– Net income of $0.06 and Adjusted Funds
from Operations ("AFFO") of $0.31 Per Diluted Share –
– Completed $117.5 Million of Investment
Activity at 7.0% Blended Cash Yield–
– Increases 2023 AFFO per Share Guidance
Range to $1.21 to $1.23 –
NETSTREIT Corp. (NYSE: NTST) (the “Company”) today
announced financial and operating results for the third quarter
ended September 30, 2023.
“We are pleased to announce another solid quarter of results,
completing $103.9 million in net investment activity in the
quarter. We are also increasing our 2023 AFFO per share guidance
midpoint, which implies 5% growth over last year. While the higher
for longer narrative has placed upward pressure on the cost of
capital for most companies, we remain well positioned from both a
balance sheet, portfolio, and earnings standpoint. More
specifically, we have no debt maturities until 2027, no net
exposure to floating rate debt, low leverage, and ample liquidity.
Coupled with our highly secure in-place rental stream, we are
confident that our portfolio and investment discipline will result
in earnings growth and increased value for our shareholders.” said
Mark Manheimer, Chief Executive Officer of NETSTREIT.
THIRD QUARTER 2023 HIGHLIGHTS
The following table summarizes the Company's select financial
results1 for the three and nine months ended September 30,
2023.
Three Months Ended September
30,
2023
2022
% Change
(Unaudited)
Net Income per Diluted Share
$
0.06
$
0.03
100
%
Funds from Operations per Diluted
Share
$
0.31
$
0.28
11
%
Core Funds from Operations per Diluted
Share
$
0.31
$
0.28
11
%
Adjusted Funds from Operations per Diluted
Share
$
0.31
$
0.30
3
%
Nine Months Ended September
30,
2023
2022
% Change
(Unaudited)
Net Income per Diluted Share
$
0.08
$
0.11
(27
)%
Funds from Operations per Diluted
Share
$
0.87
$
0.82
6
%
Core Funds from Operations per Diluted
Share
$
0.88
$
0.82
7
%
Adjusted Funds from Operations per Diluted
Share
$
0.91
$
0.87
5
%
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 and
disposition activities (dollars in thousands) for the three and
nine months ended September 30, 2023.
Three Months Ended September
30, 2023
Nine Months Ended
September 30, 2023
Number of Investments
Amount
Number of Investments
Amount
Investments
29
$
117,455
139
$
361,391
Dispositions1
6
13,543
16
33,511
Net Investment Activity
$
103,912
$
327,880
Investment Activity
Cash Yield
7.0
%
7.2
%
% of ABR derived from Investment Grade
Tenants
75.1
%
77.2
%
% of ABR derived from Investment Grade
Profile Tenants
22.1
%
14.2
%
Weighted Average Lease Term (years)
10.0
10.6
Disposition Activity
Cash Yield1
6.9
%
6.8
%
Weighted Average Lease Term (years)
7.1
6.0
1.
Includes mortgage loan payoffs.
The following table summarizes the Company's on-going
development projects and estimated development costs (dollars in
thousands) as of September 30, 2023.
Developments
Three Months Ended September
30, 2023
Amount Funded During the Quarter
$
33,017
As of September 30,
2023
Number of Developments
32
Amount Funded to Date
$
42,108
Estimated Funding Remaining on
Developments
26,189
Total Estimated Development
Cost
$
68,297
PORTFOLIO UPDATE
The following table summarizes the Company's real estate
portfolio (weighted by ABR, dollars in thousands) as of September
30, 2023.
As of September 30,
2023
Number of Investments
547
ABR
$
124,341
States
45
Square Feet
9,971,909
Tenants
85
Industries
26
Occupancy
100.0
%
Weighted Average Lease Term (years)
9.3
Investment Grade %
68.6
%
Investment Grade Profile %
14.6
%
CAPITAL MARKETS AND BALANCE SHEET
The following tables summarize the Company's leverage, balance
sheet, liquidity, ATM issuances, and settlement of our forward
equity offerings (dollars in thousands, except per share data) as
of and for September 30, 2023.
Leverage
As of September 30,
2023
Net Debt Adjusted for Outstanding Forward
Equity/ Annualized Adjusted EBITDAre
4.2x
Liquidity
Unused Unsecured Revolver Capacity
$
358,000
Cash, Cash Equivalents and Restricted
Cash
7,934
Value of Outstanding Forward Equity1
98,671
Total Liquidity
$
464,605
Plus: Remaining Available Principal of
2029 Term Loan
100,000
Total Proforma Liquidity
$
564,605
ATM Program
Shares Issued During Quarter2
1,672,242
Weighted Average Price Per Share
$
16.55
Net Proceeds
$
27,418
Forward Equity
Shares Outstanding as of September 30,
2023
5,983,711
Weighted Average Price Per Share
$
16.49
Value of Outstanding Forward Equity1
$
98,671
1.
Reflects 5,983,711 of unsettled forward
equity shares under the ATM program at the September 30, 2023
available net settlement price of $16.49.
2.
Includes 1,516,289 of settled forward
equity shares.
DEBT ACTIVITY
On July 3, 2023, the Company closed a new three-year $250.0
million sustainability-linked senior unsecured term loan facility
with a delayed draw option (the "Term Loan"). The Term Loan
initially matures in July 2026 and includes two one-year options
and one six-month option to extend the maturity to January 2029
(5.5-year term) at the Company's discretion, and an accordion
feature that allow the Company to increase the aggregate
availability under the Term Loan to $400.0 million. At close, the
initial amount drawn on the Term Loan was $150.0 million.
The following table summarizes the terms of the Term Loan
(dollars in thousands).
2029 Term Loan
Fully Extended Maturity Date
January 2029
Principal Drawn as of September 30,
2023
$
150,000
Remaining Available Principal as of
September 30, 2023
$
100,000
Total Principal
$
250,000
Full Capacity if Accordion Exercised
$
400,000
All-In Fixed Interest Rate1
4.99
%
1.
All-in fixed rate consists of the fixed
rate SOFR swap of 3.74% on $250.0 million of notional value, plus a
credit spread adjustment of 0.10% and a borrowing spread of
1.15%.
DIVIDEND
On October 24, 2023, the Company’s Board of Directors declared a
quarterly cash dividend of $0.205 per share for the fourth quarter
of 2023. On an annualized basis, the dividend of $0.82 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 15, 2023 to shareholders of record on December 1,
2023.
2023 GUIDANCE
The Company is increasing its full year 2023 AFFO per share
guidance range to $1.21 to $1.23 from $1.20 to $1.23, resulting in
an increase to the midpoint of the range. The Company now expects
2023 net investment activity to be around $450.0 million.
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.
EARNINGS CONFERENCE CALL
A conference call will be held on Thursday, October 26, 2023 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 2, 2023, 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 13741443.
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.
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 and 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, 2022 filed with
the Securities and Exchange Commission (the “SEC”) on February 23,
2023 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,
December 31,
2023
2022
Assets
Real estate, at cost:
Land
$
449,718
$
401,146
Buildings and improvements
1,081,427
907,084
Total real estate, at cost
1,531,145
1,308,230
Less accumulated depreciation
(90,890
)
(62,526
)
Property under development
33,497
16,796
Real estate held for investment, net
1,473,752
1,262,500
Assets held for sale
38,839
23,208
Mortgage loans receivable, net
109,091
46,378
Cash, cash equivalents and restricted
cash
7,934
70,543
Lease intangible assets, net
163,824
151,006
Other assets, net
69,403
52,057
Total assets
$
1,862,843
$
1,605,692
Liabilities and equity
Liabilities:
Term loans, net
$
521,613
$
373,296
Revolving credit facility
42,000
113,000
Mortgage note payable, net
7,890
7,896
Lease intangible liabilities, net
26,699
30,131
Liabilities related to assets held for
sale
1,024
406
Accounts payable, accrued expenses and
other liabilities
33,727
22,540
Total liabilities
632,953
547,269
Commitments and contingencies
Equity:
Stockholders’ equity
Common stock, $0.01 par value, 400,000,000
shares authorized; 68,701,223 and 58,031,879 shares issued and
outstanding as of September 30, 2023 and December 31, 2022,
respectively
687
580
Additional paid-in capital
1,289,810
1,091,514
Distributions in excess of retained
earnings
(100,006
)
(66,937
)
Accumulated other comprehensive income
30,494
23,673
Total stockholders’ equity
1,220,985
1,048,830
Noncontrolling interests
8,905
9,593
Total equity
1,229,890
1,058,423
Total liabilities and equity
$
1,862,843
$
1,605,692
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,
2023
2022
2023
2022
Revenues
Rental revenue (including
reimbursable)
$
31,167
$
24,339
$
89,347
$
67,309
Interest income on loans receivable
2,244
674
5,145
1,671
Other revenue
550
—
550
—
Total revenues
33,961
25,013
95,042
68,980
Operating expenses
Property
3,883
2,539
11,350
8,156
General and administrative
5,133
4,552
15,299
13,608
Depreciation and amortization
15,804
13,407
46,599
36,137
Provisions for impairment
1,538
—
4,374
1,114
Transaction costs
143
51
267
704
Total operating expenses
26,501
20,549
77,889
59,719
Other income (expense)
Interest expense, net
(3,946
)
(3,017
)
(13,412
)
(5,708
)
Gain on sales of real estate, net
373
143
669
2,162
Loss on debt extinguishment
—
—
(128
)
—
Other income, net
367
—
586
36
Total other income (expense), net
(3,206
)
(2,874
)
(12,285
)
(3,510
)
Net income before income taxes
4,254
1,590
4,868
5,751
Income tax (expense) benefit
(15
)
(171
)
60
(356
)
Net income
4,239
1,419
4,928
5,395
Net income attributable to noncontrolling
interests
24
16
32
63
Net income attributable to common
stockholders
$
4,215
$
1,403
$
4,896
$
5,332
Amounts available to common stockholders
per common share:
Basic
$
0.06
$
0.03
$
0.08
$
0.11
Diluted
$
0.06
$
0.03
$
0.08
$
0.11
Weighted average common shares:
Basic
67,112,587
50,449,735
62,123,334
47,679,870
Diluted
68,048,369
51,384,758
62,897,957
48,657,049
NETSTREIT CORP. AND
SUBSIDIARIES
RECONCILIATION OF NET 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,
2023
2022
2023
2022
(Unaudited)
(Unaudited)
Net income
$
4,239
$
1,419
$
4,928
$
5,395
Depreciation and amortization of real
estate
15,726
13,241
46,379
35,701
Provisions for impairment
1,538
—
4,374
1,114
Gain on sales of real estate, net
(373
)
(143
)
(669
)
(2,162
)
FFO
$
21,130
$
14,517
$
55,012
$
40,048
Adjustments:
Non-recurring executive transition costs,
severance and related charges
62
—
276
—
Loss on debt extinguishment and other
related costs
—
—
223
—
Gain on insurance proceeds
(1
)
—
(47
)
(36
)
Core FFO
$
21,191
$
14,517
$
55,464
$
40,012
Adjustments:
Straight-line rent adjustments
(245
)
(272
)
(707
)
(1,144
)
Amortization of deferred financing
costs
578
239
1,165
553
Amortization of above/below-market assumed
debt
29
—
86
—
Amortization of loan origination costs
26
28
83
59
Amortization of lease-related
intangibles
(121
)
(313
)
(517
)
(644
)
Earned development interest
189
—
189
—
Capitalized interest expense
(404
)
(115
)
(688
)
(218
)
Non-cash interest expense
(1,134
)
—
(1,134
)
—
Non-cash compensation expense
1,280
1,302
3,559
3,645
AFFO
$
21,389
$
15,386
$
57,500
$
42,263
Weighted average common shares
outstanding, basic
67,112,587
50,449,735
62,123,334
47,679,870
Operating partnership units
outstanding
501,987
514,890
507,014
530,940
Unvested restricted stock units
173,001
255,613
167,215
261,727
Unsettled shares under open forward equity
contracts
260,794
164,520
100,394
184,512
Weighted average common shares
outstanding, diluted
68,048,369
51,384,758
62,897,957
48,657,049
FFO per common share, diluted
$
0.31
$
0.28
$
0.87
$
0.82
Core FFO per common share, diluted
$
0.31
$
0.28
$
0.88
$
0.82
AFFO per common share, diluted
$
0.31
$
0.30
$
0.91
$
0.87
RECONCILIATION OF NET INCOME
TO EBITDA, EBITDAre AND ADJUSTED EBITDAre
(In thousands)
(Unaudited)
Three Months Ended September
30,
2023
2022
(Unaudited)
Net income
$
4,239
$
1,419
Depreciation and amortization of real
estate
15,726
13,241
Amortization of lease-related
intangibles
(121
)
(313
)
Non-real estate depreciation and
amortization
78
166
Interest expense, net
3,946
3,017
Income tax expense (benefit)
15
171
Amortization of loan origination costs
26
28
EBITDA
23,909
17,729
Adjustments:
Provision for impairments
1,538
—
Gain on sales of real estate, net
(373
)
(143
)
EBITDAre
25,074
17,586
Adjustments:
Straight-line rent adjustments
(245
)
(272
)
Non-recurring executive transition costs,
severance and related charges
62
—
Gain on insurance proceeds
(1
)
—
Non-cash compensation expense
1,280
1,302
Lease termination fees
(550
)
—
Adjustment for construction in process
(1)
720
263
Adjustment for intraquarter investment
activities (2)
1,341
1,182
Adjusted EBITDAre
$
27,681
$
20,061
Annualized Adjusted EBITDAre (3)
$
110,724
Net Debt Adjusted for Outstanding Forward
Equity / Annualized Adjusted EBITDAre
4.2 x
As of September 30,
2023
Principal amount of total debt
$
575,399
Less: Cash, cash equivalents and
restricted cash
(7,934
)
Net Debt
567,465
Value of outstanding forward equity
(4)
(98,671
)
Net Debt Adjusted for Outstanding Forward
Equity
$
468,794
(1)
Adjustment reflects the estimated cash
yield on developments in process balances as of period end.
(2)
Adjustment assumes all re-leasing
activity, investments in and dispositions of real estate, including
developments and interest earning loan activity completed during
the three months ended September 30, 2023 and 2022 had occurred on
July 1, 2023 and July 1, 2022, respectively.
(3)
We calculate Annualized Adjusted EBITDAre
by multiplying Adjusted EBITDAre by four.
(4)
There were 5,983,711 of unsettled forward
equity shares under the ATM program at the September 30, 2023
available net settlement price of $16.49.
RECONCILIATION OF NET INCOME
TO NOI AND CASH NOI
(In thousands)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
(Unaudited)
(Unaudited)
Net income
$
4,239
$
1,419
$
4,928
$
5,395
General and administrative
5,133
4,552
15,299
13,608
Depreciation and amortization
15,804
13,407
46,599
36,137
Provisions for impairment
1,538
—
4,374
1,114
Transaction costs
143
51
267
704
Interest expense, net
3,946
3,017
13,412
5,708
Gain on sales of real estate, net
(373
)
(143
)
(669
)
(2,162
)
Income tax expense (benefit)
15
171
(60
)
356
Loss on debt extinguishment
—
—
128
—
Interest income on mortgage loans
receivable
(2,244
)
(674
)
(5,145
)
(1,671
)
Lease termination fees
(550
)
—
(550
)
—
Other income, net
(367
)
—
(586
)
(36
)
Property-Level NOI
27,284
21,800
77,997
59,153
Straight-line rent adjustments
(245
)
(272
)
(707
)
(1,144
)
Amortization of lease-related
intangibles
(121
)
(313
)
(517
)
(644
)
Property-Level Cash NOI
$
26,918
$
21,215
$
76,773
$
57,365
Adjustment for intraquarter acquisitions,
dispositions and completed development (1)
1,320
Property-Level Cash NOI Estimated Run
Rate
28,238
Interest income on mortgage loans
receivable
2,244
Adjustments for intraquarter mortgage loan
activity (2)
21
Total Cash NOI - Estimated Run Rate
$
30,503
(1)
Adjustment assumes all re-leasing
activity, investments in and dispositions of real estate, including
developments completed during the three months ended September 30,
2023, had occurred on July 1, 2023.
(2)
Adjustment assumes all loan activity
completed during the three months ended September 30, 2023, had
occurred on July 1, 2023.
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 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, gain on insurance proceeds,
and loss on debt extinguishments and other related costs.
AFFO is a non-GAAP financial measure defined as Core FFO
adjusted for GAAP net 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
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 income or cash flows from
operations as defined by GAAP. You should not consider FFO, Core
FFO and AFFO to be alternatives to net 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, gain on insurance proceeds, other
non-recurring expenses (income), lease termination fees, adjustment
for construction in process, and adjustment for intraquarter
activities. Beginning in the quarter ended June 30, 2023, we
modified our definition of Adjusted EBITDAre to include adjustments
for construction in process and intraquarter investment activities.
Prior periods have been recast to reflect this new definition.
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 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 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
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 further adjust Net Debt by the
value of outstanding forward equity as period end to derive Net
Debt Adjusted for Outstanding Forward Equity. 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 analysis.
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 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
income (or expense). 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 income
or cash flows from operating activities determined in accordance
with GAAP.
OTHER DEFINITIONS
ABR is annualized base rent as of
September 30, 2023, 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, interest income
from mortgage loans receivable, and completed developments, divided
by the gross investment amount, or gross proceeds in the case of
dispositions.
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20231025159042/en/
Investor Relations ir@netstreit.com 972-597-4825
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