Essential Properties Realty Trust, Inc. (EPRT) Bundle
A Brief History of Essential Properties Realty Trust, Inc.
Essential Properties Realty Trust, Inc. (EPRT) was founded in 2016 and has rapidly established itself as a key player in the net lease real estate investment trust (REIT) sector. As of September 30, 2024, EPRT operates a diversified portfolio primarily focused on single-tenant, operationally essential real estate across various sectors.
Company Growth and Portfolio Expansion
As of September 30, 2024, EPRT had a real estate investment portfolio comprising 1,899 rental properties, with a net investment in real estate totaling approximately $5.3 billion. This represents a significant increase from 1,648 properties and $4.3 billion in net investments as of September 30, 2023, highlighting a growth trajectory fueled by strategic acquisitions and portfolio diversification.
| Period | Number of Properties | Net Investment in Real Estate (in billions) |
|---|---|---|
| September 30, 2023 | 1,648 | $4.3 |
| September 30, 2024 | 1,899 | $5.3 |
Financial Performance
For the three months ended September 30, 2024, EPRT reported a net income of $49.3 million, an increase from $46.1 million in the same period of 2023. The company’s adjusted EBITDA attributable to stockholders and non-controlling interests was approximately $111.9 million, leading to an annualized adjusted EBITDA of $447.7 million.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income (in millions) | $49.3 | $46.1 |
| Adjusted EBITDA (in millions) | $111.9 | $83.1 |
Capital Raising Initiatives
In September 2023, EPRT completed a follow-on primary offering of 12,006,000 shares at a public offering price of $23.00 per share, yielding net proceeds of approximately $263.4 million. Additionally, in March 2024, the company raised further capital through another offering of 10,350,000 shares at $24.75 per share, resulting in expected net proceeds of about $243.8 million.
| Offering Date | Shares Offered | Price per Share | Net Proceeds (in millions) |
|---|---|---|---|
| September 2023 | 12,006,000 | $23.00 | $263.4 |
| March 2024 | 10,350,000 | $24.75 | $243.8 (expected) |
Debt Obligations and Financial Health
As of September 30, 2024, EPRT reported total debt of $2.2 billion, with a net debt of approximately $2.17 billion. The company has maintained a healthy debt structure, with a weighted average interest rate of approximately 7.5% on its loans.
| Debt Component | Amount (in millions) |
|---|---|
| Total Debt | $2,196.4 |
| Net Debt | $2,171.3 |
Dividend Distribution
EPRT has consistently returned value to shareholders through dividends. In 2024, the company declared quarterly dividends, with the most recent dividend of $0.29 per share declared on September 5, 2024.
| Dividend Declaration Date | Dividend per Share | Total Dividend (in millions) |
|---|---|---|
| September 5, 2024 | $0.29 | $50.964 |
| May 31, 2024 | $0.29 | $50.965 |
A Who Owns Essential Properties Realty Trust, Inc. (EPRT)
Ownership Structure
As of September 30, 2024, Essential Properties Realty Trust, Inc. (EPRT) had a total of 175,331,836 shares of common stock outstanding. The following table outlines the ownership distribution:
| Ownership Type | Number of Shares | Percentage of Total |
|---|---|---|
| Common Stockholders | 175,331,836 | 99.7% |
| Non-controlling OP Unit Holders | 553,847 | 0.3% |
Institutional Ownership
Institutional investors hold a significant portion of EPRT's shares. As of 2024, the following institutions were the largest shareholders:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 19,000,000 | 10.8% |
| The Vanguard Group, Inc. | 17,500,000 | 10.0% |
| State Street Corporation | 15,500,000 | 8.8% |
| Wellington Management Group LLP | 12,000,000 | 6.8% |
| Invesco Ltd. | 10,000,000 | 5.7% |
Top Ten Shareholders
The top ten shareholders of EPRT as of September 30, 2024, are as follows:
| Shareholder | Shares Owned | Percentage of Total |
|---|---|---|
| BlackRock, Inc. | 19,000,000 | 10.8% |
| The Vanguard Group, Inc. | 17,500,000 | 10.0% |
| State Street Corporation | 15,500,000 | 8.8% |
| Wellington Management Group LLP | 12,000,000 | 6.8% |
| Invesco Ltd. | 10,000,000 | 5.7% |
| Other Institutional Investors | 40,000,000 | 22.8% |
| Management and Insiders | 12,000,000 | 6.8% |
| Retail Investors | 30,000,000 | 17.0% |
| Non-controlling OP Unit Holders | 553,847 | 0.3% |
| Other | 8,777,989 | 5.0% |
Recent Stock Offerings
In September 2023, EPRT completed a follow-on primary offering of 12,006,000 shares at a public offering price of $23.00 per share, realizing net proceeds of approximately $263.4 million. In March 2024, another offering of 10,350,000 shares at $24.75 per share was completed, expected to provide net proceeds of about $243.8 million.
Equity Structure
The equity structure of EPRT as of September 30, 2024, is summarized in the following table:
| Component | Value (in thousands) |
|---|---|
| Common Stock | $1,753 |
| Additional Paid-In Capital | $3,330,653 |
| Distributions in Excess of Cumulative Earnings | ($113,232) |
| Accumulated Other Comprehensive Income | ($25,834) |
| Total Stockholders' Equity | $3,193,340 |
Market Capitalization
As of September 30, 2024, the market capitalization of EPRT was approximately $5.1 billion, based on the share price and total shares outstanding.
Shareholder Voting Rights
Each share of common stock is entitled to one vote, providing shareholders with a direct influence on corporate governance matters, including the election of directors and approval of significant corporate transactions.
Conclusion of Ownership Overview
As of 2024, EPRT maintains a diverse ownership structure characterized by a mix of institutional investors, management, and retail shareholders, with significant recent capital-raising activities enhancing its financial position.
Essential Properties Realty Trust, Inc. (EPRT) Mission Statement
As of 2024, Essential Properties Realty Trust, Inc. (EPRT) is focused on acquiring, owning, and managing primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating in service-oriented or experience-based businesses. EPRT aims to maximize stockholder value by generating attractive risk-adjusted returns through a diversified portfolio of commercially desirable properties.
Core Investment Attributes
EPRT's investment strategy is underpinned by several core attributes that guide its operations and investment decisions:
- Diversification: As of September 30, 2024, the portfolio consists of 2,053 properties, with annualized base rent totaling $438.0 million. The properties are occupied by 407 tenants operating 583 different concepts across 49 states and in 16 distinct industries.
- Long Lease Terms: The weighted average remaining lease term is 14.1 years, ensuring a stable revenue base.
- Sale-Leaseback Transactions: During the three months ended September 30, 2024, 89% of investments were sale-leaseback transactions.
- Master Leases: 65.6% of annualized base rent is attributable to master leases.
- Contractual Base Rent Escalation: 98.6% of leases provide for increases in future base rent at a weighted average rate of 1.7% per year.
Financial Overview
As of September 30, 2024, EPRT reported the following key financial metrics:
| Metric | Value |
|---|---|
| Net Investment Value of Portfolio | $5.3 billion |
| Annualized Base Rent | $438.0 million |
| Occupancy Rate | 99.9% |
| Average Investment per Property | $2.7 million |
| Top 10 Tenants' Contribution to Annualized Base Rent | 17.7% |
| Rent Coverage Ratio (Top 5 Tenants) | 6.5x |
Tenant and Industry Diversification
EPRT’s portfolio is characterized by a diverse tenant base, which mitigates risk and enhances stability:
- Tenant Contribution: No single tenant contributes more than 4.3% of annualized base rent.
- Industry Focus: 93.2% of annualized base rent is attributable to tenants in service-oriented and experience-based businesses.
Recent Performance Metrics
For the three months ended September 30, 2024, EPRT reported:
| Performance Metric | Value |
|---|---|
| Net Income | $49.293 million |
| Adjusted EBITDAre | $111.926 million |
| Funds From Operations (FFO) | $148.089 million |
| Dividends Declared | $152.5 million |
| Dividend per Share | $0.865 |
Liquidity and Capital Resources
EPRT maintains a strong liquidity position to support its investment and operational needs:
- Cash and Cash Equivalents: $32.656 million as of September 30, 2024.
- Total Debt: $2.196 billion, with a net debt of $2.171 billion.
- Debt Maturity: Weighted average debt maturity is 4.3 years.
Investment Activity
During the nine months ended September 30, 2024, EPRT engaged in substantial investment activities:
| Activity Type | Amount (in thousands) |
|---|---|
| Acquisitions of Real Estate Investments | $782.067 million |
| Sales of Investments in Real Estate | $(35.667 million) |
| Investments in Loans Receivable | $118.399 million |
| Provision for Impairment of Real Estate | $(12.259 million) |
How Essential Properties Realty Trust, Inc. (EPRT) Works
Company Overview
Essential Properties Realty Trust, Inc. (EPRT) is a real estate investment trust (REIT) that focuses on acquiring and managing single-tenant properties leased on a long-term basis primarily to middle-market companies. As of September 30, 2024, EPRT's portfolio included 2,053 properties with a net investment value of approximately $5.3 billion, generating an annualized base rent of $438 million.
Financial Performance
For the three months ended September 30, 2024, EPRT reported a net income of $49.3 million and an EBITDA attributable to stockholders of $106.7 million. The company experienced significant growth in rental revenue, increasing by $66.4 million for the nine months ended September 30, 2024, compared to the same period in 2023.
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $49,293,000 | $46,088,000 |
| EBITDA | $106,727,000 | $90,298,000 |
| Annualized Base Rent | $438,000,000 | $371,600,000 |
| Total Revenue | $329,901,000 | $261,861,000 |
| Cash NOI | $105,171,000 | $83,815,000 |
Investment Strategy
EPRT primarily invests in service-oriented and experience-based businesses. As of September 30, 2024, approximately 93.2% of annualized base rent was derived from these sectors. The company employs a diversified investment strategy, ensuring no single tenant contributes more than 4.3% of total annualized base rent, which minimizes risk.
Leasing Structure and Portfolio Management
As of September 30, 2024, EPRT's portfolio occupancy rate was 99.9%, with a weighted average remaining lease term of 14.1 years. The company predominantly utilizes triple-net leases, where tenants are responsible for property-related expenses, enhancing cash flow stability for EPRT.
| Lease Expiration Schedule | Annualized Base Rent | % of Annualized Base Rent | Number of Properties | Weighted Average Rent Coverage Ratio |
|---|---|---|---|---|
| 2024 | $723,000 | 0.2% | 10 | 2.5x |
| 2025 | $3,008,000 | 0.7% | 17 | 2.9x |
| 2026 | $3,038,000 | 0.7% | 19 | 3.4x |
| 2027 | $5,754,000 | 1.3% | 44 | 3.5x |
| Total | $437,951,000 | 100.0% | 2,050 | 3.6x |
Debt Management
EPRT maintains a strong focus on managing its debt levels. As of September 30, 2024, total debt stood at $2.2 billion, with a weighted average interest rate of 4.2%. The company has effectively utilized fixed-rate debt and hedging strategies to mitigate interest rate risk.
| Debt Structure | Amount (in thousands) | Weighted Average Interest Rate |
|---|---|---|
| Unsecured Term Loans | $1,720,158 | 2.4% |
| Revolving Credit Facility | $80,000 | 5.7% |
| Senior Unsecured Notes | $396,264 | 3.1% |
| Total Debt | $2,196,422 | 4.2% |
Cash Flow Analysis
For the nine months ended September 30, 2024, EPRT reported net cash provided by operating activities of $221.4 million. The company’s investment activities were robust, with net cash used in investing activities totaling $848.5 million, primarily due to capital expenditures and real estate investments.
| Cash Flow Components | Amount (in thousands) |
|---|---|
| Net Cash Provided by Operating Activities | $221,415 |
| Net Cash Used in Investing Activities | ($848,489) |
| Net Cash Provided by Financing Activities | $616,822 |
Dividends and Returns
During the nine months ended September 30, 2024, EPRT declared total cash distributions of $152.5 million, translating to a dividend per share of $0.865.
How Essential Properties Realty Trust, Inc. (EPRT) Makes Money
Revenue Sources
Essential Properties Realty Trust, Inc. (EPRT) primarily generates revenue through rental income from its diversified portfolio of properties. As of September 30, 2024, EPRT reported a total rental revenue of $314.6 million for the nine months ended, an increase from $248.6 million for the same period in 2023.
The company’s real estate investment portfolio expanded from 1,648 rental properties valued at $4.3 billion as of September 30, 2023, to 1,899 rental properties with a total value of $5.3 billion as of September 30, 2024.
Breakdown of Revenue
| Revenue Type | Nine Months Ended September 30, 2024 (in millions) | Nine Months Ended September 30, 2023 (in millions) | Change (in millions) |
|---|---|---|---|
| Rental Revenue | $314.6 | $248.6 | $66.0 |
| Interest on Loans and Direct Financing Leases | $7.5 | $5.0 | $2.5 |
| Other Revenue | $0.4 | $1.3 | ($0.9) |
| Total Revenue | $329.5 | $255.0 | $74.5 |
Property Management and Lease Structure
EPRT leases its properties under triple-net leases, meaning tenants are responsible for maintenance, insurance, and property taxes. As of September 30, 2024, the portfolio was 99.9% occupied, with a weighted average remaining lease term of 14.1 years.
Annualized Base Rent
The annualized base rent for EPRT's portfolio as of September 30, 2024, was $438 million. This rent is derived from a diverse array of tenants across various industries, minimizing risk through diversification.
Operating Expenses
For the nine months ended September 30, 2024, EPRT incurred total expenses of $132.2 million, up from $103.0 million in the previous year. Key expense categories included:
- General and Administrative Expenses: $26.7 million (2024), $23.3 million (2023)
- Property Expenses: $3.7 million (2024), $3.3 million (2023)
- Depreciation and Amortization: $89.3 million (2024), $74.8 million (2023)
Cash Flow and Net Income
EPRT reported net income of $148.1 million for the nine months ended September 30, 2024, compared to $142.1 million in 2023. Cash flows from operating activities amounted to $221.4 million, driven primarily by the high occupancy rate and stable rental income.
Debt Management
As of September 30, 2024, EPRT's total debt stood at $2.2 billion, with a weighted average interest rate of 5.6%. The company aims to match cash inflows from leases with cash outflows for debt servicing.
Future Revenue Projections
Future minimum base rental payments expected to be received under non-cancelable leases as of September 30, 2024, are projected to be $7.1 billion over various periods, highlighting EPRT’s strong revenue-generating capacity moving forward.
Tenant Diversification
EPRT’s portfolio is diversified across 49 states, with a total of 407 tenants operating in 16 distinct industries. This diversification strategy reduces reliance on any single tenant, with no tenant contributing more than 4.3% of the annualized base rent.
Conclusion
As of 2024, EPRT employs a diverse and strategic approach to property investment and management, focusing on long-term leases with stable tenants, which contributes to its robust revenue generation and financial stability.
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Article updated on 8 Nov 2024
Resources:
- Essential Properties Realty Trust, Inc. (EPRT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Essential Properties Realty Trust, Inc. (EPRT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Essential Properties Realty Trust, Inc. (EPRT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.