OUR  NETLEASED RETAIL REAL ESTATE We believe that our niche of net-leased retail real estate remains a compelling long-term investment opportunity  for the following reasons: • Many of our properties are acquired from what we describe as relationship tenants. These are tenants with whom  we have done business previously and with whom we establish a recurring programmatic pipeline. For the last  five years our team has done a terrific job of earning the respect and trust of a number of growing retailers that  come to us to provide repeat sale-leaseback transactions. By dealing directly with retailers, we are most likely to  end up owning those properties that they expect to operate for a long time. • Our leases are long-term, with typical initial lease durations of 15 to 20 years. Our average tenant is currently  contractually obligated to pay rent for the next 12 years. • The quality of the rental revenue that we receive from our triple net leases is remarkably high. Our triple-net-lease  structure means that the tenants are responsible for property taxes, insurance and maintenance. As a result,  our operating cash flow is more secure and consistent than many other types of real estate because we are not  negatively impacted by increases in these costs.  • The ratio of land value to the total cost of each property is high when compared to most other real estate  categories including offices, apartments and large regional malls. The land value of our well-located properties –  usually at or near corners at busy intersections – is generally in the range of 30-50% of the total value at the time  of purchase. With economic growth, inflation and the difficulty of replacing these well-located sites factored in,  the land value alone at the end of the lease can reasonably approximate the price that we paid for both the land  and the building at the time of the original acquisition. • We continue to focus on retail real estate as we are convinced that the residual value of well-located retail  properties is higher than other net lease property types such as industrial or office. • The initial yields on investment of approximately 8% that we have obtained the past two years are well in excess  of our weighted average cost of capital. Further, in almost all of our leases the rent increases meaningfully, and as  a result, the investment spread over our cost of capital should expand further over time. • The freestanding net lease retail property market is very large. However, large institutional investors, such as  pension funds and insurance companies, generally prefer to focus on larger, higher profile trophy properties.  The amount of work involved in sourcing our smaller properties creates a barrier to entry for us. This enables us to  earn higher initial risk-adjusted returns than those that can be achieved in many other real estate sectors, where  these other investors tend to focus.  10