Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (September 2023)
33 slides from Essential Properties Realty Trust's investor presentation, Sep 11, 2023
Slide 1: Investor Presentation September 2023
Investor Presentation – September 20230 Investor Presentation September 2023 Exhibit 99.1
Slide 2: Disclaimer
Investor Presentation – September 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 “expec
Slide 3: Executive Summary
Investor Presentation – September 20232 Healthy Net Lease Portfolio1 • Stable Portfolio: 99.9% leased; same-store rent growth has averaged 1.6% over the last four quarters • Strong Coverage: Unit-level coverage of 4.1x with ~99% of ABR required to report unit-level P&Ls • De-Minimis Near-Term Expira
Slide 4: Investment Highlights
Investor Presentation – September 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 • Differentia
Slide 5: Differentiated Investment Strategy Based on Decades of Experience
Investor Presentation – September 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
Slide 6: Relationship Based Strategy – Capital Provider of Choice
Investor Presentation – September 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 June 30, 2023 that was acquired from parties who previou
Slide 7: Portfolio Review
Portfolio Review
Slide 8: New Vintage Portfolio Focused on Targeted Industries
Investor Presentation – September 20237 New Vintage Portfolio Focused on Targeted Industries Disciplined Investing Focused on Service-Oriented and Experience-Based Businesses with Unit-Level Reporting 1. Includes 142 properties that secure mortgage loans receivable. 2. Exclusive of Initial Portfolio
Slide 9: Top Tenant Concentration
Investor Presentation – September 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 40 3.6% 6 1.7% 10 1.7% 77 1.7% 6 1.7% 16 1.5% 12 1.4% 21 1.4% 17 1.4% 13 1.4% Top 10 Tenants 218 1
Slide 10: Diversified Portfolio – Our Tenants Identify the Location of Opportunities
Investor Presentation – September 20239 Diversified Portfolio – Our Tenants Identify the Location of Opportunities Geographical Diversity is an Output of our Strategy • Geographic Diversity ~77% of Total Cash ABR comes from Top 19 States (States with >2.0% of our total ABR) ~50% of Total Cash ABR co
Slide 11: Established and Proven Investment Platform
Investor Presentation – September 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 investmen
Slide 12: Active Asset Management
Investor Presentation – September 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
Slide 13: Leasing Summary
Investor Presentation – September 202312 Leasing Summary Consistent Contractual Rent Escalations Generate Dependable Internal Growth 1. Based on cash ABR as of June 30, 2023. 2. Represents the weighted average annual escalation rate of the entire portfolio as if all escalations occur annually. For l
Slide 14: Same-Store Rent Growth
Investor Presentation – September 202313 Same-Store Rent Growth Alignment with Average Contractual Rent Bumps is 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 period
Slide 15: Disciplined Underwriting Leading to Healthy Portfolio Metrics
Investor Presentation – September 202314 Disciplined Underwriting Leading to Healthy Portfolio Metrics Virtually 100% Unit-Level Reporting Provides Timely Visibility into Tenant Health and Expansive Intellectual Capital Rent Coverage Ratio (x) Tenant Financial Reporting Requirements % of Cash ABR by
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 – September 202316 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 Structure1: • 100% Unsecured Balance Sheet:
Slide 18: Strong Liquidity to Drive Leading AFFO/sh Growth
Investor Presentation – September 202317 Strong Liquidity to Drive Leading AFFO/sh Growth $834mm of Liquidity1 and Balance Sheet Capacity to Support External Growth Aspirations ($000s) 2Q’23 Pro Forma 2Q’231 Cash $ 14.1 $ 34.1 Unused Revolver Capacity 600.0 600.0 Undrawn Term Loan Funding 0.0 200.0
Slide 19: Peer Comparison
Peer Comparison
Slide 20: Differentiated Net Lease Investment Opportunity
Investor Presentation – September 202319 4.8x 4.1x 3.3x 2.9x 2.8x 2.7x NR NR NR NR FCPT EPRT BNL O SRC GTY WPC ADC NNN NTST 74% 70% 51% 38% 32% 27% 22% 19% 19% 18% 3% 5% 8% 10% 11% 12% 13% 13% 14% 15% 100% 100% 93% 70% 48% 42% 37% 27% 20% 15% FCPT GTY EPRT NNN O SRC BNL ADC WPC NTST Differentiated N
Slide 21: Relative Valuation, Growth and Leverage
Investor Presentation – September 202320 7.4% 4.4% 3.1% 3.0% 2.2% 2.1% 2.0% 1.5% 1.0% 0.7% 15.6x 15.0x 14.7x 14.1x 14.1x 13.7x 12.2x 12.1x 11.5x 10.8x Source: Public filings, FactSet and SNL. Note: Market data as of September 1, 2023. 1. 2023E AFFO per share multiple calculated using current price p
Slide 22: Commitment to ESG
Commitment to ESG
Slide 23: Environmental, Social and Governance
Investor Presentation – September 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 En
Slide 24: Financials
Financials
Slide 25: Financial Summary – 2Q'23 Consolidated Statements of Operations
Investor Presentation – September 202324 Financial Summary – 2Q'23 Consolidated Statements of Operations 1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $144, $159, $320 and $315 for the three and six months ended June 30, 2023 and 2022, resp
Slide 26: Financial Summary – 2Q'23 FFO and AFFO
Investor Presentation – September 202325 Financial Summary – 2Q'23 Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) 1. During the three and six months ended June 30, 2023, includes $0.2 million of severance expense and non-cash compensation expense in connection with the departu
Slide 27: Financial Summary – 2Q'23 Consolidated Balance Sheets
Investor Presentation – September 202326 Financial Summary – 2Q'23 Consolidated Balance Sheets (in thousands, except share and per share amounts) June 30, 2023 December 31, 2022 ASSETS (unaudited) (audited) Investments: Real estate investments, at cost: Land and improvements $ 1,370,069 $ 1,228,687
Slide 28: Financial Summary – 2Q'23 GAAP Reconciliations to EBITDAre, NOI
Investor Presentation – September 202327 Financial Summary – 2Q'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 repay
Slide 29: Market Capitalization, Debt Summary and Leverage Metrics
Investor Presentation – September 202328 Financial Summary – 2Q'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
Slide 30: Glossary
Glossary
Slide 31: Glossary – Supplemental Reporting Measures
Investor Presentation – September 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 – September 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 im
Slide 33: Glossary – Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI
Investor Presentation – September 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
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