Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (November 2023)
33 slides from Essential Properties Realty Trust's investor presentation, Nov 13, 2023
Slide 1: Investor Presentation November 2023
Investor Presentation – November 20230 Investor Presentation November 2023
Slide 2: Disclaimer
Investor Presentation – November 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
Slide 3: Business Update: Continuing to Execute Our Business Plan
Investor Presentation – November 20232 Healthy Net Lease Portfolio1 • Stable Portfolio: 99.8% leased; same-store rent growth has averaged 1.5% over the last four quarters • Strong Coverage: Unit-level coverage of 4.0x with ~99% of ABR required to report unit-level P&Ls • De-Minimis Near-Term Expirat
Slide 4: Investment Highlights
Investor Presentation – November 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 • Differentiat
Slide 5: Focused Investment Strategy Based on Decades of Experience
Investor Presentation – November 20234 Focused Investment Strategy Based on Decades of Experience Investment Discipline Refined Over Multiple Decades Across Various Credit Cycles Service-Oriented & Experience-Based Industries Sale-Leaseback Transactions - Middle-Market Tenants Small-Scale Fungible N
Slide 6: Relationship Based Strategy – Capital Provider of Choice
Investor Presentation – November 20235 Relationship Based Strategy – Capital Provider of Choice Actively Leveraging Our Relationships to Directly Originate New Investment Opportunities Relationship-Based Sourcing 1. Percentage of portfolio cash ABR as of September 30, 2023 that was acquired from par
Slide 7: Portfolio Review
Portfolio Review
Slide 8: New Vintage Portfolio Focused on Targeted Industries
Investor Presentation – November 20237 New Vintage Portfolio Focused on Targeted Industries Disciplined Investing Focused on Service-Oriented and Experience-Based Businesses with Unit-Level Reporting 1. Includes 138 properties that secure mortgage loans receivable. 2. Exclusive of Initial Portfolio.
Slide 9: Top Tenant Concentration
Investor Presentation – November 20238 Top 10 Tenant Concentration Highly Diversified Portfolio by Tenant: Top 10 Tenants Represent only 18% of Total Cash ABR Top 10 Tenants Diversification by Industry 1. Represents tenant, guarantor or parent company. 2. Property count includes 138 properties that
Slide 10: Diversified Portfolio – Our Tenants Identify the Location of Opportunities
Investor Presentation – November 20239 Diversified Portfolio – Our Tenants Identify the Location of Opportunities Geographical Diversity is an Output of our Strategy • Geographic Diversity ~76% of Total Cash ABR comes from Top 19 States (States with >2.0% of our total ABR) ~50% of Total Cash ABR com
Slide 11: Established and Proven Investment Platform
Investor Presentation – November 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
Slide 12: Active Asset Management
Investor Presentation – November 202311 Active Asset Management Proactive Asset Management Mitigates Risk, Optimizes Accretive Capital Recycling 1. Includes the impact of transaction costs. 2. Gains/(losses) based on our initial purchase price. 3. Cash ABR at time of sale divided by gross sale price
Slide 13: Leasing Summary
Investor Presentation – November 202312 Leasing Summary Consistent Contractual Rent Escalations Generate Dependable Internal Growth 1. Based on cash ABR as of September 30, 2023. 2. Represents the weighted average annual escalation rate of the entire portfolio as if all escalations occur annually. F
Slide 14: Same-Store Rent Growth
Investor Presentation – November 202313 Same-Store Rent Growth Alignment with Average Contractual Rent Bumps is an Indicator of Limited Credit Loss Experience Same-Store Portfolio Performance1 1. All properties owned, excluding new sites under construction, for the entire same-store measurement peri
Slide 15: Disciplined Underwriting Leading to Healthy Portfolio Metrics
Investor Presentation – November 202314 Disciplined Underwriting Leading to Healthy Portfolio Metrics Virtually 100% Unit-Level Reporting Provides Timely Visibility into Tenant Health and Expansive Intellectual Capital Tenant Financial Reporting Requirements % of Cash ABR by Unit-Level Coverage Tran
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 – November 202316 4.7x 4.6x 4.7x 4.4x 4.5x 4.1x 4.2x 3.7x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 4Q' 21 1Q' 22 2Q' 22 3Q' 22 4Q' 22 1Q' 23 2Q' 23 3Q' 23 $600 $430 $400 $450 $400 0 100 200 300 400 500 600 2023 2024 2025 2026 2027 2028 2029 2030 2031 M at ur in g Pr in ci ap l B al an ce
Slide 18: Strong Liquidity to Drive Leading AFFO/sh Growth
Investor Presentation – November 202317 $316 $467 $408 $894 $694 $775 $634 $990 $0 $200 $400 $600 $800 $1,000 $1,200 4Q' 21 1Q' 22 2Q' 22 3Q' 22 4Q' 22 1Q' 23 2Q' 23 3Q' 23 Total Liquidity Investment Volume Strong Liquidity to Drive Leading AFFO/sh Growth $990mm of Liquidity1 and Balance Sheet Capac
Slide 19: Peer Comparison
Peer Comparison
Slide 20: Differentiated Net Lease Investment Opportunity
Investor Presentation – November 202319 72% 68% 51% 37% 32% 27% 23% 19% 19% 18% 4.8x 4.0x 3.4x 2.9x 2.9x 2.7x NR NR NR NR FCPT EPRT BNL O SRC GTY WPC ADC NNN NTST 3% 5% 7% 9% 10% 10% 11% 12% 12% 14% 100% 99% 93% 70% 47% 42% 38% 27% 27% 14% Differentiated Net Lease Investment Opportunity Portfolio Mi
Slide 21: Relative Valuation, Growth and Leverage
Investor Presentation – November 202320 7.2% 5.2% 4.7% 3.3% 2.1% 2.1% 1.7% 1.2% 0.8% (1.4%) 3.7x 4.2x 4.7x 4.8x 4.9x 5.0x 5.4x 5.4x 5.4x 5.6x 14.7x 14.0x 13.2x 12.8x 12.6x 12.4x 12.0x 10.8x 10.5x 10.4x Source: Public filings, FactSet and SNL. Note: Market data as of November 8, 2023. 1. 2023E AFFO p
Slide 22: Commitment to ESG
Commitment to ESG
Slide 23: Environmental, Social and Governance
Investor Presentation – November 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 Environ
Slide 24: Financials
Financials
Slide 25: Financial Summary – 3Q'23 Consolidated Statements of Operations
Investor Presentation – November 202324 Financial Summary – 3Q'23 Consolidated Statements of Operations 1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $198, $210, $518 and $526 for the three and nine months ended September 30, 2023 and 2022,
Slide 26: Financial Summary – 3Q'23 FFO and AFFO
Investor Presentation – November 202325 Financial Summary – 3Q'23 Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) 1. Includes the following during the: i) three months ended September 30, 2023 — $0.1 million loss on debt extinguishment; ii) nine months ended September 30, 2023
Slide 27: Financial Summary – 3Q'23 Consolidated Balance Sheets
Investor Presentation – November 202326 Financial Summary – 3Q'23 Consolidated Balance Sheets (in thousands, except share and per share amounts) September 30, 2023 December 31, 2022 ASSETS (unaudited) (audited) Investments: Real estate investments, at cost: Land and improvements $ 1,431,441 $ 1,228,
Slide 28: Financial Summary – 3Q'23 GAAP Reconciliations to EBITDAre, NOI
Investor Presentation – November 202327 Financial Summary – 3Q'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 repaym
Slide 29: Financial Summary – 3Q'23 Market Capitalization, Debt Summary and Leverage
Investor Presentation – November 202328 Financial Summary – 3Q'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 (for 2027 and 2028 Term Loans) or
Slide 30: Glossary
Glossary
Slide 31: Glossary: Supplemental Reporting Measures
Investor Presentation – November 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”
Slide 32: Glossary: Supplemental Reporting Measures (EBITDAre, NOI)
Investor Presentation – November 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 imp
Slide 33: Glossary: Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI
Investor Presentation – November 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 q
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