Netstreit Corp. · NYSE:NTST
Netstreit — Investor Presentation (October 2022)
32 slides from Netstreit's investor presentation, Oct 27, 2022
Slide 1: Investor Presentation October 2022
1 Investor Presentation October 2022
Slide 2: Disclaimer
Disclaimer 2 This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements concerning our b
Slide 3: Company & Investment Highlights
Company & Investment Highlights 3 NETSTREIT Is Built on a Foundation of Strength on Both Sides of the Balance Sheet, Led by a Seasoned Leadership Team with an Exceptional Track Record High-Quality, Diversified, and Defensive Net Lease Retail Portfolio Conservative Capitalization to Support Accretive
Slide 4: Durable and Defensive Cash Flows with Demonstrated Resiliency
Durable and Defensive Cash Flows with Demonstrated Resiliency NETSTREIT STRATEGY BY THE NUMBERS1 4 Source: Company data. Data represents portfolio and balance sheet as of 9/30/2022 unless otherwise noted. 1. Figures represent percentage of ABR unless otherwise noted. 2. Represents tenants with inves
Slide 5: NTST's Stable, Defensive Cash Flow Profile Drives Superior Risk-Adjusted Returns
2.9% 3.3% 4.2% 5.7% 9.1% 10.3% 11.6% 16.5% 13.2 13.8 9.6 8.8 9.0 10.3 10.6 8.8 STOR EPRT NTST FCPT ADC SRC NNN O Lease Rollover % ('22-'25) WALT 63% 68% 65% 43% 22% 18% 0% 0% ADC NTST FCPT O SRC NNN STOR EPRT 5 NTST's Stable, Defensive Cash Flow Profile Drives Superior Risk-Adjusted Returns Source:
Slide 6: Portfolio Overview
Portfolio Overview 6 Sources: Company data. Portfolio data represents portfolio as of 9/30/2022. 1. Excludes mortgage loan receivables. 2. Represents tenants with investment grade credit metrics (more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x), but do no
Slide 7: Portfolio Diversification In Defensive Retail Sectors
Dollar Stores: Grocery: Discount Retail: Home Improvement: Drug Stores & Pharmacies: Portfolio Diversification In Defensive Retail Sectors Source: Company data. Portfolio data represents portfolio as of 9/30/2022. All figures represent percentage of portfolio ABR. Note: Due to rounding, respective d
Slide 8: NTST Portfolio Transformation
NTST Portfolio Transformation 8 NETSTREIT has prudently allocated offering proceeds and recycled capital to grow the scale of its asset base while also improving portfolio quality through further diversification and increased exposure to defensive credit tenancy 2 Source: Company Filings and Company
Slide 9: Strong External Growth Profile
$74.2 $150.5 $102.6 $81.2 $88.2 $116.7 $90.1 $150.5 $138.0 $133.1 $131.3 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 Completed Investments New Quarterly Investments Strong External Growth Profile 337 Completed Investments 9 Source: Company data. 1. Includes completed developmen
Slide 10: Active Asset Management
Active Asset Management 10 NETSTREIT continuously tracks property performance and stratifies the portfolio to achieve consistent cash flows and balanced growth for its investors Source: Company data. Portfolio data represents portfolio as of 9/30/2022. Since inception, the Company has disposed of 61
Slide 11: Three-Part Underwriting Philosophy
Three-Part Underwriting Philosophy 11 NETSTREIT leverages a disciplined, three-pronged approach to underwriting potential acquisitions which positions the Company to benefit from superior downside protection on its investments 3 REAL ESTATE VALUATION UNIT-LEVEL PROFITABILITY• Review underlying key r
Slide 12: Tenant Credit Underwriting
Tenant Credit Underwriting 12 NETSTREIT employs a credit-focused underwriting strategy for all tenants – the MOST IMPORTANT element of the Company’s underwriting process that drives stable revenue and long-term return on investment Source: Company data. Portfolio data represents portfolio as of 9/30
Slide 13: Focus on Investment Grade Tenants
Focus on Investment Grade Tenants 13 Investment grade tenants have outperformed during economic downturns and largely avoided bankruptcy Sources: Capital IQ, Company data, The Deal Pipeline, Bloomberg, SNL Financial 1. Indicates best credit rating held after 1/1/2005 and date when the respective cre
Slide 14: Real Estate Valuation
Real Estate Valuation 14 Real Estate closely follows Credit as a top priority: NETSTREIT utilizes a ground-up framework rooted in real estate fundamentals to underpin its valuation and further quantify the upside potential for a transaction Market-Level Considerations Property-Level Considerations •
Slide 15: Unit-Level Profitability
Unit-Level Profitability 15 In assessing unit-level financial performance, NETSTREIT focuses on mission-critical properties with strong rent coverage and higher variability in operating costs Obtain Financial Information Perform Financial Analysis 2 Assess Investment Merits 1 3 • Provides clarity in
Slide 16: Portfolio Strategy / Investment Philosophy
Portfolio Strategy / Investment Philosophy 16 Source: Company data. Portfolio data represents portfolio as of 9/30/2022. 1. Portfolio statistics by percentage of ABR. Current MetricsInvestment Philosophy Portfolio Strategy Defensive Tenancy in Necessity-Based and E-commerce-Resistant Retail Industri
Slide 17: Bell Curve Investing – Focusing on the Right Side
Bell Curve Investing – Focusing on the Right Side 17 Inefficiently Priced Assets “Market-Taker” Assets TYPICAL TRANSACTION - Large portfolio ($0.2b to $1.0b+) or outsized buyer pool - Well marketed transaction - Straight-forward transaction - Ability to finance transaction with high loan-to- value d
Slide 18: Opportunistic Capital Markets Activity – Over $1 Billion Raised/Refinanced in 2022
Opportunistic Capital Markets Activity – Over $1 Billion Raised/Refinanced in 2022 NETSTREIT CAPITAL MARKETS ACTIVITY - 2022 18 January Forward Equity Raise $230 million August Forward Equity Raise $209 million August Credit Facility Recast $600 million January 2022 Forward Equity Raise: ▪ 10.4 mill
Slide 19: Fortified Balance Sheet Positively Positions Us for Future Investment Opportunities
Fortified Balance Sheet Positively Positions Us for Future Investment Opportunities NETSTREIT BALANCE SHEET 19 Total Liquidity $585 million Leverage (adjusted for unsettled forward equity) 2.5x Fixed Rate Debt % 93% Liquidity: ▪ $370 million of unused revolver capacity ▪ $199 million of unsettled fo
Slide 20: Senior Leadership
Senior Leadership 20 Source: Company data. 1. First Potomac Realty Trust was publicly traded on the NYSE until October 2017. Seasoned leadership team with significant net lease retail and public company experience Mark Manheimer President, CEO & Director Mr. Manheimer leads the overall strategy, acq
Slide 21: Key Personnel
Key Personnel 21 Source: Company data. 1. First Potomac Realty Trust was publicly traded on the NYSE until October 2017. Experienced team of professionals drive NETSTREIT’s day to day operations Jeff Fuge Senior Vice President, Acquisitions • Joined in December 2019 • Prior experience includes: – Di
Slide 22: Corporate Responsibility
Corporate Responsibility 22 ▪ Dedication to reducing the Company’s ecological footprint ▪ Endorsement of renewable resources and encouragement of tenants to practice leading sustainability initiatives ▪ Implementation of energy conservation practices in the office E Environmental Responsibility ▪ Em
Slide 23: Corporate Responsibility
Corporate Responsibility 23 NETSTREIT aligns its corporate responsibility efforts to support that of the United Nations Sustainable Development Goals (SDGs). 5 Promote health and well-being in our offices. Company provides insurance benefits to our employees and family. Company provides employees wi
Slide 24: Environmental Responsibility
Environmental Responsibility 24 5 We encourage sustainable practices among our employees and remain committed to make environmentally friendly decisions in our daily operations The new corporate headquarters is LEED v4 O+M: EB Gold Certified, meeting strict guidelines set forth by the Environmental
Slide 25: Environmental Responsibility
Environmental Responsibility 25 5 Our top tenants have corporate sustainability programs that govern their business operations. 18 of our top 20 tenants in our portfolio have ESG commitments Source: Company data. Portfolio data represents portfolio as of 9/30/2022. Corporate sustainability programs
Slide 26: Environmental Responsibility
Environmental Responsibility 26 5 We can achieve up to 2.5 bps pricing adjustment if we meet certain annual key performance indicators set by our sustainability agent. The KPI is based on the percentages of our portfolio ABR that is derived by tenants who have set targets of reducing GHG with SBTi o
Slide 27: Social Responsibility
Social Responsibility 27 5 Human Capital Management is the Cornerstone of our ESG and Corporate Strategy. We believe in the value of a diverse workforce and inclusive culture 401K Plan 100% company match of up to a 3% contribution, and 50% of up to the next 2% Insurance Health, dental, and vision in
Slide 28: Corporate Governance
Corporate Governance 28 5 Source: Company data. We are committed to acting with honesty and integrity and conducting all corporate opportunities in an ethical manner Annual Director Elections Majority Voting Standard For Election of Directors Director Resignation Policy Annual Director and Committee
Slide 29: Board of Directors
Board of Directors Lead Independent Director ▪ Compensation Committee Chair ▪ Investment Committee Chair ▪ Audit Committee Member Background ▪ Formerly AEW Capital Management, Head of AEW Real Estate Securities ▪ Formerly Landmark Land Company, VP Matt Troxell, CFA Independent Director ▪ Audit Commi
Slide 30: Company & Investment Highlights
Company & Investment Highlights 30 NETSTREIT Is A Growth Company With A Defensive Net Lease Retail Strategy High-Quality, Diversified, and Defensive Net Lease Retail Portfolio Conservative Capitalization to Support Accretive Growth Active Asset Management to Achieve Optimal Portfolio Performance Dis
Slide 31: Definitions
Definitions 31 ABR means annualized base rent. ABR is calculated by multiplying (i) cash rental payments (a) for the month ended September 30, 2022 (or, if applicable, the next full month's cash rent contractually due in the case of rent abatements, rent deferrals, recently acquired properties and p
Slide 32: Investor Relations
32 Investor Relations ir@netstreit.com 972-597-4825