the recognition of right-of-use assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged.

Major Tenants

Getty Petroleum Marketing Inc.

Getty Petroleum Marketing Inc. (“Marketing”) was our largest tenant from 1997 until 2012 under a unitary triple-net master lease that was terminated in April 2012, at which time we either sold or released these properties. As of June 30, 2026, 283 of the properties we own or lease were previously leased to Marketing, of which 260 properties are subject to ten separate, long-term triple-net leases with petroleum distributors, and 21 properties are subject to single-unit triple-net leases (one property is vacant and one property is under redevelopment). These leases generally have initial terms of 15 years with tenant options for successive renewal terms of up to 20 years and, as of June 30, 2026, the weighted average remaining lease term, excluding renewal options, for the properties previously leased to Marketing was 9.1 years.

In connection with leases for properties previously leased to Marketing, title to the USTs and the related retirement and decommissioning obligations were transferred to the tenants. We remain contingently liable if tenants fail to perform. Through June 30, 2026, we removed $13.8 million of asset retirement obligations and $10.8 million of net asset retirement costs related to USTs from our

balance sheet. The remaining $0.2 million (net of accumulated amortization of $2.8 million) is recorded as deferred rental revenue and is recognized on a straight-line basis as additional rental revenue over the respective lease terms.