Mission Statement, Vision, & Core Values (2024) of Essential Properties Realty Trust, Inc. (EPRT)

An Overview of Essential Properties Realty Trust, Inc. (EPRT)

General Summary of Essential Properties Realty Trust, Inc. (EPRT)

Essential Properties Realty Trust, Inc. (EPRT) was established to acquire and manage a diversified portfolio of single-tenant, net-leased commercial properties. As of September 30, 2024, EPRT owns 2,053 properties located across 49 states, with an annualized base rent of $438.0 million. The company primarily invests in properties leased to tenants in service-oriented and experience-based sectors, such as restaurants, automotive services, and fitness centers, which are believed to be more resistant to e-commerce pressures. As of 2024, EPRT operates with a high occupancy rate of 99.9%, reflecting its effective management and tenant selection strategies.

Company's Financial Performance in the Latest Financial Reports

In the third quarter of 2024, EPRT reported a net income of $49.3 million, with total revenues reaching $111.6 million, marking a significant increase compared to the previous year. The company achieved an Adjusted EBITDAre of $111.9 million for the quarter, leading to an annualized Adjusted EBITDAre of $447.7 million. The nine-month period ending September 30, 2024, saw cash flows from operating activities amounting to $221.4 million, driven by robust leasing activity and tenant performance.

EPRT's total debt as of September 30, 2024, stood at $2.21 billion, with a weighted average interest rate of 5.6%. The company reported a cash cap rate of 8.1% for its investments. The top ten tenants contributed 17.7% of the annualized base rent, with no single tenant exceeding 4.3%, demonstrating a diversified revenue base.

Introduction to EPRT as a Leader in the Industry

Essential Properties Realty Trust, Inc. is recognized as a leader in the net lease sector, focusing on acquiring properties that provide stable and predictable cash flows. The company's disciplined investment strategy is complemented by an experienced management team that has successfully scaled operations. EPRT's portfolio is characterized by strong credit quality among tenants, with a weighted average rent coverage ratio of 3.6x. The company’s commitment to diversification across tenants and industries positions it favorably within the commercial real estate landscape, making it an attractive option for investors looking for reliable returns.

Mission Statement of Essential Properties Realty Trust, Inc. (EPRT)

Company's Mission Statement Overview

The mission statement of Essential Properties Realty Trust, Inc. (EPRT) serves as a foundational guide for the company's strategic direction and decision-making processes. It encapsulates the core purpose of the organization, articulating its commitment to creating value for its stakeholders through responsible property investments and management. The mission statement is pivotal in aligning the company's operational activities with its long-term objectives, thereby fostering a culture of accountability and excellence.

Core Component 1: Commitment to High-Quality Investments

EPRT's mission emphasizes its dedication to making high-quality investments in real estate. This commitment is reflected in the company's portfolio, which as of September 30, 2024, comprises 2,053 properties with a total net investment value of approximately $5.3 billion. The annualized base rent from these properties stands at $438 million, showcasing the revenue-generating potential of its investments.

Core Component 2: Tenant Relationships

Another critical aspect of EPRT's mission is fostering strong relationships with tenants. The company aims to create mutually beneficial partnerships that enhance tenant satisfaction and operational efficiency. As of September 30, 2024, EPRT reported a portfolio occupancy rate of 99.9%, indicating a high level of tenant satisfaction and stability within its properties. This strong occupancy is a testament to EPRT's effective tenant management strategies.

Core Component 3: Sustainable Growth

The mission statement also highlights EPRT's focus on sustainable growth through strategic acquisitions and responsible capital management. In the nine months ended September 30, 2024, EPRT generated net cash provided by operating activities of $221.4 million, indicating strong operational performance. Additionally, the company engaged in significant investment activities, with net cash used in investing activities amounting to $848.5 million during the same period.

Vision Statement of Essential Properties Realty Trust, Inc. (EPRT)

Vision Statement Overview

The vision statement of Essential Properties Realty Trust, Inc. (EPRT) reflects its commitment to maximizing stockholder value through the acquisition, management, and growth of a diverse portfolio of single-tenant properties. As of 2024, EPRT aims to be a leading provider of real estate solutions for service-oriented and experience-based businesses.

Focus on Service-Oriented and Experience-Based Businesses

EPRT prioritizes investments in properties leased to tenants operating in sectors that are less susceptible to e-commerce competition. As of September 30, 2024, 93.2% of EPRT’s annualized base rent is derived from tenants in these industries, which include:

• Car washes
• Restaurants (primarily quick service)
• Early childhood education centers
• Medical and dental services
• Convenience stores
• Automotive services
• Equipment rental
• Health and fitness
• Entertainment venues

Diversification of Portfolio

As of September 30, 2024, EPRT's portfolio comprises 2,053 properties across 49 states, with an annualized base rent of $438.0 million. This diversification is crucial for stability and risk management:

Strong Financial Performance

EPRT's financial health is demonstrated by its strong income metrics and effective management of its assets. For the nine months ending September 30, 2024, EPRT reported:

Commitment to Long-Term Growth

EPRT's strategic focus on long-term leases enhances its revenue predictability. As of September 30, 2024, the weighted average remaining lease term across the portfolio was:

Conclusion of Vision Components

EPRT’s vision for 2024 is characterized by a robust strategy focused on diversification, service-oriented business investments, and a commitment to long-term growth, ensuring strong financial performance and value creation for its stockholders.

Core Values of Essential Properties Realty Trust, Inc. (EPRT)

Diversification

The core value of diversification is foundational to Essential Properties Realty Trust, Inc. (EPRT). As of September 30, 2024, EPRT's portfolio consists of 2,053 properties, with an annualized base rent of $438.0 million. The company's strategy aims to minimize risk by ensuring that no single tenant contributes more than 4.3% of total annualized base rent, with a goal of not exceeding 5% from any single tenant over time. This approach ensures that EPRT is well-positioned to withstand fluctuations in market conditions.

As of the same date, EPRT's properties are diversified across 16 distinct industries and 49 states, featuring 407 tenants operating 583 different concepts. This diversification mitigates the impact of adverse events affecting any specific tenant or sector, enhancing overall portfolio stability.

Long Lease Term

EPRT emphasizes long lease terms as a crucial aspect of its business model. As of September 30, 2024, the weighted average remaining lease term across its portfolio is 14.1 years, with only 3.9% of annualized base rent tied to leases expiring before January 1, 2029. This structure provides a stable revenue base essential for future growth. The long-term nature of the leases helps EPRT maintain predictable cash flows, which are vital for operational planning and investment.

Significant Use of Sale-Leaseback Investments

Sale-leaseback transactions are a significant part of EPRT's investment strategy. During the three months ended September 30, 2024, 89% of the company’s investments were in sale-leaseback transactions. This approach allows EPRT to acquire properties that are crucial to the operations of middle-market businesses while providing these businesses with the capital needed for growth. These transactions not only enhance cash flow but also align the interests of EPRT with those of its tenants, fostering long-term partnerships.

Commitment to Tenant Relationships

EPRT places a strong emphasis on maintaining healthy relationships with its tenants, which is vital for operational success. As of September 30, 2024, 99.0% of leases require tenants to provide periodic financial reporting, allowing EPRT to monitor tenant performance closely. This oversight helps manage risks associated with tenant defaults and ensures that EPRT can respond proactively to any potential issues. The weighted average rent coverage ratio of the portfolio was 3.6x, indicating robust financial health among tenants.

Operational Excellence

Operational excellence is a core value that drives EPRT's performance. The company's disciplined underwriting practices lead to strong portfolio characteristics. As of September 30, 2024, EPRT has achieved a high occupancy rate of 99.9%, with only three properties out of the 2,053 in the portfolio being vacant. This operational success is attributed to EPRT's focus on service-oriented and experience-based businesses, which comprise 93.2% of its annualized base rent. This focus positions EPRT favorably against e-commerce pressures.

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.