Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (September 2018)
31 slides from Essential Properties Realty Trust's investor presentation, Sep 11, 2018
Slide 1: Investor Presentation – September 2018
Investor Presentation – September 2018 Exhibit 99.1
Slide 2: Disclaimer
Disclaimer 242, 242, 242 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements can be identified by the use of words such as “expect,” “plan,” "will," “estim
Slide 3: Investment Highlights
Investment Highlights 242, 242, 242 Service and Experiential Cash ABR1 90.0% Average Investment Per Property $2.0mm Internally-Originated Sale-Leasebacks1,2 82.5% Average Quarterly Investment Activity3 $123mm Proforma Net Debt / Annualized Adj. EBITDA5 3.9x of Liquidity4 ~$426mm Based on cash ABR as
Slide 4: Experienced and Proven Management Team
Experienced and Proven Management Team Pete Mavoides President & CEO +20 years of experience in the single-tenant net lease industry and has overseen $4 billion of aggregate acquisitions Previously served as President and Chief Operating Officer of Spirit Realty Capital (SRC) and was there from Sept
Slide 5: Our Investment Strategy Captures Identified Market Opportunities
Our Investment Strategy Captures Identified Market Opportunities Per Rosen Consulting Group. 242, 242, 242 Service-Oriented & Experience-Based Industries Sale-Leaseback Transactions with Middle-Market Tenants Smaller-Scale Net Leased Properties E-commerce resistant Profit centers essential to tenant
Slide 6: Building Essential Properties: Our History
Building Essential Properties 242, 242, 242 Our History Cumulative Acquisition Volume1 Partnered with Eldridge Industries to provide capital solutions to middle-market tenants Early 2016 Jun 2016 Aug 2016 Dec 2016 Jan 2017 Feb 2017 Jul 2017 Jun 2018 Mar 2016 Commenced investment activities with a $2
Slide 7: New Vintage Portfolio is Focused on Select Industries
New Vintage Portfolio is Focused on Select Industries Our portfolio is the result of a disciplined adherence to investing in properties leased to service-oriented and experienced-based businesses with unit-level reporting 242, 242, 242 Investment Properties (#)1 621 Square Footage (MM) 5.2 Tenants (
Slide 8: Top Tenant Concentration
Top 10 Tenant Concentration Essential has 140 tenants across 621 properties with the top 10 representing 188 properties and 36.8% of cash ABR 242, 242, 242 Top 10 Tenants Properties % of Cash ABR1 76 5.6% 5 4.7% 13 4.4% 15 4.0% 5 3.7% 13 3.3% 26 3.1% 3 2.8% 19 2.8% 13 2.6% Top 10 Tenants 188 36.8% T
Slide 9: Net Lease Risk Factor Mitigation
242, 242, 242 Net Lease Risk Factor Essential Properties Mitigation Challenged Retail Categories No exposure to big-box apparel, electronics, sporting goods or other soft goods retailers At-Risk Retail Categories No exposure to pharmacy or discount retailers; de minimis exposure to grocers Asset Con
Slide 10: Disciplined Underwriting Leading to Healthy Portfolio Metrics
Disciplined Underwriting Leading to Healthy Portfolio Metrics 97.5% of unit-level reporting provides (near) real-time tenant visibility 242, 242, 242 Tenant Financial Reporting Unit-Level Coverage2 Tranches Long Weighted Remaining Lease Term Healthy Rent Coverage Ratios1 Note: ‘NR’ means not reporte
Slide 11: Established and Proven Investment Infrastructure
Established and Proven Investment Infrastructure Scalable platform allows for consistent and attractive investment activity without sacrificing our rigorous underwriting standards and narrowed investment focus 242, 242, 242 Note: Exclusive of GE Seed Portfolio and nine additional properties that wer
Slide 12: Active Asset Management
Active Asset Management 242, 242, 242 Selective Dispositions Criteria Enables Proactive Management to Maximize Risk-Adjusted Returns Remaining lease term Credit profile In-place rents vs. market Current and projected rent coverage Lease structure (master leases vs. single asset) Alternative use Indu
Slide 13: Growth Oriented Balance Sheet Supported by Scalable Infrastructure
Growth Oriented Balance Sheet Supported by Scalable Infrastructure $1.4 Billion Total Capitalization1,2 Selected Credit Ratios 242, 242, 242 Pro forma for the impact of the partial exercise of the underwriters' overallotment option in the IPO. On July 24, 2018, the underwriters completed the exercis
Slide 14: Debt Structure Allows for Capital Flexibility
Debt Structure Allows for Capital Flexibility Embedded Prepayment Option: We have the ability to retire all Master Trust Funding notes and release the associated collateral without payment of a make-whole amount after November 2021 Debt Maturity Schedule1,2 242, 242, 242 Maturity figures for our sec
Slide 15: Recent Developments & Upcoming Events
Recent Developments & Upcoming Events 242, 242, 242 Recent Developments Since IPO: Management has continued to grow and actively manage its portfolio and improve its disclosure and transparency Early August: Reported our first quarter (2Q’2018) and held our first conference call as a publicly traded
Slide 16: Differentiated Net Lease Investment Opportunity
Differentiated Net Lease Investment Opportunity Strong Unit-Level Coverage2 Service-Oriented & Experience-Based Tenant Profile Long Weighted Average Remaining Lease Term Smaller-Scale Net Leased Properties ü ü ü ü Source: Public filings. Note: Essential Properties data as of June 30, 2018. Public ne
Slide 17: Public Net Lease REIT Benchmarking
Public Net Lease REIT Benchmarking Attractive relative valuation persists despite our favorable portfolio metrics and low leverage Leverage Implied Nominal Cap Rate1 2019E AFFO per Share Multiple3 Dividend Yield4 Source: Public filings, FactSet and SNL. Note: Market data as of August 31, 2018. Compa
Slide 18: Investment Highlights
Investment Highlights 242, 242, 242 Service and Experiential Cash ABR1 90.0% Average Investment Per Property $2.0mm Internally-Originated Sale-Leasebacks1,2 82.5% Average Quarterly Investment Activity3 $123mm Proforma Net Debt / Annualized Adj. EBITDA5 3.9x of Liquidity4 ~$426mm Based on cash ABR as
Slide 19: Appendix
+ Appendix
Slide 20: Seek to be the Capital Provider of Choice
Seek to be the Capital Provider of Choice Maintain direct relationships with our tenants and actively seek to leverage our tenant relationships to identify new investment opportunities 242, 242, 242 Relationship-Based Sourcing Percentage of portfolio cash ABR as of August 31, 2018 that was acquired
Slide 21: Fully Integrated and Scalable Platform
Fully Integrated and Scalable Platform Hillary Hai CFO Dan Donlan SVP, Capital Markets Gregg Seibert EVP, COO Pete Mavoides CEO, President Director, Acquisitions SVP, Asset Management SVP, Credit Controller Director, Acquisitions Associate, Acquisitions Associate Analyst Closing Associate Asset Mgmt
Slide 22: Contractual Base Rent Escalation Provisions
Contractual Base Rent Escalation Provisions Provides source of internal growth and a measure of inflation protection 242, 242, 242 Leases contributing 96.3% of cash ABR2 provided for base rent escalation, generally ranging from 1.0% to 4.0% annually, with a weighted average annual escalation rate of
Slide 23: Same-Store Analysis
Same-Store Analysis While our same-store portfolio only represents 43.7% of our current portfolio, our same-store growth in 2Q’18 was healthy as compared to our weighted average annual rent escalation of 1.5% 242, 242, 242 Same-Store Portfolio: All properties owned, excluding new sites under constru
Slide 24: Financial Summary: Condensed Statement of Operations
Financial Summary Condensed Statement of Operations 242, 242, 242 Includes $0.2 million, $0.5 million, $0.7 million and $0.7 million of contingent rent (based on a percentage of the tenant's gross sales at the leased property) during the three months ended June 30, 2018 and 2017 and the six months e
Slide 25: Financial Summary: FFO and AFFO
Financial Summary Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) 242, 242, 242 Three Months Ended June 30, Six Months Ended June 30, (unaudited, in thousands) 2018 2017 2018 2017 Net income $ 3,499 $ 2,047 $ 4,607 $ 2,629 Depreciation and amortization of real estate 7,610 4,30
Slide 26: Financial Summary: Consolidated Balance Sheets
Financial Summary Consolidated Balance Sheets 242, 242, 242 June 30, 2018 December 31, 2017 (in thousands, except share, per share, unit and per unit amounts) (unaudited) (audited) ASSETS Investments: Real estate investments, at cost: Land and improvements $ 355,184 $ 278,985 Building and improvemen
Slide 27: Financial Summary: GAAP Reconciliations to EBITDAre, NOI and Cash NOI
Financial Summary GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI and Estimated Run Rate Metrics 242, 242, 242 These adjustments are made to reflect EBITDAre, NOI and Cash NOI as if all acquisitions and dispositions of real estate investments made during the three months ended June 30, 2018 had
Slide 28: Financial Summary: Market Capitalization, Debt Summary and Leverage Metrics
Financial Summary Market Capitalization, Debt Summary and Leverage Metrics 242, 242, 242 Maturity figures for our secured debt are based off of our anticipated repayment schedule. The Series 2016-1 notes mature in November 2046 but have an anticipated repayment date of November 2021. The Series 2017
Slide 29: Glossary: Supplemental Reporting Measures FFO and AFFO
Glossary Supplemental Reporting Measures 242, 242, 242 FFO and AFFO Our reported results are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). We also disclose funds from operations (“FFO”) and adjusted funds from operations (“AFFO”), both of which are non-GAAP fin
Slide 30: Glossary: Supplemental Reporting Measures EBITDA and EBITDAre
Glossary Supplemental Reporting Measures 242, 242, 242 EBITDA and EBITDAre We calculate EBITDA as earnings (GAAP net income) before interest expense, taxes, depreciation and amortization. In 2017, NAREIT issued a white paper recommending that companies that report EBITDA also report EBITDAre in all
Slide 31: Glossary of Supplemental Reporting Measures: Other Terms
Glossary of Supplemental Reporting Measures Other Terms 242, 242, 242 Cash ABR Cash ABR means annualized contractually specified cash base rent in effect as of the end of the current quarter for all of our leases (including those accounted for as direct financing leases) commenced as of that date, a
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