Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (April 2024)
33 slides from Essential Properties Realty Trust's investor presentation, Apr 9, 2024
Slide 1: Investor Presentation April 2024
Investor Presentation – April 20240 Investor Presentation April 2024 Exhibit 99.1
Slide 2: Disclaimer
Investor Presentation – April 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 “expect,”
Slide 3: Healthy Net Lease Portfolio
Investor Presentation – April 20242 Healthy Net Lease Portfolio1 • Stable Portfolio: 99.8% leased; same-store rent growth has averaged 1.5% over the last four quarters • Strong Coverage: Unit-level coverage of 3.8x with ~99% of ABR required to report unit-level P&Ls • De-Minimis Near-Term Expiration
Slide 4: Investment Highlights
Investor Presentation – April 20243 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 • Differentiated,
Slide 5: Focused Investment Strategy Based on Decades of Experience
Investor Presentation – April 20244 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 Net
Slide 6: Relationship Based Strategy – Capital Provider of Choice
Investor Presentation – April 20245 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 December 31, 2023 that was acquired from parties
Slide 7: Portfolio Review
Portfolio Review
Slide 8: New Vintage Portfolio Focused on Targeted Industries
Investor Presentation – April 20247 Car Washes 15.1% Early Childhood Education 11.6% Quick Service 10.7% Medical / Dental 10.6% Auto Service 8.2% Casual Dining 7.0% Equipment Rental and Sales 5.1% C-Stores 5.0% Other Services 2.4% Family Dining 1.9% Pet Care Services 1.6% Entertainment 8.2% Health a
Slide 9: Top Tenant Concentration
Investor Presentation – April 20248 Top 10 Tenant Concentration Highly Diversified Portfolio by Tenant: Top 10 Tenants Represent only 18% of Total Cash ABR1 Top 10 Tenants1 Diversification by Industry1 1. As of December 31, 2023. 2. Represents tenant, guarantor or parent company. 3. Property count i
Slide 10: Diversified Portfolio – Our Tenants Identify the Location of Opportunities
Investor Presentation – April 20249 Diversified Portfolio – Our Tenants Identify the Location of Opportunities Geographical Diversity is an Output of our Strategy • Geographic Diversity1 ~80% of Total Cash ABR comes from Top 21 States (States with >2.0% of our total ABR) ~50% of Total Cash ABR comes
Slide 11: Established and Proven Investment Platform
Investor Presentation – April 202410 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 investment di
Slide 12: Active Asset Management
Investor Presentation – April 202411 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 price (e
Slide 13: Leasing Summary
Investor Presentation – April 202412 Leasing Summary Consistent Contractual Rent Escalations Generate Dependable Internal Growth Lease Escalation Frequency Lease Escalation Type 1. Based on cash ABR as of December 31, 2023. 2. Represents the weighted average annual escalation rate of the entire port
Slide 14: Same-Store Portfolio Performance
Investor Presentation – April 202413 1. All properties owned, excluding new sites under construction, for the entire same-store measurement period, which is October 1, 2022 through December 31, 2023. The same-store portfolio for 4Q’23 is comprised of 1,451 properties and represents 72% of our total
Slide 15: Tenant Financial Reporting Requirements
Investor Presentation – April 202414 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 98.8% Corporate-Level Fina
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 – April 202416 4.6x 4.7x 4.4x 4.5x 4.1x 4.2x 3.7x 4.0x5 3.2x3 .0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 PF Conservative and Flexible Debt Structure 100% Unsecured Debt – 100% Unencumbered Asset Base – Minimal Near-Term Debt Maturities – I
Slide 18: Consistently Strong Liquidity to Fund Growth
Investor Presentation – April 202417 Consistently Strong Liquidity to Fund Growth ($mm) $467 $408 $894 $694 $775 $634 $990 $780 $1,078 $0 $200 $400 $600 $800 $1,000 $1,200 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 PF Total Liquidity Investment Volume Strong Liquidity to Drive Leading AFFO/sh G
Slide 19: Peer Comparison
Peer Comparison
Slide 20: Differentiated Net Lease Investment Opportunity
Investor Presentation – April 202419 4.9x 3.8x 3.4x 2.9x 2.6x NR NR NR NR 70% 68% 54% 37% 32% 27% 21% 20% 18% 2% 4% 6% 8% 9% 11% 12% 12% 12% 98% 93% 90% 70% 37% 36% 28% 24% 15% Differentiated Net Lease Investment Opportunity Portfolio Mix and Underlying Fundamentals are Favorable Relative to Peers S
Slide 21: 2024E AFFO per Share Multiple and Growth vs Peers
Investor Presentation – April 202420 2.5x 4.0x 4.6x 4.7x 5.0x 5.4x 5.5x 5.6x 5.7x 14.6x 13.9x 13.7x 13.7x 12.6x 12.4x 11.9x 11.7x 10.6x 5.4% 4.0% 3.7% 3.4% 2.8% 2.5% 0.6% (0.6%) NA Source: Public filings, FactSet and S&P Capital IQ. Note: Market data as of April 4, 2024. 1. 2024E AFFO per share mult
Slide 22: Commitment to ESG
Commitment to ESG
Slide 23: Environmental, Social and Governance
Investor Presentation – April 202422 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 Enviro
Slide 24: Financials
Financials
Slide 25: Financial Summary – 4Q'23 Consolidated Statements of Operations
Investor Presentation – April 202424 Financial Summary – 4Q'23 Consolidated Statements of Operations Three Months Ended December 31, Year Ended December 31, (in thousands, except share and per share data) 2023 2022 2023 2022 (unaudited) (unaudited) (audited) (audited) Revenues: Rental revenue1,2 $ 9
Slide 26: Financial Summary – 4Q'23 FFO and AFFO
Investor Presentation – April 202425 Financial Summary – 4Q'23 Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) Three Months Ended December 31, Year Ended December 31, (unaudited, in thousands except per share amounts) 2023 2022 2023 2022 Net income $ 49,271 $ 35,521 $ 191,415 $
Slide 27: Financial Summary – 4Q'23 Consolidated Balance Sheets
Investor Presentation – April 202426 Financial Summary – 4Q'23 Consolidated Balance Sheets (in thousands, except share and per share amounts) December 31, 2023 December 31, 2022 ASSETS (audited) (audited) Investments: Real estate investments, at cost: Land and improvements $ 1,542,302 $ 1,228,687 Bu
Slide 28: Financial Summary – 4Q'23 GAAP Reconciliations to EBITDAre, NOI
Investor Presentation – April 202427 Financial Summary – 4Q'23 GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI and Estimated Run Rate Metrics Three Months Ended (unaudited, in thousands) December 31, 2023 Net income $ 49,271 Depreciation and amortization 27,440 Interest expense 15,760 Interest
Slide 29: Market Capitalization, Debt Summary and Leverage Metrics
Investor Presentation – April 202428 Financial Summary – 4Q'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 (for 2027 and 2028 Term Loans) or 95b
Slide 30: Glossary
Glossary
Slide 31: Glossary Supplemental Reporting Measures
Investor Presentation – April 202430 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”) a
Slide 32: Glossary Supplemental Reporting Measures
Investor Presentation – April 202431 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 impair
Slide 33: Glossary Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI
Investor Presentation – April 202432 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 quar
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