FALSE000179810000017981002024-11-042024-11-04
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 4, 2024
NETSTREIT Corp.
(Exact Name of Registrant as Specified in its Charter)
| | | | | | | | | | | |
| Maryland | 001-39443 | 84-3356606 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
2021 McKinney Avenue Suite 1150 Dallas, Texas | 75201 |
| (Address of Principal Executive Offices) | (Zip Code) |
972-200-7100
(Registrant’s telephone number, including area code)
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| | | | | |
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $0.01 par value per share | NTST | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 4, 2024, NETSTREIT Corp. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
The information contained in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (“Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01. Regulation FD Disclosure.
On November 4, 2024, the Company furnished supplemental financial information for the third quarter ended September 30, 2024. Also on November 4, 2024, the Company furnished an updated investor presentation. The supplemental financial information and investor presentation are attached hereto as Exhibits 99.2 and 99.3, respectively, and incorporated by reference herein. The supplemental information and investor presentation also are available on the “Investors / Events & Presentations” page of the Company’s website at www.netstreit.com. The information found on, or otherwise accessible through, the Company’s website is not incorporated by reference herein.
The information contained in Exhibits 99.2 and 99.3 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
| | | | | | | | | | | |
| (d) | Exhibits. |
| Exhibit No. | | Description | |
| 99.1 | | | |
| 99.2 | | | |
| 99.3 | | | |
| 104 | | Cover page interactive data file (embedded within the inline XBRL document). | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | | | | | | | | | |
| | | NETSTREIT Corp. |
| | | |
| November 4, 2024 | | /s/ DANIEL DONLAN |
| Date | | Daniel Donlan |
| | | Chief Financial Officer and Treasurer |
| | | (Principal Financial Officer, Principal Accounting Officer) |
NETSTREIT REPORTS THIRD QUARTER 2024 FINANCIAL AND OPERATING RESULTS
– Net loss of $(0.07) and Adjusted Funds from Operations ("AFFO") of $0.32 Per Diluted Share –
– Completed Record Gross Investment Activity of $151.6 Million at a 7.5% Blended Cash Yield –
– 2024 AFFO Per Share Guidance Midpoint Maintained –
– Lori Wittman Appointed as Chair of the Board of Directors –
Dallas, TX – November 4, 2024 – NETSTREIT Corp. (NYSE: NTST) (the “Company”) today announced financial and operating results for the third quarter ended September 30, 2024.
“We are pleased to announce our highest quarterly investment activity in the Company's history with $151.6 million in gross investments at a blended cash yield of 7.5%. Our 100% occupied portfolio remains in excellent condition to support our growing earnings base and attractive dividend yield. Looking forward, we remain focused on identifying quality investment opportunities that further enhance our portfolio diversification while elevating our internal growth profile to generate consistent AFFO per share growth and deliver sustained value for shareholders,” said Mark Manheimer, Chief Executive Officer of NETSTREIT.
THIRD QUARTER 2024 HIGHLIGHTS
The following table summarizes the Company's select financial results1 for the three and nine months ended September 30, 2024.
| | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, |
| 2024 | | 2023 | | % Change |
| (Unaudited) |
Net (Loss) Income per Diluted Share | $ | (0.07) | | | $ | 0.06 | | | (217) | % |
| Funds from Operations per Diluted Share | $ | 0.32 | | | $ | 0.31 | | | 3 | % |
| Core Funds from Operations per Diluted Share | $ | 0.32 | | | $ | 0.31 | | | 3 | % |
| Adjusted Funds from Operations per Diluted Share | $ | 0.32 | | | $ | 0.31 | | | 3 | % |
| | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2024 | | 2023 | | % Change |
| (Unaudited) |
Net (Loss) Income per Diluted Share | $ | (0.09) | | | $ | 0.08 | | | (213) | % |
| Funds from Operations per Diluted Share | $ | 0.87 | | | $ | 0.87 | | | — | % |
| Core Funds from Operations per Diluted Share | $ | 0.93 | | | $ | 0.88 | | | 6 | % |
| Adjusted Funds from Operations per Diluted Share | $ | 0.94 | | | $ | 0.91 | | | 3 | % |
1.Funds from operations ("FFO"), core funds from operations ("Core FFO"), and adjusted funds from operations ("AFFO") are non-GAAP financial measures. See "Non-GAAP Financial Measures."
INVESTMENT ACTIVITY
The following tables summarize the Company's investment, disposition, and loan repayment activities (dollars in thousands) for the three and nine months ended September 30, 2024.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2024 | | Nine Months Ended September 30, 2024 |
| Number of Investments | | Amount | | Number of Investments | | Amount |
| Investments | 33 | | $ | 151,555 | | | 103 | | $ | 396,496 |
| Dispositions | 8 | | 24,105 | | | 26 | | 58,406 |
| Loan Repayments | 4 | | 8,857 | | | 5 | | 11,181 | |
| Net Investment Activity | | | $ | 118,593 | | | | | $ | 326,909 | |
| | | | | | | |
| Investment Activity | | | | | | | |
| Cash Yield | | | 7.5 | % | | | | 7.5 | % |
| % of ABR derived from Investment Grade Tenants | | | 37.3 | % | | | | 52.4 | % |
| % of ABR derived from Investment Grade Profile Tenants | | | 15.1 | % | | | | 6.6 | % |
| Weighted Average Lease Term (years) | | | 12.5 | | | | | 13.4 | |
| | | | | | | |
| Disposition Activity | | | | | | | |
| Cash Yield | | | 7.3 | % | | | | 7.0 | % |
| Weighted Average Lease Term (years) | | | 9.9 | | | | | 10.1 | |
| | | | | | | |
| Loan Repayments | | | | | | | |
| Cash Yield | | | 8.7 | % | | | | 9.0 | % |
The following table summarizes the Company's ongoing development projects and estimated development costs (dollars in thousands) as of and for the three months ended September 30, 2024.
| | | | | |
| Developments | Three Months Ended September 30, 2024 |
| Amount Funded During the Quarter | $ | 5,085 | |
| |
| As of September 30, 2024 |
| Number of Developments | 8 | |
| Amount Funded to Date | $ | 14,554 | |
| Estimated Funding Remaining on Developments | 7,386 | |
| Total Estimated Development Cost | $ | 21,940 | |
PORTFOLIO UPDATE
The following table summarizes the Company's real estate portfolio (weighted by ABR, dollars in thousands) as of September 30, 2024.
| | | | | |
| As of September 30, 2024 |
| Number of Investments | 671 |
| ABR | $ | 156,999 |
| States | 45 |
| Square Feet | 12,076,093 |
| Tenants | 93 |
| Industries | 26 |
| Occupancy | 100.0 | % |
| Weighted Average Lease Term (years) | 9.5 |
| Investment Grade % | 60.9 | % |
| Investment Grade Profile % | 14.4 | % |
CAPITAL MARKETS AND BALANCE SHEET
The following tables summarize the Company's leverage, balance sheet, liquidity, ATM sales, and settlement of our forward equity offerings (dollars in thousands, except per share data) as of and for the three months ended September 30, 2024.
| | | | | |
| Leverage | As of September 30, 2024 |
Net Debt / Annualized Adjusted EBITDAre | 5.3 | x |
Adjusted Net Debt / Annualized Adjusted EBITDAre | 4.0 | x |
| |
| Liquidity | |
| Unused Unsecured Revolver Capacity | $ | 249,850 | |
| Cash, Cash Equivalents and Restricted Cash | 28,750 | |
Net Value of Unsettled Forward Equity | 185,474 | |
| Total Liquidity | $ | 464,074 | |
| |
Forward Equity Settlement Activity | As of September 30, 2024 |
Shares Settled During Quarter | 4,183,711 | |
Weighted Average Price Per Share (Gross) | $ | 17.29 | |
Net Value of Settled Forward Equity | $ | 70,449 | |
| |
ATM Activity | |
Shares Sold During Quarter | 152,547 | |
Weighted Average Price Per Share (Gross) | $ | 17.13 | |
Net Value of Unsettled Forward Equity | $ | 2,589 | |
2024 ATM Program Initial Capacity | $ | 300,000 | |
ATM Capacity Remaining as of September 30, 2024 | $ | 297,387 | |
| |
Unsettled Forward Equity | |
Shares Unsettled as of September 30, 20241 | 10,735,647 | |
Weighted Average Price Per Share (Gross) | $ | 17.93 | |
Net Value of Unsettled Forward Equity | $ | 185,474 | |
1.Includes 152,547 of forward equity shares sold under ATM Program during the quarter.
DIVIDEND
On October 18, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.21 per share for the fourth quarter of 2024. On an annualized basis, the dividend of $0.84 per share of common stock represents an increase of $0.02 per share over the prior year annualized dividend. The dividend will be paid on December 13, 2024 to shareholders of record on December 2, 2024.
2024 GUIDANCE
The Company is maintaining its full year 2024 AFFO per share guidance midpoint and updating the range to $1.26 to $1.27 from its prior range of $1.25 to $1.28. The Company now expects cash G&A to be in the range of $12.8 million to $13.2 million (exclusive of transaction costs and severance payments).
The Company's 2024 guidance is based on a number of assumptions that are subject to change and many of which are outside the Company's control. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that the Company will achieve these results.
AFFO is a non-GAAP financial measure. The Company does not provide a reconciliation of such forward-looking non-GAAP measure to the most directly comparable financial measures calculated and presented in accordance with GAAP because to do so would be potentially misleading and not practical given the difficulty of projecting event driven transactional and other non-core operating items in any future period. The magnitude of these items, however, may be significant.
BOARD GOVERNANCE CHANGES
Effective October 1, 2024, the Company appointed Lori Wittman as the Chair of its Board of Directors. Ms. Wittman has been a Board member since December 2019 and has served as the Chair of the Audit Committee since the Company's initial public offering in August 2020, other than during the period when she served as the Company's interim Chief Financial Officer from November 2022 to April 2023.
As a result of the transition of Ms. Wittman to Chair of the Board, Michael Christodolou has been appointed Chair of the Audit Committee and Todd Minnis has been appointed to serve on the Nominating and Corporate Governance Committee, each effective October 1, 2024.
EARNINGS CONFERENCE CALL
A conference call will be held on Tuesday, November 5, 2024 at 11:00 AM ET. During the conference call the Company’s officers will review third quarter performance, discuss recent events, and conduct a question and answer period.
The webcast will be accessible on the “Investor Relations” section of the Company’s website at www.NETSTREIT.com. To listen to the live webcast, please go to the site at least fifteen minutes prior to the scheduled start time to register, as well as download and install any necessary audio software. A replay of the webcast will be available for 90 days on the Company’s website shortly after the call.
The conference call can also be accessed by dialing 1-877-451-6152 for domestic callers or 1-201-389-0879 for international callers. A dial-in replay will be available starting shortly after the call until November 12, 2024, which can be accessed by dialing 1-844-512-2921 for domestic callers or 1-412-317-6671 for international callers. The passcode for this dial-in replay is 13749106.
SUPPLEMENTAL PACKAGE
The Company’s supplemental package will be available prior to the conference call in the Investor Relations section of the Company’s website at www.investors.netstreit.com.
About NETSTREIT Corp.
NETSTREIT Corp. is an internally managed real estate investment trust (REIT) based in Dallas, Texas that specializes in acquiring single-tenant net lease retail properties nationwide. The growing portfolio consists of high-quality properties leased to e-commerce resistant tenants with healthy balance sheets. Led by a management team of seasoned commercial real estate executives, NETSTREIT’s strategy is to create the highest quality net lease retail portfolio in the country with the goal of generating consistent cash flows and dividends for its investors.
Investor Relations
ir@netstreit.com
972-597-4825
NON-GAAP FINANCIAL MEASURES
This press release contains non-GAAP financial measures, including FFO, Core FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Annualized Adjusted EBITDAre, Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI Estimated Run Rate, Total Property-Level Cash NOI Estimated Run Rate, Net Debt, and Adjusted Net Debt. A reconciliation of each non-GAAP financial measure to the most comparable GAAP measure, and definitions of each non-GAAP measure, are included below.
FORWARD LOOKING STATEMENTS
This press release 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 business and growth strategies, investment, financing and leasing activities, including estimated development costs, and trends in our business, including trends in the market for single-tenant, retail commercial real estate. Words such as “expects,” “anticipates,” “intends,” “plans,” “likely,” “will,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this press release may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. For a further discussion of these and other factors that could impact future results, performance or transactions, see the information under the heading “Risk Factors” in our Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) on February 14, 2024 and other reports filed with the SEC from time to time. Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release. New risks and uncertainties may arise over time and it is not possible for us to predict those events or how they may affect us. Many of the risks identified herein and in our periodic reports have been and will continue to be heightened as a result of the ongoing and numerous adverse effects arising from macroeconomic conditions, including inflation, interest rates and instability in the banking system. We expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law.
NETSTREIT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
| | | | | | | | | | | |
| 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 | (136,528) | | | (101,210) | |
| Property under development | 9,361 | | | 29,198 | |
| Real estate held for investment, net | 1,744,413 | | | 1,538,693 | |
| Assets held for sale | 45,712 | | | 52,451 | |
| Mortgage loans receivable, net | 142,171 | | | 114,472 | |
| Cash, cash equivalents and restricted cash | 28,750 | | | 29,929 | |
| Lease intangible assets, net | 164,905 | | | 161,354 | |
| Other assets, net | 59,298 | | | 49,337 | |
| Total assets | $ | 2,185,249 | | | $ | 1,946,236 | |
| Liabilities and equity | | | |
| Liabilities: | | | |
| Term loans, net | $ | 622,239 | | | $ | 521,912 | |
| Revolving credit facility | 150,000 | | | 80,000 | |
| Mortgage note payable, net | 7,861 | | | 7,883 | |
| Lease intangible liabilities, net | 23,341 | | | 25,353 | |
| Liabilities related to assets held for sale | 732 | | | 1,158 | |
| Accounts payable, accrued expenses and other liabilities | 33,752 | | | 36,498 | |
| Total liabilities | 837,925 | | | 672,804 | |
| Commitments and contingencies | | | |
| Equity: | | | |
| Stockholders’ equity | | | |
| Common stock, $0.01 par value, 400,000,000 shares authorized; 81,583,917 and 73,207,080 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | 816 | | | 732 | |
| Additional paid-in capital | 1,507,170 | | | 1,367,505 | |
| Distributions in excess of retained earnings | (165,421) | | | (112,276) | |
| Accumulated other comprehensive (loss) income | (2,453) | | | 8,943 | |
| Total stockholders’ equity | 1,340,112 | | | 1,264,904 | |
| Noncontrolling interests | 7,212 | | | 8,528 | |
| Total equity | 1,347,324 | | | 1,273,432 | |
| Total liabilities and equity | $ | 2,185,249 | | | $ | 1,946,236 | |
NETSTREIT CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Revenues | | | | | | | |
| Rental revenue (including reimbursable) | $ | 38,172 | | | $ | 31,167 | | | $ | 110,226 | | | $ | 89,347 | |
| Interest income on loans receivable | 3,272 | | | 2,244 | | | 8,458 | | | 5,145 | |
| Other revenue | — | | | 550 | | | — | | | 550 | |
| Total revenues | 41,444 | | 33,961 | | 118,684 | | 95,042 |
| Operating expenses | | | | | | | |
| Property | 4,494 | | | 3,883 | | | 12,578 | | | 11,350 | |
| General and administrative | 4,287 | | | 5,133 | | | 15,266 | | | 15,299 | |
| Depreciation and amortization | 20,438 | | | 15,804 | | | 56,522 | | | 46,599 | |
| Provisions for impairment | 9,838 | | | 1,538 | | | 17,336 | | | 4,374 | |
| Transaction costs | 26 | | | 143 | | | 201 | | | 267 | |
| Total operating expenses | 39,083 | | | 26,501 | | | 101,903 | | | 77,889 | |
| Other (expense) income | | | | | | | |
| Interest expense, net | (7,965) | | | (3,946) | | | (21,749) | | | (13,412) | |
| (Loss) gain on sales of real estate, net | (132) | | | 373 | | | 874 | | | 669 | |
| Loss on debt extinguishment | — | | | — | | | — | | | (128) | |
| Other income (expense), net | 416 | | | 367 | | | (2,451) | | | 586 | |
| Total other (expense) income, net | (7,681) | | | (3,206) | | | (23,326) | | | (12,285) | |
| Net (loss) income before income taxes | (5,320) | | | 4,254 | | | (6,545) | | | 4,868 | |
| Income tax (expense) benefit | (2) | | | (15) | | | (31) | | | 60 | |
| Net (loss) income | (5,322) | | | 4,239 | | | (6,576) | | | 4,928 | |
| Net (loss) income attributable to noncontrolling interests | (27) | | | 24 | | | (35) | | | 32 | |
| Net (loss) income attributable to common stockholders | $ | (5,295) | | | $ | 4,215 | | | $ | (6,541) | | | $ | 4,896 | |
| | | | | | | |
| Amounts available to common stockholders per common share: | | | | | | | |
| Basic | $ | (0.07) | | | $ | 0.06 | | | $ | (0.09) | | | $ | 0.08 | |
| Diluted | $ | (0.07) | | | $ | 0.06 | | | $ | (0.09) | | | $ | 0.08 | |
| Weighted average common shares: | | | | | | | |
| Basic | 77,610,680 | | | 67,112,587 | | | 74,822,286 | | | 62,123,334 | |
| Diluted | 77,610,680 | | | 68,048,369 | | | 74,822,286 | | | 62,897,957 | |
NETSTREIT CORP. AND SUBSIDIARIES
RECONCILIATION OF NET (LOSS) INCOME TO FFO, CORE FFO AND ADJUSTED FFO
(In thousands, except share and per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| (Unaudited) | | (Unaudited) |
| Net (loss) income | $ | (5,322) | | | $ | 4,239 | | | $ | (6,576) | | | $ | 4,928 | |
| Depreciation and amortization of real estate | 20,360 | | | 15,726 | | | 56,286 | | | 46,379 | |
| Provisions for impairment | 9,838 | | | 1,538 | | | 17,336 | | | 4,374 | |
| Loss (gain) on sales of real estate, net | 132 | | | (373) | | | (874) | | | (669) | |
| FFO | 25,008 | | | 21,130 | | | 66,172 | | | 55,012 | |
| Adjustments: | | | | | | | |
| Non-recurring executive transition costs, severance and related charges | 14 | | | 62 | | | 1,495 | | | 276 | |
| Loss on debt extinguishment and other related costs | — | | | — | | | — | | | 223 | |
| Other non-recurring (gain) loss, net | (115) | | | (1) | | | 3,077 | | | (47) | |
| Core FFO | 24,907 | | | 21,191 | | | 70,744 | | | 55,464 | |
| Adjustments: | | | | | | | |
| Straight-line rent adjustments | (749) | | | (245) | | | (1,829) | | | (707) | |
| Amortization of deferred financing costs | 558 | | | 578 | | | 1,673 | | | 1,165 | |
| Amortization of above/below-market assumed debt | 29 | | | 29 | | | 86 | | | 86 | |
| Amortization of loan origination costs and discounts | (265) | | | 26 | | | (242) | | | 83 | |
| Amortization of lease-related intangibles | (170) | | | (121) | | | (363) | | | (517) | |
| Earned development interest | 259 | | | 189 | | | 962 | | | 189 | |
| Capitalized interest expense | (130) | | | (404) | | | (709) | | | (688) | |
| Non-cash interest expense | (990) | | | (1,134) | | | (2,948) | | | (1,134) | |
| Non-cash compensation expense | 1,376 | | | 1,280 | | | 4,128 | | | 3,559 | |
| AFFO | $ | 24,825 | | | $ | 21,389 | | | $ | 71,502 | | | $ | 57,500 | |
| | | | | | | |
| Weighted average common shares outstanding, basic | 77,610,680 | | | 67,112,587 | | | 74,822,286 | | | 62,123,334 | |
| Operating partnership units outstanding | 433,942 | | | 501,987 | | | 450,952 | | | 507,014 | |
| Unvested restricted stock units | 115,703 | | | 173,001 | | | 117,761 | | | 167,215 | |
| Unsettled shares under open forward equity contracts | 10,219 | | | 260,794 | | | 311,475 | | | 100,394 | |
| Weighted average common shares outstanding, diluted | 78,170,544 | | | 68,048,369 | | | 75,702,474 | | | 62,897,957 | |
| | | | | | | |
| FFO per common share, diluted | $ | 0.32 | | | $ | 0.31 | | | $ | 0.87 | | | $ | 0.87 | |
| Core FFO per common share, diluted | $ | 0.32 | | | $ | 0.31 | | | $ | 0.93 | | | $ | 0.88 | |
| AFFO per common share, diluted | $ | 0.32 | | | $ | 0.31 | | | $ | 0.94 | | | $ | 0.91 | |
RECONCILIATION OF NET (LOSS) INCOME TO EBITDA, EBITDAre AND ADJUSTED EBITDAre
(In thousands)
(Unaudited)
| | | | | | | | | | | |
| Three Months Ended
September 30, |
| 2024 | | 2023 |
| (Unaudited) |
| 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 depreciation and amortization | 78 | | | 78 | |
| Interest expense, net | 7,965 | | | 3,946 | |
| Income tax expense (benefit) | 2 | | | 15 | |
| Amortization of loan origination costs and discounts | (265) | | | 26 | |
| EBITDA | 22,648 | | | 23,909 | |
| Adjustments: | | | |
| Provisions for impairment | 9,838 | | | 1,538 | |
| Loss (gain) on sales of real estate, net | 132 | | | (373) | |
EBITDAre | 32,618 | | | 25,074 | |
| Adjustments: | | | |
| Straight-line rent adjustments | (749) | | | (245) | |
| Non-recurring executive transition costs, severance and related charges | 14 | | | 62 | |
| Other non-recurring (gain) loss, net | (115) | | | (1) | |
| Other non-recurring expenses, net | 523 | | | — | |
Lease termination fees | — | | | (550) | |
| Non-cash compensation expense | 1,376 | | | 1,280 | |
Adjustment for construction in process (1) | 258 | | | 720 | |
Adjustment for intraquarter investment activities (2) | 1,921 | | | 1,341 | |
Adjusted EBITDAre | $ | 35,846 | | | $ | 27,681 | |
Annualized Adjusted EBITDAre (3) | $ | 143,384 | | | |
| | | |
| 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 (4) | (185,474) | | | |
| Adjusted Net Debt | $ | 569,021 | | | |
| | | |
| Leverage | | | |
Net Debt / Annualized Adjusted EBITDAre | 5.3 | x | | |
Adjusted Net Debt / Annualized Adjusted EBITDAre | 4.0 | x | | |
(1) Adjustment reflects the estimated cash yield on developments in process as of September 30, 2024.
(2) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended
September 30, 2024 and 2023, had occurred on July 1, 2024 and 2023, respectively.
(3) We calculate Annualized Adjusted EBITDAre by multiplying Adjusted EBITDAre by four.
(4) Reflects 10,735,647 of unsettled forward equity shares at the September 30, 2024 available net settlement price of $17.28.
RECONCILIATION OF NET (LOSS) INCOME TO NOI AND CASH NOI
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| (Unaudited) | | (Unaudited) |
| 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 | 20,438 | | | 15,804 | | | 56,522 | | | 46,599 | |
| Provisions for impairment | 9,838 | | | 1,538 | | | 17,336 | | | 4,374 | |
| Transaction costs | 26 | | | 143 | | | 201 | | | 267 | |
| Interest expense, net | 7,965 | | | 3,946 | | | 21,749 | | | 13,412 | |
| Loss (gain) on sales of real estate, net | 132 | | | (373) | | | (874) | | | (669) | |
| Income tax expense (benefit) | 2 | | | 15 | | | 31 | | | (60) | |
| Loss on debt extinguishment | — | | | — | | | — | | | 128 | |
| Interest income on mortgage loans receivable | (3,272) | | | (2,244) | | | (8,458) | | | (5,145) | |
| Lease termination fees | — | | | (550) | | | — | | | (550) | |
| Other expense (income), net | 107 | | | (367) | | | 2,451 | | | (586) | |
| Property-Level NOI | 34,201 | | | 27,284 | | | 97,648 | | | 77,997 | |
| Straight-line rent adjustments | (749) | | | (245) | | | (1,829) | | | (707) | |
| Amortization of lease-related intangibles | (170) | | | (121) | | | (363) | | | (517) | |
| Property-Level Cash NOI | $ | 33,282 | | | $ | 26,918 | | | $ | 95,456 | | | $ | 76,773 | |
Adjustment for intraquarter acquisitions, dispositions and completed development (1) | 1,722 | | | | | | | |
| Property-Level Cash NOI Estimated Run Rate | 35,004 | | | | | | | |
| Interest income on mortgage loans receivable | 3,272 | | | | | | | |
Adjustments for intraquarter mortgage loan activity (2) | 199 | | | | | | | |
| Total Cash NOI - Estimated Run Rate | $ | 38,475 | | | | | | | |
(1) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended
September 30, 2024, had occurred on July 1, 2024.
(2) Adjustment assumes all loan activity completed during the three months ended September 30, 2024, had occurred on July 1, 2024.
NON-GAAP FINANCIAL MEASURES
FFO, Core FFO and AFFO
The National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a widely accepted non-GAAP financial measure of operating performance known as FFO. Our FFO is net (loss) income in accordance with GAAP, excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable real property.
Core FFO is a non-GAAP financial measure defined as FFO adjusted to remove the effect of unusual and non-recurring items that are not expected to impact our operating performance or operations on an ongoing basis. These include non-recurring executive transition costs, severance and related charges, non-recurring other loss (gain), net, and loss on debt extinguishments and other related costs.
AFFO is a non-GAAP financial measure defined as Core FFO adjusted for GAAP net (loss) income related to non-cash revenues and expenses, such as straight-line rent, amortization of above- and below-market lease-related intangibles, amortization of lease incentives, capitalized interest expense, earned development interest, non-cash interest expense, non-cash compensation expense, amortization of deferred financing costs, amortization of above/below-market assumed debt, and amortization of loan origination costs.
Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. In fact, real estate values historically have risen or fallen with market conditions. FFO is intended to be a standard supplemental measure of operating performance that excludes historical cost depreciation and valuation adjustments from net (loss) income. We consider FFO to be useful in evaluating potential property acquisitions and measuring operating performance.
We further consider FFO, Core FFO and AFFO to be useful in determining funds available for payment of distributions. FFO, Core FFO and AFFO do not represent net (loss) income or cash flows from operations as defined by GAAP. You should not consider FFO, Core FFO and AFFO to be alternatives to net (loss) income as a reliable measure of our operating performance nor should you consider FFO, Core FFO and AFFO to be alternatives to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.
FFO, Core FFO and AFFO do not measure whether cash flow is sufficient to fund our cash needs, including principal amortization, capital improvements and distributions to stockholders. FFO, Core FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP. Further, FFO, Core FFO and AFFO as disclosed by other REITs might not be comparable to our calculations of FFO, Core FFO and AFFO.
EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre
We compute EBITDA as earnings before interest expense, income tax expense, and depreciation and amortization. In 2017, NAREIT issued a white paper recommending that companies that report EBITDA also report EBITDAre. We compute EBITDAre in accordance with the definition adopted by NAREIT. NAREIT defines EBITDAre as EBITDA (as defined above) excluding gains (or losses) from the sales of depreciable property and impairment charges on depreciable real property.
Adjusted EBITDAre is a non-GAAP financial measure defined as EBITDAre further adjusted to exclude straight-line rent, non-cash compensation expense, non-recurring executive transition costs, severance and related charges, loss on debt extinguishment and other related costs, non-recurring other loss (gain), net, other non-recurring expenses (income), lease termination fees, adjustment for construction in process, and adjustment for intraquarter activities.
Annualized Adjusted EBITDAre is Adjusted EBITDAre multiplied by four.
We present EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre as they are measures commonly used in our industry. We believe that these measures are useful to investors and analysts because they provide supplemental information concerning our operating performance, exclusive of certain non-cash items and other costs. We use EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre as measures of our operating performance and not as measures of liquidity.
EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre do not include all items of revenue and expense included in net (loss) income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net (loss) income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, our computation of EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs.
Net Debt and Adjusted Net Debt
We calculate our Net Debt as our principal amount of total debt outstanding excluding deferred financing costs, net discounts and debt issuance costs less cash, cash equivalents and restricted cash available for future investment. We believe excluding cash, cash equivalents and restricted cash available for future investment from our principal amount, all of which could be used to repay debt, provides an estimate on the net contractual amount of borrowed capital to be repaid. We believe these adjustments are additional beneficial disclosures to investors and analysts.
We further adjust Net Debt by the net value of unsettled forward equity as period end to derive Adjusted Net Debt.
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 Rate are non-GAAP financial measures which we use to assess our operating results. We compute Property-Level NOI as net (loss) income (computed in accordance with GAAP), excluding general and administrative expenses, interest expense (or income), income tax expense, transaction costs, depreciation and amortization, gains (or losses) on sales of depreciable property, real estate impairment losses, interest income on mortgage loans receivable, loss on debt extinguishment, lease termination fees, and other expense (income), net. We further adjust Property-Level NOI for non-cash revenue components of straight-line rent and amortization of lease-intangibles to derive Property-Level Cash NOI. We further adjust Property-Level Cash NOI for intraquarter acquisitions, dispositions and completed developments to derive Property-Level Cash NOI - Estimated Run Rate. We further adjust Property-Level Cash NOI - Estimated Run Rate for interest income on mortgage loans receivable and intraquarter mortgage loan activity to derive Total Cash NOI - Estimated Run Rate. We believe Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis.
Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate are not measurements of financial performance under GAAP, and may not be comparable to similarly titled measures of other companies. You should not consider our measures as alternatives to net (loss) income or cash flows from operating activities determined in accordance with GAAP.
OTHER DEFINITIONS
ABR is annualized base rent as of September 30, 2024, for all leases that commenced and annualized cash interest on mortgage loans receivable in place as of that date.
Cash Yield is the annualized base rent contractually due from acquired properties and completed developments, and interest income from mortgage loans receivable, divided by the gross investment amount, gross proceeds in the case of dispositions, or loan repayment amount.
Investments are lease agreements in place at owned properties, properties that have leases associated with mortgage loans receivable, developments where rent commenced, or in the case of master lease arrangements each property under the master lease is counted as a separate lease.
Investment Grade are investments, or investments that are subsidiaries of a parent entity, with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody's) or NAIC2 (National Association or Insurance Commissioners) or higher.
Investment Grade Profile are investments with investment grade credit metrics (more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x), but do not carry a published rating from S&P, Fitch, Moody's, or NAIC.
Occupancy is expressed as a percentage, and is the number of economically occupied properties divided by the total number of properties owned, excluding mortgage loans receivable and properties under development.
Weighted Average Lease Term is weighted by the annualized base rent, excluding lease extension options and investments associated with mortgage loans receivable.
Third Quarter 2024 Supplemental Financial Information
Table of Contents 2 03 Corporate Overview 04 Quarterly Highlights 05 Consolidated Statements of Operations 06 Funds from Operations and Adjusted Funds from Operations 07 EBITDAre and Adjusted EBITDAre 08 Net Operating Income 09 Consolidated Balance Sheets 10 Debt, Capitalization and Financial Ratios 12 Investment Activity 13 Portfolio Information 17 Lease Expiration Schedule 18 Non-GAAP Measures and Definitions 22 Forward Looking and Cautionary Statements
Management Team Mark Manheimer Chief Executive Officer and President Daniel Donlan Chief Financial Officer and Treasurer Jeff Fuge Senior Vice President of Acquisitions Chad Shafer Senior Vice President of Real Estate and Underwriting 3 Corporate Overview Corporate Profile NETSTREIT Corp. (NYSE: NTST) is an internally managed real estate investment trust (REIT) based in Dallas, Texas that specializes in acquiring single-tenant net lease retail properties nationwide. The growing portfolio consists of high-quality properties leased to e- commerce resistant tenants with healthy balance sheets. Led by a management team of seasoned commercial real estate executives, NETSTREIT’s strategy is to create the highest quality net lease retail portfolio in the country in order to generate consistent cash flows and dividends for its investors. Board of Directors Lori Wittman - Chair Michael Christodolou Heidi Everett Mark Manheimer Todd Minnis Matthew Troxell Robin Zeigler Corporate Headquarters 2021 McKinney Avenue Suite 1150 Dallas, Texas, 75201 Phone: (972) 597 - 4825 Website: www.netstreit.com Transfer Agent Computershare PO Box 43007 Providence, RI 09240-3007 Phone: (800) 736 - 3001 Website: www.computershare.com
Quarterly Highlights (unaudited, dollars in thousands, except per share data) 4 1. Includes acquisitions, mortgage loans receivable, and completed developments. 2. Excludes investments that secure mortgage loans receivable. 3. Weighted by ABR; excludes lease extension options and investments that secure mortgage loans receivable. 4. Investments, or investments that are subsidiaries of a parent entity, with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody's) or NAIC2 (National Association of Insurance Commissioners) or higher. 5. Investments with investment grade credit metrics (more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x), but do not carry a published rating from S&P, Fitch, Moody's, or NAIC. Three Months Ended Financial Results September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 Net (loss) income $ (5,322) $ (2,306) $ 1,045 $ 1,962 $ 4,239 Net (loss) income per common share outstanding - diluted $ (0.07) $ (0.03) $ 0.01 $ 0.03 $ 0.06 Funds from Operations (FFO) $ 25,008 $ 19,987 $ 21,179 $ 21,165 $ 21,130 FFO per common share outstanding - diluted $ 0.32 $ 0.27 $ 0.28 $ 0.30 $ 0.31 Core Funds from Operations (Core FFO) $ 24,907 $ 23,389 $ 22,450 $ 21,220 $ 21,191 Core FFO per common share outstanding - diluted $ 0.32 $ 0.31 $ 0.30 $ 0.30 $ 0.31 Adjusted Funds from Operations (AFFO) $ 24,825 $ 23,817 $ 22,863 $ 21,573 $ 21,389 AFFO per common share outstanding - diluted $ 0.32 $ 0.32 $ 0.31 $ 0.31 $ 0.31 Dividends per share $ 0.210 $ 0.205 $ 0.205 $ 0.205 $ 0.205 Weighted average common shares outstanding - diluted 77,610,680 73,588,605 74,565,790 69,922,646 68,048,369 Portfolio Metrics(1) Number of Investments 671 649 628 598 547 Square feet 12,076,093 11,701,160 11,322,746 10,624,183 9,971,909 Occupancy(2) 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Weighted average lease term remaining (years)(3) 9.5 9.5 9.2 9.2 9.3 Investment grade (rated) - % of ABR(4) 60.9 % 68.9 % 71.1 % 70.5 % 68.6 % Investment grade profile (unrated) - % of ABR(5) 14.4 % 13.7 % 13.3 % 14.1 % 14.6 % Combined Investment grade (rated) & Investment grade profile (unrated) - % of ABR 75.3 % 82.6 % 84.4 % 84.6 % 83.3 %
5 Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 REVENUES Rental revenue (including reimbursable) $ 38,172 $ 31,167 $ 110,226 $ 89,347 Interest income on loans receivable 3,272 2,244 8,458 5,145 Other revenue — 550 — 550 Total revenues 41,444 33,961 118,684 95,042 OPERATING EXPENSES Property 4,494 3,883 12,578 11,350 General and administrative 4,287 5,133 15,266 15,299 Depreciation and amortization 20,438 15,804 56,522 46,599 Provisions for impairment 9,838 1,538 17,336 4,374 Transaction costs 26 143 201 267 Total operating expenses 39,083 26,501 101,903 77,889 OTHER (EXPENSE) INCOME Interest expense, net (7,965) (3,946) (21,749) (13,412) (Loss) gain on sales of real estate, net (132) 373 874 669 Loss on debt extinguishment — — — (128) Other income (expense), net 416 367 (2,451) 586 Total other (expense) income, net (7,681) (3,206) (23,326) (12,285) Net (loss) income before income taxes (5,320) 4,254 (6,545) 4,868 Income tax (expense) benefit (2) (15) (31) 60 Net (loss) income (5,322) 4,239 (6,576) 4,928 Net (loss) income attributable to noncontrolling interests (27) 24 (35) 32 Net (loss) income attributable to common stockholders $ (5,295) $ 4,215 $ (6,541) $ 4,896 Amounts available to common stockholders per common share: Basic $ (0.07) $ 0.06 $ (0.09) $ 0.08 Diluted $ (0.07) $ 0.06 $ (0.09) $ 0.08 Weighted average common shares: Basic 77,610,680 67,112,587 74,822,286 62,123,334 Diluted 77,610,680 68,048,369 74,822,286 62,897,957 Consolidated Statements of Operations (unaudited, dollars in thousands, except per share data)
Funds From Operations and Adjusted Funds From Operations (unaudited, dollars in thousands, except per share data) 6 Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 GAAP Reconciliation: Net (loss) income $ (5,322) $ 4,239 $ (6,576) $ 4,928 Depreciation and amortization of real estate 20,360 15,726 56,286 46,379 Provisions for impairment 9,838 1,538 17,336 4,374 Loss (gain) on sales of real estate, net 132 (373) (874) (669) Funds from Operations (FFO) 25,008 21,130 66,172 55,012 Non-recurring executive transition costs, severance and related charges 14 62 1,495 276 Loss on debt extinguishment and other related costs — — — 223 Other non-recurring (gain) loss, net (115) (1) 3,077 (47) Core Funds from Operations (Core FFO) 24,907 21,191 70,744 55,464 Straight-line rent adjustments (749) (245) (1,829) (707) Amortization of deferred financing costs 558 578 1,673 1,165 Amortization of above/below-market assumed debt 29 29 86 86 Amortization of loan origination costs and discounts (265) 26 (242) 83 Amortization of lease-related intangibles (170) (121) (363) (517) Earned development interest 259 189 962 189 Capitalized interest expense (130) (404) (709) (688) Non-cash interest expense (990) (1,134) (2,948) (1,134) Non-cash compensation expense 1,376 1,280 4,128 3,559 Adjusted Funds from Operations (AFFO) $ 24,825 $ 21,389 $ 71,502 $ 57,500 FFO per common share, diluted $ 0.32 $ 0.31 $ 0.87 $ 0.87 Core FFO per common share, diluted $ 0.32 $ 0.31 $ 0.93 $ 0.88 AFFO per common share, diluted $ 0.32 $ 0.31 $ 0.94 $ 0.91 Dividends per share $ 0.210 $ 0.205 $ 0.620 $ 0.605 Dividends per share as a percent of AFFO 66 % 66 % 66 % 66 % Weighted average common shares outstanding, basic 77,610,680 67,112,587 74,822,286 62,123,334 Operating partnership units outstanding 433,942 501,987 450,952 507,014 Unvested restricted stock units 115,703 173,001 117,761 167,215 Unsettled shares under open forward equity contracts 10,219 260,794 311,475 100,394 Weighted average common shares outstanding, diluted 78,170,544 68,048,369 75,702,474 62,897,957
1. Adjustment reflects the estimated cash yield on developments in process as of September 30, 2024. 2. The adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended September 30, 2024 and 2023, had occurred on July 1, 2024 and 2023, respectively. 3. We calculate Annualized Adjusted EBITDAre by multiplying Adjusted EBITDAre by four. 4. Reflects 10,735,647 of unsettled forward equity shares at the September 30, 2024, available weighted average net settlement price of $17.28 per share. EBITDAre and Adjusted EBITDAre (unaudited, dollars in thousands) 7 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 depreciation and amortization 78 78 Interest expense, net 7,965 3,946 Income tax expense (benefit) 2 15 Amortization of loan origination costs and discounts (265) 26 EBITDA 22,648 23,909 Provisions for impairment 9,838 1,538 Loss (gain) on sales of real estate, net 132 (373) EBITDAre 32,618 25,074 Straight-line rent adjustments (749) (245) Non-recurring executive transition costs, severance and related charges 14 62 Other non-recurring (gain) loss, net (115) (1) Other non-recurring expenses, net 523 — Lease termination fees — (550) Non-cash compensation expense 1,376 1,280 Adjustment for construction in process (1) 258 720 Adjustment for intraquarter investment activities (2) 1,921 1,341 Adjusted EBITDAre $ 35,846 $ 27,681 Annualized Adjusted EBITDAre (3) $ 143,384 Net Debt As of 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 (4) (185,474) Adjusted Net Debt $ 569,021 Leverage Net Debt / Annualized Adjusted EBITDAre 5.3 x Adjusted Net Debt / Annualized Adjusted EBITDAre 4.0 x
Net Operating Income (unaudited, dollars in thousands) 8 Three Months Ended September 30, Nine Months Ended 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 20,438 15,804 56,522 46,599 Provisions for impairment 9,838 1,538 17,336 4,374 Transaction costs 26 143 201 267 Interest expense, net 7,965 3,946 21,749 13,412 Loss (gain) on sales of real estate, net 132 (373) (874) (669) Income tax expense (benefit) 2 15 31 (60) Loss on debt extinguishment — — — 128 Interest income on mortgage loans receivable (3,272) (2,244) (8,458) (5,145) Lease termination fees — (550) — (550) Other expense (income), net 107 (367) 2,451 (586) Property-Level NOI 34,201 27,284 97,648 77,997 Straight-line rent adjustments (749) (245) (1,829) (707) Amortization of lease-related intangibles (170) (121) (363) (517) Property-Level Cash NOI $ 33,282 $ 26,918 $ 95,456 $ 76,773 Adjustment for intraquarter acquisitions, dispositions and completed development (1) 1,722 Property-Level Cash NOI Estimated Run Rate 35,004 Interest income on mortgage loans receivable 3,272 Adjustments for intraquarter mortgage loan activity (2) 199 Total Cash NOI - Estimated Run Rate $ 38,475 Property Operating Expense Coverage Reimbursable property operating expense $ 3,919 $ 3,451 11,067 $ 10,233 Property operating expenses (4,494) (3,883) (12,578) (11,350) Property operating expenses, net $ (575) $ (432) $ (1,511) $ (1,117) 1. Adjustments assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended September 30, 2024, had occurred on July 1, 2024. 2. Adjustment assumes all loan activity completed during the three months ended September 30, 2024, had occurred on July 1, 2024.
Consolidated Balance Sheets (unaudited, dollars in thousands, except per share data) 9 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 (136,528) (101,210) Property under development 9,361 29,198 Real estate held for investment, net 1,744,413 1,538,693 Assets held for sale 45,712 52,451 Mortgage loans receivable, net 142,171 114,472 Cash, cash equivalents and restricted cash 28,750 29,929 Lease intangible assets, net 164,905 161,354 Other assets, net 59,298 49,337 Total assets $ 2,185,249 $ 1,946,236 LIABILITIES AND EQUITY Liabilities: Term loans, net $ 622,239 $ 521,912 Revolving credit facility 150,000 80,000 Mortgage note payable, net 7,861 7,883 Lease intangible liabilities, net 23,341 25,353 Liabilities related to assets held for sale 732 1,158 Accounts payable, accrued expenses and other liabilities 33,752 36,498 Total liabilities 837,925 672,804 Equity: Stockholders’ equity Common stock, $0.01 par value, 400,000,000 shares authorized; 81,583,917 and 73,207,080 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 816 732 Additional paid-in capital 1,507,170 1,367,505 Distributions in excess of retained earnings (165,421) (112,276) Accumulated other comprehensive (loss) income (2,453) 8,943 Total stockholders’ equity 1,340,112 1,264,904 Noncontrolling interests 7,212 8,528 Total equity 1,347,324 1,273,432 Total liabilities and equity $ 2,185,249 $ 1,946,236
1. Rates presented exclude the impact of capitalized loan fee amortization. 2. Interest rate reflects the all-in borrowing rate as of September 30, 2024. Facility fees are charged at an annual rate of 0.15% of the total facility size of $400 million, and are not included in the interest rate presented. The facility has a one-year extension option. Remaining capacity reduced by $0.15 million for outstanding letters of credit. 3. Interest rate consists of the fixed rate SOFR swap of 1.87%, plus a credit spread adjustment of 0.10% and a borrowing spread of 1.15%. See the $175 million Term Loan - Interest Rate Schedule table for additional detail on the fixed interest rate changes through the fully extended maturity. 4. Interest rate consists of the fixed rate SOFR swap of 2.63%, plus a credit spread adjustment of 0.10% and a borrowing spread of 1.15%. The swap terminates of February 11, 2028. 5. Interest rate consists of the fixed rate SOFR swap of 3.74%, plus a credit spread adjustment of 0.10% and a borrowing spread of 1.15%. The term loan matures on July 3, 2026, and includes two one-year extension options and one six-month extension option. 6. The mortgage note was assumed as part of an asset acquisition during the third quarter of 2022. Debt, Capitalization, and Financial Ratios (unaudited, dollars in thousands) 10 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 loan(3) January 15, 2027 175,000 3.12% — 2.3 Unsecured term loan(4) February 11, 2028 200,000 3.88% — 3.4 Unsecured term loan(5) January 3, 2029 250,000 4.99% — 4.3 Mortgage note(6) November 1, 2027 8,245 4.53% — 3.1 Total / Weighted Average $ 783,245 4.46% $ 249,850 3.3 $175 million Term Loan - Interest Rate Schedule Start Date End Date Applicable Balance Fixed Rate(1) November 27, 2023 December 23, 2024 $ 175,000 3.12 % December 23, 2024 January 15, 2027 $ 175,000 3.65 % $175 $200 $250 $8 $400 $0 $100 $200 $300 $400 $500 $600 2023 2024 2025 2026 2027 2028 2029 2024 Unsecured Term Loan 2028 Unsecured Term Loan 2029 Unsecured Term Loan Mortgage Note Revolving Credit Facility Capacity Debt Maturity Schedule Floating, 19% Fixed, 81% Fixed vs. Floating Debt
Debt, Capitalization, and Financial Ratios (unaudited, dollars in thousands, except per share data) 11 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 Net Debt $ 569,021 Net Debt / Annualized Adjusted EBITDAre 5.3x Adjusted Net Debt / Annualized Adjusted EBITDAre 4.0x Key Debt Covenant Information Required Actual Consolidated total leverage ratio ≤ 60.0% 34.0% Fixed charge coverage ratio ≥ 1.50x 4.49x Maximum secured indebtedness ≤ 40.0% 0.4% Maximum recourse indebtedness ≤ 10.0% —% Unencumbered leverage ratio ≤ 60.0% 36.2% Unencumbered interest coverage ratio ≥ 1.75x 4.49x Liquidity As of September 30, 2024 Unused unsecured revolver capacity $ 249,850 Cash, cash equivalents and restricted cash 28,750 Net value of unsettled forward equity(1) 185,474 Total Liquidity $ 464,074 Equity Ending Shares/ Units as of September 30, 2024 Equity Market Capitalization % of Total Common shares(2) 81,583,917 $ 1,348,582 99.5 % OP units(2) 424,956 7,025 0.5 % Total 82,008,873 $ 1,355,607 100.0 % Enterprise Value As of September 30, 2024 % of Total Principal amount of total debt $ 783,245 36.6 % Equity market capitalization(2) 1,355,607 63.4 % Total enterprise value $ 2,138,852 100.0 % 1. Reflects 10,735,647 of unsettled forward equity shares at the September 30, 2024 weighted average net settlement price of $17.28 per share. 2. Value is based on the September 30, 2024 closing share price of $16.53 per share.
1. Includes acquisitions, mortgage loans receivable, and completed developments. 2. ABR divided by the Gross Investment. 3. Weighted by ABR; excludes lease extension options and investments that secure mortgage loans receivable. 4. Includes investments associated with mortgage loans receivable. 5. Excludes transaction costs and principal payments from mortgage loans receivable. 6. ABR divided by Gross Proceeds; excludes vacant properties. 7. Includes payoff of outstanding mortgage loans receivable. Excludes amortization of existing mortgage loans receivable. 8. Effective interest rate of mortgage loans receivable. Investment Activity (unaudited, dollars in thousands) 12 Three Months Ended September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Investments Number of Investments(1) 33 28 42 57 29 Gross Investment $ 151,555 $ 115,734 $ 129,207 $ 119,128 $ 117,455 Cash Yield(2) 7.5 % 7.5 % 7.5 % 7.2 % 7.0 % Weighted Average Lease Term (years)(3) 12.5 16.7 11.5 10.9 10.0 Investment Grade and Investment Grade Profile % 52.4 % 39.1 % 84.8 % 98.7 % 97.2 % Dispositions Number of Investments(4) 8 6 12 5 4 Number of Vacant Properties — — — — — Gross Proceeds(5) $ 24,105 $ 12,707 $ 21,594 $ 14,513 $ 7,543 Cash Yield(6) 7.3 % 6.8 % 6.8 % 7.1 % 7.2 % Weighted Average Lease Term (years)(3) 9.9 10.3 10.3 11.2 7.1 Loan Repayments Number of Loan Repayments(7) 4 1 — 1 2 Amount of Repayment $ 8,857 $ 2,324 $ — $ 1,482 $ 6,000 Cash Yield(8) 8.7 % 10.3 % — % 7.6 % 6.5 % Developments Industry Location Lease Term (years) Amount Funded to Date Anticipated Rent Commencement Dollar Stores (multiple programs) Various (9 completed) 10 to 15 $ 17,929 Commenced 1Q'24 Farm Supplies Malakoff, TX 20 $ 6,345 Commenced 1Q'24 Dollar Stores (multiple programs) Various (5 completed) 15 $ 9,071 Commenced 2Q'24 Automotive Service (multiple locations) Various (1 completed) 10 to 15 $ 3,256 Commenced 2Q'24 Home Improvement Butte, MT 15 $ 10,601 Commenced 3Q'24 Dollar Stores (multiple programs) Various (2 completed) 15 $ 4,163 Commenced 3Q'24 Automotive Service (multiple locations) Various (1 completed) 15 $ 3,358 Commenced 3Q'24 Dollar Stores (multiple programs) Various (3 in progress) 10 to 15 $ 4,424 4Q'24 to 1Q'25 Automotive Service (multiple locations) Various (4 in progress) 15 $ 7,741 4Q'24 to 1Q'25 Pet Supplies Sumter, SC 10 $ 2,389 1Q'25
1. Includes acquisitions, mortgage loans receivable, and completed developments. 2. Excludes 80 investments that secure mortgage loans receivable. 3. Weighted by ABR; excludes lease extension options and 80 investments that secure mortgage loans receivable. 4. Investments, or investments that are subsidiaries of a parent entity (with such subsidiary making up at least 50% of the parent company total revenue), with a credit rating of BBB- (S&P), Baa3 (Moody's) or NAIC2 (National Association of Insurance Commissioners) or higher. 5. Investments with investment grade credit metrics (more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x), but do not carry a published rating from S&P, Moody's, or NAIC. 6. Investments, or investments that are subsidiaries of a parent entity (with such subsidiary making up at least 50% of the parent company total revenue), with a credit rating of BB+ (S&P), Ba1 (Moody's) or NAIC3 (National Association of Insurance Commissioners) or lower. Portfolio Information (unaudited, dollars in thousands) 13 Portfolio Metrics September 30, 2024 Number of Investments(1) 671 Number of states 45 Square feet 12,076,093 Tenants 93 Industries 26 Occupancy(2) 100.0 % Weighted average lease term remaining (years)(3) 9.5 Tenant Quality Number of Investments ABR % of ABR Investment grade (rated)(4) 488 $ 95,574 60.9% Investment grade profile (unrated)(5) 60 22,620 14.4% Sub-investment grade (rated)(6) 59 24,295 15.5% Sub-investment grade profile (unrated) 64 14,510 9.2% Total 671 $ 156,999 100.0% Investment grade, 60.9% Investment grade profile, 14.4% Sub- investment grade, 15.5% Sub- investment grade profile, 9.2% 75.3% of ABR Inv. Grade Inv. Grade Profile Tenant Quality Necessity, 48.8% Discount, 21.6% Service, 17.7% Other, 11.9% 88.1% of ABR Necessity Discount Service Defensive Category
1. If rated by a credit rating agency, reflects highest rating from S&P, Fitch, Moody's or National Association of Insurance Commissioners. 2. Dollar Tree banners, as a percentage of ABR: Dollar Tree - 1.2%; Dollar Tree / Family Dollar Combo - 3.0%; Family Dollar - 1.2%. 3. Stats for Walgreens incorporate all completed activities as of November 4, 2024, as if they occurred by September 30, 2024; all other portfolio stats are as of September 30, 2024. Portfolio Information (cont’d) (unaudited, dollars in thousands) 14 Top 20 Tenants Number of Investments ABR % of ABR Credit Rating(1) 147 $ 17,548 11.2% BBB 33 10,246 6.5% BBB 5 8,522 5.4% A 74 8,455 5.4% BBB 25 7,544 4.8% BB 16 6,513 4.1% IG Profile 6 5,276 3.4% BBB+ 17 4,619 2.9% Baa1 19 4,431 2.8% A 49 4,288 2.7% A 2 4,169 2.7% B+ 7 3,969 2.5% A3 7 3,899 2.5% IG Profile 3 3,824 2.4% IG Profile 39 3,761 2.4% Baa3 6 3,727 2.4% AA 4 3,578 2.3% BBB+ 7 3,408 2.2% Baa1 11 2,685 1.7% IG Profile 2 2,615 1.7% BB Total 481 $ 113,946 72.6% (2) (3)
Portfolio Information (cont’d) (unaudited, dollars in thousands) 15 State Number of Investments ABR % of ABR Texas 58 $ 16,132 10.3% Illinois 28 14,141 9.0% New York 34 11,346 7.2% Wisconsin 24 9,447 6.0% North Carolina 74 8,416 5.4% Georgia 34 8,149 5.2% Alabama 53 7,820 5.0% Ohio 43 6,851 4.4% Florida 36 6,687 4.3% Pennsylvania 30 6,060 3.9% Other 257 61,951 39.5% Total 671 $ 156,999 100.0%
Portfolio Information (cont’d) (unaudited, dollars in thousands) 16 Industry Defensive Category Number of Investments ABR % of ABR Dollar Stores Discount 221 $ 26,002 16.6% Grocery Necessity 33 21,151 13.5% Home Improvement Necessity 31 18,550 11.8% Drug Stores & Pharmacies(1) Necessity 58 17,790 11.3% Convenience Stores Service 78 11,116 7.1% Discount Retail Discount 31 7,972 5.1% Arts & Crafts Other 15 6,443 4.1% Health and Fitness Service 4 6,120 3.9% Auto Parts Necessity 61 5,467 3.5% Farm Supplies Necessity 18 5,191 3.3% Automotive Service Service 32 4,481 2.9% Quick Service Restaurants Service 28 4,262 2.7% Consumer Electronics Other 7 3,969 2.5% Sporting Goods Other 4 3,780 2.4% General Retail Necessity 6 3,710 2.4% Healthcare Necessity 13 2,939 1.9% Specialty Other 2 1,719 1.1% Apparel Other 5 1,234 0.8% Casual Dining Service 7 1,067 0.7% Furniture Stores Other 2 939 0.6% Equipment Rental and Leasing Service 5 687 0.4% Banking Necessity 3 476 0.3% Wholesale Warehouse Club Necessity 1 417 0.3% Telecommunications Other 2 314 0.2% Gift, Novelty, and Souvenir Shops Other 1 200 0.1% Home Furnishings Other 1 134 0.1% Total 671 $ 156,999 100.0% Defensive Category Number of Investments ABR % of ABR Necessity 226 76,560 48.8% Discount 252 33,974 21.6% Service 154 27,734 17.7% Other 39 18,732 11.9% Total 671 $ 156,999 100.0% 1. Stats for Drug Stores & Pharmacies incorporate all completed activities as of November 4, 2024; all other portfolio stats are as of September 30, 2024.
Lease Expiration Schedule(1) (unaudited, dollars in thousands) 17 Year of Expiration Number of Investments Expiring ABR Expiring Expiring as a % of Portfolio 2024 — $ — —% 2025 5 1,360 0.9% 2026 9 2,459 1.7% 2027 14 4,344 3.0% 2028 26 10,304 7.1% 2029 45 10,292 7.1% 2030 39 12,541 8.7% 2031 62 12,341 8.5% 2032 37 9,868 6.8% 2033 55 11,725 8.1% 2034 61 15,521 10.7% 2035 20 7,681 5.3% 2036 20 5,430 3.8% 2037 21 7,265 5.0% 2038 79 10,219 7.1% 2039 44 8,071 5.6% 2040 3 797 0.6% 2041 4 1,246 0.9% 2042 1 985 0.7% 2043 14 3,178 2.2% 2044 22 7,931 5.5% 2045 2 303 0.2% 2046 — — —% 2047 1 156 0.1% 2048 — — —% 2049 7 666 0.5% 2050 — — —% TOTAL 591 $ 144,682 100.0% 1. Excludes 80 investments that secure mortgage loans receivable.
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 impairment charges on depreciable real property. Core FFO means core funds from operations. Core FFO is a non-GAAP financial measure defined as FFO adjusted to remove the effect of unusual and non-recurring items that are not expected to impact our operating performance or operations on an ongoing basis. These have included non-recurring executive transition costs, severance and related charges, non-recurring other loss (gain), net, and loss on debt extinguishments and other related costs. AFFO means adjusted funds from operations. AFFO is a non-GAAP financial measure defined as Core FFO adjusted for GAAP net (loss) income related to non-cash revenues and expenses, such as straight-line rent, amortization of above- and below-market lease-related intangibles, amortization of lease incentives, capitalized interest expense, earned development interest, non-cash interest expense, non-cash compensation expense, amortization of deferred financing costs, amortization of above/below-market assumed debt, and amortization of loan origination costs. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. In fact, real estate values historically have risen or fallen with market conditions. FFO is intended to be a standard supplemental measure of operating performance that excludes historical cost depreciation and valuation adjustments from net (loss) income. We consider FFO to be useful in evaluating potential property acquisitions and measuring operating performance. We further consider FFO, Core FFO and AFFO to be useful in determining funds available for payment of distributions. FFO, Core FFO and AFFO do not represent net (loss) income or cash flows from operations as defined by GAAP. You should not consider FFO, Core FFO and AFFO to be alternatives to net (loss) income as a reliable measure of our operating performance; nor should you consider FFO, Core FFO and AFFO to be alternatives to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity. FFO, Core FFO and AFFO do not measure whether cash flow is sufficient to fund our cash needs, including principal amortization, capital improvements and distributions to stockholders. FFO, Core FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP. Further, FFO, Core FFO and AFFO as disclosed by other REITs might not be comparable to our calculations of FFO, Core FFO and AFFO. Non-GAAP Measures and Definitions 18
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 further adjusted to follow the definition included in a white paper issued in 2017 by NAREIT, which recommended that companies that report EBITDA also report EBITDAre. We compute EBITDAre in accordance with the definition adopted by NAREIT. NAREIT defines EBITDAre as EBITDA (as defined above) excluding gains (or losses) from sales of depreciable property and impairment charges on depreciable real property. Adjusted EBITDAre is a non-GAAP financial measure defined as EBITDAre adjusted to exclude straight- line rent, non-cash compensation expense, non-recurring executive transition costs, severance and related charges, loss on debt extinguishment and other related costs, other non-recurring loss (gain), net, other non- recurring expenses (income), lease termination fees, adjustment for construction in process, and adjustment for intraquarter activities. Annualized Adjusted EBITDAre is a non-GAAP financial measure defined as Adjusted EBITDAre multiplied by four. We present EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre as they are measures commonly used in our industry. We believe that these measures are useful to investors and analysts because they provide supplemental information concerning our operating performance, exclusive of certain non-cash items and other costs. We use EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre as measures of our operating performance and not as measures of liquidity. EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre do not include all items of revenue and expense included in net (loss) income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net (loss) income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, our computation of EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. Net Debt and Adjusted Net Debt Net Debt is calculated as our principal amount of total debt outstanding excluding deferred financing costs, net discounts and debt issuance costs less cash, cash equivalents and restricted cash available for future investment. We believe excluding cash, cash equivalents and restricted cash available for future investment from our principal amount, all of which could be used to repay debt, provides an estimate of the net contractual amount of borrowed capital to be repaid. We believe these adjustments are additional beneficial disclosures to investors and analysts. Adjusted Net Debt is Net Debt adjusted by the net value of unsettled forward equity as of period end. Non-GAAP Measures and Definitions (cont’d) 19
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 Rate are non-GAAP financial measures which we use to assess our operating results. We compute Property-Level NOI as net (loss) income (computed in accordance with GAAP), excluding general and administrative expenses, interest expense (or income), income tax expense, transaction costs, depreciation and amortization, gains (or losses) on sales of depreciable property, real estate impairment losses, interest income on mortgage loans receivable, loss on debt extinguishment, lease termination fees, and other expense (income), net. We further adjust Property-Level NOI for non-cash revenue components of straight-line rent and amortization of lease-intangibles to derive Property-Level Cash NOI. We further adjust Property-Level Cash NOI for intraquarter acquisitions, dispositions and completed developments to derive Property-Level Cash NOI - Estimated Run Rate. We further adjust Property-Level Cash NOI - Estimated Run Rate for interest income on mortgage loans receivable and intraquarter mortgage loan activity to derive Total Cash NOI - Estimated Run Rate. We believe Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis. Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate are not measurements of financial performance under GAAP, and may not be comparable to similarly titled measures of other companies. You should not consider our measures as alternatives to net (loss) income or cash flows from operating activities determined in accordance with GAAP. Other Definitions ABR is annualized base rent as of September 30, 2024, for all leases that commenced and annualized cash interest on mortgage loans receivable in place as of that date. Cash Yield is the annualized base rent contractually due from acquired properties and completed developments, and interest income from mortgage loans receivable, divided by the gross investment amount, gross proceeds in the case of dispositions, or loan repayment amount. Defensive Category is considered by us to represent tenants that focus on necessity goods and essential services in the retail sector, including discount stores, grocers, drug stores and pharmacies, home improvement, automotive service and quick-service restaurants, which we refer to as defensive retail industries. The defensive sub-categories as we define them are as follows: (1) Necessity, which are retailers that are considered essential by consumers and include sectors such as drug stores, grocers and home improvement, (2) Discount, which are retailers that offer a low price point and consist of off-price and dollar stores, (3) Service, which consist of retailers that provide services rather than goods, including, tire and auto services and quick service restaurants, and (4) Other, which are retailers that are not considered defensive in terms of being considered necessity, discount or service, as defined by us. Non-GAAP Measures and Definitions (cont’d) 20
Non-GAAP Measures and Definitions (cont’d) 21 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 under the master lease is counted as a separate lease. Occupancy is expressed as a percentage, and it is the number of economically occupied properties divided by the total number of properties owned, excluding mortgage loans receivable and properties under development. OP units means operating partnership units not held by NETSTREIT. Weighted Average Lease Term is weighted by the annualized base rent, excluding lease extension options and investments associated with mortgage loans receivable.
Forward Looking and Cautionary Statements 22 This supplemental report 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 business and growth strategies, investment, financing and leasing activities, including estimated development costs, and trends in our business, including trends in the market for single-tenant, retail commercial real estate. Words such as “expects,” “anticipates,” “intends,” “plans,” “likely,” “will,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this supplemental report may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. For a further discussion of these and other factors that could impact future results, performance or transactions, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 14, 2024 and other reports filed with the SEC from time to time. Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this supplemental report. New risks and uncertainties may arise over time and it is not possible for us to predict those events or how they may affect us. Many of the risks identified herein and in our periodic reports have been and will continue to be heightened as a result of the ongoing and numerous adverse effects arising from macroeconomic conditions, including inflation, interest rates and instability in the banking system. We expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law.
1 Investor Presentation November 2024
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 business and growth strategies, investment, financing and leasing activities, including estimated development costs, and trends in our business, including trends in the market for single-tenant, retail commercial real estate. Words such as “expects,” “anticipates,” “intends,” “plans,” “likely,” “will,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this presentation may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements, or our objectives and plans will be achieved. For a further discussion of these and other factors that could impact future results, performance or transactions, see the information under the heading “Risk Factors” in our Form 10-K for the year ended December 31, 2023, filed with the SEC on February 14, 2024, and other reports filed with the SEC from time to time. Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this presentation. New risks and uncertainties may arise over time, and it is not possible for us to predict those events or how they may affect us. Many of the risks identified herein and in our periodic reports have been and will continue to be heightened as a result of the ongoing and numerous adverse effects arising from macroeconomic conditions, including inflation, interest rates and instability in the banking system. We expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law. This presentation also includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) including, but not limited to, FFO, Core FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Annualized Adjusted EBITDAre, NOI, Cash NOI, Normalized Cash NOI, Net Debt, Adjusted Net Debt, and Pro forma Adjusted Net Debt. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that the presentation of these measures may not be comparable to similarly-titled measures used by other companies. The Company believes these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing its financial results with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Certain monetary amounts, percentages and other figures included in this presentation have been subject to rounding adjustments. Certain other amounts that appear in this presentation may not sum due to rounding.
Investment Highlights & Business Update 3 Source: Company data and balance sheet as of September 30, 2024, unless otherwise noted. Figures represent percentage of ABR unless otherwise noted. 1. Represents tenants with investment grade credit metrics (more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x), but do not carry a published rating from S&P, Fitch, Moody's, or NAIC. 2. Reflects 10,735,647 of unsettled forward equity shares at the September 30, 2024, weighted average net settlement price of $17.28 per share. 3. Assumes Company exercises its one-year extension option to further extend maturity to January 2027. 88% Necessity, Discount, and Service-Oriented Tenants 100% Occupancy 100% Rent Collection $464 million Total Liquidity2 4.0x Adj. Net Debt2 / Annualized Adj. EBITDAre ✓Focused on growing portfolio with high quality tenants that offer strong credit profiles and provide consistent performance through various economic cycles ✓Proven track record of full occupancy and rent collection; NTST’s single Big Lots vacancy has received strong interest from multiple retailers at or above current rent ✓Long weighted average lease term and de minimis intermediate-term lease expirations within the pharmacy and dollar store industries ✓Low leverage with no immediate-term debt maturities ✓$185.5mm of unsettled forward equity provides ample capital runaway into 2025 ✓Strong liquidity supported by active ATM program High Credit Quality & Resilient Net Lease Portfolio Well Capitalized Balance Sheet 75% Investment Grade (IG) and Investment Grade Profile (IGP)1 6.9% Wtd. Avg. Cash Yield Since 3Q’20 ✓Strong investment pace since 2020 with a solid pipeline of investment opportunities at attractive cash yields ✓$151.6 million of gross investments completed in 3Q’24 Proven Ability to Source Attractive Investment Opportunities 2027 First Debt Maturity3 $107 million Avg. Net Investments Per Quarter Since 3Q’20 24% Adj. Net Debt2 / Undepreciated Gross Assets $327 million YTD Net Investments 7.5% YTD Cash Yield 9.5 Years Weighted Average Lease Term (WALT) 50bps Pharmacy & Dollar Store ABR Expiring Thru YE’28
11.2% 6.5% 5.4% 5.4% 4.8%5 4.1% 3.4% 2.9% 2.8% 2.7% Portfolio Overview High-Quality, Diversified Portfolio Consisting of 60.9% Investment Grade Tenants Across 45 States 4 Source: Company data as of September 30, 2024, unless otherwise noted. 1. 80 properties that secure mortgage loans receivable are denoted as individual investments. 2. Excludes 80 investments that secure mortgage loans receivable. 3. Investments, or investments that are subsidiaries of a parent entity, with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody’s) or NAIC2 (National Association of Insurance Commissioners) or higher. 4. Weighted by ABR; excludes lease extension options and 80 investments that secure mortgage loans receivable. 5. Stats for Walgreens incorporate all completed activities as of November 4, 2024, as if they occurred by September 30, 2024; all other portfolio stats are as of September 30, 2024. 6. Represent investments with investment grade credit metrics (more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x), but do not carry a published rating from S&P, Moody’s, Fitch or NAIC. Key Portfolio Stats Investments1 671 States 45 Portfolio Square Feet (in millions) 12.1 Tenants 93 Retail Sectors 26 % Occupancy2 100% % Investment Grade Tenants (by ABR) 3 60.9% WALT (Years)4 9.5 Lease Turnover Through 2027 (by ABR) 5.6% National Footprint in Attractive Markets Top 10 Tenants by % of ABR Investment Grade BBB Sub-Investment Grade ≥1% and <3% ABR <1% ABR ≥5% and <10% ABR ≥3% and <5% ABR 0% ABR AK HI WA OR MT CA AZ WY NV ID UT CO NM TX OK ND SD NE KS LA AR MO IA MN WI IL IN MI OH KY TN FL MS AL GA SC NC VA WV PA DE NJ NY ME VT NH MA MD CT RI Baa1 IG Profile BBB BBB+ BBB BB A A A Investment Grade Profile6
Home Improvement: 11.8% Dollar Stores: 16.6% 1 Portfolio Diversification In Defensive Retail Sectors Nationally Diversified Portfolio Primarily Comprised of Recession Resilient Retail Tenants Source: Company data as of September 30, 2024. All figures represent percentage of ABR. Due to rounding, respective defensive retail sector exposure may not precisely reflect the absolute figures. 1. Stats for Drug Stores & Pharmacies incorporate all completed activities as of November 4, 2024; all other portfolio stats are as of September 30, 2024. Top Industries48.8% Necessity 21.6% Discount 11.9% Other Drug Stores & Pharmacies1: 11.3% 3 Grocery: 13.5% 2 4 Convenience Stores: 7.1% 5 17.7% Service 88.1% ABR Necessity Discount Service 5
Resilient, Cycle-Tested Investment Grade Credit Tenants with Durable Cash Flows1 >60% 75.3% (60.9% Investment Grade Credit and 14.4% Investment Grade Profile) Granular Assets in Highly Fragmented, Undercapitalized Market Segment $3.4 million Avg. Asset Size $1 to $10 million Avg. Asset Size Net Lease Retail Assets with Long Lease Term Benefiting From Contractual Rent Growth ~10 Year WALT 9.5 Year2 WALT Diversification by Industry, Tenant, State1 <15% Industry <50% Top 10 Tenants <15% State 16.6% Industry 49.3% Top 10 Tenants3 10.3% State Significant Focus on Fundamental Real Estate Underwriting Attractive cost basis with durable valuation supported by market rents and demos, physical structure and location, and alternative use analyses 6 Source: Company data as of September 30, 2024, unless otherwise noted. 1. Portfolio statistics as a percentage of ABR. 2. Weighted by ABR; excludes lease extension options and 80 investments that secure mortgage loans receivable. 3. Includes percentage of ABR for all completed activities for Walgreens as of November 4, 2024, as if they occurred by September 30, 2024. Current MetricsInvestment Philosophy Portfolio Strategy Defensive Tenancy in Necessity-Based and E-commerce-Resistant Retail Industries1 88.1%Primarily Consistent Investment Approach Disciplined and Deliberate Portfolio Construction
“Market-Taker Assets” 7 Inefficiently Priced Assets TYPICAL TRANSACTION - Well marketed transaction - Straight-forward transaction - Ability to finance transaction - Highly competitive, well capitalized investors TYPICAL TRANSACTION - Not highly marketed - May involve transaction structuring that limits buyer pool - Limited financing options - Less competitive Efficiently Priced Assets Acquisition Strategy – Bell Curve Investing Acquisition Strategy is Focused on Inefficiently Priced Assets Where Risk Adjusted Returns are Higher
8 Real Estate Valuation Unit-Level Profitability • Review underlying key real estate metrics to maximize re- leasing potential • Location analysis • Alternative use analysis • Determine rent coverage (min. 2.0x) and cost variability • Assess volatility and likelihood of cash flow weakness C B Tenant Credit Underwriting • Evaluate corporate level financials • Assess business risks • Determine ownership/sponsorship • Rigorous credit underwriting A L e v e l o f U n d e rw ri ti n g E m p h a s is Stringent Three-Part Underwriting Process Our Three-Pronged Approach Results in Superior Downside Protection
Investment Grade (rated) Investment Grade Profile (unrated) Sub-IG (rated) & Sub-IG Profile (unrated) Description • Validated financial strength and stability • Professional management with standardized operational practices • Focus on corporate guarantee credit • Lower relative yields • Higher competition for deals • IG-caliber balance sheets without explicit rating • Threshold metrics: • At least $1B in sales • Debt / adjusted EBITDA of less than 2.0x • Well-capitalized retailers • National footprint with strong brand equity • Focus on real estate quality / unit- level profitability • Higher relative yields • Lower competition for deals Durability • Coverage and credit enhancements required given more susceptible to market disruptions % Of ABR 60.9% 14.4% 24.7% Lease Terms (WALT, Rent Bumps, etc.) Less negotiating leverage More negotiating leverage Most negotiating leverage Representative Tenants 9 Source: Company data as of September 30, 2024, unless otherwise noted. 75.3% IG and IG Profile Defensive, consistent performance through economic cycles Strong Tenant Credit Underwriting Credit-Focused Underwriting Approach Drives Stable Revenue and Long-Term Return on Investment
10 Market-Level Considerations Property-Level Considerations • Fungibility of building for alternative uses • Replacement cost • Location analysis • Traffic counts • Nearby uses and traffic drivers, complementary nature thereof • Accessibility and parking capacity • Ingress and egress • Visibility / signage • Vacancy analysis • Marketability of the real estate without current tenant • List of likely replacement tenants • Rent analysis • Market rent versus in-place rent • Demographic analysis • Current demographics plus trends and forecasts • Competitive analysis • Market position versus competing retail corridors 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
11 Obtain Financial Info Perform Financial Analysis 2 Assess Investment Merits 1 3 • Provides clarity into location-specific performance • Analyze store demand dynamics, cost structure and liquidity profile • Determine whether property meets investment criteria • Obtain unit-level financial information from parent company if possible • If financials are not provided, utilize data provided by third party vendors to estimate sales by location • Third party data includes: • Cell phone traffic • Point of sales (POS) data • Triangulate P&L based on available information • Foot traffic • Sales • EBITDAR margin • Rent • Account for variability in business model cost structure • Higher proportion of fixed costs = more variability in rent coverage • Determine store ranking within tenant’s broader operating portfolio based on estimated sales Key Unit-Level Investment Criteria Minimum 2.0x Rent Coverage✓ Higher Cost Variability✓ Ranks in Top Half of Tenant’s Store Portfolio✓ Unit-Level Profitability Assess Unit-Level Financial Performance to Focus on Properties with Strong Rent Coverage and Higher Variability in Operating Costs
12 Source: Company filings from August 2020 through September 30, 2024. 1. Investments with investment grade credit metrics (more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x), but do not carry a published rating from S&P, Fitch, Moody’s, or NAIC. 2. Excludes lease extension options and investments that secure mortgage loans receivable. 3. Assumes cash cap rate is 30bps lower than reported GAAP cap rate. 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 NA IG + IG Profile % 76.5% NA NA NA NA WALT2 10.5 9.5 10.7 10.7 14.8 Weighted Average Cash Yield 6.9% 6.3%3 6.9% 6.6% 7.5% History of Sourcing Investments at Attractive Yields Consistently Invested at Above-Market Yields Despite Focus on High-Quality Tenants Sourcing Volume Since 3Q’20
$104,069 $128,615 $115,321 $117,455 $119,128 $129,207 $115,795 $151,555 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 G ro s s I n v e s tm e n t A c ti v it y ($ 0 0 0 s ) 13 Investment Activity Summary Details Source: Company data as of September 30, 2024. 1. Includes acquisitions, mortgage loans receivable, and completed developments. 2. Excludes lease extension options and investments that secure mortgage loans receivable. Investments1 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 Number of Investments 24 71 39 29 57 42 28 33 Average Investment $4,336 $1,811 $2,957 $4,050 $2,090 $3,076 $4,136 $4,593 Cash Cap Rates 6.9% 7.7% 6.8% 7.0% 7.2% 7.5% 7.5% 7.5% IG + IGP % 97.7% 94.9% 80.7% 97.2% 98.7% 84.8% 39.1% 52.4% Weighted Average Lease Term2 11.1 10.3 11.5 10.0 10.9 11.5 16.7 12.5
$12,294 $15,907 $4,060 $13,543 $15,995 $21,600 $12,707 $24,105 $0 $3,000 $6,000 $9,000 $12,000 $15,000 $18,000 $21,000 $24,000 $27,000 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 D is p o s it io n s A c ti v it y ($ 0 0 0 s ) 14 Disposition Activity Summary Details Source: Company data as of September 30, 2024. 1. Excludes vacant properties. Dispositions 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 Cash Cap Rates1 6.7% 6.8% 6.7% 6.9% 7.2% 6.8% 6.8% 7.3% Number of Investments 3 8 2 6 6 12 6 8 Weighted Average Lease Term 10.8 5.6 4.2 7.1 11.2 10.3 10.3 9.9
15 Source: Company data as of September 30, 2024. Since inception, the Company has disposed of 109 properties totaling $298 million, which has materially improved portfolio performance metrics such as tenant quality, WALT, and geographic diversity Identify properties not meeting strategy and/or risk management criteria (i.e. rent coverage) Periodically review all properties for changes in performance, credit, and local conditions Leverage 1031 exchange transfers where possible to access deep, non- institutional market for portfolio optimization Strategic Recycling Perpetual Stratification Active Monitoring Identify Active Asset Management Continuously Track Property Performance to Stratify Portfolio and Ensure a Secure Rental Stream
$175 $200 $250 $8 $400 $0 $100 $200 $300 $400 $500 $600 2024 2025 2026 2027 2028 2029 2024 Unsecured Term Loan 2028 Unsecured Term Loan 2029 Unsecured Term Loan Mortgage Note Revolving Credit Facility Capacity Source: Company data as September 30, 2024, unless otherwise noted. 1. Reflects 10,735,647 of unsettled forward equity shares at the September 30, 2024, weighted average net settlement price of $17.28 per share. 2. The three-year $250.0 million senior unsecured delayed draw term loan includes two one-year extension options and one six-month to extend maturity to January 2029, at Company’s discretion, totaling 5.5 year of available term. 3. Company extended the existing $175 million term loan maturity to January 2026 from December 2024, with a one-year extension option to further extend maturity to January 2027. Conservative Balance Sheet with Improved Liquidity Balance Sheet Positioned for Growth Given Strong Liquidity Profile and Low Leverage Position Debt Maturity Schedule – Pro Forma2,3 Abundant Liquidity to Support Growth: $464.1 million in total liquidity1 Well-Staggered Debt Maturity Profile: No term loan maturities expected until 20272,3 Unsecured Balance Sheet: Asset base is over 99% unencumbered Low Leverage: Adjusted Net Debt1 / Annualized Adjusted EBITDAre of 4.0x 3 2 16
97% 18% 80% 27% 47% 56%22% 16% 7% 49% 3% 39% 10% 5% FCPT NTST EPRT ADC O NNN Service Discount Necessity 2.9% 5.6% 12.6% 15.9% 16.6% 16.6% EPRT NTST ADC NNN FCPT O 57% 68% 61% 29% 17% 0% ADC NTST FCPT O NNN EPRT Source: Public filings as of September 30, 2024, unless otherwise noted. O is as of June 30, 2024 1. Examples of service includes convenience stores, quick service restaurants, automotive service, and health and fitness. Examples of discount include dollar store and discount retail. Examples of necessity include, drug stores & pharmacy, home improvement, auto parts, and banking. Portfolio Highlights Relative to Peers NTST’s Stable & Predictable Cash Flow Profile Drives Superior Risk-Adjusted Returns Lease Rollover Through 2027 Average Investment Size per Property Investment Grade % Portfolio Composition1 Weighted-Average Lease Term 17 14.1 9.5 7.9 10.0 7.3 9.6 $3.9 $3.9 $3.4 $3.1 $2.7 $2.6
7.7% 4.1% 4.1% 3.6% 3.5% 3.3% 3.2% 2.7% 3.2x 3.5x 4.0x 4.2x 4.9x 5.2x 5.2x 5.4x 18.2x 17.9x 15.9x 14.0x 13.5x 12.9x 12.1x 11.8x 17.2x 16.9x 15.4x 13.5x 13.0x 12.6x 11.6x 11.4x Net Debt + Pref. / EBITDA3 Multiple and Earnings Growth Comparison Relative Valuation and Growth Remains Stable 18 Source: Public filings, FactSet and S&P Capital IQ. Note: Market data as of November 1, 2024. Capitalization data as of September 30, 2024, except O capitalization data as of June 30, 2024. 1. 2025E AFFO per share growth is calculated using FactSet mean 2025E AFFO per share estimates and 2024E AFFO per share. 2. 2024E AFFO per share multiple calculated using current price per share and FactSet mean 2024E AFFO per share estimates. 3. Net Debt plus Preferred is adjusted for forward equity. 4. 2025E AFFO per share multiple calculated using current price per share and FactSet mean 2025E AFFO per share estimates. 2025E AFFO per Share Growth1 2024E AFFO per Share Multiple2 2025E AFFO per Share Multiple4
Applied Cap Rate and NAV Analysis Strong Upside Potential Given Relative Valuation Applied Nominal Cap Rate – Sensitivity Analysis Source: Public filings, FactSet and S&P Capital IQ. Note: Capitalization data as of September 30, 2024, except O capitalization data as of June 30, 2024. Market data as of November 1, 2024; closing price per share of $15.28. Companies may define adjusted cash NOI differently. Accordingly, such data for these companies and NTST may not be comparable. 1. Assumes 10.7 million of unsettled forward equity shares were settled for cash on September 30, 2024 at a weighted average net settlement price of $17.28 per share. 2. (NOI – TTM G&A) / Implied Real Estate Value. 19 Implied Cap Rate G&A Adjusted Implied Cap Rate2 2024E AFFO Multiple 5.5% 5.1% 17.9x 5.5% 5.1% 18.2x 6.0% 5.4% 15.9x 6.6% 6.4% 14.0x 6.9% 6.6% 12.9x 7.7% 7.1% 12.1x Average 6.4% 6.0% 15.2x Peer Benchmarking (unaudited, in millions) Three Months Ended, September 30, 2024 NOI - Property $34.2 Straight-line Rental Adjustments (0.7) Amortization of Lease-Related Intangibles (0.2) Cash NOI - Property 33.3 Intraquarter Net Investment Activity 1.7 Normalized Cash NOI - Property 35.0 Annualized Normalized Cash NOI - Property $140.0 Applied Cap Rate 7.50% 7.25% 7.00% 6.75% 6.50% Implied Real Estate Value $1,867 $1,931 $2,000 $2,074 $2,154 Mortgage Loan Receivable 142.2 Property Under Development 9.4 Other Tangible Assets 59.3 Net Debt1 (569.0) Other Tangible Liabilities (33.8) Implied Equity Value $1,475 $1,539 $1,608 $1,682 $1,762 Fully Diluted Shares Outstanding 82.0 Unsettled Forward Shares1 10.7 Implied Equity Value per Share $15.90 $16.60 $17.34 $18.14 $19.00
20 Case Studies
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 21 • Loan provided the borrower funding to acquire a 49 property Speedway portfolio • Loan-to-value of ~60%, with first lien senior secured priority with no capital ahead of NETSTREIT’s loan • Yield maintenance provides protection from refinancing • Valuation excludes pending uncapped CPI rent escalations Investment Stats: Investment Highlights Case Study: Loan Strategy
22 • Acquisition of one Walmart Supercenter and one Sam’s Club by partnering and concurrently closing with a shopping center acquirer who purchased the remainder of the center • Significantly higher cap rate achieved through creative structuring • Strong retail corridor in Tupelo, MS INVESTMENT STATS:INVETMENT STATS: Close Date: July 2020 Purchase Price: $17.0 million Cash Cap Rate: 6.6% Location: Tupelo, MS Term at Close: 12 years Credit Rating: AA / Aa2 Investment Stats: Investment Highlights Case Study: Breakup Strategy
23 • NTST negotiated a new 10-year lease with only a 7.4% rent reduction to increase lease term by six years • Cash cap rate of 6.9% compares favorably to other 10-year Tractor Supply transactions in the market at the time • Exceptional real estate that tenant is committed to long term INVESTMENT STATS: Close Date: March 2021 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 Stats: Investment Highlights Case Study: Blend & Extend
24 Corporate Responsibility
25 Source: Company data. 1. Reflects gender and racial / ethnic diversity. Annual Director Elections Majority Voting Standard For Election of Directors Director Resignation Policy Annual Director and Committee Assessments No poison pill or differential voting stock structure to chill shareholder participation Shareholders’ right to amend the charter and bylaws by simple majority vote Separate non-executive Chair and CEO roles and Lead Independent Director with strong role and significant governance duties Governance Highlights Board Independence and Diversity 86% Independent Directors 50% Diverse Independent Directors1 43% Female Directors 3 Fully Independent Committees Governance We are committed to acting with honesty and integrity and conducting all corporate opportunities in an ethical manner.
26 401K Plan 100% company match of up to a 3% contribution, and 50% of up to the next 2% Insurance Health, dental, and vision insurance costs covered at 90% for employees and 60% for dependents Leave Ten weeks of paid maternity leave at 100% salary as well as four weeks of paid family bonding; Company also provides jury duty, witness leave, and military leave Paid Time Off A minimum of twenty-three PTO days Paid Holidays Twelve days of paid holidays Employee Assistance 24/7 toll-free hotline to access confidential counseling on various physical and mental health needs Continuing Education Reimbursement for certifications, tuition, courses, and seminars for continuing professional education BenefitsWorkforce Diversity Source: Company data. 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. Female, 40% Male, 60% White, 70% Ethnically Diverse, 30% Female, 36% Male, 64% White, 71% Ethnically Diverse, 29%
27 Source: Tenants within our portfolio that have public environmental, social, or governance initiatives as of June 30, 2024. 1. Includes the $200 million unsecured term loan which matures in February 2028, the $250 million unsecured term loan which matures in January 2029, and the $400 million revolver which matures in August 2027. Environmental Responsibility We are committed to fulfilling our responsibility as an outstanding corporate citizen. ✓ 18 of our top 20 tenants have corporate sustainability initiatives in place ✓ 73% of ABR represents tenants with ESG initiatives ✓ We incorporated green lease clauses in our standard lease form and as part of our corporate guidelines ✓ We received Silver Level recognition from Green Lease Leaders for our efforts ✓ We incorporated sustainability-linked loan feature, based on SBTi, to our unsecured term loans and credit facility1 ✓ We completed scope 1 and 2 greenhouse gas emissions inventory for our corporate headquarters ✓ We participated in our first GRESB Public Disclosure ✓ Corporate headquarters is LEED v4 O+M: EB Gold Certified, meeting strict guidelines set forth by the Environmental Protection Agency ✓ Implementation of conservation practices in office Corporate Sustainability Initiatives from Tenants Greenhouse Gas Emissions Green Lease Clauses Sustainable Practices Science Based Target initiatives (“SBTi”) GRESB Public Disclosure
28 Financial Information and Non-GAAP Reconciliations
Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 REVENUES Rental revenue (including reimbursable) $ 38,172 $ 31,167 $ 110,226 $ 89,347 Interest income on loans receivable 3,272 2,244 8,458 5,145 Other revenue — 550 — 550.00 Total revenues 41,444 33,961 118,684 95,042 OPERATING EXPENSES Property 4,494 3,883 12,578 11,350 General and administrative 4,287 5,133 15,266 15,299 Depreciation and amortization 20,438 15,804 56,522 46,599 Provisions for impairment 9,838 1,538 17,336 4,374 Transaction costs 26 143 201 267 Total operating expenses 39,083 26,501 101,903 77,889 OTHER (EXPENSE) INCOME Interest expense, net (7,965) (3,946) (21,749) (13,412) (Loss) gain on sales of real estate, net (132) 373 874 669 Loss on debt extinguishment — — — (128) Other income, net 416 367 (2,451) 586 Total other (expense) income, net (7,681) (3,206) (23,326) (12,285) Net (loss) income before income taxes (5,320) 4,254 (6,545) 4,868 Income tax (expense) benefit (2) (15) (31) 60 Net (loss) income (5,322) 4,239 (6,576) 4,928 Net (loss) income attributable to noncontrolling interests (27) 24 (35) 32 Net (loss) income attributable to common stockholders $ (5,295) $ 4,215 $ (6,541) $ 4,896 Amounts available to common stockholders per common share: Basic $ (0.07) $ 0.06 $ (0.09) $ 0.08 Diluted $ (0.07) $ 0.06 $ (0.09) $ 0.08 Weighted average common shares: Basic 77,610,680 67,112,587 74,822,286 62,123,334 Diluted 77,610,680 68,048,369 74,822,286 62,897,957 Consolidated Statements of Operations (unaudited, dollars in thousands, except per share data) 29
Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 GAAP Reconciliation: Net (loss) income $ (5,322) $ 4,239 $ (6,576) $ 4,928 Depreciation and amortization of real estate 20,360 15,726 56,286 46,379 Provisions for impairment 9,838 1,538 17,336 4,374 Loss (gain) on sales of real estate, net 132 (373) (874) (669) Funds from Operations (FFO) $ 25,008 $ 21,130 $ 66,172 $ 55,012 Non-recurring executive transition costs, severance and related charges 14 62 1,495 276 Loss on debt extinguishment and other related costs — — — 223 Other non-recurring (gain) loss, net (115) (1) 3,077 (47) Core Funds from Operations (Core FFO) $ 24,907 $ 21,191 $ 70,744 $ 55,464 Straight-line rent adjustments (749) (245) (1,829) (707) Amortization of deferred financing costs 558 578 1,673 1,165 Amortization of above/below-market assumed debt 29 29 86 86 Amortization of loan origination costs and discounts (265) 26 (242) 83 Amortization of lease-related intangibles (170) (121) (363) (517) Earned development interest 259 189 962 189 Capitalized interest expense (130) (404) (709) (688) Non-cash interest expense (990) (1,134) (2,948) (1,134) Non-cash compensation expense 1,376 1,280 4,128 3,559 Adjusted Funds from Operations (AFFO) $ 24,825 $ 21,389 $ 71,502 $ 57,500 FFO per common share, diluted $ 0.32 $ 0.31 $ 0.87 $ 0.87 Core FFO per common share, diluted $ 0.32 $ 0.31 $ 0.93 $ 0.88 AFFO per common share, diluted $ 0.32 $ 0.31 $ 0.94 $ 0.91 Dividends per share $ 0.210 $ 0.205 $ 0.620 $ 0.605 Dividends per share as a percent of AFFO 66% 66% 66% 66% Weighted average common shares outstanding, basic 77,610,680 67,112,587 74,822,286 62,123,334 Operating partnership units outstanding 433,942 501,987 450,952 507,014 Unvested restricted stock units 115,703 173,001 117,761 167,215 Unsettled shares under open forward equity contracts 10,219 260,794 311,475 100,394 Weighted average common shares outstanding, diluted 78,170,544 68,048,369 75,702,474 62,897,957 Funds From Operations and Adjusted Funds From Operations (unaudited, dollars in thousands, except per share data) 30
1. Adjustment reflects the estimated cash yield on developments in process as of September 30, 2024. 2. The adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended September 30, 2024 and 2023, had occurred on July 1, 2024 and 2023, respectively. 3. We calculate Annualized Adjusted EBITDAre by multiplying Adjusted EBITDAre by four. 4. Reflects 10,735,647 of unsettled forward equity shares at the September 30, 2024, available weighted average net settlement price of $17.28 per share. 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 depreciation and amortization 78 78 Interest expense, net 7,965 3,946 Income tax expense (benefit) 2 15 Amortization of loan origination costs and discounts (265) 26 EBITDA 22,648 23,909 Provisions for impairment 9,838 1,538 Loss (gain) on sales of real estate, net 132 (373) EBITDAre 32,618 25,074 Straight-line rent adjustments (749) (245) Non-recurring executive transition costs, severance and related charges 14 62 Other non-recurring (gain) loss, net (115) (1) Other non-recurring expenses, net 523 — Lease termination fees — (550) Non-cash compensation expense 1,376 1,280 Adjustment for construction in process (1) 258 720 Adjustment for intraquarter investment activities (2) 1,921 1,341 Adjusted EBITDAre $ 35,846 $ 27,681 Annualized Adjusted EBITDAre (3) $ 143,384 Net Debt As of 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 (4) (185,474) Adjusted Net Debt $ 569,021 Leverage Net Debt / Annualized Adjusted EBITDAre 5.3 x Adjusted Net Debt / Annualized Adjusted EBITDAre 4.0 x EBITDAre and Adjusted EBITDAre (unaudited, dollars in thousands) 31
Net Operating Income (unaudited, dollars in thousands) 1. Adjustments assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended September 30, 2024, had occurred on July 1, 2024. 2. Adjustment assumes all loan activity completed during the three months ended September 30, 2024, had occurred on July 1, 2024. Three Months Ended September 30, Nine Months Ended 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 20,438 15,804 56,522 46,599 Provisions for impairment 9,838 1,538 17,336 4,374 Transaction costs 26 143 201 267 Interest expense, net 7,965 3,946 21,749 13,412 Loss (gain) on sales of real estate, net 132 (373) (874) (669) Income tax expense (benefit) 2 15 31 (60) Loss on debt extinguishment — — — 128 Interest income on mortgage loans receivable (3,272) (2,244) (8,458) (5,145) Lease termination fees — (550) — (550) Other expense (income), net 107 (367) 2,451 (586) Property-Level NOI 34,201 27,284 97,648 77,997 Straight-line rent adjustments (749) (245) (1,829) (707) Amortization of lease-related intangibles (170) (121) (363) (517) Property-Level Cash NOI $ 33,282 $ 26,918 $ 95,456 $ 76,773 Adjustment for intraquarter acquisitions, dispositions and completed development (1) 1,722 Property-Level Cash NOI Estimated Run Rate 35,004 Interest income on mortgage loans receivable 3,272 Adjustments for intraquarter mortgage loan activity (2) 199 Total Cash NOI - Estimated Run Rate $ 38,475 Property Operating Expense Coverage Reimbursable property operating expense $ 3,919 $ 3,451 $ 11,067 $ 10,233 Property operating expenses (4,494) (3,883) (12,578) (11,350) Property operating expenses, net $ (575) $ (432) $ (1,511) $ (1,117) 32
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 (136,528) (101,210) Property under development 9,361 29,198 Real estate held for investment, net 1,744,413 1,538,693 Assets held for sale 45,712 52,451 Mortgage loans receivable, net 142,171 114,472 Cash, cash equivalents and restricted cash 28,750 29,929 Lease intangible assets, net 164,905 161,354 Other assets, net 59,298 49,337 Total assets $ 2,185,249 $ 1,946,236 LIABILITIES AND EQUITY Liabilities: Term loans, net $ 622,239 $ 521,912 Revolving credit facility 150,000 80,000 Mortgage note payable, net 7,861 7,883 Lease intangible liabilities, net 23,341 25,353 Liabilities related to assets held for sale 732 1,158 Accounts payable, accrued expenses and other liabilities 33,752 36,498 Total liabilities $ 837,925 $ 672,804 Equity: Stockholders’ equity Common stock, $0.01 par value, 400,000,000 shares authorized; 81,583,917 and 73,207,080 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 816 732 Additional paid-in capital 1,507,170 1,367,505 Distributions in excess of retained earnings (165,421) (112,276) Accumulated other comprehensive (loss) income (2,453) 8,943 Total stockholders’ equity 1,340,112 1,264,904 Noncontrolling interests 7,212 8,528 Total equity 1,347,324 1,273,432 Total liabilities and equity $ 2,185,249 $ 1,946,236 Consolidated Balance Sheets (unaudited, dollars in thousands, except per share data) 33
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 loan(3) January 15, 2027 175,000 3.12% — 2.3 Unsecured term loan(4) February 11, 2028 200,000 3.88% — 3.4 Unsecured term loan(5) January 3, 2029 250,000 4.99% — 4.3 Mortgage note(6) November 1, 2027 8,245 4.53% — 3.1 Total / Weighted Average $ 783,245 4.46% $ 249,850 3.3 1. Rates presented exclude the impact of capitalized loan fee amortization. 2. Interest rate reflects the all-in borrowing rate as of September 30, 2024. Facility fees are charged at an annual rate of 0.15% of the total facility size of $400 million, and are not included in the interest rate presented. The facility has a one year extension option. Remaining capacity reduced by $0.15 million for outstanding letters of credit. 3. Interest rate consists of the fixed rate SOFR swap of 1.87%, plus a credit spread adjustment of 0.10% and a borrowing spread of 1.15%. See the $175 million Term Loan - Interest Rate Schedule table for additional detail on the fixed interest rate changes through the fully extended maturity. 4. Interest rate consists of the fixed rate SOFR swap of 2.63%, plus a credit spread adjustment of 0.10% and a borrowing spread of 1.15%. The swap terminates of February 11, 2028. 5. Interest rate consists of the fixed rate SOFR swap of 3.64%, plus a credit spread adjustment of 0.10% and a borrowing spread of 1.15%. The term loan matures on July 3, 2026 and includes two one-year extension options and one six-month extension option. 6. The mortgage note was assumed as part of an asset acquisition during the third quarter of 2022. Debt, Capitalization, and Financial Ratios (unaudited, dollars in thousands) 34 $175 million Term Loan - Interest Rate Schedule Start Date End Date Applicable Balance Fixed Rate(1) November 27, 2023 December 23, 2024 $ 175,000 3.12 % December 23, 2024 January 15, 2027 $ 175,000 3.65 % $175 $200 $250 $8 $400 $0 $100 $200 $300 $400 $500 $600 2023 2024 2025 2026 2027 2028 2029 2024 Unsecured Term Loan 2028 Unsecured Term Loan 2029 Unsecured Term Loan Mortgage Note Revolving Credit Facility Capacity Debt Maturity Schedule Floating, 19% Fixed, 81% Fixed vs. Floating Debt
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 Net Debt $ 569,021 Net Debt / Annualized Adjusted EBITDAre 5.3 x Adjusted Net Debt / Annualized Adjusted EBITDAre 4.0 x Key Debt Covenant Information Required Actual Consolidated total leverage ratio ≤ 60.0% 34.0 % Fixed charge coverage ratio ≥ 1.50x 4.49x Maximum secured indebtedness ≤ 40.0% 0.4 % Maximum recourse indebtedness ≤ 10.0% — % Unencumbered leverage ratio ≤ 60.0% 36.2 % Unencumbered interest coverage ratio ≥ 1.75x 4.49x Liquidity As of September 30, 2024 Unused unsecured revolver capacity $ 249,850 Cash, cash equivalents and restricted cash 28,750 Net value of unsettled forward equity(1) 185,474 Total Liquidity $ 464,074 Equity Ending Shares/ Units as of September 30, 2024 Equity Market Capitalization % of Total Common shares(2) 81,583,917 $ 1,348,582 99.5 % OP units(2) 424,956 7,025 0.5 % Total 82,008,873 $ 1,355,607 100.0 % Enterprise Value As of September 30, 2024 % of Total Principal amount of total debt $ 783,245 36.6 % Equity market capitalization(2) 1,355,607 63.4 % Total enterprise value $ 2,138,852 100.0 % Debt, Capitalization, and Financial Ratios (cont’d) (unaudited, dollars in thousands) 35 1. Reflects 10,735,647 of unsettled forward equity shares at the September 30, 2024 available net settlement price of $17.28. 2. Value is based on the September 30, 2024 closing share price of $16.53 per share.
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 impairment charges on depreciable real property. Core FFO means core funds from operations. Core FFO is a non-GAAP financial measure defined as FFO adjusted to remove the effect of unusual and non-recurring items that are not expected to impact our operating performance or operations on an ongoing basis. These have included non- recurring executive transition costs, severance and related charges, non-recurring other loss (gain), net, and loss on debt extinguishments and other related costs. AFFO means adjusted funds from operations. AFFO is a non-GAAP financial measure defined as Core FFO adjusted for GAAP net (loss) income related to non-cash revenues and expenses, such as straight-line rent, amortization of above- and below-market lease-related intangibles, amortization of lease incentives, capitalized interest expense, earned development interest, non-cash interest expense, non-cash compensation expense, amortization of deferred financing costs, amortization of above/below-market assumed debt, and amortization of loan origination costs. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. In fact, real estate values historically have risen or fallen with market conditions. FFO is intended to be a standard supplemental measure of operating performance that excludes historical cost depreciation and valuation adjustments from net (loss) income. We consider FFO to be useful in evaluating potential property acquisitions and measuring operating performance. We further consider FFO, Core FFO and AFFO to be useful in determining funds available for payment of distributions. FFO, Core FFO and AFFO do not represent net (loss) income or cash flows from operations as defined by GAAP. You should not consider FFO, Core FFO and AFFO to be alternatives to net (loss) income as a reliable measure of our operating performance; nor should you consider FFO, Core FFO and AFFO to be alternatives to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity. FFO, Core FFO and AFFO do not measure whether cash flow is sufficient to fund our cash needs, including principal amortization, capital improvements and distributions to stockholders. FFO, Core FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP. Further, FFO, Core FFO and AFFO as disclosed by other REITs might not be comparable to our calculations of FFO, Core FFO and AFFO. 36
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 further adjusted to follow the definition included in a white paper issued in 2017 by NAREIT, which recommended that companies that report EBITDA also report EBITDAre. We compute EBITDAre in accordance with the definition adopted by NAREIT. NAREIT defines EBITDAre as EBITDA (as defined above) excluding gains (or losses) from sales of depreciable property and impairment charges on depreciable real property. Adjusted EBITDAre is a non-GAAP financial measure defined as EBITDAre adjusted to exclude straight-line rent, non-cash compensation expense, non-recurring executive transition costs, severance and related charges, loss on debt extinguishment and other related costs, other non-recurring loss (gain), net, other non-recurring expenses (income), lease termination fees, adjustment for construction in process, and adjustment for intraquarter activities. Annualized Adjusted EBITDAre is a non-GAAP financial measure defined as Adjusted EBITDAre multiplied by four. We present EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre as they are measures commonly used in our industry. We believe that these measures are useful to investors and analysts because they provide supplemental information concerning our operating performance, exclusive of certain non-cash items and other costs. We use EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre as measures of our operating performance and not as measures of liquidity. EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre do not include all items of revenue and expense included in net (loss) income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net (loss) income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, our computation of EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. Net Debt and Adjusted Net Debt Net Debt is calculated as our principal amount of total debt outstanding excluding deferred financing costs, net discounts and debt issuance costs less cash, cash equivalents and restricted cash available for future investment. We believe excluding cash, cash equivalents and restricted cash available for future investment from our principal amount, all of which could be used to repay debt, provides an estimate of the net contractual amount of borrowed capital to be repaid. We believe these adjustments are additional beneficial disclosures to investors and analysts. Adjusted Net Debt is Net Debt adjusted by the net value of unsettled forward equity as of period end. 37
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 Rate are non- GAAP financial measures which we use to assess our operating results. We compute Property-Level NOI as net (loss) income (computed in accordance with GAAP), excluding general and administrative expenses, interest expense (or income), income tax expense, transaction costs, depreciation and amortization, gains (or losses) on sales of depreciable property, real estate impairment losses, interest income on mortgage loans receivable, loss on debt extinguishment, lease termination fees, and other expense (income), net. We further adjust Property-Level NOI for non-cash revenue components of straight-line rent and amortization of lease-intangibles to derive Property- Level Cash NOI. We further adjust Property-Level Cash NOI for intraquarter acquisitions, dispositions and completed developments to derive Property-Level Cash NOI - Estimated Run Rate. We further adjust Property-Level Cash NOI - Estimated Run Rate for interest income on mortgage loans receivable and intraquarter mortgage loan activity to derive Total Cash NOI - Estimated Run Rate. We believe Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis. Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate are not measurements of financial performance under GAAP, and may not be comparable to similarly titled measures of other companies. You should not consider our measures as alternatives to net (loss) income or cash flows from operating activities determined in accordance with GAAP. Other Definitions ABR is annualized base rent as of September 30, 2024, for all leases that commenced and annualized cash interest on mortgage loans receivable in place as of that date. Cash Yield is the annualized base rent contractually due from acquired properties and completed developments, and interest income from mortgage loans receivable, divided by the gross investment amount, gross proceeds in the case of dispositions, or loan repayment amount. Defensive Category is considered by us to represent tenants that focus on necessity goods and essential services in the retail sector, including discount stores, grocers, drug stores and pharmacies, home improvement, automotive service and quick-service restaurants, which we refer to as defensive retail industries. The defensive sub-categories as we define them are as follows: (1) Necessity, which are retailers that are considered essential by consumers and include sectors such as drug stores, grocers and home improvement, (2) Discount, which are retailers that offer a low price point and consist of off- price and dollar stores, (3) Service, which consist of retailers that provide services rather than goods, including, tire and auto services and quick service restaurants, and (4) Other, which are retailers that are not considered defensive in terms of being considered necessity, discount or service, as defined by us. 38 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 under the master lease is counted as a separate lease. Occupancy is expressed as a percentage, and it is the number of economically occupied properties divided by the total number of properties owned, excluding mortgage loans receivable and properties under development. OP units means operating partnership units not held by NETSTREIT. Weighted Average Lease Term is weighted by the annualized base rent, excluding lease extension options and investments associated with mortgage loans receivable. 39 Non-GAAP Measures and Definitions (cont’d)
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| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
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-Publisher SEC
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| X |
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-Publisher SEC
-Name Exchange Act
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| Namespace Prefix: |
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| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
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| Namespace Prefix: |
dei_ |
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NetSTREIT (NYSE:NTST)
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NetSTREIT (NYSE:NTST)
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