Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (May 2023)
33 slides from Essential Properties Realty Trust's investor presentation, May 10, 2023
Slide 1: May 2023 Investor Presentation
Investor Presentation – May 20230 Exhibit 99.1 May 2023 Investor Presentation
Slide 2: Disclaimer
Investor Presentation – May 20231 Disclaimer 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,” “p
Slide 3: Executive Summary: Continuing to Execute Our Strategy
Investor Presentation – May 20232 Healthy Net Lease Portfolio1 • Stable Portfolio: 99.8% leased; same-store rent growth has averaged 1.7% over the last four quarters • Strong Coverage: Unit-level coverage of 3.9x with ~99% of ABR required to report unit-level P&Ls • De-Minimis Near-Term Expirations:
Slide 4: Investment Highlights
Investor Presentation – May 20233 Investment Highlights • Newly Assembled Portfolio of Net Lease Properties • Long Duration Leases with Strong Unit-Level Rent Coverage • Focused on Service-Oriented and Experience-Based Tenants • Fungible and Smaller-Scale Single-Tenant Properties • Differentiated, D
Slide 5: Differentiated Investment Strategy Based on Decades of Experience
Investor Presentation – May 20234 Differentiated Investment Strategy Based on Decades of Experience Investment Discipline Refined Over Multiple Decades, Extensive Experience Through Various Credit Cycles Service-Oriented & Experience-Based Industries Sale-Leaseback Transactions - Middle-Market Tenan
Slide 6: Relationship Based Strategy – Capital Provider of Choice
Investor Presentation – May 20235 Relationship Based Strategy – Capital Provider of Choice Actively Leveraging Our Relationships to Source New Investment Opportunities Relationship-Based Sourcing 1. Percentage of portfolio cash ABR as of March 31, 2023 that was acquired from parties who previously e
Slide 7: Portfolio Review
Portfolio Review
Slide 8: New Vintage Portfolio Focused on Targeted Industries
Investor Presentation – May 20237 Car Washes 14.6% Early Childhood Education 12.4% Quick Service 11.4% Medical / Dental 10.8% Auto Service 8.3% Casual Dining 6.6% C-Stores 4.7% Equipment Rental and Sales 4.3% Other Services 2.4% Family Dining 2.3% Pet Care Services 1.5% Entertainment 8.0% Health and
Slide 9: Top Tenant Concentration
Investor Presentation – May 20238 Top 10 Tenant Concentration Highly Diversified Portfolio by Tenant: Top 10 Tenants Represent only 17% of Total Cash ABR Top 10 Tenants1 Properties2 % of Cash ABR 31 3.0% 6 1.8% 75 1.7% 23 1.6% 16 1.6% 9 1.5% 5 1.5% 17 1.5% 13 1.5% 6 1.4% Top 10 Tenants 201 17.1% Tot
Slide 10: Diversified Portfolio – Our Tenants Identify the Location of Opportunities
Investor Presentation – May 20239 Diversified Portfolio – Our Tenants Identify the Location of Opportunities Geographical Diversity is an Output of our Strategy • Geographic Diversity ~81% of Total Cash ABR comes from Top 22 States (States with >2.0% of our total ABR) TX, GA, FL, OH, and WI represen
Slide 11: Established and Proven Investment Platform
Investor Presentation – May 202310 Established and Proven Investment Platform Scalable Infrastructure – Consistent Investment Sourcing at Attractive Yields without Sacrificing Quality 1. Includes investments in mortgage loans receivable. 2. Cash ABR for the first full month after the investment divi
Slide 12: Active Asset Management
Investor Presentation – May 202311 Active Asset Management Proactive Asset Management Mitigates Risk, Optimizes Accretive Capital Recycling and Risk-Adjusted Returns 1. Includes the impact of transaction costs. 2. Gains/(losses) based on our initial purchase price. 3. Cash ABR at time of sale divide
Slide 13: Leasing Summary
Investor Presentation – May 202312 Leasing Summary Consistent Contractual Rent Escalations Generate Dependable Internal Growth Contractual Fixed 95.5% CPI 2.8% Flat 1.7% 1. Based on cash ABR as of March 31, 2023. 2. Represents the weighted average annual escalation rate of the entire portfolio as if
Slide 14: Same-Store Rent Growth
Investor Presentation – May 202313 Same-Store Rent Growth Alignment with Average Contractual Rent Bumps is Indicator of Limited Credit Loss Experience Same-Store Portfolio Performance1 Contractual Cash Rent ($000s) 2 % Type of Business 1Q’22 1Q’23 Change Service $ 48,344 $ 49,209 1.8% Experience 6,7
Slide 15: Disciplined Underwriting Leading to Healthy Portfolio Metrics
Investor Presentation – May 202314 Disciplined Underwriting Leading to Healthy Portfolio Metrics Virtually 100% Unit-Level Reporting Provides Timely Visibility into Tenant Health and Expansive Intellectual Capital 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8
Slide 16: Leverage & Liquidity
EPRT Board Meeting Management Presentation First Quarter Ended March 31, 2023 Leverage & Liquidity
Slide 17: Conservative and Flexible Debt Structure
Investor Presentation – May 202316 $600 $200 $430 $400 $400 0 100 200 300 400 500 600 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 M a tu ri n g P ri n c ip a l B a la n c e ( $ m m ) Revolving Credit Facility Availability 2024 Unsecured Term Loan 2027 Unsecured Term Loan Public Unsecured Bonds
Slide 18: Strong Liquidity to Drive Leading AFFO/sh Growth
Investor Presentation – May 202317 Strong Liquidity to Drive Leading AFFO/sh Growth $775mm of Liquidity1 and Balance Sheet Capacity to Support External Growth Aspirations ($000s) 1Q’23 Pro Forma 1Q’231 Cash $ 71.0 $ 174.6 Unused Revolver Capacity 600.0 600.0 Forward Equity Sales - Unsettled 103.6 0
Slide 19: Peer Comparison
Peer Comparison
Slide 20: Differentiated Net Lease Investment Opportunity
Investor Presentation – May 202319 Differentiated Net Lease Investment Opportunity Portfolio Mix and Underlying Fundamentals are Favorable Relative to Peers Strong Unit-Level Coverage3 & Transparency Service-Oriented & Experience-Based Industries Limited Intermediate-Term Lease Maturities ✓ ✓✓ Sourc
Slide 21: Relative Valuation, Growth and Leverage
Investor Presentation – May 202320 Relative Valuation, Growth and Leverage Compelling Valuation, Projected AFFO/sh Growth Relative to Net Lease Peers, and Conservative Leverage Source: Public filings, FactSet and SNL. Note: Market data as of May 8, 2023. 1. 2023E AFFO per share multiple calculated u
Slide 22: Commitment to ESG
Commitment to ESG
Slide 23: Environmental, Social and Governance
Investor Presentation – May 202322 Governance ▪ Leading governance practices, Board accountability, strong board diversity, required minimum stock ownership, published compensation clawback policy, and no hedging or pledging ▪ Industry recognized investor engagement and disclosure practices Environm
Slide 24: Financials
Financials
Slide 25: Financial Summary – 1Q'23 Consolidated Statements of Operations
Investor Presentation – May 202324 Financial Summary – 1Q'23 Consolidated Statements of Operations 1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $176 and $156 for the three months ended March 31, 2023 and 2022, respectively. 2. Includes rei
Slide 26: Financial Summary – 1Q'23 FFO and AFFO
Investor Presentation – May 202325 Financial Summary – 1Q'23 Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) 1. During the three months ended March 31, 2023, includes $0.9 million of insurance recovery income related to two properties and, during the three months ended March 31
Slide 27: Financial Summary – 1Q'23 Consolidated Balance Sheets
Investor Presentation – May 202326 Financial Summary – 1Q'23 Consolidated Balance Sheets (in thousands, except share and per share amounts) March 31, 2023 December 31, 2022 ASSETS (unaudited) (audited) Investments: Real estate investments, at cost: Land and improvements $ 1,274,398 $ 1,228,687 Build
Slide 28: Financial Summary – 1Q'23 GAAP Reconciliations to EBITDAre, NOI
Investor Presentation – May 202327 Financial Summary – 1Q'23 GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI and Estimated Run Rate Metrics 1. Adjustment made to reflect EBITDAre, NOI and Cash NOI as if all re-leasing activity, investments in and dispositions of real estate and loan repayments
Slide 29: Market Capitalization, Debt Summary and Leverage Metrics
Investor Presentation – May 202328 Financial Summary – 1Q'23 Market Capitalization, Debt Summary and Leverage Metrics 1. Rates presented for our term loans are fixed at the stated rates after giving effect to our interest rate swaps, applicable margin of 85bps and SOFR premium of 10bps. 2. Our revol
Slide 30: Glossary
Glossary
Slide 31: Glossary: Supplemental Reporting Measures
Investor Presentation – May 202330 Glossary Supplemental Reporting Measures FFO, Core 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”), core funds from operations (“Core FFO”) and
Slide 32: Glossary: Supplemental Reporting Measures
Investor Presentation – May 202331 Glossary Supplemental Reporting Measures We also present our earnings before interest, taxes and depreciation and amortization for real estate (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) on sales of depreciable property and real estate impairme
Slide 33: Glossary: Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI
Investor Presentation – May 202332 Glossary Supplemental Reporting Measures Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI We further adjust EBITDAre, NOI and Cash NOI i) based on an estimate calculated as if all re-leasing, investment and disposition activity that took place during the quarte
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