Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (January 2023)
29 slides from Essential Properties Realty Trust's investor presentation, Jan 9, 2023
Slide 1: Investor Presentation – January 2023
Investor Presentation – January 2023 Exhibit 99.1
Slide 2: Disclaimer
Investor Presentation – January 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: Investment Highlights
Investor Presentation – January 20232 Investment Highlights • Newly Assembled Portfolio of Net Lease Properties • Long Duration Leases with Solid Unit-Level Rent Coverage • Concentrated on Service-Oriented and Experience-Based Tenants • Fungible and Smaller-Scale Single-Tenant Properties • Disciplin
Slide 4: Healthy Net Lease Portfolio and Well Positioned Balance Sheet
Investor Presentation – January 20233 Healthy Net Lease Portfolio1 • Stable Portfolio: 99.8% leased; average same-store cash rent growth of 1.7% over the trailing four quarters • Strong Coverage: Unit-level coverage of 4.2x with 99% of ABR required to report unit-level P&Ls • De-Minimis Near-Term Ex
Slide 5: Service-Oriented & Experience-Based Industries
Investor Presentation – January 20234 Service-Oriented & Experience-Based Industries Sale-Leaseback Transactions with Middle-Market Tenants Small-Scale Net Leased Properties ✓ E-commerce resistant ✓ Profit centers essential to tenant’s operations ✓ Customers must visit to receive service/experience
Slide 6: Seek to be the Capital Provider of Choice
Investor Presentation – January 20235 Seek to be the Capital Provider of Choice Maintain Direct Relationships with Our Tenants and Actively Seek to Leverage Our Relationships to Identify New Investment Opportunities Relationship-Based Sourcing 1. Percentage of portfolio cash ABR as of September 30,
Slide 7: New Vintage Portfolio is Focused on Targeted Industries
Investor Presentation – January 20236 New Vintage Portfolio is Focused on Targeted Industries Our Portfolio is the Result of a Disciplined Adherence to Investing in Properties Leased to Service-Oriented and Experience-Based Businesses with Unit-Level Reporting Investment Properties (#)1 1,572 Square
Slide 8: Top Tenant Concentration
Investor Presentation – January 20237 Top 10 Tenant Concentration Our Top 10 Tenants Operate 204 Properties and Represent 19.4% of Cash ABR Diversification by Industry 1. Represents tenant, guarantor or parent company. 2. Property count includes 146 properties that secure mortgage loans receivable a
Slide 9: Disciplined Underwriting Leading to Healthy Portfolio Metrics
Investor Presentation – January 20238 Disciplined Underwriting Leading to Healthy Portfolio Metrics 98.5% of Unit-Level Reporting Provides (Near) Real-Time Tenant Visibility Tenant Financial Reporting Requirements % of Cash ABR by Unit-Level Coverage Tranche1 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2
Slide 10: Established and Proven Investment Infrastructure
Investor Presentation – January 20239 $244,078 $197,816 $223,186 $230,755 $322,203 $237,795 $175,738 $195,454 $0 $40,000 $80,000 $120,000 $160,000 $200,000 $240,000 $280,000 $320,000 $360,000 In v e s tm e n t A c ti v it y ( $ 0 0 0 s ) Established and Proven Investment Infrastructure Scalable Plat
Slide 11: Active Asset Management
Investor Presentation – January 202310 $39,042 $25,197 $19,578 $10,089 $4,466 $18,443 $26,091 $35,513 $0 $10,000 $20,000 $30,000 $40,000 D is p o s it io n A c ti v it y ( $ 0 0 0 s )1 Active Asset Management Proactive Asset Management Mitigates Risk and Maximizes Risk-Adjusted Returns 1. Includes t
Slide 12: Leasing Summary and Contractual Rent Escalations
Investor Presentation – January 202311 1. Based on cash ABR as of September 30, 2022. 2. Represents the weighted average annual escalation rate of the entire portfolio as if all escalations occur annually. For leases in which rent escalates by the greater of a stated fixed percentage or CPI, we have
Slide 13: Debt Maturity Schedule
Investor Presentation – January 202312 $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 B
Slide 14: Low Leverage and Ample Liquidity to Drive Solid AFFO/sh Growth
Investor Presentation – January 202313 2.5x 3.5x 4.4x 4.8x 4.9x 5.2x 5.2x 5.3x 5.4x Low Leverage and Ample Liquidity to Drive Solid AFFO/sh Growth Strong Liquidity and Balance Sheet Capacity to Support External Growth • 100% Unsecured Balance Sheet: Asset base is 100% unencumbered with no secured de
Slide 15: Differentiated Net Lease Investment Opportunity
Investor Presentation – January 202314 4% 4% 8% 8% 12% 14% 15% 16% 17% 21% 76% 76% 54% 37% 33% 28% 22% 19% 18% 17% 4.7x 4.2x 4.0x 3.1x 2.8x 2.8x 2.7x NR NR NR STOR EPRT FCPT BNL SRC O GTY ADC NNN NTST 100% 100% 93% 71% 67% 46% 46% 39% 28% 13% FCPT GTY EPRT NNN STOR SRC O BNL ADC NTST Differentiated
Slide 16: Peer AFFO Multiples and Growth
Investor Presentation – January 202315 18.5x 16.5x 16.4x 16.3x 16.2x 15.2x 15.1x 14.5x 12.2x 11.3x 5.0% 4.1% 4.0% 2.6% 2.6% 1.9% 1.5% 1.3% 1.2% 0.7% 23.3% 14.0% 9.9% 9.0% 8.6% 8.2% 6.7% 5.3% 5.2% 5.2% 18.0x 16.1x 15.9x 15.9x 15.5x 15.1x 14.4x 14.4x 12.0x 11.2x Source: Public filings, FactSet and SNL
Slide 17: Commitment to ESG
+ Commitment to ESG
Slide 18: Our Commitment, Progress and Goals
Investor Presentation – January 202317 Our Commitment Our Progress Our Goals • Reducing our Carbon Footprint Implementing sustainability upgrades at our properties to reduce our carbon footprint and specifically our Scope 3 emissions • Expanding our Relationship with our Tenants through Sustainabili
Slide 19: Workforce and Employee Benefits
Investor Presentation – January 202318 • Providing a dynamic work environment, rewarding work experience and career development for our team • Providing a positive work environment for everyone, valuing equal opportunity and fair employment practices • Strive to offer our employees attractive and eq
Slide 20: Board and Governance Practices
Investor Presentation – January 202319 Avg. Tenure 3.5 yrs. 7 Independent 38% Female 13% Diverse Board Practices: • Independent Chairman of the Board • Annual elections for all directors • All committees are fully independent • Opted out of MUTA • Opted out of control share acquisition provisions of
Slide 21: 3Q'22 Financials
+ 3Q’22 Financials
Slide 22: Financial Summary – 3Q'22 Consolidated Statements of Operations
Investor Presentation – January 202321 Financial Summary – 3Q’22 Consolidated Statements of Operations 1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $210, $233, $526 and $464 for the three and nine months ended September 30, 2022 and 2021,
Slide 23: Financial Summary – 3Q'22 FFO and AFFO
Investor Presentation – January 202322 Financial Summary – 3Q’22 Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) 1. During the nine months ended September 30, 2022, includes debt extinguishment costs associated with the Company's restructuring of its credit and term loan facili
Slide 24: Financial Summary – 3Q'22 Consolidated Balance Sheets
Investor Presentation – January 202323 Financial Summary – 3Q’22 Consolidated Balance Sheets (in thousands, except share and per share amounts) September 30, 2022 December 31, 2021 ASSETS (unaudited) (audited) Investments: Real estate investments, at cost: Land and improvements $ 1,163,660 $ 1,004,1
Slide 25: GAAP Reconciliations to EBITDAre, NOI and Cash NOI
Investor Presentation – January 202324 Financial Summary – 3Q’22 GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI and Estimated Run Rate Metrics 1. These adjustments are made to reflect EBITDAre, NOI and Cash NOI as if all re-leasing activity, investments in and dispositions of real estate made
Slide 26: Market Capitalization, Debt Summary and Leverage Metrics
Investor Presentation – January 202325 Financial Summary – 3Q’22 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 2
Slide 27: Glossary – Supplemental Reporting Measures
Investor Presentation – January 202326 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 28: Glossary – Supplemental Reporting Measures (EBITDA)
Investor Presentation – January 202327 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 impa
Slide 29: Glossary – Adjusted EBITDAre / NOI / Cash NOI
Investor Presentation – January 202328 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 qu
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