Lineage (LINE) FY2025 10-K Risk Factors: 9 New, 23 Dropped

What the changes say

Lineage expanded its risk disclosures around internal controls, IT infrastructure, AI adoption, and fleet accident liabilities.

What changed since the prior 10-K

New

NewRisks Related to Our Business and Operations
We face various risks and uncertainties related to public health crises, including supply chain disruptions, potential work stoppages, volatility in demand for temperature-controlled warehouse storage, and other operational challenges
We face supply chain disruptions, demand volatility, and work stoppages from public health crises.
NewRisks Related to Our Business and Operations
We may be subject to risks associated with artificial intelligence
Our use of artificial intelligence and cloud computing creates risks of data loss, security costs, and ethical controversies.
NewRisks Related to Our Business and Operations
Execution of these strategies, as well as demonstrable progress on and achievement of our calendar 2040 net-zero goal, is subject to risks and uncertainties, many of which are outside of our control
We may fail to execute our strategies or achieve our calendar 2040 net-zero goal, harming our reputation.
NewRisks Related to Our Business and Operations
The transportation services provided by our integrated solutions business are dependent in part on in-house trucking services and in part on third-party truckload carrier and rail services, each of which subjects us to risks
In-house and third-party trucking services expose us to severe accidents and costly nuclear verdicts exceeding insurance.
NewRisks Related to Our Business and Operations
accurately reporting our financial results in a timely manner, which would likely have a negative effect on the market price of our common stock
We identified a material weakness in IT general controls regarding user access and program change management.
NewRisks Related to Our Business and Operations
Geopolitical conflicts may adversely affect our business and results of operations
Geopolitical conflicts like the Russia-Ukraine war and related sanctions have disrupted our supply chain and customers.
NewRisks related to climate change could have a material adverse effect on our results of operations
federal government or the award of damages to private litigants. If, under the ADA, we are required to make substantial alterations and capital expenditures in one or more of our warehouses, including the removal of access barriers, it could materially and adversely affect us
Complying with OSHA workplace safety rules involves substantial costs and liabilities for team member injuries.
NewRisks Related to Our Organizational Structure
rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all of the votes entitled to be cast on the matter, excluding all interested shares
Maryland statutory provisions and our governance rules limit certain business combinations and stockholder votes.
NewRisks Related to Our Organizational Structure
partnership and its subsidiaries will be able to satisfy the claims of our stockholders only after all of our and our operating partnership’s and its subsidiaries’ liabilities and obligations have been paid in full
Stockholder claims will be satisfied only after our operating partnership liabilities are paid in full.

Dropped

DroppedRisks Related to Our Business and Operations
for their products could cause our customers to reduce their inventory levels at and throughput through our warehouses, which could reduce the storage, handling and other fees payable to us and materially and adversely affect us
DroppedRisks Related to Our Business and Operations
Our future greenfield development and expansion activity may not be consistent with the estimates related to our future long-term pipeline set forth in this Annual Report
Local weather disasters and regional economic disturbances impacting temperature-controlled warehouses.
DroppedRisks Related to Our Business and Operations
The storage and other fees we generate from customers with month-to-month warehouse rate agreements may be adversely affected by declines in market storage and other fee rates more quickly than with respect to our contracts that contain stated terms
DroppedRisks Related to Our Business and Operations
We can only terminate the transition services agreement with Bay Grove under limited circumstances and will be required to pay fees thereunder even if Bay Grove does not perform the services required
DroppedRisks Related to Our Business and Operations
Prior to our IPO, we had no experience operating as a publicly traded REIT
DroppedRisks Related to Our Business and Operations
Pandemics or disease outbreaks, and associated responses, may disrupt our business, including among other things, increasing our costs, impacting our supply chain, and impacting demand for cold storage, which could have a material adverse impact on our business
DroppedRisks Related to Our Business and Operations
Additionally, if we are not able to accurately anticipate expenses and capitalized costs related to system upgrades and changes or if we are unable to realize the expected benefits from our technology initiatives, this may have an adverse impact on our financial condition and operating results
DroppedRisks Related to Our Business and Operations
significant resources to develop, test, and maintain our platform, offerings, services, and features to help us implement AI ethically in order to minimize unintended, harmful impact
DroppedRisks Related to Our Business and Operations
such customer as a warehouse customer would also impact our integrated solutions segment, thereby exacerbating the risks described above
DroppedRisks Related to Our Business and Operations
We use in-house trucking services to provide transportation services to our customers, and any increased severity or frequency of accidents or other claims, delays or disruptions in services or changes in regulations could have a material adverse effect on us
Greenfield development pipeline risks and construction cost estimates.
DroppedRisks Related to Our Business and Operations
We also rely on third-party truckload carriers and rail services to transport customer inventory
DroppedRisks Related to Our Business and Operations
We are subject to risks related to the manufacture and sale of food products for human consumption
Month-to-month warehouse rate agreement storage fee fluctuations.
DroppedRisks Related to Our Business and Operations
investors to lose confidence in our reports filed with, or submitted to, the SEC, which would likely have a negative effect on the market price of our common stock
DroppedRisks Related to Our Business and Operations
With the hiring of additional key internal resources and the engagement of third-party specialists, we were able to complete our risk assessment and design and implement and/or effectively operate controls throughout the period to remediate this material weakness. Thus, it has been remediated as of December 31, 2024
DroppedRisks Related to Our Business and Operations
Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting, including as a result of the material weakness identified by management and discussed above
DroppedRisks Related to Our Business and Operations
Geopolitical conflicts, including the conflict between Russia and Ukraine and continued instability in the Middle East, including from the Houthi rebels in Yemen, may adversely affect our business and results of operations
DroppedRisks Related to Our Business and Operations
climate change or new climate change regulations, and future changes in environmental laws or in the interpretation of those laws, including stricter requirements affecting our operations, could result in increased capital and operating costs
DroppedRisks related to climate change could have a material adverse effect on our results of operations
adversely affect us. In addition, we may have no source of funding to repair or reconstruct the damaged property, and we cannot assure you that any such sources of funding will be available to us for such purposes in the future on favorable terms or at all
Inability to terminate the Bay Grove transition services agreement for poor performance.
DroppedRisks related to climate change could have a material adverse effect on our results of operations
customers or us could directly or indirectly have a material adverse effect on us. In addition, changes in these governmental laws and regulations, or their interpretation by agencies and courts, could occur
DroppedRisks Related to Ownership of Shares of Our Common Stock
If research analysts do not publish research, or publish inaccurate or unfavorable research, about us, the price of our common stock could decline
Lack of experience operating as a publicly traded REIT prior to the IPO.
DroppedRisks Related to Our REIT Status and Other Tax Risks
failure of a Subsidiary REIT to qualify as a REIT could have an adverse effect on our ability to comply with the REIT income and asset tests, and thus our ability to qualify as a REIT
Pandemics and disease outbreak disruptions.
DroppedRisks Related to Our REIT Status and Other Tax Risks
indirectly by the transferor partnership to a C corporation partner, if the property had been sold at fair market value on the date of the contribution of the property to us, would be subject to the sting tax. As a result, a sale of a portion of our assets may be subject to the sting tax
DroppedRisks Related to Our REIT Status and Other Tax Risks
We are subject to IRS tax audits that could adversely affect us

Reworded

91% rewrittenRisks Related to Our Business and Operations
We may be unable to achieve or demonstrate progress on our net-zero goal, or face heightened scrutiny, for our global operations by calendar 2040
Updated the net-zero goal wording to include facing heightened scrutiny for global operations by calendar 2040.
Was: We may be unable to achieve or demonstrate progress on our goal of carbon neutrality, or face heightened scrutiny, for our global operations by calendar 2040
76% rewrittenRisks Related to Our Business and Operations
Our investments are concentrated in the temperature-controlled warehouse industry, and our business would be materially and adversely affected by an economic downturn in that industry or the market for our customers’ products
75% rewrittenRisks Related to Our REIT Status and Other Tax Risks
Legislative or regulatory tax changes could adversely affect us or our stockholders, and challenges to our tax positions could have a material adverse effect on our results of operations and financial position
Added risks regarding state, local, and foreign tax laws, including global minimum tax regimes increasing our effective tax rate.
Was: Legislative or regulatory tax changes could adversely affect us or our stockholders
72% rewrittenRisks Related to Our Business and Operations
Many of our costs, such as operating expenses, interest expense, and real estate acquisition and construction costs could be adversely impacted by periods of heightened inflation
Noted that while inflation slowed globally through 2025, rising costs continue to impact our expenses.
65% rewrittenRisks related to climate change could have a material adverse effect on our results of operations
We could experience uninsured or under-insured losses related to our global warehousing business, including our real property, as well as our integrated solutions business
64% rewrittenRisks Related to Our Business and Operations
A portion of our future growth depends upon acquisitions and we may be unable to identify, complete, and successfully integrate acquisitions, which may impede our growth, and our future acquisitions may not achieve their intended benefits or may disrupt our plans and operations
Updated total completed acquisitions from 120 through 2024 to 126 through 2025.
62% rewrittenRisks Related to Our REIT Status and Other Tax Risks
In the event we acquire assets of C corporations (including by merger) in carry-over basis transactions, we may inherit material tax liabilities and other tax attributes from such acquired corporations, and we may be required to distribute earnings and profits
60% rewrittenRisks Related to Our Business and Operations
The short-term nature and lack of minimum storage guarantees in many of our customer contracts exposes us to certain risks that could have a material adverse effect on us
Updated the percentage of storage revenues generated from agreements with minimum storage guarantees from 44.0% in 2024 to 46.1% in 2025.
50% rewrittenRisks Related to Our Organizational Structure
Certain provisions of Maryland law may limit the ability of a third-party to acquire control of us
45% rewrittenRisks Related to Our REIT Status and Other Tax Risks
Failure to qualify as a REIT would cause us to be taxed as a regular C corporation, which would substantially reduce funds available for distributions to stockholders
45% rewrittenRisks Related to Our Business and Operations
We depend on certain customers for a substantial amount of our revenues
43% rewrittenRisks Related to Our Organizational Structure
We are a holding company with no direct operations and rely on funds received from our operating partnership to pay liabilities and distributions to our stockholders
42% rewrittenRisks Related to Our Business and Operations
We have and expect to continue to incur increased costs as a result of operating as a newly public company, and our management is required to devote substantial time and attention to compliance efforts
Was: We have and expect to continue to incur significantly increased costs as a result of operating as a newly public company, and our management is required to devote substantial time and attention to compliance efforts
39% rewrittenRisks Related to Our Business and Operations
Power costs may increase or be subject to volatility, which could result in increased costs that we may be unable to recover
36% rewrittenRisks Related to Our Indebtedness
We have significant indebtedness outstanding, which may expose us to the risk of default under our debt obligations
33% rewrittenRisks Related to Our Indebtedness
Increases in interest rates could increase the amount of our debt payments and interest expense
Was: Increases in interest rates could increase the amount of our debt payments
32% rewrittenRisks Related to Our Business and Operations
We hold leasehold interests in over 100 of our warehouses, and we may be forced to vacate our warehouses if we default on our obligations thereunder and we will be forced to vacate our warehouses if we are unable to renew such leases upon their expiration
28% rewrittenRisks Related to Our Business and Operations
We may be unable to maintain railcar assets on lease at satisfactory lease rates
27% rewrittenRisks Related to Our Business and Operations
Interest rate and hedging activity exposes us to risks, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate
27% rewrittenRisks Related to Our Business and Operations
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately determine or disclose our financial results. As a result, our stockholders could lose confidence in our financial results
Was: If we fail to implement and maintain an effective system of internal control over financial reporting, we may not be able to accurately determine or disclose our financial results. As a result, our stockholders could lose confidence in our financial results
21% rewrittenRisks Related to Our Business and Operations
We face ongoing litigation risks which could result in material liabilities and harm to our business regardless of whether we prevail in any particular matter
20% rewrittenRisks Related to Our Business and Operations
We have uncapped expense payment and indemnification obligations with respect to various costs incurred by BGLH, Bay Grove, and their affiliates
Was: We will have uncapped expense payment and indemnification obligations with respect to various costs incurred by BGLH, Bay Grove, and their affiliates

All 89 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business and Operations

01Our investments are concentrated in the temperature-controlled warehouse industry, and our business would be materially and adversely affected by an economic downturn in that industry or the market for our customers’ products76% rewritten
02Global market and economic conditions may materially and adversely affect us
03Many of our costs, such as operating expenses, interest expense, and real estate acquisition and construction costs could be adversely impacted by periods of heightened inflation72% rewritten
04Labor shortages, increased turnover, and work stoppages have in the past disrupted, and may in the future disrupt, our or our customers’ operations, increase costs, and negatively impact our profitability
05Wage increases driven by competitive pressures or applicable legislation on employee wages and benefits could negatively affect our operating margins and our ability to attract qualified personnel
06Supply chain disruptions have in the past, and may again in the future, negatively impact our business
07We are exposed to risks associated with expansion and development, including greenfields, which could result in returns below expectations and unforeseen costs and liabilities
08The actual initial full year stabilized NOI yields from our greenfield development and expansion projects may not be consistent with the targeted NOI yield ranges set forth in this Annual Report
09The short-term nature and lack of minimum storage guarantees in many of our customer contracts exposes us to certain risks that could have a material adverse effect on us60% rewritten
10Our integrated solutions business depends on the performance of our global warehousing business
11Our growth may strain our management and resources, which may have a material adverse effect on us
12A portion of our future growth depends upon acquisitions and we may be unable to identify, complete, and successfully integrate acquisitions, which may impede our growth, and our future acquisitions may not achieve their intended benefits or may disrupt our plans and operations64% rewritten
13We may be unable to successfully expand our operations into new markets or new lines of business
14We are dependent on Bay Grove to provide certain services to us pursuant to the transition services agreement, and it may be difficult to replace the services provided under such agreement
15We have uncapped expense payment and indemnification obligations with respect to various costs incurred by BGLH, Bay Grove, and their affiliates20% rewritten
16We face various risks and uncertainties related to public health crises, including supply chain disruptions, potential work stoppages, volatility in demand for temperature-controlled warehouse storage, and other operational challengesNew
17We may be vulnerable to security breaches or cybersecurity incidents, which could disrupt our operations and have a material adverse effect on our financial condition and operating results
18We depend on IT systems to operate our business, and issues with maintaining, upgrading, or implementing these systems, could have a material adverse effect on our business
19We may be subject to risks associated with artificial intelligenceNew
20Privacy and data security concerns, and data collection and transfer restrictions and related regulations may adversely affect our business
21We are subject to additional risks with respect to our current and potential international operations and properties
22Competition in certain of our markets has increased recently and may increase further or in other markets over time if our competitors open new warehouses or expand their logistics or integrated service offerings that compete with our offerings
23Power costs may increase or be subject to volatility, which could result in increased costs that we may be unable to recover39% rewritten
24We depend on certain customers for a substantial amount of our revenues45% rewritten
25Interest rate and hedging activity exposes us to risks, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate27% rewritten
26We may incur liabilities or harm our reputation as a result of quality-control issues associated with our global warehouse storage business and other services provided by our integrated solutions business
27We are subject to risks related to corporate social and environmental responsibility and reputation
28We may be unable to achieve or demonstrate progress on our net-zero goal, or face heightened scrutiny, for our global operations by calendar 204091% rewritten
29Execution of these strategies, as well as demonstrable progress on and achievement of our calendar 2040 net-zero goal, is subject to risks and uncertainties, many of which are outside of our controlNew
30Our temperature-controlled warehouse infrastructure and systems may become obsolete or unmarketable, and we may not be able to upgrade our equipment cost-effectively or at all
31The transportation services provided by our integrated solutions business are dependent in part on in-house trucking services and in part on third-party truckload carrier and rail services, each of which subjects us to risksNew
32We may be unable to maintain railcar assets on lease at satisfactory lease rates28% rewritten
33We depend on key personnel and specialty personnel, and a deterioration of employee relations could harm our business and operating and financial results
34We could experience power outages, disruptions in the supply of utilities, outbreak of fire or other calamity or breakdowns of our refrigeration equipment
35We hold leasehold interests in over 100 of our warehouses, and we may be forced to vacate our warehouses if we default on our obligations thereunder and we will be forced to vacate our warehouses if we are unable to renew such leases upon their expiration32% rewritten
36Our results of operations are affected by certain commodity markets
37We face ongoing litigation risks which could result in material liabilities and harm to our business regardless of whether we prevail in any particular matter21% rewritten
38We are a “controlled company” within the meaning of Nasdaq rules and, as a result, qualify for, and may rely on, exemptions from certain corporate governance requirements. You do not have the same protections afforded to stockholders of companies that are subject to such requirements
39We have and expect to continue to incur increased costs as a result of operating as a newly public company, and our management is required to devote substantial time and attention to compliance efforts42% rewritten
40If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately determine or disclose our financial results. As a result, our stockholders could lose confidence in our financial results27% rewritten
41accurately reporting our financial results in a timely manner, which would likely have a negative effect on the market price of our common stockNew
42Charges for impairment of goodwill, long-lived assets, or finite lived intangible assets and declines in real estate valuations could adversely affect our financial condition and results of operations
43Geopolitical conflicts may adversely affect our business and results of operationsNew
44Our performance and value are subject to economic conditions affecting the real estate market generally, and temperature-controlled warehouses in particular, as well as the broader economy
45We could incur significant costs under environmental laws related to the presence and management of asbestos, anhydrous ammonia, and other chemicals and underground storage tanks
46We could incur significant costs related to environmental conditions, liabilities, and regulations

Risks related to climate change could have a material adverse effect on our results of operations

47Our insurance coverage may be insufficient to cover potential environmental liabilities
48Our properties may contain or develop harmful molds or have other air quality issues, which could lead to financial liability for adverse health effects to our employees or third parties, and costs of remediating the problem
49Illiquidity of real estate investments, particularly our specialized temperature-controlled warehouses, could significantly impede our ability to respond to adverse changes in the performance of our business and properties
50We could experience uninsured or under-insured losses related to our global warehousing business, including our real property, as well as our integrated solutions business65% rewritten
51Costs of complying with governmental laws and regulations could adversely affect us and our customers
52federal government or the award of damages to private litigants. If, under the ADA, we are required to make substantial alterations and capital expenditures in one or more of our warehouses, including the removal of access barriers, it could materially and adversely affect usNew
53We are currently invested in various joint ventures and may invest in additional joint ventures in the future and face risks stemming from our partial ownership interests in such properties, which could materially and adversely affect the value of any such joint venture investments

Risks Related to Our Indebtedness

54We have significant indebtedness outstanding, which may expose us to the risk of default under our debt obligations36% rewritten
55Increases in interest rates could increase the amount of our debt payments and interest expense33% rewritten
56Market conditions could adversely affect our ability to refinance existing indebtedness or obtain additional financing for growth on acceptable terms or at all, which could materially and adversely affect us
57Our existing indebtedness contains, and any future indebtedness is likely to contain, covenants that restrict our ability to engage in certain activities
58Secured indebtedness exposes us to the possibility of foreclosure, which could result in the loss of our investment in certain of our subsidiaries or in a property or group of properties or other assets subject to indebtedness and limits our ability to raise future capital

Risks Related to Our Organizational Structure

59Our Co-Executive Chairmen have substantial influence over our business, and our Co-Executive Chairmen’s interests, and the interests of certain members of our management, differ from our interests and those of our other stockholders in certain respects
60Our rights and the rights of our stockholders to take action against our directors and officers are limited
61Our charter and bylaws contain provisions that may delay, defer, or prevent an acquisition of our common stock or a change in control
62Certain provisions of Maryland law may limit the ability of a third-party to acquire control of us50% rewritten
63rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all of the votes entitled to be cast on the matter, excluding all interested sharesNew
64Termination of the employment of certain members of our senior management team could be costly and prevent a change in control of our company
65Our board of directors may change our investment and financing policies without stockholder approval, and we may become more highly leveraged, which may increase our risk of default under our debt obligations
66We are a holding company with no direct operations and rely on funds received from our operating partnership to pay liabilities and distributions to our stockholders43% rewritten
67partnership and its subsidiaries will be able to satisfy the claims of our stockholders only after all of our and our operating partnership’s and its subsidiaries’ liabilities and obligations have been paid in fullNew
68Conflicts of interest exist or could arise in the future with our operating partnership or its partners

Risks Related to Ownership of Shares of Our Common Stock

69The market price and trading volume of shares of our common stock may be volatile
70There can be no assurance that we will be able to make or maintain cash distributions, and certain agreements related to our indebtedness may, under certain circumstances, limit or eliminate our ability to make distributions to our common stockholders
71Increases in market interest rates may result in a decrease in the value of shares of our common stock
72Broad market fluctuations could negatively impact the market price of shares of our common stock
73Future offerings of debt, which would be senior to shares of our common stock upon liquidation, and/or preferred equity securities that may be senior to shares of our common stock for purposes of distributions or upon liquidation, may materially and adversely affect the market price of shares of our common stock
74Future contractual repurchase obligations may materially and adversely affect the market price of shares of our common stock and may reduce future distributions
75Sales of substantial amounts of our common stock in the public market, or the perception that such sales could occur, could adversely affect the market price of our common stock and may make it more difficult for you to sell your common stock at a time and price that you deem appropriate

Risks Related to Our REIT Status and Other Tax Risks

76Failure to qualify as a REIT would cause us to be taxed as a regular C corporation, which would substantially reduce funds available for distributions to stockholders45% rewritten
77Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash available for distribution to our stockholders
78If our operating partnership or any other subsidiary partnership or limited liability company fails to qualify as a partnership or disregarded entity for U.S. federal income tax purposes, we could fail to qualify as a REIT and would suffer adverse consequences
79Our operating partnership has a carryover tax basis on certain of its assets as a result of certain transactions, and the amount that we have to distribute to stockholders therefore may be higher
80Our property taxes could increase due to property tax rate changes or reassessment, which could impact our cash flow
81We use TRSs, which may cause us to fail to qualify as a REIT
82REIT distribution requirements could adversely affect our ability to execute our business plans, including because we may be required to borrow funds to make distributions to stockholders or otherwise depend on external sources of capital to fund such distributions
83Complying with REIT requirements may cause us to forgo otherwise attractive opportunities or liquidate otherwise attractive investments
84The prohibited transactions tax may limit our ability to engage in transactions, including disposition of assets, which would be treated as sales for U.S. federal income tax purposes
85We may recognize substantial amounts of REIT taxable income, which we would be required to distribute to our stockholders, in a year in which we are not profitable under GAAP or other economic measures
86Our qualification as a REIT could be jeopardized as a result of an interest in joint ventures
87Dividends payable by REITs may be taxed at higher rates
88In the event we acquire assets of C corporations (including by merger) in carry-over basis transactions, we may inherit material tax liabilities and other tax attributes from such acquired corporations, and we may be required to distribute earnings and profits62% rewritten
89Legislative or regulatory tax changes could adversely affect us or our stockholders, and challenges to our tax positions could have a material adverse effect on our results of operations and financial position75% rewritten

Other Lineage 10-Ks

FY2024 10-K risk factors
103 risks
Concentrated exposure to temperature-controlled warehousing, high utility and labor costs, rapid recent growth via acquisitions, and transition away from Bay Grove.
Filed Feb 26, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.