Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (March 2019)
31 slides from Essential Properties Realty Trust's investor presentation, Mar 18, 2019
Slide 1: Investor Presentation – March 2019
Investor Presentation – March 2019
Slide 2: Disclaimer
Disclaimer 242, 242, 242 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,” “plan,” "will," “estim
Slide 3: Investment Highlights
Investment Highlights 242, 242, 242 Service and Experiential Cash ABR1 91.1% Average Investment Per Property $2.0mm Internally-Originated Sale-Leasebacks1,2 82.2% Average Quarterly Investment Activity3 $131mm Based on cash ABR as of December 31, 2018. Percentage of portfolio cash ABR that was attrib
Slide 4: Experienced and Proven Management Team
Experienced and Proven Management Team Pete Mavoides President & CEO +20 years of experience in the single-tenant net lease industry and has overseen $8 billion of aggregate acquisitions Previously served as President and Chief Operating Officer of Spirit Realty Capital (SRC) and was there from Sept
Slide 5: Building Essential Properties: Our History
1Q 2019 Building Essential Properties 242, 242, 242 Our History Cumulative Acquisition Volume1 Partnered with Eldridge Industries to build net lease investment platform Feb 2016 Jun 2016 Aug 2016 Dec 2016 Jan 2017 Feb 2017 Jul 2017 Jun 2018 Mar 2016 Commenced investment activities with a $280mm port
Slide 6: Service-Oriented & Experience-Based Industries
242, 242, 242 242, 242, 242 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 Longer lease ter
Slide 7: Seek to be the Capital Provider of Choice
242, 242, 242 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 242, 242, 242 Relationship-Based Sourcing Percentage of portfolio cash ABR as of December 31, 2018 that was
Slide 8: New Vintage Portfolio is Focused on Targeted Industries
242, 242, 242 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 (#)1 677 Square Footage (mm) 6.0 Tenants
Slide 9: Top Tenant Concentration
Top 10 Tenant Concentration Essential Has 161 Tenants Across 677 Properties with the Top 10 Representing 181 Properties and 33.1% of Cash ABR 242, 242, 242 Top 10 Tenant1 Properties % of Cash ABR 77 5.0% 5 4.1% 13 3.9% 15 3.6% 5 3.4% 13 2.9% 26 2.7% 3 2.5% 19 2.5% 5 2.5% Top 10 Tenants 181 33.1% Tot
Slide 10: Net Lease Risk Factor Mitigation by Essential Properties
242, 242, 242 Net Lease Risk Factor Mitigation by Essential Properties Challenged Retail Categories No exposure to big-box apparel, electronics, sporting goods or other soft goods retailers At-Risk Retail Categories No exposure to pharmacy, dollar stores or discount retailers; de minimis exposure to
Slide 11: Disciplined Underwriting Leading to Healthy Portfolio Metrics
Disciplined Underwriting Leading to Healthy Portfolio Metrics 97.5% of Unit-Level Reporting Provides (Near) Real-Time Tenant Visibility 242, 242, 242 Tenant Financial Reporting % of Cash ABR by Unit-Level Coverage2 Long Weighted Remaining Lease Term Healthy Rent Coverage Ratios1 Only 0.7% of cash AB
Slide 12: Established and Proven Investment Infrastructure
Established and Proven Investment Infrastructure Scalable Platform Allows for Consistent and Attractive Investment Activity without Sacrificing Underwriting Standards and Investment Focus 242, 242, 242 Investment activity has averaged $131mm per quarter over the last eight quarters Cash ABR for the
Slide 13: Active Asset Management: Dispositions at Attractive Cap Rates
Dispositions Have Traded at Attractive Cap Rates: Since inception in 2016, we have sold 109 properties for over $130mm and achieved a weighted average cash cap rate of 6.6% on the sale of 71 leased properties7 Diverse Mix of Industries Represented in 2018 Sales: No single industry was overrepresente
Slide 14: Growth Oriented Balance Sheet Supported by Scalable Infrastructure
Growth Oriented Balance Sheet Supported by Scalable Infrastructure $1.9 Billion Total Capitalization1,2 Selected Credit Ratios 242, 242, 242 Share price of $18.10 as of March 15, 2019. We adjusted our 4Q’18 balance sheet to include closed net investment activity of approximately $53.0 million as of
Slide 15: Debt Structure Allows for Capital Flexibility
Debt Structure Allows for Capital Flexibility Debt Maturity Schedule1,2 242, 242, 242 Maturity figures for our secured debt are based off of our anticipated repayment schedule. The Series 2016-1 notes mature in November 2046 but have an anticipated repayment date of November 2021. The Series 2017-1
Slide 16: Differentiated Net Lease Investment Opportunity
Differentiated Net Lease Investment Opportunity Strong Unit-Level Coverage2 Service-Oriented & Experience-Based Tenant Profile Limited Immediate-Term Lease Maturities Smaller-Scale Net Leased Properties ü ü ü ü Source: Public filings. Note: Essential Properties data as of February 26, 2019. Public n
Slide 17: Public Net Lease REIT Benchmarking
Public Net Lease REIT Benchmarking Leverage 2019E AFFO per Share Multiple1 2019E AFFO per Share Growth2 Dividend Yield3 Source: Public filings, FactSet and SNL. Note: Market data as of March 15, 2019. Companies may define adjusted cash NOI and adjusted annualized EBITDAre differently. Accordingly, s
Slide 18: Net Asset Value Analysis
(unaudited, in thousands) Three Months Ended, Dec 31, 2018 Adjusted net operating income ("NOI")1 $29,287 Straight-line rental revenue, net1 (2,542) Amortization of market lease-related intangibles, capitalized lease incentives and non-cash items 100 Adjusted Cash NOI 26,845 Annualized Adjusted Cash
Slide 19: Completed and Pending Net Investment Activity
Completed and Pending Net Investment Activity As of March 8th Activity for the period from January 1, 2019 to March 8, 2019. As of March 8, 2019, we were a party to purchase and sale and other agreements. Includes transaction costs. Net of disposition costs. Includes $0.2 million associated with fun
Slide 20: Recent Developments & Upcoming Events
Recent Developments & Upcoming Events 242, 242, 242 Recent Developments: February 28th: Inclusion into the MSCI U.S. REIT Index (RMZ) March 13th: Priced Our First Follow-On Offering of Common Stock Raised Approximately $234.5 Million in Net Proceeds1 Increased Total Shares and OP Units Outstanding b
Slide 21: Appendix
+ Appendix
Slide 22: Contractual Base Rent Escalation Provisions
Contractual Base Rent Escalation Provisions Provides Source of Internal Growth and a Measure of Inflation Protection 242, 242, 242 Leases contributing 97% of cash ABR provided for base rent escalation, generally ranging from 1.0% to 4.0% annually, with a weighted average annual escalation rate of 1.
Slide 23: Same-Store Analysis
Same-Store Analysis Same-Store NOI Growth of 1.9% in 4Q’18 was Healthy Versus Our Weighted Average Annual Rent Escalation of ~1.5% 242, 242, 242 Same-Store Portfolio: All properties owned, excluding new sites under construction, for the entire same-store measurement period, which is October 1, 2017,
Slide 24: Financial Summary: Condensed Statement of Operations
Financial Summary Condensed Statement of Operations 242, 242, 242 Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $205 and $195 for the three months ended December 31, 2018 and 2017 and $1,082 and $1,123 for the years ended December 31, 2018 and
Slide 25: Financial Summary: FFO and AFFO
Financial Summary Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) 242, 242, 242 Three Months Ended December 31, Year Ended December 31, (unaudited, in thousands except per share amounts) 2018 2017 2018 2017 Net income $ 8,299 $ 3,145 $ 20,614 $ 6,296 Depreciation and amortizati
Slide 26: Financial Summary: Consolidated Balance Sheets
Financial Summary Consolidated Balance Sheets 242, 242, 242 December 31, 2018 December 31, 2017 (in thousands, except share, per share, unit and per unit amounts) (audited) (audited) ASSETS Investments: Real estate investments, at cost: Land and improvements $ 420,848 $ 278,985 Building and improvem
Slide 27: GAAP Reconciliations to EBITDAre, NOI and Cash NOI
Financial Summary GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI and Estimated Run Rate Metrics 242, 242, 242 Adjustment assumes all acquisitions and dispositions of real estate investments made during the three months ended December 31, 2018 had occurred on October 1, 2018. Three Months Ended
Slide 28: Market Capitalization, Debt Summary and Leverage Metrics
Financial Summary Market Capitalization, Debt Summary and Leverage Metrics 242, 242, 242 Maturity figures for our secured debt are based off of our anticipated repayment schedule. The Series 2016-1 notes mature in November 2046 but have an anticipated repayment date of November 2021. The Series 2017
Slide 29: Glossary: Supplemental Reporting Measures
Glossary Supplemental Reporting Measures 242, 242, 242 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”) and adjusted funds from operations (“AFFO”), both of which are non-GAAP fin
Slide 30: Glossary: Supplemental Reporting Measures
Glossary Supplemental Reporting Measures 242, 242, 242 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 impairment losses (“EBITDAre”
Slide 31: Glossary of Supplemental Reporting Measures: Other Terms
Glossary of Supplemental Reporting Measures Other Terms 242, 242, 242 Cash ABR Cash ABR means annualized contractually specified cash base rent in effect as of the end of the current quarter for all of our leases (including those accounted for as direct financing leases) commenced as of that date an
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