Netstreit Corp. · NYSE:NTST
Netstreit — Investor Presentation (February 2023)
30 slides from Netstreit's investor presentation, Feb 23, 2023
Slide 1: Investor Presentation February 2023
1 Investor Presentation February 2023
Slide 2: Disclaimer
Disclaimer 2 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 b
Slide 3: Investment Highlights
Investment Highlights 3 Source: Company data. Data represents portfolio and balance sheet as of 12/31/2022 unless otherwise noted. 1. Figures represent percentage of ABR unless otherwise noted. 2. Represents tenants with investment grade credit metrics (more than $1.0 billion in annual sales and a d
Slide 4: Stable & Predictable Cash Flow Profile vs. Peers
3.6% 6.2% 8.1% 9.4% 13.3% 15.2% 18.8% 13.9 9.5 8.3 10.4 8.8 10.4 9.5 EPRT NTST FCPT SRC ADC NNN O Lease Rollover % ('23-'26) WALT 61% 68% 63% 33% 20% 18% 0% ADC NTST FCPT O SRC NNN EPRT 4 Investment Highlights Source: Company Filings as of 12/31/2022. 1. ADC, FCPT, O, NNN, and EPRT as of 12/31/2022.
Slide 5: Investment Highlights – Portfolio Overview
10.1% 6.5% 6.2% 5.5% 4.6% 3.9% 3.8% 3.6% 3.4% 3.2% Investment Highlights – Portfolio Overview 5 Sources: Company data. Portfolio data represents portfolio as of 12/31/2022. 1. Excludes mortgage loan receivables. 2. Represents tenants with investment grade credit metrics (more than $1.0 billion in an
Slide 6: Investment Highlights - Portfolio Diversification In Defensive Retail Sectors
Discount Retail: Home Improvement: Dollar Stores: Grocery: Drug Stores & Pharmacies: Investment Highlights - Portfolio Diversification In Defensive Retail Sectors Source: Company data. Portfolio data represents portfolio as of 12/31/2022. All figures represent percentage of portfolio ABR. Note: Due
Slide 7: NTST Portfolio Transformation – Growth & Upgrade
NTST Portfolio Transformation – Growth & Upgrade 7 NETSTREIT has prudently allocated offering proceeds and recycled capital to grow the scale of its asset base while also improving portfolio quality through further diversification and increased exposure to defensive credit tenancy Source: Company Fi
Slide 8: Investment Highlight – Strong External Growth Profile
$74 $151 $103 $81 $88.2 $117 $90 $151 $138 $133 $131 $104 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 Completed Investments New Quarterly Investments Investment Highlight – Strong External Growth Profile 360 Completed Investments 8 Source: Company data. 1. Includes comple
Slide 9: Foundation to Building a High-Quality Net Lease Portfolio
NETSTREIT’s Foundation to Building a High-Quality Net Lease Portfolio 9 Established Investment Guideposts 1 Differentiated and Multi- Faceted Acquisition Process 2 Stringent Real Estate & Tenant Underwriting 3 Active Asset Management 4 Strong Balance Sheet & Liquidity 5 Focus on ESG6 Platform Scaled
Slide 10: Portfolio Strategy / Investment Philosophy
Portfolio Strategy / Investment Philosophy 10 Source: Company data. Portfolio data represents portfolio as of 12/31/2022. 1. Portfolio statistics by percentage of ABR. Current MetricsInvestment Philosophy Portfolio Strategy Defensive Tenancy in Necessity-Based and E-commerce-Resistant Retail Industr
Slide 11: Acquisition Strategy – Bell Curve Investing
Acquisition Strategy – Bell Curve Investing 11 Inefficiently Priced Assets “Market-Taker” Assets TYPICAL TRANSACTION - Well marketed transaction - Straight-forward transaction - Ability to finance transaction - Highly competitive, well capitalized investors TYPICAL TRANSACTION - Not highly marketed
Slide 12: Acquisition Execution – Generating Robust Deal Pipelines
Acquisition Execution – Generating Robust Deal Pipelines 12 The team’s extensive experience in the net lease space, combined with industry relationships, provides attractive acquisition opportunities Utilization of a multi-faceted acquisition strategy to deploy capital allows greater flexibility to
Slide 13: Stringent Underwriting Process – Three-Part Process
Stringent Underwriting Process – Three-Part Process 13 NETSTREIT leverages a disciplined, three-pronged approach to underwriting potential acquisitions which positions the Company to benefit from superior downside protection on its investments REAL ESTATE VALUATION UNIT-LEVEL PROFITABILITY• Review u
Slide 14: Strong Tenant Credit Underwriting
Strong Tenant Credit Underwriting – Drives Consistent Revenue Growth 14 NETSTREIT employs a credit-focused underwriting strategy for all tenants that drives stable revenue and long-term return on investment Source: Company data. Portfolio data represents portfolio as of 12/31/2022. 1. IG stands for
Slide 15: Real Estate Valuation
Real Estate Valuation 15 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 16: Unit-Level Profitability
Unit-Level Profitability 16 In assessing unit-level financial performance, NETSTREIT focuses on mission-critical properties with strong rent coverage and higher variability in operating costs Obtain Financial Information Perform Financial Analysis 2 Assess Investment Merits 1 3 • Provides clarity in
Slide 17: Active Asset Management
Active Asset Management 17 NETSTREIT continuously tracks property performance and stratifies the portfolio to achieve consistent cash flows and balanced growth for its investors Source: Company data. Portfolio data represents portfolio as of 12/31/2022. Since inception, the Company has disposed of 6
Slide 18: Strength of Balance Sheet Facilitates Growth & Strong Cash Flow
Strength of Balance Sheet Facilitates Growth & Strong Cash Flow OVER $1 BILLION OF CAPITAL RAISED IN 2022 18 January 2022 Forward Equity Raise: ▪ 10.4 million shares at $22.25 price to public ($230 million in gross proceeds) ▪ Fully settled as of September 30, 2022 August 2022 Forward Equity Raise:
Slide 19: Fortified Balance Sheet Positively Positions Us for Future Investment
Fortified Balance Sheet Positively Positions Us for Future Investment Opportunities BALANCE SHEET 19 Liquidity: ▪ $287 million of unused revolver capacity ▪ $141 million of unsettled forwards ▪ $71 million of unrestricted cash ▪ TOTAL LIQUIDITY: $499 million Leverage: ▪ 5.0x Net Debt to Adjusted EBI
Slide 20: Corporate Responsibility
Corporate Responsibility 20 ▪ Dedication to reducing the Company’s ecological footprint ▪ Endorsement of renewable resources and encouragement of tenants to practice leading sustainability initiatives ▪ New corporate headquarters is LEED v4 O+M: EB Gold Certified ▪ Implementation of energy conservat
Slide 21: Corporate Responsibility – UN Sustainable Development Goals
Corporate Responsibility 21 NETSTREIT aligns its corporate responsibility efforts to support that of the United Nations Sustainable Development Goals (SDGs). Promote health and well-being in our offices. Company provides insurance benefits to our employees and family. Company provides employees with
Slide 22: Environmental Responsibility
Environmental Responsibility 22 Our top tenants have corporate sustainability programs that govern their business operations. 18 of our top 20 tenants in our portfolio have ESG commitments Source: Company data. Portfolio data represents portfolio as of 12/31/2022. Corporate sustainability programs f
Slide 23: Environmental Responsibility – Reducing Interest Costs
Environmental Responsibility – Reducing Interest Costs 23 We can achieve up to 2.5 bps pricing adjustment if we meet certain annual key performance indicators set by our sustainability agent. The KPI is based on the percentages of our portfolio ABR that is derived by tenants who have set targets of
Slide 24: Social Responsibility – Diversity Strengthens Workforce
Social Responsibility – Diversity Strengthens Workforce 24 Human Capital Management is the Cornerstone of our ESG and Corporate Strategy. We believe in the value of a diverse workforce and inclusive culture. 401K Plan 100% company match of up to a 3% contribution, and 50% of up to the next 2% Insura
Slide 25: Corporate Governance
Corporate Governance 25 Source: Company data. We are committed to acting with honesty and integrity and conducting all corporate opportunities in an ethical manner Annual Director Elections Majority Voting Standard For Election of Directors Director Resignation Policy Annual Director and Committee A
Slide 26: Senior Leadership with Deep Expertise
Senior Leadership with Deep Expertise 26 Source: Company data. Seasoned leadership team with significant net lease retail and public company experience Mark Manheimer President, CEO & Director Mr. Manheimer leads the overall strategy, acquisitions, underwriting, and asset management for the company
Slide 27: Key Personnel
Key Personnel 27 Source: Company data. 1. First Potomac Realty Trust was publicly traded on the NYSE until October 2017. Experienced team of professionals drive NETSTREIT’s day to day operations Jeff Fuge Senior Vice President, Acquisitions • Joined in December 2019 • Prior experience includes: – Di
Slide 28: Board of Directors
Board of Directors Independent Director ▪ Compensation Committee Chair ▪ Investment Committee Chair ▪ Audit Committee Member Background ▪ Formerly AEW Capital Management, Head of AEW Real Estate Securities ▪ Formerly Landmark Land Company, VP Matt Troxell, CFA Non-Independent Director ▪ Expected to
Slide 29: Definitions
Definitions 29 ABR means annualized base rent. ABR is calculated by multiplying (i) cash rental payments (a) for the month ended December 31, 2022 (or, if applicable, the next full month's cash rent contractually due in the case of rent abatements, rent deferrals, recently acquired properties and pr
Slide 30: Investor Relations
30 Investor Relations ir@netstreit.com 972-597-4825