Netstreit Corp. · NYSE:NTST
Netstreit — Investor Presentation (October 2020)
26 slides from Netstreit's investor presentation, Oct 29, 2020
Slide 1: Investor Presentation October 2020
Investor Presentation October 2020
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements concerning our bus
Slide 3: Company & Investment Highlights
Company & Investment Highlights NETSTREIT Is Built on a Foundation of Strength on Both Sides of the Balance Sheet, Led by Seasoned Leadership Team with Exceptional Track Record 1 Strategy Overview and Performance During COVID 2 Active Asset Management to Achieve Optimal Portfolio Performance 3 Disci
Slide 4: Strategy Overview and Performance During COVID
1 Strategy Overview and Performance During COVID Investment grade tenancy provides defensive, consistent performance through economic cycles NETSTREIT STRATEGY BY THE NUMBERS1 ▪ High-quality tenancy creates bond-like leases with high rent collections during times of disruption ▪ 99.4% of Investment
Slide 5: Portfolio Overview
2 Portfolio Overview High-quality, diversified portfolio consisting of 68% investment grade tenants across 37 states Key Portfolio Stats Top 10 Tenants by % of ABR Properties 189 States 37 Baa1 / AA- Portfolio Square Feet (in millions) 3.4 Tenants 53 Baa1 / BBB+ Industries 24 % Occupancy 100.0% Baa2
Slide 6: Portfolio Diversification In Defensive Retail Sectors
2 Portfolio Diversification In Defensive Retail Sectors NETSTREIT offers a national diversified portfolio comprised primarily of defensive retail tenants Necessity Discount Top Industries (% of ABR) 1 Home 17% Improvement: 2 Convenience 12% Stores: 50% 90% 17% of ABR Necessity 3 Discount Discount Re
Slide 7: Active Asset Management
2 Active Asset Management NETSTREIT continuously tracks property performance and stratifies the portfolio to achieve consistent cash flows and balanced growth for its investors Disciplined Acquisitions Active Monitoring Pursue opportunities that Periodically review all align with objectives properti
Slide 8: Three-Part Underwriting Philosophy
3 Three-Part Underwriting Philosophy NETSTREIT leverages a disciplined, three-pronged approach to underwriting potential acquisitions which positions the Company to benefit from superior downside protection on its investments A B C TENANT CREDIT UNDERWRITING • Evaluate corporate level REAL ESTATE fi
Slide 9: A Tenant Credit Underwriting
3 A Tenant Credit Underwriting NETSTREIT employs a credit-focused underwriting strategy for all tenants – the MOST IMPORTANT element of the Company’s underwriting process that drives stable revenue and long-term return on investment Investment Grade Profile Sub-IG (rated) & Investment Grade (rated)
Slide 10: A Focus on Investment Grade Tenants
3 A Focus on Investment Grade Tenants Investment grade tenants have outperformed during economic downturns and largely avoided bankruptcy Price Performance vs. S&P 500 During GFC and COVID-191 Major Net Lease Retail Tenant Bankruptcies (2009 – 2020) 2008 Financial Crisis COVID-19 Outbreak Best Credi
Slide 11: B Real Estate Valuation
3 B Real Estate Valuation Real Estate closely follows Credit as a top priority: NETSTREIT utilizes a ground-up framework rooted in real estate fundamentals to underpin its valuation and further quantify the upside potential for a transaction Market-Level Considerations Property-Level Considerations
Slide 12: C Unit-Level Profitability
3 C Unit-Level Profitability In assessing unit-level financial performance, NETSTREIT focuses on mission-critical properties with strong rent coverage and higher variability in operating costs 1 2 3 Obtain Financial Information Perform Financial Analysis Assess Investment Merits • Provides clarity i
Slide 13: Portfolio Strategy / Investment Philosophy
4 Portfolio Strategy / Investment Philosophy Investment Philosophy Portfolio Strategy Current Metrics Defensive Tenancy in Necessity-Based and Primarily 90% E-commerce-Resistant Industries1 Resilient, Cycle-Tested Investment Grade Credit >60% 68% Tenants with Durable Cash Flows1 Granular Assets in H
Slide 14: Growth Strategy: Generating Both Quality & Quantity
4 Growth Strategy: Generating Both Quality & Quantity The Company utilizes a multi-faceted growth strategy to deploy capital in a variety of investment structures in the Net Lease Retail sector, allowing it greater flexibility to build its portfolio from a larger opportunity set Investment Descripti
Slide 15: 2020 Quarterly Investment Activity
4 2020 Quarterly Investment Activity Cumulative Acquisitions in 2020 ($ in millions) 98 Total Acquisitions Properties Acquired: 24 44 30 Quarterly Portfolio Expansion1: 27% 43% 21% Average Acquisition Activity per Quarter = $109 million Source: Company data. Portfolio data represents portfolio as of
Slide 16: Acquisition Case Study: Walmart Supercenter and Sam's Club – Tupelo, MS
4 Acquisition Case Study: Invested Grade (rated) Walmart Supercenter and Sam’s Club – Tupelo, MS Acquisition Completed: July 2020 $17.0M 2 Purchase Price Properties 6.6% $538.1B Acquisition Cap Rate Tenant Sales (2020)1 12 Years 0.0% Avg. Annual Rent New Lease Terms Increases $396.5B AA / Aa2 S&P/Mo
Slide 17: Acquisition Case Study: Ollie's Bargain Outlet Portfolio
4 Acquisition Case Study: Investment Grade Profile (unrated) Ollie’s Bargain Outlet Portfolio Acquisition – Various Locations Acquisition Completed: March 2020 $26.1M 7 Purchase Price Properties1 6.9% $1.6B Acquisition Cap Rate Tenant Sales (2020)2 10 Years 0.8% Avg. Annual Rent New Lease Terms Incr
Slide 18: Acquisition Case Study: Floor & Decor – La Quinta, CA
4 Acquisition Case Study: Sub-Investment Grade (rated) Floor & Decor – La Quinta, CA Acquisition Completed: June 2020 $9.6M 1 Purchase Price Property 8.5% $2.1B Acquisition Cap Rate Tenant Sales (2020)1 10 Years 2.0% Avg. Annual Rent New Lease Term Increases $7.8B BB- / Ba3 S&P/Moody’s Credit Market
Slide 19: Acquisition Case Study: O'Reilly Auto Parts
4 Acquisition Case Study: Invested Grade (rated) O’Reilly Auto Parts – Various Locations Acquisition Completed: August 2020 $5.7M 7 Purchase Price Properties 6.9% $10.7B Acquisition Cap Rate Tenant Sales (2020)1 11 Years 0.0% Avg. Annual Rent Remaining Lease Term Increases $34.2B BBB / Baa1 S&P/Mood
Slide 20: Senior Leadership
5 Senior Leadership Seasoned leadership team with significant net lease retail and public company experience High-Quality Real Estate Portfolio Conservative Capitalization Mark Manheimer Andy Blocher President, CEO & Director CFO, Treasurer & Secretary Mr. Manheimer leads the overall Mr. Blocher man
Slide 21: Key Personnel
5 Key Personnel Experienced team of professionals drive NETSTREIT’s day to day operations High-Quality Real Estate Portfolio Conservative Capitalization Jeff Fuge Trish McBratney Senior Vice President, Acquisitions Senior Vice President and Chief Accounting Officer • Joined in December 2019 • Joined
Slide 22: Corporate Responsibility
5 Corporate Responsibility NETSTREIT is committed to fulfilling its responsibility as an outstanding corporate citizen The Company’s mission is to be the leader in the net lease industry by practicing and implementing innovative, impactful Environmental, Social and Governance policies with the highe
Slide 23: Board of Directors
5 Board of Directors In addition to Mr. Manheimer, the Company’s board is comprised of six additional directors, five of whom are independent, each possessing diverse backgrounds in industry, public company and investment experience Todd Minnis Matt Troxell, CFA Lori Wittman Robin Zeigler Heidi Ever
Slide 24: Company & Investment Highlights
Company & Investment Highlights NETSTREIT Is A Growth Company With A Defensive Net Lease Retail Strategy Attractive Sector Fundamentals with Compelling Growth Opportunity Seasoned Leadership Team with Extensive Track Record Active Asset Management to Achieve Optimal Portfolio Performance Disciplined
Slide 25: Definitions
Definitions ABR means annualized base rent. ABR is calculated by multiplying (i) cash rental payments (a) for the month following the period shown plus (b) for properties under development, the first full month’s permanent cash rent contractually due after the development period by (ii) 12. Defensiv
Slide 26: Investor Relations
Investor Relations ir@netstreit.com 972-597-4825 26