Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (December 2018)
30 slides from Essential Properties Realty Trust's investor presentation, Dec 3, 2018
Slide 1: Investor Presentation – December 2018
Investor Presentation – December 2018 Exhibit 99.1
Slide 2: Disclaimer
Disclaimer 242, 242, 242 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,” “plan,” "will," “estim
Slide 3: Investment Highlights
Investment Highlights 242, 242, 242 Service and Experiential Cash ABR1 90.6% Average Investment Per Property $2.0mm Internally-Originated Sale-Leasebacks1,2 82.2% Average Quarterly Investment Activity3 $132mm Net Debt / Annualized Adj. EBITDA5 4.7x of Liquidity4 ~$374mm Based on cash ABR as of Septe
Slide 4: Experienced and Proven Management Team
Experienced and Proven Management Team Pete Mavoides President & CEO +20 years of experience in the single-tenant net lease industry and has overseen $4 billion of aggregate acquisitions Previously served as President and Chief Operating Officer of Spirit Realty Capital (SRC) and was there from Sept
Slide 5: Building Essential Properties: Our History
Building Essential Properties 242, 242, 242 Our History Cumulative Acquisition Volume1 Partnered with Eldridge Industries to provide capital solutions to middle-market tenants Early 2016 Jun 2016 Aug 2016 Dec 2016 Jan 2017 Feb 2017 Jul 2017 Jun 2018 Mar 2016 Commenced investment activities with a $2
Slide 6: Our Investment Strategy Captures Identified Market Opportunities
Our Investment Strategy Captures Identified Market Opportunities Per Rosen Consulting Group. 242, 242, 242 Service-Oriented & Experience-Based Industries Sale-Leaseback Transactions with Middle-Market Tenants Smaller-Scale Net Leased Properties E-commerce resistant Profit centers essential to tenant
Slide 7: New Vintage Portfolio is Focused on Select Industries
New Vintage Portfolio is Focused on Select Industries Our portfolio is the result of a disciplined adherence to investing in properties leased to service-oriented and experienced-based businesses with unit-level reporting 242, 242, 242 Investment Properties (#)1 645 Square Footage (MM) 5.5 Tenants (
Slide 8: Top Tenant Concentration
Top 10 Tenant Concentration Essential has 153 tenants across 645 properties with the top 10 representing 189 properties and 35.0% of cash ABR 242, 242, 242 Top 10 Tenants Properties % of Cash ABR1 77 5.3% 5 4.4% 13 4.2% 15 3.8% 5 3.6% 13 3.1% 26 2.9% 3 2.7% 19 2.6% 13 2.4% Top 10 Tenants 189 35.0% T
Slide 9: Net Lease Risk Factor Mitigation
242, 242, 242 Net Lease Risk Factor Essential Properties Mitigation Challenged Retail Categories No exposure to big-box apparel, electronics, sporting goods or other soft goods retailers At-Risk Retail Categories No exposure to pharmacy or discount retailers; de minimis exposure to grocers Asset Con
Slide 10: Disciplined Underwriting Leading to Healthy Portfolio Metrics
Disciplined Underwriting Leading to Healthy Portfolio Metrics 97.6% of unit-level reporting provides (near) real-time tenant visibility 242, 242, 242 Tenant Financial Reporting Unit-Level Coverage2 Tranches Long Weighted Remaining Lease Term Healthy Rent Coverage Ratios1 Only ~1.2% of cash ABR has l
Slide 11: Established and Proven Investment Infrastructure
Established and Proven Investment Infrastructure Scalable platform allows for consistent and attractive investment activity without sacrificing our rigorous underwriting standards and narrowed investment focus 242, 242, 242 Investment activity has averaged $132.3mm per quarter over the last eight qu
Slide 12: Active Asset Management
Active Asset Management 242, 242, 242 Selective Dispositions Criteria Enables Proactive Management to Maximize Risk-Adjusted Returns Remaining lease term Credit profile In-place rents vs. market Current and projected rent coverage Lease structure (master leases vs. single asset) Alternative use Indu
Slide 13: Growth Oriented Balance Sheet Supported by Scalable Infrastructure
Growth Oriented Balance Sheet Supported by Scalable Infrastructure $1.4 Billion Total Capitalization1 Selected Credit Ratios 242, 242, 242 Stock price of $14.37 as of November 29, 2018. Stock price of $14.19 as of September 30, 2018. Debt and cash and cash equivalents balance as of September 30, 201
Slide 14: Debt Structure Allows for Capital Flexibility
Debt Structure Allows for Capital Flexibility Embedded Prepayment Option: We have the ability to retire all Master Trust Funding notes and release the associated collateral without payment of a make-whole amount after November 2021 Debt Maturity Schedule1,2 242, 242, 242 Maturity figures for our sec
Slide 15: Differentiated Net Lease Investment Opportunity
Differentiated Net Lease Investment Opportunity Strong Unit-Level Coverage2 Service-Oriented & Experience-Based Tenant Profile Long Weighted Average Remaining Lease Term Smaller-Scale Net Leased Properties ü ü ü ü Source: Public filings. Note: Essential Properties data as of September 30, 2018. Publ
Slide 16: Public Net Lease REIT Benchmarking
Public Net Lease REIT Benchmarking Leverage Implied Nominal Cap Rate1 2019E AFFO per Share Multiple3 Dividend Yield4 Source: Public filings, FactSet and SNL. Note: Market data as of November 29, 2018. Companies may define adjusted cash NOI and adjusted annualized EBITDAre differently. Accordingly, s
Slide 17: Recent Developments & Upcoming Events
Recent Developments & Upcoming Events 242, 242, 242 Recent Developments September 21st: Inclusion into the Russell 2000, Russell 3000, and three FTSE NAREIT indices Early November: Reported first full quarter as a publicly traded company Provided 2019 AFFO/sh guidance at a range of $1.11 to $1.15 Cl
Slide 18: Appendix
+ Appendix
Slide 19: Seek to be the Capital Provider of Choice
Seek to be the Capital Provider of Choice Maintain direct relationships with our tenants and actively seek to leverage our tenant relationships to identify new investment opportunities 242, 242, 242 Relationship-Based Sourcing Percentage of portfolio cash ABR as of September 30, 2018 that was acquir
Slide 20: Fully Integrated and Scalable Platform
Fully Integrated and Scalable Platform Hillary Hai CFO Dan Donlan SVP, Capital Markets Gregg Seibert EVP, COO Pete Mavoides CEO, President Director, Acquisitions SVP, Asset Management SVP, Credit Controller Director, Acquisitions Associate, Acquisitions Associate Analyst Closing Associate Asset Mgmt
Slide 21: Contractual Base Rent Escalation Provisions
Contractual Base Rent Escalation Provisions Provides source of internal growth and a measure of inflation protection 242, 242, 242 Leases contributing 96.9% of cash ABR2 provided for base rent escalation, generally ranging from 1.0% to 4.0% annually, with a weighted average annual escalation rate of
Slide 22: Same-Store Analysis
Same-Store Analysis While our same-store portfolio only represents 45.5% of our current portfolio, our same-store NOI growth of 2.0% in 3Q’2018 was healthy as compared to our weighted average annual rent escalation of 1.5% 242, 242, 242 Same-Store Portfolio: All properties owned, excluding new sites
Slide 23: Financial Summary: Condensed Statement of Operations
Financial Summary Condensed Statement of Operations 242, 242, 242 Includes $0.2 million, $0.5 million, $0.9 million and $0.9 million of contingent rent (based on a percentage of the tenant's gross sales at the leased property) during the three months ended September 30, 2018 and 2017 and the nine mo
Slide 24: Financial Summary: FFO and AFFO
Financial Summary Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) 242, 242, 242 Three Months Ended September 30, Nine Months Ended September 30, (unaudited, in thousands) 2018 2017 2018 2017 Net income $ 7,707 $ 522 $ 12,314 $ 3,151 Depreciation and amortization of real estate
Slide 25: Financial Summary: Consolidated Balance Sheets
Financial Summary Consolidated Balance Sheets 242, 242, 242 September 30, 2018 December 31, 2017 (in thousands, except share, per share, unit and per unit amounts) (unaudited) (audited) ASSETS Investments: Real estate investments, at cost: Land and improvements $ 392,831 $ 278,985 Building and impro
Slide 26: Financial Summary: GAAP Reconciliations to EBITDAre, NOI
Financial Summary GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI and Estimated Run Rate Metrics 242, 242, 242 These adjustments are made to reflect EBITDAre, NOI and Cash NOI as if all acquisitions and dispositions of real estate investments made during the three months ended September 30, 201
Slide 27: Financial Summary: Market Capitalization, Debt Summary and Leverage
Financial Summary Market Capitalization, Debt Summary and Leverage Metrics 242, 242, 242 Maturity figures for our secured debt are based off of our anticipated repayment schedule. The Series 2016-1 notes mature in November 2046 but have an anticipated repayment date of November 2021. The Series 2017
Slide 28: Glossary: Supplemental Reporting Measures
Glossary Supplemental Reporting Measures 242, 242, 242 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”) and adjusted funds from operations (“AFFO”), both of which are non-GAAP fin
Slide 29: Glossary: Supplemental Reporting Measures
Glossary Supplemental Reporting Measures 242, 242, 242 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 impairment losses (“EBITDAre”
Slide 30: Glossary of Supplemental Reporting Measures: Other Terms
Glossary of Supplemental Reporting Measures Other Terms 242, 242, 242 Cash ABR Cash ABR means annualized contractually specified cash base rent in effect as of the end of the current quarter for all of our leases (including those accounted for as direct financing leases) commenced as of that date, a
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