Essential Properties Realty Trust, Inc. · NYSE:EPRT
Essential Properties Realty Trust — Investor Presentation (June 2020)
30 slides from Essential Properties Realty Trust's investor presentation, Jun 30, 2020
Slide 1: Investor Presentation – July 2020
Investor Presentation – July 2020 Exhibit 99.1
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 ABR2 94.4% Average Investment Per Property $2.0mm Internally-Originated Sale-Leasebacks2,3 81.6% Average Quarterly Investment Activity4 $163mm As of March 31, 2020. Based on cash ABR as of March 31, 2020. Exclusive of GE Seed Portfoli
Slide 4: Covid-19 Impact: Status of Portfolio and Rent Collection
242, 242, 242 Covid-19 Impact: Status of Portfolio and Rent Collection Over 89% of Our Portfolio is Currently Open or Operating in a Limited Capacity Portfolio Operating Status Continues to Improve: As of June 30th, 89% of our ABR was open or operating on a limited basis, which compares to 82% at Ma
Slide 5: Covid-19 Impact: Tenant Industry Breakdown
242, 242, 242 Property operating status as of June 30, 2020, as measured by Cash ABR as of June 1, 2020, including the full impact of 2Q’2020 investments. Covid-19 Impact: Tenant Industry Breakdown Long-term Conviction in Our Targeted Industries Remains Unchanged Despite Negative Impact from Covid-1
Slide 6: Liquidity / Projected 2020 Fixed Costs and 2020 Debt Maturities
Liquidity2 / Projected 2020 Fixed Costs4 and 2020 Debt Maturities5 Source: Public filings and SNL. Note: Financial data as of March 31, 2020 as adjusted for subsequent publicly-disclosed events. This is the all-in interest rate once our forward LIBOR swap becomes effective on July 9, 2020. Before th
Slide 7: Well Capitalized Balance Sheet
Well Capitalized Balance Sheet Lower Levered Balance Sheet with Strong Liquidity 242, 242, 242 (dollars in thousands, except share and per share amounts) March 31, 2020 Rate Maturity1 Secured debt: Series 2017-1, Class A $ 160,455 4.10% 4.2 years Series 2017-1, Class B 15,669 5.11% 4.2 years Total s
Slide 8: Debt Structure Allows for Capital Flexibility
Debt Structure Allows for Capital Flexibility No Significant Debt Maturities Until 2024 Debt Maturity Schedule1,2,3 242, 242, 242 Debt balances are as of March 31, 2020. Maturity figures for our secured debt are based off of our anticipated repayment schedule. The Series 2017-1 notes mature in June
Slide 9: Targeted Investment Strategy Based on Decades of Experience
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 10: 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 March 31, 2020 that was acq
Slide 11: 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 1,050 Square Footage (mm) 8.3 Tenant
Slide 12: Top Tenant Concentration
Top 10 Tenant Concentration EPRT Has 212 Tenants Across 1,050 Properties with the Top 10 Representing 204 Properties and 23.1% of Cash ABR 242, 242, 242 Top 10 Tenant1 Properties % of Cash ABR 74 3.2% 23 2.9% 13 2.7% 4 2.4% 5 2.3% 34 2.3% 13 2.0% 26 1.8% 5 1.8% 7 1.7% Top 10 Tenants 204 23.1% Total
Slide 13: Disciplined Underwriting Leading to Healthy Portfolio Metrics
42.1% Disciplined Underwriting Leading to Healthy Portfolio Metrics 98.3% of Unit-Level Reporting Provides (Near) Real-Time Tenant Visibility 242, 242, 242 Tenant Financial Reporting % of Cash ABR by Unit-Level Coverage Tranche2 Long Weighted Remaining Lease Term Healthy Rent Coverage Ratios1 Only 2
Slide 14: Established and Proven Investment Infrastructure
Established and Proven Investment Infrastructure Scalable Platform Allows for Consistent Sourcing of Investment Activity at Attractive Yields without Sacrificing Underwriting Standards and Investment Focus 242, 242, 242 Investment activity has averaged ~$163mm per quarter over the last eight quarter
Slide 15: Active Asset Management: Dispositions at Attractive Cap Rates
Dispositions Have Traded at Attractive Cap Rates: Since inception in 2016 through 2019, we have sold 155 properties for $222mm in net proceeds and achieved a weighted average cash cap rate of 6.8% on the sale of 113 leased properties8 Trailing 12-Month (TTM) Sales Came from a Diverse Mix of Industri
Slide 16: Differentiated Net Lease Investment Opportunity
Differentiated Net Lease Investment Opportunity Portfolio Mix and Underlying Fundamentals are Favorable Relative to Peers Strong Unit-Level Coverage2 & Transparency Service-Oriented & Experience-Based Industries Limited Immediate-Term Lease Maturities ü ü ü Source: Public filings and press releases.
Slide 17: Public Net Lease REIT Benchmarking – Leverage and Dividend Sustainability
Public Net Lease REIT Benchmarking – Leverage and Dividend Sustainability Low Leverage and Healthy Payout Ratio Underscore Sustainability of Current Income 2019 AFFO Payout Ratio4 Net Debt + Preferred / EBITDAre Debt / Undepreciated Gross Assets2 Dividend Yield3 Source: Public filings and FactSet. N
Slide 18: Implied Cap Rate
Implied Cap Rate4 5.0% 5.4% 5.6% 6.8% 6.9% 6.9% 7.5% 7.8% 7.8% 9.8% Average 6.9% (unaudited, in thousands) Three Months Ended, March 31, 2020 Adjusted net operating income ("NOI")1 $42,862 Straight-line rental revenue, net1 (2,966) Other amortization and non-cash charges 434 Adjusted Cash NOI 40,330
Slide 19: Appendix
+ Appendix
Slide 20: Unsecured Covenants Calculation
242, 242, 242 Unsecured Covenants Calculation 03/31/20 Limit Consolidated Leverage Ratio Total debt / total asset value (TAV) 36.7% 60.0% Unencumbered Leverage Ratio Unsecured debt / unencumbered TAV 35.3% 60.0% Consolidated Secured Debt Leverage Ratio Consolidated secured debt / TAV 7.4% 50.0% Cons
Slide 21: Public Net Lease REIT Benchmarking – Liquidity Analysis
Public Net Lease REIT Benchmarking – Liquidity Analysis EPRT is in a Superior Liquidity Position Relative to Peers Liquidity1 / Undepreciated Investments2 Liquidity1 / Cash ABR at 1Q’2020 Source: Public filings and SNL. Note: Financial data as of March 31, 2020 as adjusted for subsequent publicly-di
Slide 22: Focused on Highly Fungible and Liquid Real Estate
Focused on Highly Fungible and Liquid Real Estate Smaller-Scale Real Estate is Inherently More Liquid and Fungible Lower ABR per Property2,3 Smaller Average Property Size Smaller-Scale Net Leased Investments ü ü ü Source: Public filings and press releases. Note: Essential Properties data as of March
Slide 23: Leasing Summary
Leasing Summary Lease Escalations 242, 242, 242 Leases contributing 99% of cash ABR provided for base rent escalation, generally ranging from 1.0% to 3.0% annually, with a weighted average annual escalation rate of 1.5%, which assumes 0.0% change in annual CPI 7% of contractual rent escalations by c
Slide 24: Financial Summary – 1Q'2020 Consolidated Statements of Operations
Financial Summary – 1Q’2020 Consolidated Statements of Operations 242, 242, 242 Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $192 and $349 for the three months ended March 31, 2020 and 2019, respectively. Includes reimbursable income from our
Slide 25: Financial Summary – 1Q'2020 FFO and AFFO
Financial Summary – 1Q’2020 Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) 242, 242, 242 Includes non-recurring expenses of $652 for accruals of severance payments and acceleration of non-cash compensation expense in connection with the termination of one of our executive offi
Slide 26: Financial Summary – 1Q'2020 Consolidated Balance Sheets
Financial Summary – 1Q’2020 Consolidated Balance Sheets 242, 242, 242 March 31, 2020 December 31, 2019 (in thousands, except share and per share amounts) (unaudited) (audited) ASSETS Investments: Real estate investments, at cost: Land and improvements $ 632,628 $ 588,279 Building and improvements 1,
Slide 27: GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI
Financial Summary – 1Q’2020 GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI and Estimated Run Rate Metrics 242, 242, 242 These adjustments are made to reflect EBITDAre, NOI and Cash NOI as if all investments in and dispositions of real estate made during the three months ended March 31, 2020 ha
Slide 28: Glossary Supplemental Reporting Measures and Other Terms
Glossary Supplemental Reporting Measures and Other Terms 242, 242, 242 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”) and adju
Slide 29: Glossary Supplemental Reporting Measures and Other Terms
Glossary Supplemental Reporting Measures and Other Terms 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 lo
Slide 30: Glossary Supplemental Reporting Measures and Other Terms
Glossary Supplemental Reporting Measures and Other Terms 242, 242, 242 Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI We further adjust EBITDAre, NOI and Cash NOI i) based on an estimate calculated as if all investment and disposition activity that took place during the quarter had been made o
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