Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (November 2022)
29 slides from Essential Properties Realty Trust's investor presentation, Nov 14, 2022
Slide 1: Investor Presentation - November 2022
Investor Presentation - November 2022
Slide 2: Disclaimer
Investor Presentation – November 20221 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: Investment Highlights
Investor Presentation – November 20222 Investment Highlights • Newly Assembled Portfolio of Net Lease Properties • Long Duration Leases with Solid Unit-Level Rent Coverage • Concentrated on Service-Oriented and Experience-Based Tenants • Fungible and Smaller-Scale Single-Tenant Properties • Discipli
Slide 4: Healthy Net Lease Portfolio, Well Positioned Balance Sheet
Investor Presentation – November 20223 Healthy Net Lease Portfolio1 • Stable Portfolio: 99.8% leased; average same-store cash rent growth of 1.7% over the last four quarters • Strong Coverage: Unit-level coverage of 4.2x with 99% of ABR required to report unit-level P&Ls • De-Minimis Near-Term Expir
Slide 5: Service-Oriented & Experience-Based Industries
Investor Presentation – November 20224 Service-Oriented & Experience-Based Industries Sale-Leaseback Transactions with Middle-Market Tenants Small-Scale Net Leased Properties ✓ E-commerce resistant ✓ Profit centers essential to tenant’s operations ✓ Customers must visit to receive service/experience
Slide 6: Seek to be the Capital Provider of Choice
Investor Presentation – November 20225 Seek to be the Capital Provider of Choice Maintain Direct Relationships with Our Tenants and Actively Seek to Leverage Our Relationships to Identify New Investment Opportunities Relationship-Based Sourcing 1. Percentage of portfolio cash ABR as of September 30,
Slide 7: New Vintage Portfolio is Focused on Targeted Industries
Investor Presentation – November 20226 New Vintage Portfolio is Focused on Targeted Industries Our Portfolio is the Result of a Disciplined Adherence to Investing in Properties Leased to Service-Oriented and Experience-Based Businesses with Unit-Level Reporting Investment Properties (#)1 1,572 Squar
Slide 8: Top Tenant Concentration
Investor Presentation – November 20227 Top 10 Tenant Concentration Our Top 10 Tenants Operate 204 Properties and Represent 19.4% of Cash ABR Diversification by Industry 1. Represents tenant, guarantor or parent company. 2. Property count includes 146 properties that secure mortgage loans receivable
Slide 9: Disciplined Underwriting Leading to Healthy Portfolio Metrics
Investor Presentation – November 20228 Disciplined Underwriting Leading to Healthy Portfolio Metrics 98.5% of Unit-Level Reporting Provides (Near) Real-Time Tenant Visibility Tenant Financial Reporting Requirements % of Cash ABR by Unit-Level Coverage Tranche1 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Slide 10: Established and Proven Investment Infrastructure
Investor Presentation – November 20229 $244,078 $197,816 $223,186 $230,755 $322,203 $237,795 $175,738 $195,454 $0 $40,000 $80,000 $120,000 $160,000 $200,000 $240,000 $280,000 $320,000 $360,000 In v e s tm e n t A c ti v it y ( $ 0 0 0 s ) Established and Proven Investment Infrastructure Scalable Pla
Slide 11: Active Asset Management
Investor Presentation – November 202210 $39,042 $25,197 $19,578 $10,089 $4,466 $18,443 $26,091 $35,513 $0 $10,000 $20,000 $30,000 $40,000 D is p o s it io n A c ti v it y ( $ 0 0 0 s )1 Active Asset Management Proactive Asset Management Mitigates Risk and Maximizes Risk-Adjusted Returns 1. Includes
Slide 12: Leasing Summary and Contractual Rent Escalations
Investor Presentation – November 202211 1. Based on cash ABR as of September 30, 2022. 2. Represents the weighted average annual escalation rate of the entire portfolio as if all escalations occur annually. For leases in which rent escalates by the greater of a stated fixed percentage or CPI, we hav
Slide 13: Debt Maturity Schedule
Investor Presentation – November 202212 $600 $200 $430 $400 $400 0 100 200 300 400 500 600 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 M a tu ri n g P ri n c ip a l B a la n c e ( $ m m ) Revolving Credit Facility Availability 2024 Unsecured Term Loan 2027 Unsecured Term Loan Public Unsecured
Slide 14: Low Leverage and Ample Liquidity to Drive Robust AFFO/sh Growth
Investor Presentation – November 202213 5.0% 4.6% 4.3% 3.2% 3.1% 2.7% 2.4% 2.3% 1.9% 1.1% 2.5x 3.5x 4.4x 4.8x 4.9x 5.2x 5.2x 5.3x 5.4x Low Leverage and Ample Liquidity to Drive Robust AFFO/sh Growth Strong Liquidity and Balance Sheet Capacity to Support External Growth • 100% Unsecured Balance Sheet
Slide 15: Differentiated Net Lease Investment Opportunity
Investor Presentation – November 202214 4% 4% 8% 8% 12% 14% 15% 16% 17% 21% 76% 76% 54% 37% 33% 28% 22% 19% 18% 17% 4.7x 4.2x 4.0x 3.1x 2.8x 2.8x 2.7x NR NR NR STOR EPRT FCPT BNL SRC O GTY ADC NNN NTST 100% 100% 93% 71% 67% 46% 46% 39% 28% 13% FCPT GTY EPRT NNN STOR SRC O BNL ADC NTST Differentiated
Slide 16: AFFO per Share Multiples and Growth vs. Peers
Investor Presentation – November 202215 5.0% 4.6% 4.3% 3.2% 3.1% 2.7% 2.4% 2.3% 1.9% 1.1% 21.4% 13.7% 10.8% 9.9% 8.9% 8.3% 8.1% 7.4% 5.4% 5.1% 17.6x 16.3x 16.0x 15.6x 15.2x 13.9x 13.8x 13.5x 12.2x 11.0x Source: Public filings, FactSet and SNL. Note: Market data as of November 11, 2022. 1. 2022E AFFO
Slide 17: Commitment to ESG
+ Commitment to ESG
Slide 18: Our Commitment, Progress and Goals
Investor Presentation – November 202217 Our Commitment Our Progress Our Goals • Reducing our Carbon Footprint Implementing sustainability upgrades at our properties to reduce our carbon footprint and specifically our Scope 3 emissions • Expanding our Relationship with our Tenants through Sustainabil
Slide 19: Workforce and Social Commitment
Investor Presentation – November 202218 • Providing a dynamic work environment, rewarding work experience and career development for our team • Providing a positive work environment for everyone, valuing equal opportunity and fair employment practices • Strive to offer our employees attractive and e
Slide 20: Board Composition and Governance Practices
Investor Presentation – November 202219 Avg. Tenure 3.5 yrs. 7 Independent 38% Female 13% Diverse Board Practices: • Independent Chairman of the Board • Annual elections for all directors • All committees are fully independent • Opted out of MUTA • Opted out of control share acquisition provisions o
Slide 21: 3Q'22 Financials
+ 3Q’22 Financials
Slide 22: Financial Summary – 3Q'22 Consolidated Statements of Operations
Investor Presentation – November 202221 Financial Summary – 3Q’22 Consolidated Statements of Operations 1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $210, $233, $526 and $464 for the three and nine months ended September 30, 2022 and 2021,
Slide 23: Financial Summary – 3Q'22 FFO and AFFO
Investor Presentation – November 202222 Financial Summary – 3Q’22 Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) 1. During the nine months ended September 30, 2022, includes debt extinguishment costs associated with the Company's restructuring of its credit and term loan facil
Slide 24: Financial Summary – 3Q'22 Consolidated Balance Sheets
Investor Presentation – November 202223 Financial Summary – 3Q’22 Consolidated Balance Sheets (in thousands, except share and per share amounts) September 30, 2022 December 31, 2021 ASSETS (unaudited) (audited) Investments: Real estate investments, at cost: Land and improvements $ 1,163,660 $ 1,004,
Slide 25: Financial Summary – 3Q'22 GAAP Reconciliations to EBITDAre and NOI
Investor Presentation – November 202224 Financial Summary – 3Q’22 GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI and Estimated Run Rate Metrics 1. These adjustments are made to reflect EBITDAre, NOI and Cash NOI as if all re-leasing activity, investments in and dispositions of real estate made
Slide 26: Market Capitalization, Debt Summary and Leverage Metrics
Investor Presentation – November 202225 Financial Summary – 3Q’22 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 and SOFR premium of 10bps. 2. Our
Slide 27: Glossary Supplemental Reporting Measures
Investor Presentation – November 202226 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 28: Glossary Supplemental Reporting Measures
Investor Presentation – November 202227 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 imp
Slide 29: Glossary Supplemental Reporting Measures
Investor Presentation – November 202228 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 q
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