Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (June 2024)
38 slides from Essential Properties Realty Trust's investor presentation, Jun 4, 2024
Slide 1: Investor Presentation June 2024
Investor Presentation – June 20240 Investor Presentation June 2024 Exhibit 99.1
Slide 2: Disclaimer
Investor Presentation – June 20241 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 – June 20242 Healthy Net Lease Portfolio1 • Stable Portfolio: 99.9% leased; same-store rent growth has averaged 1.4% 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 Lease Expiration Risk
Slide 4: NAREIT Conference Annual Portfolio Update
NAREIT Conference Annual Portfolio Update
Slide 5: Historical Portfolio Performance
Investor Presentation – June 20244 Historical Portfolio Performance Resilient leasing performance has driven steady cash flow generation Avg. Since IPO: 102% Healthy Re-leasing Recovery Rate ✓ (% of ABR Recaptured Upon Lease Expiration) Consistently High Portfolio Occupancy Rates ✓ (Occupancy as % o
Slide 6: Top Industries
Investor Presentation – June 20245 Top Industries Car Washes Early Childhood Education Medical / Dental Quick Service Restaurants Automotive Service % ABR (3/31/2024) 15.1% 11.3% 10.9% 10.5% 8.2% Thesis & Outlook • Thesis: Subscription model continues to drive recurring revenue and margins • Outlook
Slide 7: Annualized Rent Gain/(Loss) – Industries with Events
Investor Presentation – June 20246 Annualized Rent Gain/(Loss) – Industries with Events Annual Portfolio Performance Snapshot Historical portfolio rent loss experience comparable to investment grade corporate bonds • Historical rent loss experience comparable to investment grade corporate bonds1 • S
Slide 8: Investment Highlights
EPRT Board Meeting Management Presentation First Quarter Ended March 31, 2023 Investment Highlights
Slide 9: Investment Highlights
Investor Presentation – June 20248 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,
Slide 10: Focused Investment Strategy Based on Decades of Experience
Investor Presentation – June 20249 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 Net L
Slide 11: Relationship Based Strategy – Capital Provider of Choice
Investor Presentation – June 202410 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 March 31, 2024 that was acquired from parties wh
Slide 12: Portfolio Review
Portfolio Review
Slide 13: New Vintage Portfolio Focused on Targeted Industries
Investor Presentation – June 202412 New Vintage Portfolio Focused on Targeted Industries Disciplined Investing Focused on Service-Oriented and Experience-Based Businesses with Unit-Level Reporting 1. As of March 31, 2024 2. Includes 135 properties that secure mortgage loans receivable. 3. Exclusive
Slide 14: Top Tenant Concentration
Investor Presentation – June 202413 Top 10 Tenant Concentration Highly Diversified Portfolio by Tenant: Top 10 Tenants Represent only 19% of Total Cash ABR1 Top 10 Tenants1 Diversification by Industry1 Top 10 Tenants1 Properties2 % of Cash ABR 54 4.3% 8 2.2% 31 1.8% 16 1.6% 25 1.6% 28 1.6% 40 1.5% 6
Slide 15: Diversified Portfolio – Our Tenants Identify the Location of Opportunities
Investor Presentation – June 202414 Diversified Portfolio – Our Tenants Identify the Location of Opportunities Geographical Diversity is an Output of our Strategy • Geographic Diversity1 ~80% of Total Cash ABR comes from Top 21 States (States with >2.0% of our total ABR) ~50% of Total Cash ABR comes
Slide 16: Established and Proven Investment Platform
Investor Presentation – June 202415 Established and Proven Investment Platform Scalable Infrastructure – Consistent Investment Sourcing at Attractive Yields without Sacrificing Quality $175,738 $195,454 $328,370 $207,147 $277,361 $213,327 $314,865 $248,770 $0 $40,000 $80,000 $120,000 $160,000 $200,0
Slide 17: Active Asset Management
Investor Presentation – June 202416 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 (ex
Slide 18: Leasing Summary
Investor Presentation – June 202417 Leasing Summary Consistent Contractual Rent Escalations Generate Dependable Internal Growth Lease Escalation Frequency Lease Escalation Type 1. Based on cash ABR as of March 31, 2024. 2. Represents the weighted average annual escalation rate of the entire portfoli
Slide 19: Same-Store Rent Growth
Investor Presentation – June 202418 Same-Store Rent Growth Alignment with Average Contractual Rent Bumps is an Indicator of Limited Credit Loss Experience Same-Store Portfolio Performance1 Trailing 4 Qtr. Avg. Same-Store Rent Growth1 Contractual Cash Rent ($000s) 2 % Type of Business 1Q’23 1Q’24 Cha
Slide 20: Tenant Financial Reporting Requirements
Investor Presentation – June 202419 Tenant Financial Reporting Requirements1 % of Cash ABR by Unit-Level Coverage Tranche1,2 Unit-Level Coverage by Lease Expiration1Unit-Level Coverage by Tenant Credit3 Reporting Requirements % of Cash ABR Unit-Level Financial Information 98.9% Corporate-Level Finan
Slide 21: Leverage & Liquidity
Leverage & Liquidity
Slide 22: Conservative and Flexible Debt Structure
Investor Presentation – June 202421 Conservative and Flexible Debt Structure 100% Unsecured Debt – 100% Unencumbered Asset Base – Minimal Near-Term Debt Maturities – Investment Grade Debt Maturity Schedule1 • Well-Laddered Maturities1: • Low-Cost Debt Structure2: • 100% Unsecured Balance Sheet: • Fl
Slide 23: Consistently Strong Liquidity to Fund Growth
Investor Presentation – June 202422 Consistently Strong Liquidity to Fund Growth ($mm) Strong Liquidity to Drive Leading AFFO/sh Growth $863mm of Liquidity1 and Balance Sheet Capacity to Support External Growth Aspirations ($mm) 1Q’24 Pro Forma 1Q’241 Cash $ 79.2 $ 263.3 Unused Revolver Capacity 600
Slide 24: Peer Comparison
Peer Comparison
Slide 25: Differentiated Net Lease Investment Opportunity
Investor Presentation – June 202424 4.9x 3.9x 3.3x 2.9x 2.6x NR NR NR NR 69% 67% 52% 37% 32% 24% 21% 20% 19% 2% 4% 6% 6% 8% 9% 10% 10% 10% 98% 93% 90% 71% 37% 34% 27% 23% 15% Differentiated Net Lease Investment Opportunity Portfolio Mix and Underlying Fundamentals are Favorable Relative to Peers Str
Slide 26: Peer Valuation and AFFO Growth Comparison
Investor Presentation – June 202425 2.9x 3.6x 4.7x 4.8x 4.8x 5.5x 5.5x 5.5x 5.6x 15.5x 14.4x 14.0x 13.7x 12.5x 12.3x 12.1x 11.8x 10.7x 5.5% 4.4% 4.2% 3.5% 2.9% 2.6% 2.6% 0.4% NA Source: Public filings, FactSet and S&P Capital IQ. Note: Market data as of May 24, 2024. Data based on reported filings f
Slide 27: Commitment to ESG
Commitment to ESG
Slide 28: Environmental, Social and Governance
Investor Presentation – June 202427 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 29: Financials
Financials
Slide 30: Financial Summary – 1Q'24 Consolidated Statements of Operations
Investor Presentation – June 202429 Financial Summary – 1Q’24 Consolidated Statements of Operations Three Months Ended March 31, (in thousands, except share and per share data) 2024 2023 (unaudited) (unaudited) Revenues: Rental revenue1,2 $ 98,510 $ 78,172 Interest on loans and direct financing leas
Slide 31: Financial Summary – 1Q'24 FFO and AFFO
Investor Presentation – June 202430 Financial Summary – 1Q’24 Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) Three Months Ended March 31, (unaudited, in thousands except per share amounts) 2024 2023 Net income $ 47,123 $ 43,056 Depreciation and amortization of real estate 28,4
Slide 32: Financial Summary – 1Q'24 Consolidated Balance Sheets
Investor Presentation – June 202431 Financial Summary – 1Q’24 Consolidated Balance Sheets (in thousands, except share and per share amounts) March 31, 2024 December 31, 2023 ASSETS (unaudited) (audited) Investments: Real estate investments, at cost: Land and improvements $ 1,635,673 $ 1,542,302 Buil
Slide 33: Financial Summary – 1Q'24 GAAP Reconciliations to EBITDAre, NOI
Investor Presentation – June 202432 Financial Summary – 1Q’24 GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI and Estimated Run Rate Metrics Three Months Ended (unaudited, in thousands) March 31, 2024 Net income $ 47,123 Depreciation and amortization 28,525 Interest expense 15,597 Interest inco
Slide 34: Financial Summary – 1Q'24 Market Capitalization, Debt Summary and Leverage
Investor Presentation – June 202433 Financial Summary – 1Q’24 Market Capitalization, Debt Summary and Leverage Metrics (dollars in thousands, except share and per share amounts) March 31, 2024 Rate Wtd. Avg. Maturity Unsecured debt: February 2027 term loan1 $ 430,000 2.4% 2.9 years January 2028 term
Slide 35: Glossary
Glossary
Slide 36: Glossary: Supplemental Reporting Measures
Investor Presentation – June 202435 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”) an
Slide 37: Glossary: Supplemental Reporting Measures
Investor Presentation – June 202436 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 impairm
Slide 38: Glossary: Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI
Investor Presentation – June 202437 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 quart
Essential Properties Realty Trust — Investor Presentation (June 2024) on 6ix