We have engaged in hedging transactions and may engage in additional hedging transactions in the future; such transactions may materially and adversely affect our results of operations and cash flows.

We use hedging strategies, in a manner consistent with the REIT qualification requirements, in an effort to reduce our exposure to changes in interest rates. As of December 31, 2019, we were party to six interest rate swap agreements with third party financial institutions having an aggregate notional amount of $450.0 million that are designated as cash flow hedges and designed to effectively fix the LIBOR component of the interest rate on a portion of the debt outstanding under our term loans. While these transactions are designed to reduce interest rate risk, unanticipated changes in interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. Interest rate hedging may fail to protect or could adversely affect us, because, among other things, it may not fully eliminate interest rate risk, it exposes us to counterparty and default risk that may result in greater losses or the loss of unrealized profits, and it creates additional expense, while any income it generates to offset losses may be limited by federal tax provisions applicable to REITs. Thus, hedging activity, while intended to limit losses, may materially and adversely affect our business, financial condition, liquidity, results of operations and ability to pay dividends to our stockholders.

A significant portion of our assets have been pledged to secure the borrowings of our subsidiaries.

A significant portion of our investment portfolio consists of assets owned by our consolidated, bankruptcy remote, special purpose entity subsidiaries that have been pledged to secure the long-term borrowings of those subsidiaries. As of December 31, 2019, we had 355 properties comprising $601.3 million of net investments pledged as collateral under our Master Trust Funding Program. We or our other consolidated subsidiaries are the equity owners of these special purpose entities, meaning we are entitled to the excess cash flows after debt service and all other required payments are made on the debt of these entities. If our subsidiaries fail to make the required payments on this indebtedness, distributions of excess cash flow to us may be reduced or eliminated and the indebtedness may become immediately due and payable. If the subsidiaries are unable to pay the accelerated indebtedness, the pledged assets could be foreclosed upon and distributions of excess cash flow to us may be suspended or terminated. In that case, our ability to make distributions to our stockholders could be materially and adversely affected.

Many of our other executive personnel also have extensive experience and strong reputations in the real estate industry and have been important in setting our strategic direction, operating our business, assembling and growing our portfolio, identifying, recruiting and training key personnel, and arranging necessary financing. In particular, the extent and nature of the relationships that these individuals have developed with financial institutions and existing and prospective tenants isare important to our growth and the success of our business.

We cannot guarantee the continued employment of any of our management team, who may choose to leave our company for any number of reasons, such as other business opportunities, differing views on our strategic direction or other personal reasons. The loss of services of one or more members of our senior management team, including due to the adverse health effects of the COVID-19 pandemic, or our inability to attract and retain highly qualified personnel, could adversely affect our business, diminish our investment opportunities and

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Any material failure, weakness, interruption or breach in security of our information systems could prevent us from effectively operating our business.

We rely on information systems across our operations and corporate functions, including finance and accounting, and depend on such systems to ensure payment of obligations, collection of cash, data warehousing to support analytics, and other various processes and procedures. Our ability to efficiently manage our business depends significantly on the reliability and capacity of these systems.

As a publicly traded company,our ability to service our debt and make cash distributions to common stockholders. Furthermore, if tenants are unable to pay their deferred rent, we are required to report annual audited financial statements and quarterly unaudited interim financial statements preparedwill not receive cash in the future in accordance with GAAP. We relyour expectations. In addition to COVID-19’s impact on our internal control over financial reportingrental revenues, it has resulted, and may continue to provide reasonable assurance regardingresult, in an increase in our general and administrative expenses, as we have incurred and may continue to incur costs to negotiate rent deferrals, restructure or terminate leases and/or enforce our contractual rights (including through litigation), as we deem appropriate on a case-by-case basis. Similarly, to the reliability of financial reporting andextent the preparation of financial statementspandemic leads to decreased occupancy, it would further increase our property-level costs, as we would be responsible for external purposes in accordance with GAAP. More broadly, effective internal control over financial reporting is a necessary componentcosts that would otherwise be borne by our tenants under triple-net leases. These factors could also cause the value of our programproperties to seekbe impaired.

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over financial reporting is a continuous effort that requires significant resources, including the expenditure of a significant amount of time by senior members of our management team.

In connection with our ongoing monitoring of our internal control over financial reporting or audits of our financial statements, we or our auditors may identify deficiencies in our internal control over financial reporting that may be significant or rise to the level of material weaknesses. Any failure to maintain effective internal control over financial reporting or to timely effect any necessary improvements to such controls could harm our operating results or cause us to fail to meet our reporting obligations (which could affect the listingmarkets. The market price of our common stock on the NYSE). Additionally, ineffective internal control over financial reportingNYSE has experienced significant volatility since the outbreak of the COVID-19 pandemic. Similarly, the availability and pricing of debt and equity capital has become increasingly volatile. Accordingly, we could alsoexperience difficulty accessing debt and equity capital on attractive terms, or at all, which would adversely affect our ability to preventgrow our business, conduct our operations or detect fraud, harmaddress maturing liabilities. Similarly, the deterioration in access to capital is likely adversely affecting our reputationtenants’ abilities to finance their businesses and cause investors to lose confidence in our reported financial information,reducing their liquidity, which would likely have a negative effect on the trading price of our common stock.

If we fail to implement and maintain effective disclosure controls and procedures, we may not be ablereduces their ability to meet applicable reporting requirements or prevent or detect fraud, which could harm our reputation, cause investorstheir obligations to lose confidence in our reports, and materially and adversely affect us.

We are subject to the informational requirements

We will continue to incur significant expenses as a result of being a public company, which will negatively impact our financial performance.

We incur, and will continue to incur, significant legal, accounting, insurance and other expenses as a result of being a public company. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), as well as related rules implemented by the SEC and the NYSE, have required changes in corporate governance practices of public companies. As of December 31, 2019, we ceased to qualify as an “emerging growth company” under the Jumpstart Our Business Startups (JOBS) Act of 2012, and as a resultfuture compliance with some of the additional regulatoryfinancial covenants relating to our credit facility, term loans and notes, some of which depend, in part, on the net operating income generated by certain of our properties or our EBITDA. Non-compliance would preclude us from borrowing further under our credit facility and, under certain circumstances, could result in an event of default and an acceleration of such indebtedness and, possibly, other requirements, we will experience an increase in legal, accounting, insurance and certain other expenses. In addition, rules that the SEC is implementing or is required to implement pursuantindebtedness through cross-default provisions. Additionally, to the Dodd-Frank Act are expected to require additional changes. Compliance with these and other similar laws, rules and regulations, including compliance with Section 404extent the COVID-19 pandemic intensifies or persists for a prolonged period of the Sarbanes-Oxley Act, may substantially increase our expenses, including our legal and accounting costs, and make some activities more time-consuming and costly. We also expect these laws, rules and regulations to maketime, it more expensive for us to obtain director and officer liability insurance, andis possible that we maywill be required to accept reduced policy limitsrecord significant further impairment charges to the value of our real estate assets.

Climate Change

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There may be environmental liabilities associated with our properties of which we are unaware. We obtain Phase I environmental site assessments on all properties we finance or acquire. The Phase I environmental site assessments are limited in scope and therefore may not reveal all environmental conditions affecting a property. Therefore, there could be undiscovered environmental liabilities on the properties we own. Some of our properties use, or may have used in the past, underground tanks for the storage of petroleum-based products or waste products that could create a potential for release of hazardous substances or penalties if tanks do not comply with legal standards. If environmental contamination exists on our properties, we could be subject to strict, joint and/or several liability for the contamination by virtue of our ownership interest. Someinterest; we may face liability regardless of our properties may contain asbestos-containing materials (“ACM”). Environmental laws governknowledge of the presence, maintenance and removalcontamination, the timing of ACM and such laws may impose fines, penalties,the contamination, the cause of the contamination, or other obligations for failure to comply with these requirements or expose us to third-party liability (e.g., liability for personal injury associated with exposure to asbestos). Environmental laws also apply to other activities that can occur on a property, such as storage of petroleum products or other hazardous toxic substances, air emissions, water discharges and exposure to lead-based paint. Such laws may impose fines and penalties for violations and may require permits or other governmental approvals to be obtainedthe party responsible for the operation of a business involving such activities.

The known or potential presence of hazardous substances on a property may adversely affect our ability to sell, lease or improve the property or to borrow using the property as collateral. In addition, environmental laws may create liens on contaminated properties in favorcontamination of the governmentproperty.

In addition, althoughliabilities. Although our leases generally require our tenants to operate in compliance with all applicable laws and to indemnify us against any environmental liabilities arising from a tenant’stenant's activities on the property, we could be subject to strict liability by virtue of our ownership interest. We cannot be sure that our tenants will, or will be able to, satisfy their indemnification obligations, if any, under our leases. Furthermore, the discovery of environmental liabilities on any of our properties could lead to significant remediation costs or to other liabilities or obligations attributable to the tenant of that property or could result in material interference with the ability of our tenants to operate their businesses as currently operated. Noncompliance with environmental laws or discovery of environmental liabilities could each individually or collectively affect such tenant’stenant's ability to make payments to us, including rental payments and, where applicable, indemnification payments.

Our Additionally the known or potential presence of hazardous substances on a property may adversely affect our ability to sell, lease or improve the property or to borrow using the property as collateral. Environmental laws may also create liens on contaminated properties in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our properties, environmental liabilitieslaws may include property and natural resources damage, personal injury, investigation and clean-up costs, among other potential environmental liabilities. These costs could be substantial. Although we may obtain insurance for environmental liability for certain properties that are deemed to warrant coverage, our insuranceimpose restrictions on the manner in which they may be insufficient to address any particular environmental situation and weused or businesses may be unable to continue to obtain insurance for environmental matters, at a reasonable cost or at all, in the future. If our environmental liability insurance is inadequate, weoperated, and these restrictions may become subject to material losses for environmental liabilities. Our ability to receive the benefits of any environmental liability insurance policy will depend on the financial stability of our insurance company and the position it takes with respect to our insurance policies. If we were to become subject to significant environmental liabilities, we could be materially and adversely affected.

Our properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediation.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing, as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, should our tenants or their employees or customers be exposed to mold at any of our properties we could be required to undertake a costly remediation program to contain or remove the mold from the affected property. In addition, exposure to mold by our tenants or others could subject us to liability if property damage or health concerns arise. If we were to become subject to significant mold-related liabilities, we could be materially and adversely affected.

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require substantial expenditures.

potential impact of climate change has begun to impact the activities of government authorities, the pattern of consumer behavior and other areas that impact the business environment in the U.S., including, but not limited to, energy-efficiency measures, water use measures and land-use practices. The promulgation of policies, laws or regulations relating to climate change by governmental authorities in the U.S. and the markets in which we own properties may require us to invest additional capital in our properties. In addition, we are required to operatethe impact of climate change on businesses operated by our tenants is not reasonably determinable at this time. Climate change may impact weather patterns, the occurrence of significant weather events and rising sea levels, which could impact economic activity or the value of our properties in compliance with fire and safety regulations, building codes and other land use regulations. Wespecific markets. The occurrence of any of these events or conditions may be requiredadversely impact our ability to make substantial capital expenditures to comply with those requirements and may be required to obtain approvals from various authorities with respect tolease our properties, including priorour or our tenants’ ability to acquiring aobtain property or when undertaking renovations of any of our existing properties. There can be no assurance that existing laws and regulatory policies will not adversely affect us or the timing or cost of any future acquisitions or renovations, or that additional regulations will not be adopted that increase such delays or result in additional costs. Additionally, failure to comply with any of these requirements could result in the imposition of fines by governmental authorities or awards of damages to private litigants. While we intend to only acquire properties that we believe are currently in substantial compliance with all regulatory requirements, these requirements may change and new requirements may be imposedinsurance on acceptable terms, which could require significant unanticipated expenditures by us.

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Changes in accounting standards maywould materially and adversely affect us.

From time to time the Financial Accounting Standards Board (“FASB”) and the SEC, who create and interpret accounting standards, may change the financial accounting and reporting standards or their interpretation and application of these standards that will govern the preparation of our financial statements. These changes could materially and adversely affect our reported financial condition and results of operations, and, under certain circumstances, may cause us to fail to comply with financial covenants contained in agreements relating to our indebtedness. In some cases, we could be required to apply a new or revised standard retroactively, resulting in restating prior period financial statements. Similarly, these changes could materially and adversely affect our tenants’ reported financial condition or results of operations and affect their preferences regarding leasing real estate.

In the future, we may acquire properties through transactions where a party contributes such properties to our Operating Partnership in exchange for interests therein that are exchangeable for shares of our common stock, which could result in stockholder dilution and limit our ability to sell such properties.

In the future we may acquire properties through tax deferred contribution transactions in exchange for interests in our Operating Partnership that are exchangeable for shares of our common stock, which may result in stockholder dilution. This acquisition structure may have the effect of, among other things, reducing the amount of tax depreciation we could deduct over the tax life of the acquired properties, and may require that we agree to protect the contributors’ ability to defer recognition of taxable gain through restrictions on our ability to dispose of the acquired properties and/or the allocation of partnership debt to the contributors to maintain their tax bases. These restrictions could limit our ability to sell an asset at a time, or on terms, that would be favorable absent such restrictions.

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The occurrence of any of these events could materially and adversely affect us.

Market

Changes

We payconsequences of any such statements and other actions.

In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for U.S. dollar LIBOR. The cash markets have generally coalesced around recommendations from the calculationAlternative Reference Rates Committee (the “ARRC”), which was convened by the Board of LIBOR after 2021. As a result,Governors of the Federal Reserve BoardSystem and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee which identified(“FRBNY”). The ARRC has recommended that U.S. dollar LIBOR be replaced by rates based on the Secured Overnight Financing Rate ("SOFR"(“SOFR”) plus, in the case of existing LIBOR contracts and obligations, a spread adjustment. The derivatives markets are also expected to use SOFR-based rates to replace U.S. dollar LIBOR. For purposes of the following discussion, the term “LIBOR” refers solely to U.S. dollar LIBOR.

It is likely that, over time, LIBOR will be replaced by SOFR. However, the manner and timing of this shift is currently unknown. SOFR is an overnight rate instead of a term rate, making SOFR an inexact replacement for LIBOR. Market participants are still considering how various types of financial instruments should react to a discontinuation of LIBOR. Switching existing financial instruments and hedging transactions from LIBOR to SOFR requires calculations of a spread. Industry organizations are attempting to structure the spread calculation in a manner that minimizes the possibility of value transfer between counterparties, borrowers, and lenders by virtue of the transition, butanother rate.

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by other floating rates and as to the effects on us.