Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (September 2024)
34 slides from Essential Properties Realty Trust's investor presentation, Sep 9, 2024
Slide 1: September 2024 Investor Presentation
Investor Presentation – September 20240 Exhibit 99.1 September 2024 Investor Presentation
Slide 2: Disclaimer
Investor Presentation – September 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 “expec
Slide 3: Business Update: Continuing to Execute Our Business Plan
Investor Presentation – September 20242 Healthy Net Lease Portfolio1 • Stable Portfolio: 99.8% leased; same-store rent growth has averaged 1.4% over the last four quarters • Strong Coverage: Unit-level coverage of 3.7x with ~99% of ABR required to report unit-level P&Ls • De-Minimis Lease Expiration
Slide 4: Investment Highlights
EPRT Board Meeting Management Presentation First Quarter Ended March 31, 2023 Investment Highlights
Slide 5: Investment Highlights
Investor Presentation – September 20244 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 6: Focused Investment Strategy Based on Decades of Experience
Investor Presentation – September 20245 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
Slide 7: Relationship Based Strategy – Capital Provider of Choice
Investor Presentation – September 20246 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 June 30, 2024 that was acquired from parties
Slide 8: Portfolio Review
Portfolio Review
Slide 9: New Vintage Portfolio Focused on Targeted Industries
Investor Presentation – September 20248 New Vintage Portfolio Focused on Targeted Industries Disciplined Investing Focused on Service-Oriented and Experience-Based Businesses with Unit-Level Reporting 1. As of June 30, 2024 2. Includes 147 properties that secure mortgage loans receivable. 3. Exclusi
Slide 10: Top Tenant Concentration
Investor Presentation – September 20249 Top 10 Tenant Concentration Highly Diversified Portfolio by Tenant: Top 10 Tenants Represent less than 19% of Total Cash ABR1 Top 10 Tenants1 Diversification by Industry1 Top 10 Tenants1 Properties2 % of Cash ABR 61 4.7% 8 2.0% 32 1.7% 16 1.6% 25 1.5% 7 1.5% 2
Slide 11: Diversified Portfolio – Our Tenants Identify the Location of Opportunities
Investor Presentation – September 202410 Diversified Portfolio – Our Tenants Identify the Location of Opportunities Geographical Diversity is an Output of our Strategy • Geographic Diversity1 ~78% of Total Cash ABR comes from Top 20 States (States with >2.0% of our total ABR) ~51% of Total Cash ABR
Slide 12: Established and Proven Investment Platform
Investor Presentation – September 202411 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 13: Active Asset Management
Investor Presentation – September 202412 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 pric
Slide 14: Leasing Summary
Investor Presentation – September 202413 Leasing Summary Consistent Contractual Rent Escalations Generate Dependable Internal Growth Lease Escalation Frequency Lease Escalation Type 1. Based on cash ABR as of June 30, 2024. 2. Represents the weighted average annual escalation rate of the entire port
Slide 15: Same-Store Rent Growth
Investor Presentation – September 202414 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 2Q’23 2Q’2
Slide 16: Tenant Financial Reporting Requirements
Investor Presentation – September 202415 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
Slide 17: Leverage & Liquidity
Leverage & Liquidity
Slide 18: Conservative and Flexible Debt Structure
Investor Presentation – September 202417 $600 $430 $400 $450 $450 $400 0 100 200 300 400 500 600 2024 2025 2026 2027 2028 2029 2030 2031 M at ur in g Pr in ci ap l B al an ce ($ m m ) Revolving Credit Facility Availability 2027 Term Loan 2028 Term Loan 2029 Term Loan 2030 Term Loan Public Unsecured
Slide 19: Consistently Strong Liquidity to Fund Growth
Investor Presentation – September 202418 Consistently Strong Liquidity to Fund Growth ($mm) Strong Liquidity to Drive Leading AFFO/sh Growth $698mm of Liquidity1 and Balance Sheet Capacity to Support External Growth Aspirations ($mm) 2Q’24 Pro Forma 2Q’241 Cash $ 24.5 $ 548.2 Unused Revolver Capacit
Slide 20: Peer Comparison
Peer Comparison
Slide 21: Differentiated Net Lease Investment Opportunity
Investor Presentation – September 202420 Differentiated Net Lease Investment Opportunity Portfolio Mix and Underlying Fundamentals are Favorable Relative to Peers Strong Unit-Level Coverage3 & Transparency Service-Oriented & Experience-Based Industries Limited Intermediate-Term Lease Maturities
Slide 22: Relative Valuation, Growth and Leverage
Investor Presentation – September 202421 Source: Public filings, FactSet and S&P Capital IQ. Note: Market data as of September 5, 2024. Data based on reported filings for period ending June 30, 2024, not adjusted for post quarter-end subsequent events. 1. 2024E AFFO per share multiple calculated usi
Slide 23: Commitment to ESG
Commitment to ESG
Slide 24: Environmental, Social and Governance
Investor Presentation – September 202423 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 25: Financials
Financials —
Slide 26: Financial Summary – 2Q'24 Consolidated Statements of Operations
Investor Presentation – September 202425 Financial Summary – 2Q’24 Consolidated Statements of Operations 1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $96, $144, $334 and $320 for the three and six months ended June 30, 2024 and 2023, respe
Slide 27: Financial Summary – 2Q'24 FFO and AFFO
Investor Presentation – September 202426 Financial Summary – 2Q’24 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 accelerated non-cash compensation expense; during the six mo
Slide 28: Financial Summary – 2Q'24 Consolidated Balance Sheets
Investor Presentation – September 202427 Financial Summary – 2Q’24 Consolidated Balance Sheets (in thousands, except share and per share amounts) June 30, 2024 December 31, 2023 ASSETS (unaudited) (audited) Investments: Real estate investments, at cost: Land and improvements $ 1,730,117 $ 1,542,302
Slide 29: Financial Summary – 2Q'24 GAAP Reconciliations to EBITDAre, NOI
Investor Presentation – September 202428 Financial Summary – 2Q’24 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 30: Financial Summary – 2Q'24 Market Capitalization, Debt Summary and Leverage
Investor Presentation – September 202429 Financial Summary – 2Q’24 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 (for 2027 and 2028 Term Loans) or
Slide 31: Glossary
Glossary
Slide 32: Glossary: Supplemental Reporting Measures
Investor Presentation – September 202431 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 33: Glossary: Supplemental Reporting Measures (continued)
Investor Presentation – September 202432 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 34: Glossary: Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI
Investor Presentation – September 202433 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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