Slide 1: Investor Presentation November 2024
Investor Presentation November 2024 1
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: Investment Highlights & Business Update
Investment Highlights & Business Update High Credit Quality & Resilient Net Lease Portfolio ✓ Focused on growing portfolio with high quality tenants that 75% 88% offer strong credit profiles and provide consistent performance Investment Grade (IG) and Necessity, Discount, and through various economi
Slide 4: Portfolio Overview
Portfolio Overview High-Quality, Diversified Portfolio Consisting of 60.9% Investment Grade Tenants Across 45 States Key Portfolio Stats Top 10 Tenants by % of ABR Investments1 671 States 45 BBB 11.2% Portfolio Square Feet (in millions) 12.1 Tenants 93 BBB 6.5% Retail Sectors 26 % Occupancy2 100% A
Slide 5: Portfolio Diversification In Defensive Retail Sectors
Portfolio Diversification In Defensive Retail Sectors Nationally Diversified Portfolio Primarily Comprised of Recession Resilient Retail Tenants 48.8% 21.6% Top Industries Necessity Discount 1 Dollar Stores: 16.6% 2 Grocery: 13.5% 88.1% 3 Home 17.7% ABR 11.9% Improvement: 11.8% Necessity Service Dis
Slide 6: Consistent Investment Approach
Consistent Investment Approach Disciplined and Deliberate Portfolio Construction Investment Philosophy Portfolio Strategy Current Metrics Defensive Tenancy in Necessity-Based and Primarily 88.1% E-commerce-Resistant Retail Industries1 75.3% Resilient, Cycle-Tested Investment Grade Credit (60.9% Inve
Slide 7: Acquisition Strategy – Bell Curve Investing
Acquisition Strategy – Bell Curve Investing Acquisition Strategy is Focused on Inefficiently Priced Assets Where Risk Adjusted Returns are Higher Efficiently Priced Inefficiently Priced Assets Assets TYPICAL TRANSACTION TYPICAL TRANSACTION - Well marketed transaction - Not highly marketed - Straight
Slide 8: Stringent Three-Part Underwriting Process
Stringent Three-Part Underwriting Process Our Three-Pronged Approach Results in Superior Downside Protection A B C Level of Underwriting Emphasis Tenant Credit Underwriting Real Estate Valuation • Evaluate corporate level Unit-Level financials Profitability • Review underlying key real • Assess busi
Slide 9: Strong Tenant Credit Underwriting
Strong Tenant Credit Underwriting Credit-Focused Underwriting Approach Drives Stable Revenue and Long-Term Return on Investment Investment Grade Investment Grade Sub-IG (rated) & (rated) Profile (unrated) Sub-IG Profile (unrated) • Validated financial strength and • Well-capitalized retailers • IG-c
Slide 10: Real Estate Valuation
Real Estate Valuation Real Estate Closely Follows Credit as a Top Priority: We Utilize a Ground-Up Framework Rooted in Real Estate Fundamentals to Underpin Valuation and Further Quantify the Upside Potential of an Investment Market-Level Considerations Property-Level Considerations • Vacancy analysi
Slide 11: Unit-Level Profitability
Unit-Level Profitability Assess Unit-Level Financial Performance to Focus on Properties with Strong Rent Coverage and Higher Variability in Operating Costs 1 2 3 Obtain Financial Info Perform Financial Analysis Assess Investment Merits • Provides clarity into • Analyze store demand • Determine wheth
Slide 12: History of Sourcing Investments at Attractive Yields
History of Sourcing Investments at Attractive Yields Consistently Invested at Above-Market Yields Despite Focus on High-Quality Tenants Sourcing Volume Since 3Q’20 Volume $(000)s $2,015 $5,511 $2,677 $1,159 $4,207 Investment Grade % 64.3% 67.1% NA 54.7% NA Investment Grade Profile1 % 12.2% NA NA NA
Slide 13: Investment Activity
Investment Activity Summary Details $160,000 $151,555 $140,000 $128,615 $129,207 $119,128 Gross Investment Activity $115,321 $117,455 $115,795 $120,000 $104,069 $100,000 ($000s) $80,000 $60,000 $40,000 $20,000 $0 1 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 Investments 4Q'22 1Q'23 2Q'23 3Q'23 4
Slide 14: Disposition Activity
Disposition Activity Summary Details $27,000 $24,105 $24,000 $21,600 $21,000 Dispositions Activity $18,000 $15,995 $15,907 ($000s) $15,000 $13,543 $12,294 $12,707 $12,000 $9,000 $6,000 $4,060 $3,000 $0 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 Dispositions 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2
Slide 15: Active Asset Management
Active Asset Management Continuously Track Property Performance to Stratify Portfolio and Ensure a Secure Rental Stream Strategic Recycling Active Monitoring Leverage 1031 exchange Periodically review all transfers where possible to properties for changes in access deep, non- performance, credit, an
Slide 16: Conservative Balance Sheet with Improved Liquidity
Conservative Balance Sheet with Improved Liquidity Balance Sheet Positioned for Growth Given Strong Liquidity Profile and Low Leverage Position Abundant Liquidity to Support Growth: Debt Maturity Schedule – Pro Forma2,3 $464.1 million in total liquidity1 $400 $600 Well-Staggered Debt Maturity Profil
Slide 17: Portfolio Highlights Relative to Peers
Portfolio Highlights Relative to Peers NTST’s Stable & Predictable Cash Flow Profile Drives Superior Risk-Adjusted Returns Investment Grade % Portfolio Composition1 68% Service Discount Necessity 61% 57% 3% 49% 39% 10% 5% 97% 7% 29% 80% 16% 17% 22% 56% 47% 27% 0% 18% ADC NTST FCPT O NNN EPRT FCPT NT
Slide 18: Multiple and Earnings Growth Comparison
Multiple and Earnings Growth Comparison Relative Valuation and Growth Remains Stable 2025E AFFO per Share Growth1 2024E AFFO per Share Multiple2 18.2x 17.9x 7.7% 15.9x 14.0x 13.5x 12.9x 12.1x 11.8x 4.1% 4.1% 3.6% 3.5% 3.3% 3.2% 2.7% Net Debt + Pref. / EBITDA3 2025E AFFO per Share Multiple4 17.2x 16.
Slide 19: Applied Cap Rate and NAV Analysis
Applied Cap Rate and NAV Analysis Strong Upside Potential Given Relative Valuation Applied Nominal Cap Rate – Sensitivity Analysis Peer Benchmarking Three Months Ended, Implied G&A Adjusted 2024E AFFO (unaudited, in millions) Cap Rate Implied Cap Rate2 Multiple September 30, 2024 NOI - Property $34.
Slide 20: Case Studies
Case Studies 20
Slide 21: Case Study: Loan Strategy
Case Study: Loan Strategy Investment Stats: Close Date: March 2023 Loan Amount: $46.1 million Interest Rate: 9.3% Location: Multiple – Southeast Term at Close: 3 years Parent Credit Rating: A / Baa2 Investment Highlights • Loan provided the borrower funding to acquire a 49 property Speedway portfoli
Slide 22: Case Study: Breakup Strategy
Case Study: Breakup Strategy Investment Stats: Close Date: July 2020 STATS: INVESTMENT INVETMENT STATS: Purchase Price: $17.0 million Cash Cap Rate: 6.6% Location: Tupelo, MS Term at Close: 12 years Credit Rating: AA / Aa2 Investment Highlights • Acquisition of one Walmart Supercenter and one Sam’s
Slide 23: Case Study: Blend & Extend
Case Study: Blend & Extend Investment Stats: Close Date: March 2021 INVESTMENT STATS: Purchase Price: $6.2 million Post-B&E Cash Cap Rate: 6.9% Location: Olympia, WA Term at Close of B&E: 10.5 Years Credit Rating: BBB / Baa1 Investment Highlights • NTST negotiated a new 10-year lease with only a 7.4
Slide 24: Corporate Responsibility
Corporate Responsibility 24
Slide 25: Governance
Governance We are committed to acting with honesty and integrity and conducting all corporate opportunities in an ethical manner. Governance Highlights Board Independence and Diversity No poison pill or differential Annual Director voting stock structure to Elections chill shareholder participation
Slide 26: Social Responsibility
Social Responsibility Human capital management is the cornerstone of our ESG and corporate strategy. We believe in the value of a diverse workforce and inclusive culture. Workforce Diversity Benefits 401K Plan Leave 100% company match of up to a Ten weeks of paid maternity leave 3% contribution, and
Slide 27: Environmental Responsibility
Environmental Responsibility We are committed to fulfilling our responsibility as an outstanding corporate citizen. Corporate Sustainability Initiatives from Tenants Greenhouse Gas Emissions ✓ 18 of our top 20 tenants have corporate sustainability ✓ We completed scope 1 and 2 greenhouse gas initiati
Slide 28: Financial Information and Non-GAAP Reconciliations
Financial Information and Non-GAAP Reconciliations 28
Slide 29: Consolidated Statements of Operations
Consolidated Statements of Operations (unaudited, dollars in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 REVENUES Rental revenue (including reimbursable) $ 38,172 $ 31,167 $ 110,226 $ 89,347 Interest income on loans receivabl
Slide 30: Funds From Operations and Adjusted Funds From Operations
Funds From Operations and Adjusted Funds From Operations (unaudited, dollars in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 GAAP Reconciliation: Net (loss) income $ (5,322) $ 4,239 $ (6,576) $ 4,928 Depreciation and amortizat
Slide 31: EBITDAre and Adjusted EBITDAre
EBITDAre and Adjusted EBITDAre (unaudited, dollars in thousands) Three Months Ended September 30, 2024 2023 GAAP Reconciliation: Net (loss) income $ (5,322) $ 4,239 Depreciation and amortization of real estate 20,360 15,726 Amortization of lease-related intangibles (170) (121) Non-real estate deprec
Slide 32: Net Operating Income
Net Operating Income (unaudited, dollars in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 GAAP Reconciliation: Net (loss) income $ (5,322) $ 4,239 $ (6,576) $ 4,928 General and administrative 4,287 5,133 15,266 15,299 Depreciation and amortization 20
Slide 33: Consolidated Balance Sheets
Consolidated Balance Sheets (unaudited, dollars in thousands, except per share data) September 30, 2024 December 31, 2023 ASSETS Real estate, at cost: Land $ 525,485 $ 460,896 Buildings and improvements 1,346,095 1,149,809 Total real estate, at cost 1,871,580 1,610,705 Less accumulated depreciation
Slide 34: Debt, Capitalization, and Financial Ratios
Debt, Capitalization, and Financial Ratios (unaudited, dollars in thousands) As of September 30, 2024 Debt Summary Fully Extended Maturity Principal Balance Interest Rate(1) Remaining Capacity Available Term (years) Unsecured revolver(2) August 11, 2027 $ 150,000 5.94% $ 249,850 2.9 Unsecured term l
Slide 35: Debt, Capitalization, and Financial Ratios (cont'd)
Debt, Capitalization, and Financial Ratios (cont’d) (unaudited, dollars in thousands) Net Debt September 30, 2024 Principal amount of total debt $ 783,245 Less: Cash, cash equivalents and restricted cash (28,750) Net Debt $ 754,495 Less: Net value of unsettled forward equity(1) (185,474) Adjusted Ne
Slide 36: Non-GAAP Measures and Definitions
Non-GAAP Measures and Definitions FFO, Core FFO, and AFFO FFO means funds from operations. It is a non-GAAP measure defined by NAREIT as net (loss) income (computed in accordance with GAAP), excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and
Slide 37: Non-GAAP Measures and Definitions (cont'd)
Non-GAAP Measures and Definitions (cont’d) EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre EBITDA is defined as earnings before interest expense, income tax expense, and depreciation and amortization. EBITDAre is the NAREIT definition of EBITDA (as defined above), but it is fur
Slide 38: Non-GAAP Measures and Definitions (cont'd)
Non-GAAP Measures and Definitions (cont’d) Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run
Slide 39: Non-GAAP Measures and Definitions (cont'd)
Non-GAAP Measures and Definitions (cont’d) Investments are lease agreements in place at owned properties, properties that have leases associated with mortgage loans receivable, developments where rent commenced, interest earning developments, or in the case of master lease arrangements each property