false000172895100017289512023-10-252023-10-25




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

October 25, 2023
Date of Report (Date of earliest event reported)

Essential Properties Realty Trust, Inc.
(Exact name of registrant as specified in its charter)
Maryland
001-38530
82-4005693
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
902 Carnegie Center Blvd., Suite 520
Princeton, New Jersey
08540
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code:
(609) 436-0619




Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations 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 ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common stock, $0.01 par valueEPRTNew 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 October 25, 2023, Essential Properties Realty Trust, Inc. (the “Company”) issued a press release announcing the Company’s financial results for the three and nine months ended September 30, 2023. The press release is furnished hereto as Exhibit 99.1 and incorporated herein by reference.

Item 7.01— Regulation FD Disclosure.
On October 25, 2023, the Company issued its Supplemental Information—Third Quarter Ended September 30, 2023. The Supplemental Information is furnished hereto as Exhibit 99.2 and incorporated herein by reference.
The foregoing information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition,” and Item 7.01, “Regulation FD Disclosure.” The information in Items 2.02 and 7.01 of this Current Report on Form 8-K and the exhibits furnished therewith shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, and shall not be or be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, regardless of any general incorporation language in such filing.

Item 9.01 — Financial Statements and Exhibits.
(d) Exhibits.

Exhibit No.Description
Earnings Press Release dated October 25, 2023 for the quarter ended September 30, 2023
Supplemental Information—Third Quarter Ended September 30, 2023
104Cover Page Interactive Data File (embedded within the Inline XBRL document)










SIGNATURES

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.

Date: October 25, 2023
ESSENTIAL PROPERTIES REALTY TRUST, INC.
By:/s/ Mark E. Patten
Mark E. Patten
Executive Vice President, Chief Financial Officer, Treasurer and Secretary

Exhibit 99.1
image_0.jpg
Essential Properties Announces Third Quarter 2023 Results
- Third Quarter Net Income per Share of $0.29 and AFFO per Share of $0.42 -
- Closed Investments of $213.3 million at a 7.6% Weighted Average Cash Cap Rate -
- Issues 2024 AFFO Guidance of $1.71 to $1.75 per Share;
- Increases Bottom End of Range for 2023 AFFO Guidance to $1.64 to $1.65 per Share -
October 25, 2023
PRINCETON, N.J.--(BUSINESS WIRE)--Essential Properties Realty Trust, Inc. (NYSE: EPRT; “Essential Properties” or the “Company”) today announced operating results for the three and nine months ended September 30, 2023.
Third Quarter 2023 Financial and Operating Highlights:
Operating Results (compared to Third Quarter 2022):
•Investments (65 properties)
$ Invested
$213.3 million
Weighted Avg Cash Cap Rate
7.6%
•Dispositions (10 properties)
Net Proceeds
$28.5 million
Weighted Avg Cash Cap Rate
    6.5%
•Net Income per Share
Increased by 12%
$0.29
•Funds from Operations ("FFO") per Share
Increased by 18%
$0.45
•Core Funds from Operations ("Core FFO") per Share
Increased by 18%
$0.45
•Adjusted Funds from Operations ("AFFO") per Share
Increased by 11%
$0.42
Debt & Equity Activity:
•New $450mm 2029 Term Loan w/ Delayed Draw Feature
Amount drawn at Sept. 30, 2023$375.0 million
•Equity Raised (Gross) - Follow-On Offering (Sept. 2023)(1)
$23.00/share$276.1 million
•Equity Raised (Gross) - ATM Program(1)    
$24.17/share
$10.7 million
image_6.jpg
1.All shares were sold on a forward basis and are currently unsettled.
Year to Date 2023 Financial and Operating Highlights:
Operating Results (compared to YTD Third Quarter 2022):
•Investments (200 properties)
$ Invested
$697.8 million
Weighted Avg Cash Cap Rate
7.5%
•Dispositions (43 properties)
Net Proceeds
$107.4 million
Weighted Avg Cash Cap Rate
6.2%
•Net Income per share
Increased by 27%
$0.94
•FFO per share
Increased by 12%
$1.31
•Core FFO per share
Increased by 10%
$1.31
•AFFO per share
Increased by 7%
$1.23
Debt & Equity Activity:
•Equity Raised (Gross) - Follow-On Offerings
$24.60/share$493.9 million
•Equity Raised (Gross) - ATM Program
$24.37/share
$97.3 million
Highlights Subsequent to Third Quarter 2023:
•Investments (12 properties)
$ Invested
$49.7 million
•Dispositions (1 property)
$ Gross Proceeds
$5.1 million
1

CEO Comments
Commenting on the third quarter 2023 results, the Company's President and Chief Executive Officer, Pete Mavoides, said, “We are pleased to report strong third quarter results, which were highlighted by continued healthy tenant trends, solid investment activity, and timely capital market executions. With quarter-end pro forma leverage of 3.7x and nearly $1 billion of available liquidity, our balance sheet is well-positioned to capitalize on accretive investment opportunities in a marketplace characterized by increasing pricing power for our capital. Our newly issued AFFO per share guidance for 2024 assumes continued balance sheet discipline and a measured pace of investment activity.”
Portfolio Highlights
The Company’s investment portfolio as of September 30, 2023 is summarized as follows:
Number of properties
1,793
Weighted average lease term (WALT)
13.9 years
Weighted average rent coverage ratio
4.0x
Number of tenants
363
Number of concepts (i.e., brands)
584
Number of industries
16
Number of states
48
Weighted average occupancy
99.8%
Total square feet of rentable space
17,798,241
Cash ABR - service-oriented or experience-based
92.8%
Cash ABR - properties subject to master lease
65.1%
Portfolio Update
Investments
The Company’s investment activity during the three and nine months ended September 30, 2023 is summarized as follows:
Quarter Ended
September 30, 2023
Year to Date
September 30, 2023
Investments:
Investment volume
$213.3 million
$697.8 million
Number of transactions3083
Property count65200
Weighted average cash / GAAP cap rate
7.6%/8.7%
7.5%/8.8%
Weighted average lease escalation
2.0%
2.0%
% Subject to master lease
60%
66%
% Sale-leaseback transactions
100%
100%
% Existing relationship
86%
80%
% Required financial reporting (tenant/guarantor)
100%
100%
WALT
17.6 years
18.7 years
2

Dispositions
The Company’s disposition activity during the three and nine months ended September 30, 2023 is summarized as follows:
Quarter Ended
September 30, 2023		Year to Date
September 30, 2023
Dispositions:
Net proceeds
$28.5 million
$107.4 million
Number of properties sold1043
Net gain / (loss)
$1.9 million
$19.3 million
Weighted average cash cap rate (excluding vacant properties and sales subject to a tenant purchase option )
6.5%
6.2%
Loan Repayments
Loan repayments to the Company during the three and nine months ended September 30, 2023 are summarized as follows:
Quarter Ended
September 30, 2023		Year to Date
September 30, 2023
Loan Repayments:
Proceeds—Principal$3.7 million$22.4 million
Proceeds—Prepayment penalties$37 thousand$0.2 million
Number of properties416
Weighted average cash cap rate
7.1%
7.2%
Leverage and Balance Sheet and Liquidity
The Company's leverage, balance sheet and liquidity are summarized in the following table.
September 30, 2023
Pro Forma September 30, 2023
Leverage:
Net debt to Annualized Adjusted EBITDAre
4.5x
3.7x
Balance Sheet and Liquidity:
Cash and cash equivalents and restricted cash
$42.0 million
$389.6 million
Unused revolving credit facility capacity
$600.0 million
$600.0 million
2029 Term Loan - remaining availability (1)
$75.0 million
$—
Forward equity sales - unsettled
$272.6 million
$—
Total available liquidity
$989.6 million
$989.6 million
ATM Program:
2022 ATM Program initial availability$500.0 million
Aggregate gross sales under the 2022 ATM Program
$172.7 million
Availability remaining under the 2022 ATM Program
$327.3 million
Average price per share of gross sales since inception in May 2022
$23.33
image_6.jpg
1.In October 2023, the Company drew the remaining $75.0 million available under its $450.0 million 2029 Term Loan and entered into interest rate swaps to fix the interest rate on all of the $450.0 million of principal through maturity in February 2029.
3

Guidance
2024 Guidance
The Company currently expects 2024 AFFO per share on a fully diluted basis to be within a range of $1.71 to $1.75.
2023 Guidance
The Company is updating its range for expected 2023 AFFO per share on a fully diluted basis to $1.64 to $1.65 from its previously announced range of $1.62 to $1.65.
Note: The Company does not provide guidance for the most comparable GAAP financial measure, net income, or a reconciliation of the forward-looking non-GAAP financial measure of AFFO to net income computed in accordance with GAAP, because it is unable to reasonably predict, without unreasonable efforts, certain items that would be contained in the GAAP measure, including items that are not indicative of the Company's ongoing operations, such as, without limitation, potential impairments of real estate assets, net gain/loss on dispositions of real estate assets, changes in allowance for credit losses and stock-based compensation expense. These items are uncertain, depend on various factors, and could have a material impact on the Company's GAAP results for the guidance period.
Dividend Information
As previously announced, on September 7, 2023, Essential Properties' board of directors declared a cash dividend of $0.28 per share of common stock for the quarter ended September 30, 2023. The dividend was paid on October 13, 2023 to stockholders of record as of the close of business on September 29, 2023.
Conference Call Information
In conjunction with the release of Essential Properties’ operating results, the Company will host a conference call on Thursday, October 26, 2023 at 10:00 a.m. EDT to discuss the results. To access the conference, dial 877-407-9208 (International: 201-493-6784). A live webcast will also be available in listen-only mode by clicking on the webcast link in the Investor Relations section at www.essentialproperties.com.
A telephone replay of the conference call can also be accessed by calling 844-512-2921 (International: 412-317-6671) and entering the access code: 13741522. The telephone replay will be available through November 9, 2023.
A replay of the conference call webcast will be available on our website approximately two hours after the conclusion of the live broadcast. The webcast replay will be available for 90 days. No access code is required for this replay.
Supplemental Materials
The Company’s Supplemental Operating & Financial Data—Third Quarter Ended September 30, 2023 is available on Essential Properties’ website at investors.essentialproperties.com.
About Essential Properties Realty Trust, Inc.
Essential Properties Realty Trust, Inc. is an internally managed REIT that acquires, owns and manages primarily single- tenant properties that are net leased on a long-term basis to companies operating service-oriented or experience-based businesses. As of September 30, 2023, the Company’s portfolio consisted of 1,793 freestanding net lease properties with a weighted average lease term of 13.9 years and a weighted average rent coverage ratio of 4.0x. In addition, as of September 30, 2023, the Company’s portfolio was 99.8% leased to 363 tenants operating 584 different concepts in 16 industries across 48 states.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. When used in this press release, the words “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximately” or “plan,” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions of
4

management. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and the Company may not be able to realize them. The Company does not guarantee that the transactions and events described will happen as described (or that they will happen at all). You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release. While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law. In light of these risks and uncertainties, the forward-looking events discussed in this press release might not occur as described, or at all.
Additional information concerning factors that could cause actual results to differ materially from these forward-looking statements is contained in the company’s Securities and Exchange Commission (the "Commission”) filings, including, but not limited to, the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Copies of each filing may be obtained from the Company or the Commission. Such forward-looking statements should be regarded solely as reflections of the Company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release.
The results reported in this press release are preliminary and not final. There can be no assurance that these results will not vary from the final results reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 that it will file with the Commission.
Non-GAAP Financial Measures and Certain Definitions
The Company’s reported results are presented in accordance with GAAP. The Company also discloses the following non-GAAP financial measures: FFO, Core FFO, AFFO, earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) on sales of depreciable property and real estate impairment losses (“EBITDAre”), adjusted EBITDAre, annualized adjusted EBITDAre, net debt, net operating income (“NOI”) and cash NOI (“Cash NOI”). The Company believes these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs.
FFO, Core FFO and AFFO
The Company computes FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO is used by management, and may be useful to investors and analysts, to facilitate meaningful comparisons of operating performance between periods and among the Company’s peers primarily because it excludes the effect of real estate depreciation and amortization and net gains and losses on sales (which are dependent on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions).
The Company computes Core FFO by adjusting FFO, as defined by NAREIT, to exclude certain GAAP income and expense amounts that it believes are infrequent and unusual in nature and/or not related to its core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Core FFO provides investors with a metric to assist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of our peers, because it removes the effect of unusual items that are not expected to impact our operating performance on an ongoing basis.
Core FFO is used by management in evaluating the performance of our core business operations. Items included in calculating FFO that may be excluded in calculating Core FFO include certain transaction related gains, losses, income or expense or other non-core amounts as they occur.
5

To derive AFFO, the Company modifies its computation of Core FFO to include other adjustments to GAAP net income related to certain items that it believes are not indicative of the Company’s operating performance, including straight-line rental revenue, non-cash interest expense, non-cash compensation expense, other amortization expense, other non-cash charges and capitalized interest expense. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. The Company believes that AFFO is an additional useful supplemental measure for investors to consider when assessing the Company’s operating performance without the distortions created by non-cash items and certain other revenues and expenses.
FFO, Core FFO and AFFO 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 FFO, Core FFO and AFFO 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.
EBITDA and EBITDAre
The Company computes EBITDA as earnings before interest, income taxes and depreciation and amortization. In 2017, NAREIT issued a white paper recommending that companies that report EBITDA also report EBITDAre. The Company computes 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 real estate impairment losses. The Company presents EBITDA and EBITDAre as they are measures commonly used in its industry and the Company believes that these measures are useful to investors and analysts because they provide supplemental information concerning its operating performance, exclusive of certain non-cash items and other costs. The Company uses EBITDA and EBITDAre as measures of its operating performance and not as measures of liquidity.
EBITDA and 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, the Company’s computation of EBITDA and 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
The Company calculates its net debt as its gross debt (defined as total debt plus net deferred financing costs on its secured borrowings) less cash and cash equivalents and restricted cash available for future investment. The Company believes excluding cash and cash equivalents and restricted cash available for future investment from gross debt, all of which could be used to repay debt, provides an estimate of the net contractual amount of borrowed capital to be repaid, which it believes is a beneficial disclosure to investors and analysts.
NOI and Cash NOI
The Company computes NOI as total revenues less property expenses. NOI excludes all other items of expense and income included in the financial statements in calculating net income or loss. Cash NOI further excludes non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash charges. The Company believes NOI and Cash NOI provide useful information because they reflect only those revenue and expense items that are incurred at the property level and present such items on an unlevered basis.
NOI and Cash NOI are not measures of financial performance under GAAP. You should not consider the Company’s NOI and Cash NOI as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. Additionally, the Company’s computation of NOI and Cash NOI 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.
6

Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI
The Company further adjusts EBITDAre, NOI and Cash NOI i) based on an estimate calculated as if all investment and disposition activity that took place during the quarter had occurred on the first day of the quarter, ii) to exclude certain GAAP income and expense amounts that the Company believes are infrequent and unusual in nature and iii) to eliminate the impact of lease termination or loan prepayment fees and contingent rental revenue from its tenants which is subject to sales thresholds specified in the lease. The Company then annualizes these estimates for the current quarter by multiplying them by four, which it believes provides a meaningful estimate of the Company’s current run rate for all investments as of the end of the current quarter. You should not unduly rely on these measures, as they are based on assumptions and estimates that may prove to be inaccurate. The Company’s actual reported EBITDAre, NOI and Cash NOI for future periods may be significantly less than these estimates of current run rates.
Cash ABR
Cash ABR means annualized contractually specified cash base rent in effect as of the end of the current quarter for all of the Company’s leases (including those accounted for as direct financing leases) commenced as of that date and annualized cash interest on its mortgage loans receivable as of that date.
Cash Cap Rate
Cash Cap Rate means annualized contractually specified cash base rent for the first full month after investment or disposition divided by the purchase or sale price, as applicable, for the property.
GAAP Cap Rate
GAAP Cap Rate means annualized rental income computed in accordance with GAAP for the first full month after investment divided by the purchase price, as applicable, for the property.
Rent Coverage Ratio
Rent coverage ratio means the ratio of tenant-reported or, when unavailable, management’s estimate based on tenant-reported financial information, annual EBITDA and cash rent attributable to the leased property (or properties, in the case of a master lease) to the annualized base rental obligation as of a specified date.
7

Essential Properties Realty Trust, Inc.
Consolidated Statements of Operations
Three months ended September 30,Nine months ended September 30,
(in thousands, except share and per share data)2023202220232022
(unaudited)(unaudited)(unaudited)(unaudited)
Revenues:
Rental revenue1,2
$86,969 $66,525 $246,960 $199,726 
Interest on loans and direct financing lease receivables
4,568 3,719 13,548 11,490 
Other revenue120 419 1,353 1,014 
Total revenues91,657 70,663 261,861 212,230 
Expenses:
General and administrative
7,174 7,868 23,343 22,956 
Property expenses3
1,359 830 3,346 2,668 
Depreciation and amortization26,212 22,054 74,779 64,441 
Provision for impairment of real estate165 349 1,645 10,541 
Change in provision for credit losses(63)(30)(85)136 
Total expenses34,847 31,071 103,028 100,742 
Other operating income:
Gain on dispositions of real estate, net1,859 6,329 19,320 18,082 
Income from operations58,669 45,921 178,153 129,570 
Other (expense)/income:
Loss on debt extinguishment4
(116)— (116)(2,138)
Interest expense(12,633)(9,892)(36,837)(28,242)
Interest income330 752 1,416 800 
Income before income tax expense46,250 36,781 142,616 99,990 
Income tax expense162 190 472 769 
Net income46,088 36,591 142,144 99,221 
Net income attributable to non-controlling interests(174)(163)(532)(441)
Net income attributable to stockholders$45,914 $36,428 $141,612 $98,780 
Basic weighted-average shares outstanding155,917,176 139,068,188 150,314,073 132,438,157 
Basic net income per share$0.29 $0.26 $0.94 $0.74 
Diluted weighted-average shares outstanding157,182,984 139,890,693 151,609,426 133,321,987 
Diluted net income per share$0.29 $0.26 $0.94 $0.74 
image_7.jpg
1.Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $198, $210, $518 and $526 for the three and nine months ended September 30, 2023 and 2022, respectively.
2.Includes reimbursable income from the Company’s tenants of $820, $530, $2,161 and $1,584 for the three and nine months ended September 30, 2023 and 2022, respectively.
3.Includes reimbursable expenses from the Company’s tenants of $820, $530, $2,161 and $1,584 for the three and nine months ended September 30, 2023 and 2022, respectively.
4.During the nine months ended September 30, 2022, includes debt extinguishment costs associated with the Company's restructuring of its credit and term loan facilities.
8

Essential Properties Realty Trust, Inc.
Consolidated Balance Sheets
(in thousands, expect share and per share amounts)September 30, 2023December 31, 2022
(Unaudited)(Audited)
ASSETS
Investments:
Real estate investments, at cost:
Land and improvements$1,431,441 $1,228,687 
Building and improvements2,798,181 2,440,630 
Lease incentive16,894 18,352 
Construction in progress69,113 34,537 
Intangible lease assets87,849 88,364 
Total real estate investments, at cost4,403,478 3,810,570 
Less: accumulated depreciation and amortization(343,637)(276,307)
Total real estate investments, net4,059,841 3,534,263 
Loans and direct financing lease receivables, net227,114 240,035 
Real estate investments held for sale, net3,539 4,780 
Net investments4,290,494 3,779,078 
Cash and cash equivalents36,106 62,345 
Restricted cash5,912 9,155 
Straight-line rent receivable, net98,620 78,587 
Derivative assets54,314 47,877 
Rent receivables, prepaid expenses and other assets, net26,735 22,991 
Total assets$4,512,181 $4,000,033 
LIABILITIES AND EQUITY
Unsecured term loans, net of deferred financing costs$1,197,155 $1,025,492 
Senior unsecured notes, net395,706 395,286 
Revolving credit facility— — 
Intangible lease liabilities, net11,230 11,551 
Dividend payable43,943 39,398 
Derivative liabilities660 2,274 
Accrued liabilities and other payables25,697 29,261 
Total liabilities1,674,391 1,503,262 
Commitments and contingencies— — 
Stockholders' equity:
Preferred stock, $0.01 par value; 150,000,000 authorized; none issued and outstanding as of September 30, 2023 and December 31, 2022
— — 
Common stock, $0.01 par value; 500,000,000 authorized; 156,024,222 and 142,379,655 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
1,560 1,424 
Additional paid-in capital2,885,825 2,563,305 
Distributions in excess of cumulative earnings(107,592)(117,187)
Accumulated other comprehensive loss49,422 40,719 
Total stockholders' equity2,829,215 2,488,261 
Non-controlling interests8,575 8,510 
Total equity2,837,790 2,496,771 
Total liabilities and equity$4,512,181 $4,000,033 
9

Essential Properties Realty Trust, Inc.
Reconciliation of Non-GAAP Financial Measures
Three months ended September 30,Nine months ended September 30,
(unaudited, in thousands except per share amounts)2023202220232022
Net income$46,088 $36,591 $142,144 $99,221 
Depreciation and amortization of real estate26,186 22,028 74,701 64,363 
Provision for impairment of real estate165 349 1,645 10,541 
Gain on dispositions of real estate, net(1,859)(6,329)(19,320)(18,082)
Funds from Operations70,580 52,639 199,170 156,043 
Non-core expense (income)1
116 250 (588)2,388 
Core Funds from Operations70,696 52,889 198,582 158,431 
Adjustments:
Straight-line rental revenue, net(7,191)(3,810)(20,739)(16,610)
Non-cash interest expense762 645 2,195 1,995 
Non-cash compensation expense2,144 2,233 7,022 7,257 
Other amortization expense708 1,775 1,244 2,177 
Other non-cash charges(68)(34)(101)126 
Capitalized interest expense(750)(236)(1,765)(363)
Adjusted Funds from Operations$66,301 $53,462 $186,438 $153,013 
Net income per share2:
Basic$0.29 $0.26 $0.94 $0.74 
Diluted$0.29 $0.26 $0.94 $0.74 
FFO per share2:
Basic$0.45 $0.38 $1.32 $1.17 
Diluted$0.45 $0.38 $1.31 $1.17 
Core FFO per share2:
Basic$0.45 $0.38 $1.31 $1.19 
Diluted$0.45 $0.38 $1.31 $1.19 
AFFO per share2:
Basic$0.42 $0.38 $1.23 $1.15 
Diluted$0.42 $0.38 $1.23 $1.15 
image_6.jpg
1.Includes the following during the: i) three months ended September 30, 2023 — $0.1 million loss on debt extinguishment; ii) nine months ended September 30, 2023 — $0.1 million loss on debt extinguishment, $0.9 million of insurance recovery income and $0.2 million of severance expense and non-cash compensation expense in connection with the departure of one of our junior executives; iii) three and nine months ended September 30, 2022 — $0.2 million of fees incurred in conjunction with a term loan amendment and $2.1 million loss on debt extinguishment.
2.Calculations exclude $101, $93, $304 and $280 from the numerator for the three and nine months ended September 30, 2023 and 2022, respectively, related to dividends paid on unvested restricted stock awards and restricted stock units.
10

Essential Properties Realty Trust, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands)
Three months ended September 30, 2023
Net income$46,088 
Depreciation and amortization26,212 
Interest expense12,633 
Interest income(330)
Income tax expense162 
EBITDA84,765 
Provision for impairment of real estate165 
Gain on dispositions of real estate, net(1,859)
EBITDAre
83,071 
Adjustment for current quarter re-leasing, acquisition and disposition activity1
3,647 
Adjustment to exclude other non-core or non-recurring activity2
(16)
Adjustment to exclude termination/prepayment fees and certain percentage rent3
(205)
Adjusted EBITDAre - Current Estimated Run Rate
86,497 
General and administrative expense6,969 
Adjusted net operating income ("NOI")93,466 
Straight-line rental revenue, net1
(8,966)
Other amortization expense708 
Adjusted Cash NOI$85,208 
Annualized EBITDAre
$332,284 
Annualized Adjusted EBITDAre
$345,988 
Annualized Adjusted NOI$373,864 
Annualized Adjusted Cash NOI$340,832 
image_7.jpg
1.Adjustment is made to reflect EBITDAre, NOI and Cash NOI as if all re-leasing activity, investments in and dispositions of real estate and loan repayments completed during the three months ended September 30, 2023 had occurred on July 1, 2023.
2.Adjustment is made to i) exclude non-core income and expense adjustments made in computing Core FFO, ii) exclude changes in our provision for credit losses and iii) eliminate the impact of seasonal fluctuation in certain non-cash compensation expense recorded in the period.
3.Adjustment excludes lease termination or loan prepayment fees and contingent rent (based on a percentage of the tenant's gross sales at the leased property) where payment is subject to exceeding a sales threshold specified in the lease, if any.
11

Essential Properties Realty Trust, Inc.
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands, except share and per share amounts)September 30, 2023RateWtd. Avg. Maturity
Unsecured debt:
February 2027 term loan1
$430,0002.4%3.4 years
January 2028 term loan1
400,0004.6%4.3 years
February 2029 term loan1,2
375,0004.1%5.4 years
Senior unsecured notes due July 2031400,0003.1%7.8 years
Revolving credit facility3
——%2.4 years
Total unsecured debt1,605,0003.5%5.2 years
Gross debt1,605,000
Less: cash & cash equivalents(36,106)
Less: restricted cash available for future investment(5,912)
Net debt1,562,982
Equity:
Preferred stock—
Common stock and OP units (156,578,069 shares @ $21.63/share as of 9/30/23)4
3,386,784
Total equity3,386,784
Total enterprise value ("TEV")$4,949,766
Pro forma adjustments to Net Debt and TEV:5
Net debt$1,562,982
Less: cash received — unsettled forward equity(272,602)
Pro forma net debt1,290,380
Total equity3,386,784
Common stock — unsettled forward equity (12,447,580 shares @ $21.63/share as of 9/30/23)
269,241
Pro forma TEV$4,946,405
Gross Debt / Undepreciated Gross Assets33.1 %
Net Debt / TEV31.6 %
Net Debt / Annualized Adjusted EBITDAre
4.5x
Pro Forma Gross Debt / Undepreciated Gross Assets31.3 %
Pro Forma Net Debt / Pro Forma TEV26.1 %
Pro Forma Net Debt / Annualized Adjusted EBITDAre
3.7x
image_7.jpg
1.Rates presented for the Company's term loans are fixed at the stated rates after giving effect to its interest rate swaps, applicable margin of 85bps (for 2027 and 2028 Term Loans) or 95bps (for 2029 Term Loan) and SOFR premium of 10bps.
2.Weighted average maturity calculation is made after giving effect to extension options exercisable at the Company's election.
3.The Company's revolving credit facility provides a maximum aggregate initial original principal amount of up to $600 million and includes an accordion feature to increase, subject to certain conditions, the maximum availability of the facility by up to $600 million. Borrowings bear interest at Term SOFR plus applicable margin of 77.5bps and SOFR premium of 10bps.
4.Common stock and OP units as of September 30, 2023, based on 156,024,222 common shares outstanding (including unvested restricted share awards) and 553,847 OP units held by non-controlling interests.
5.Pro forma adjustments have been made to reflect 12,447,580 shares sold on a forward basis in the Company's September 2023 follow-on offering or through the Company's ATM Program as if they had been physically settled on September 30, 2023.
12

Investor/Media:
Essential Properties Realty Trust, Inc.
Robert W. Salisbury, CFA
Senior Vice President, Capital Markets
609-436-0619
investors@essentialproperties.com
Source: Essential Properties Realty Trust, Inc.
13
Supplemental Information | As of September 30, 20230 Supplemental Information Third Quarter 2023 Exhibit 99.2

 
Supplemental Information | As of September 30, 20231 Table of Contents Financial Summary Consolidated Statements of Operations 2 Funds from Operations and Adjusted Funds from Operations 3 Consolidated Balance Sheets 4 GAAP Reconciliations to EBITDAre, GAAP NOI and Cash NOI 5 Market Capitalization, Debt Summary and Leverage Metrics 6 Net Investment Activity Investment Summary 7 Disposition Summary 8 Portfolio Summary Portfolio Highlights 9 Tenant and Industry Diversification 10 Portfolio Health 11 Leasing Summary Leasing Expiration Schedule, Leasing Activity and Statistics 12 Same-Store Analysis 13 Lease Escalations 14 Glossary 15-17

 
Supplemental Information | As of September 30, 20232 l t l I f r ti | s f t r , 2 1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $198, $210, $518 and $526 for the three and nine months ended September 30, 2023 and 2022, respectively. 2. Includes reimbursable income from the Company’s tenants of $820, $530, $2,161 and $1,584 for the three and nine months ended September 30, 2023 and 2022, respectively. 3. Includes reimbursable expenses from the Company’s tenants of $820, $530, $2,161 and $1,584 for the three and six months ended September 30, 2023 and 2022, respectively. 4. During the three and nine months ended September 30, 2023, includes debt extinguishment costs associated with the full repayment of the Company’s 2024 Term Loan and during the nine months ended September 30, 2022, includes debt extinguishment costs associated with the Company's restructuring of its credit and term loan facilities. Financial Summary Consolidated Statements of Operations Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share data) 2023 2022 2023 2022 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: Rental revenue1,2 $ 86,969 $ 66,525 $ 246,960 $ 199,726 Interest on loans and direct financing lease receivables 4,568 3,719 13,548 11,490 Other revenue, net 120 419 1,353 1,014 Total revenues 91,657 70,663 261,861 212,230 Expenses: General and administrative 7,174 7,868 23,343 22,956 Property expenses3 1,359 830 3,346 2,668 Depreciation and amortization 26,212 22,054 74,779 64,441 Provision for impairment of real estate 165 349 1,645 10,541 Change in provision for loan losses (63) (30) (85) 136 Total expenses 34,847 31,071 103,028 100,742 Other operating income: Gain on dispositions of real estate, net 1,859 6,329 19,320 18,082 Income from operations 58,669 45,921 178,153 129,570 Other (expense)/income: Loss on debt extinguishment4 (116) — (116) (2,138) Interest expense (12,633) (9,892) (36,837) (28,242) Interest income 330 752 1,416 800 Income before income tax expense 46,250 36,781 142,616 99,990 Income tax expense 162 190 472 769 Net income 46,088 36,591 142,144 99,221 Net income attributable to non-controlling interests (174) (163) (532) (441) Net income attributable to stockholders $ 45,914 $ 36,428 $ 141,612 $ 98,780 Basic weighted-average shares outstanding 155,917,176 139,068,188 150,314,073 132,438,157 Basic net income per share $ 0.29 $ 0.26 $ 0.94 $ 0.74 Diluted weighted-average shares outstanding 157,182,984 139,890,693 151,609,426 133,321,987 Diluted net income per share $ 0.29 $ 0.26 $ 0.94 $ 0.74

 
Supplemental Information | As of September 30, 20233 l t l I f r ti | s f t r , 3 1. Includes the following during the: i) three months ended September 30, 2023 — $0.1 million loss on debt extinguishment; ii) nine months ended September 30, 2023 — $0.1 million loss on debt extinguishment, $0.9 million of insurance recovery income and $0.2 million of severance expense and non-cash compensation expense in connection with the departure of one of our junior executives; iii) three and nine months ended September 30, 2022 — $0.2 million of fees incurred in conjunction with a term loan amendment and $2.1 million loss on debt extinguishment. 2. Calculations exclude $101, $93, $304 and $280 from the numerator for the three and nine months ended September 30, 2023 and 2022, respectively, related to dividends paid on unvested restricted stock awards and restricted stock units. Financial Summary Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) Three months ended September 30, Nine months ended September 30, (unaudited, in thousands except per share amounts) 2023 2022 2023 2022 Net income $ 46,088 $ 36,591 $ 142,144 $ 99,221 Depreciation and amortization of real estate 26,186 22,028 74,701 64,363 Provision for impairment of real estate 165 349 1,645 10,541 Gain on dispositions of real estate, net (1,859) (6,329) (19,320) (18,082) Funds from Operations 70,580 52,639 199,170 156,043 Non-core expense (income)1 116 250 (588) 2,388 Core Funds from Operations 70,696 52,889 198,582 158,431 Adjustments: Straight-line rental revenue, net (7,191) (3,810) (20,739) (16,610) Non-cash interest expense 762 645 2,195 1,995 Non-cash compensation expense 2,144 2,233 7,022 7,257 Other amortization expense 708 1,775 1,244 2,177 Other non-cash charges (68) (34) (101) 126 Capitalized interest expense (750) (236) (1,765) (363) Adjusted Funds from Operations $ 66,301 $ 53,462 $ 186,438 $ 153,013 Net income per share2: Basic $ 0.29 $ 0.26 $ 0.94 $ 0.74 Diluted $ 0.29 $ 0.26 $ 0.94 $ 0.74 FFO per share2: Basic $ 0.45 $ 0.38 $ 1.32 $ 1.17 Diluted $ 0.45 $ 0.38 $ 1.31 $ 1.17 Core FFO per share2: Basic $ 0.45 $ 0.38 $ 1.31 $ 1.19 Diluted $ 0.45 $ 0.38 $ 1.31 $ 1.19 AFFO per share2: Basic $ 0.42 $ 0.38 $ 1.23 $ 1.15 Diluted $ 0.42 $ 0.38 $ 1.23 $ 1.15

 
Supplemental Information | As of September 30, 20234 l t l I f r ti | s f t r , 4 Financial Summary Consolidated Balance Sheets (in thousands, except share and per share amounts) September 30, 2023 December 31, 2022 ASSETS (unaudited) (audited) Investments: Real estate investments, at cost: Land and improvements $ 1,431,441 $ 1,228,687 Building and improvements 2,798,181 2,440,630 Lease incentive 16,894 18,352 Construction in progress 69,113 34,537 Intangible lease assets 87,849 88,364 Total real estate investments, at cost 4,403,478 3,810,570 Less: accumulated depreciation and amortization (343,637) (276,307) Total real estate investments, net 4,059,841 3,534,263 Loans and direct financing lease receivables, net 227,114 240,035 Real estate investments held for sale, net 3,539 4,780 Net investments 4,290,494 3,779,078 Cash and cash equivalents 36,106 62,345 Restricted cash 5,912 9,155 Straight-line rent receivable, net 98,620 78,587 Derivative assets 54,314 47,877 Rent receivables, prepaid expenses and other assets, net 26,735 22,991 Total assets $ 4,512,181 $ 4,000,033 LIABILITIES AND EQUITY Unsecured term loans, net of deferred financing costs $ 1,197,155 $ 1,025,492 Senior unsecured notes, net 395,706 395,286 Revolving credit facility — — Intangible lease liabilities, net 11,230 11,551 Dividend payable 43,943 39,398 Derivative liabilities 660 2,274 Accrued liabilities and other payables 25,697 29,261 Total liabilities 1,674,391 1,503,262 Commitments and contingencies — — Stockholders' equity: Preferred stock, $0.01 par value; 150,000,000 authorized; none issued and outstanding as of 9/30/23 and 12/31/22 — — Common stock, $0.01 par value; 500,000,000 authorized; 156,024,222 and 142,379,655 issued and outstanding as of 9/30/23 and 12/31/22, respectively 1,560 1,424 Additional paid-in capital 2,885,825 2,563,305 Distributions in excess of cumulative earnings (107,592) (117,187) Accumulated other comprehensive loss 49,422 40,719 Total stockholders' equity 2,829,215 2,488,261 Non-controlling interests 8,575 8,510 Total equity 2,837,790 2,496,771 Total liabilities and equity $ 4,512,181 $ 4,000,033

 
Supplemental Information | As of September 30, 20235 l t l I f r ti | s f t r , 5 Financial Summary GAAP Reconciliations to EBITDAre, GAAP NOI, Cash NOI and Estimated Run Rate Metrics 1. Adjustment made to reflect EBITDAre, NOI and Cash NOI as if all re-leasing activity, investments in and dispositions of real estate and loan repayments completed during the three months ended September 30, 2023 had occurred on July 1, 2023. 2. Adjustment is made to i) exclude non-core income and expense adjustments made in computing Core FFO, ii) exclude changes in our provision for credit losses and iii) eliminate the impact of seasonal fluctuation in certain non-cash compensation expense recorded in the period. 3. Adjustment excludes lease termination or loan prepayment fees and contingent rent (based on a percentage of the tenant's gross sales at the leased property) where payment is subject to exceeding a sales threshold specified in the lease, if any. Three Months Ended (unaudited, in thousands) September 30, 2023 Net income $ 46,088 Depreciation and amortization 26,212 Interest expense 12,633 Interest income (330) Income tax expense 162 EBITDA 84,765 Provision for impairment of real estate 165 Gain on dispositions of real estate, net (1,859) EBITDAre 83,071 Adjustment for current quarter re-leasing, acquisition and disposition activity1 3,647 Adjustment to exclude other non-core and non-recurring activity2 (16) Adjustment to exclude termination/prepayment fees and certain percentage rent3 (205) Adjusted EBITDAre - Current Estimated Run Rate 86,497 General and administrative 6,969 Adjusted net operating income ("NOI") 93,466 Straight-line rental revenue, net1 (8,966) Other amortization expense 708 Adjusted Cash NOI $ 85,208 Annualized EBITDAre $ 332,284 Annualized Adjusted EBITDAre $ 345,988 Annualized Adjusted NOI $ 373,864 Annualized Adjusted Cash NOI $ 340,832

 
Supplemental Information | As of September 30, 20236 l t l I f r ti | s f t r , 6 Financial Summary Market Capitalization, Debt Summary and Leverage Metrics 1. Rates presented for our term loans are fixed at the stated rates after giving effect to our interest rate swaps, applicable margin of 85bps (for 2027 and 2028 Term Loans) or 95bps (for 2029 Term Loan) and SOFR premium of 10bps. 2. Weighted average maturity calculation is made after giving effect to extension options exercisable at our election. 3. Our revolving credit facility provides a maximum aggregate initial original principal amount of up to $600 million and includes an accordion feature to increase, subject to certain conditions, the maximum availability of the facility by up to $600 million. Borrowings bear interest at Term SOFR plus applicable margin of 77.5bps and SOFR premium of 10bps. 4. Common stock and OP units as of September 30, 2023, based on 156,024,222 common shares outstanding and 553,847 OP units held by non-controlling interests. 5. Pro forma adjustments have been made to reflect 12,447,580 shares sold on a forward basis through the Company’s September 2023 follow-on offering and ATM Program as if they had been physically settled on September 30, 2023. (dollars in thousands, except share and per share amounts) September 30, 2023 Rate Wtd. Avg. Maturity Unsecured debt: February 2027 term loan1 $ 430,000 2.4% 3.4 years January 2028 term loan1 400,000 4.6% 4.3 years February 2029 term loan1,2 375,000 4.1% 5.4 years Senior unsecured notes due July 2031 400,000 3.1% 7.8 years Revolving credit facility3 — —% 2.4 years Total unsecured debt 1,605,000 3.5% 5.2 years Gross debt 1,605,000 Less: cash & cash equivalents (36,106) Less: restricted cash available for future investment (5,912) Net debt 1,562,982 Equity: Preferred stock — Common stock and OP units (156,578,069 shares @ $21.63/share as of 9/30/23)4 3,386,784 Total equity 3,386,784 Total enterprise value ("TEV") $ 4,949,766 Pro forma adjustments to Net Debt and TEV:5 Net debt $ 1,562,982 Less: cash received — unsettled forward equity (272,602) Pro forma net debt 1,290,380 Total equity 3,386,784 Common stock — unsettled forward equity (12,447,580 shares @ $21.63/share as of 9/30/23) 269,241 Pro forma TEV $ 4,946,405 Gross Debt / Undepreciated Gross Assets 33.1% Net Debt / TEV 31.6% Net Debt / Annualized Adjusted EBITDAre 4.5x Pro Forma Gross Debt / Undepreciated Gross Assets 31.3% Pro Forma Net Debt / Pro Forma TEV 26.1% Pro Forma Net Debt / Annualized Adjusted EBITDAre 3.7x

 
Supplemental Information | As of September 30, 20237 $322,203 $237,795 $175,738 $195,454 $328,370 $207,147 $277,361 $213,327 $0 $40,000 $80,000 $120,000 $160,000 $200,000 $240,000 $280,000 $320,000 $360,000 In ve st m en t Ac tiv ity ($ 00 0s ) Net Investment Activity Investment Summary 1. Includes investments in mortgage loans receivable. 2. Cash ABR for the first full month after the investment divided by the gross investment in the property plus transaction costs. 3. GAAP rent and interest income for the first twelve months after the investment divided by the gross investment in the property plus transaction costs. 4. As a percentage of cash ABR for the quarter. 5. Includes investments in mortgage loans receivable collateralized by more than one property. 6. Includes investments in mortgage loans receivable made in support of sale-leaseback transactions. Investments1 4Q'21 1Q’22 2Q’22 3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 Number of Transactions 55 23 23 27 39 24 29 30 Property Count 96 105 39 40 115 57 78 65 Average Investment per Unit (in 000s) $3,230 $2,187 $3,870 $3,750 $2,782 $3,401 $3,350 $2,812 Cash Cap Rates2 6.9% 7.0% 7.0% 7.1% 7.5% 7.6% 7.4% 7.6% GAAP Cap Rates3 7.8% 7.8% 8.0% 8.2% 8.8% 9.0% 8.7% 8.7% Weighted Average Lease Escalation 1.6% 1.4% 1.5% 1.6% 1.8% 2.0% 1.9% 2.0% Master Lease %4,5 59% 83% 86% 68% 90% 86% 57% 60% Sale-Leaseback %4,6 96% 100% 100% 89% 99% 100% 99% 100% Existing Relationship %4 89% 83% 79% 94% 95% 94% 66% 86% % of Financial Reporting4 98% 100% 100% 100% 100% 100% 100% 100% Rent Coverage Ratio 3.0x 3.3x 2.7x 4.4x 3.2x 3.3x 3.9x 3.3x Lease Term Years 16.3 15.0 17.2 16.5 18.7 19.0 19.3 17.6

 
Supplemental Information | As of September 30, 20238 $4,466 $18,443 $26,091 $35,513 $75,522 $37,161 $41,736 $28,496 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 D is po si tio n Ac tiv ity ($ 00 0s )1 Net Investment Activity Disposition Summary 1. Includes the impact of transaction costs. 2. Gains/(losses) based on our initial purchase price. 3. Cash ABR at time of sale divided by gross sale price (excluding transaction costs) for the property. 4. Property count excludes dispositions of undeveloped land parcels or dispositions where only a portion of the owned parcel is sold. 5. Excludes properties sold pursuant to an existing tenant purchase option or properties purchased by the tenant. Dispositions 4Q'21 1Q’22 2Q’22 3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 Realized Gain/(Loss)1,2 7.5% 0.4% 38.6% 11.1% 7.2% (2.1%) (0.9%) (2.3%) Cash Cap Rate on Leased Assets3 6.0% 7.1%5 6.2% 6.2%5 6.9% 6.1%5 6.2%5 6.5%5 Leased Properties Sold4 2 6 8 12 25 17 14 9 Vacant Properties Sold4 — — — — 1 — 2 1 Rent Coverage Ratio 0.0x 2.5x5 1.1x 1.2x 2.1x 2.3x 2.2x 3.6x

 
Supplemental Information | As of September 30, 20239 Portfolio Summary Portfolio Highlights Investment Properties (#)1 1,793 Square Footage (mm) 17.8 Tenants (#) 363 Concepts (#) 584 Industries (#) 16 States (#) 48 Weighted Average Remaining Lease Term (Years) 13.9 Triple-Net Leases (% of Cash ABR) 95.6% Master Leases (% of Cash ABR) 65.1% Sale-Leaseback (% of Cash ABR)2,3 89.5% Unit-Level Rent Coverage 4.0x Unit-Level Financial Reporting (% of Cash ABR) 98.7% Leased (%) 99.8% Top 10 Tenants (% of Cash ABR) 17.8% Average Investment Per Property ($mm) $2.6 Total Cash ABR ($mm) $341.8 1. Includes 138 properties that secure mortgage loans receivable. 2. Exclusive of our Initial Portfolio. 3. Includes investments in mortgage loans receivable made in support of sale-leaseback transactions. As of September 30, 2023

 
Supplemental Information | As of September 30, 202310 Top 10 Tenants1 Properties2 % of Cash ABR 39 3.3% 7 2.0% 31 2.0% 6 1.7% 10 1.7% 77 1.6% 16 1.4% 21 1.4% 12 1.4% 13 1.3% Top 10 Tenants 232 17.8% Total 1,790 100.0% Portfolio Summary Tenant and Industry Diversification Top 10 Tenants Diversification by Industry 1. Represents tenant, guarantor or parent company. 2. Property count includes 138 properties that secure mortgage loans receivable and excludes three vacant properties. 3. Calculation excludes three vacant properties, properties with no annualized base rent and properties under construction. Tenant Industry Type of Business Cash ABR ($'000s) % of Cash ABR # of Properties2 Building SqFt3 Rent Per SqFt3 Car Washes Service $ 52,306 15.3% 174 880,223 $ 59.79 Early Childhood Education Service 41,017 12.0% 186 1,937,472 21.17 Medical / Dental Service 36,856 10.8% 205 1,493,524 24.68 Quick Service Service 36,327 10.6% 404 1,106,725 33.10 Automotive Service Service 29,013 8.5% 219 1,461,303 19.85 Casual Dining Service 24,943 7.3% 114 810,337 30.97 Equipment Rental and Sales Service 15,529 4.5% 63 1,063,533 14.60 Convenience Stores Service 14,417 4.2% 129 496,512 30.37 Other Services Service 7,921 2.3% 41 502,465 15.76 Family Dining Service 6,806 2.0% 38 249,173 27.31 Pet Care Services Service 4,665 1.4% 37 253,305 20.38 Service Subtotal $ 269,800 78.9% 1,610 10,254,570 $ 26.48 Entertainment Experience 28,301 8.3% 52 1,548,087 18.29 Health and Fitness Experience 14,735 4.3% 35 1,340,774 10.99 Movie Theatres Experience 4,398 1.3% 6 293,206 15.00 Experience Subtotal $ 47,334 13.9% 93 3,182,067 $ 14.91 Grocery Retail 11,582 3.4% 32 1,477,780 7.84 Home Furnishings Retail 1,492 0.4% 3 176,809 8.44 Retail Subtotal $ 13,074 3.8% 35 1,654,589 $ 7.90 Other Industrial Industrial 7,621 2.2% 29 1,342,335 5.68 Building Materials Industrial 3,910 1.2% 23 1,257,017 3.11 Industrial Subtotal $ 11,531 3.4% 52 2,599,352 $ 4.44 Total $ 341,839 100.0% 1,790 17,690,579 $ 19.40

 
Supplemental Information | As of September 30, 202311 ≥ 2.00x: 74.1% Not Reported: 1.4% 1.50x to 1.99x: 12.1% 1.00x to 1.49x: 9.3% < 1.00x: 3.1% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 20 23 20 24 20 25 20 26 20 27 20 28 20 29 20 30 20 31 20 32 20 33 20 34 20 35 20 36 20 37 20 38 Th er ea fte r % o f C as h AB R < 1.00x 1.00 to 1.49x 1.50 to 1.99x ≥ 2.00x NR 40.4% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% C C C + B- B B+ BB - BB BB + BB B- BB B BB B+ A- A A+ AA - % o f C as h AB R < 1.00x 1.00 to 1.49x 1.50 to 1.99x ≥ 2.00x NR Portfolio Summary Portfolio Health Tenant Financial Reporting Requirements % of Cash ABR by Unit-Level Coverage Tranche1 Unit-Level Coverage by Lease ExpirationUnit-Level Coverage by Tenant Credit2 Note: ‘NR’ means not reported. 1. Certain tenants, whose leases do not require unit-level financial reporting, provide the Company with unit-level financial information. The data shown includes unit-level coverage for these leases. 2. The chart illustrates the portions of annualized base rent as of September 30, 2023, attributable to leases with tenants having specified implied credit ratings based on their Moody’s RiskCalc scores. Moody’s equates the EDF scores generated using RiskCalc with a corresponding credit rating. Reporting Requirements % of Cash ABR Unit-Level Financial Information 98.7% Corporate-Level Financial Reporting 98.9% Both Unit-Level and Corporate-Level Financial Information 98.3% No Financial Information 0.8% Rent Coverage Ratio (x) Rent Coverage Ratio (x)

 
Supplemental Information | As of September 30, 202312 Cash ABR % of # of Wgt. Avg. Lease Terminated Leases Re-Leased Total Year1 ($’000)s Cash ABR Properties2 Coverage3 $(000)s Renewals Without Vacancy After Vacancy Leasing 2023 234 0.1% 4 2.7x Prior Cash ABR $ 333 $ 2,561 $ 284 $ 3,178 2024 5,297 1.5% 51 6.8x New Cash ABR4 356 2,224 240 2,820 2025 2,271 0.7% 17 3.0x Recovery Rate 107.0% 86.8% 84.4% 88.7% 2026 3,042 0.9% 19 3.1x Number of Leases 5 18 5 28 2027 6,234 1.8% 56 2.9x Average Months Vacant — — 8.4 — 2028 4,314 1.3% 16 2.6x % of Total Cash ABR5 0.1% 0.7% 0.1% 0.8% 2029 5,784 1.7% 79 4.5x 2030 4,109 1.2% 46 7.2x 2031 13,026 3.8% 78 3.0x 2032 11,416 3.3% 46 3.9x 2033 7,803 2.3% 24 3.7x Vacant Properties at June 30, 2023 2 2034 28,324 8.3% 200 6.4x Expiration Activity — 2035 15,051 4.4% 100 3.6x Properties Subject to Lease Termination 3 2036 39,571 11.6% 160 4.8x Vacant Property Sales — 2037 27,618 8.1% 135 5.0x Properties Leased (2) 2038 27,606 8.1% 136 4.0x Vacant Properties at September 30, 2023 3 2039 17,328 5.1% 80 3.4x 2040 29,510 8.6% 130 2.6x 2041 23,081 6.8% 112 2.7x 2042 38,403 11.2% 173 3.2x Thereafter 31,817 9.2% 128 3.5x Total $ 341,839 100.0% 1,790 4.0x Leasing Summary Leasing Expiration Schedule, Leasing Activity and Statistics 1. Expiration year of contracts in place as of September 30, 2023, excluding any tenant option renewal periods that have not been exercised. 2. Property count includes 138 properties that secure mortgage loans receivable but excludes three vacant properties. 3. Weighted by cash ABR as of September 30, 2023. 4. New cash ABR reflects full lease rental rate without giving effect to free rent or discounted rent periods. 5. New cash ABR divided by total cash ABR as of September 30, 2023. Annual Lease Expiration by Cash ABR Leasing Activity – Trailing 12 Months Leasing Statistics

 
Supplemental Information | As of September 30, 202313 Leasing Summary Same-Store Analysis Same-Store Portfolio Performance1 Contractual Cash Rent ($000s) 2 % Type of Business 3Q’22 3Q’23 Change Service $ 52,056 $ 52,774 1.4% Experience 7,645 7,644 0.0% Retail 2,804 2,816 0.4% Industrial 1,662 1,690 1.7% Total Same-Store Rent $ 64,167 $ 64,924 1.2% 1. All properties owned, excluding new sites under construction, for the entire same-store measurement period, which is July 1, 2022 through September 30, 2023. The same-store portfolio for 3Q’23 is comprised of 1,454 properties and represents 76% of our total portfolio as measured by contractual cash rent and interest divided by our cash ABR at September 30, 2023. 2. The amount of cash rent and interest our tenants are contractually obligated to pay per the in-place lease or mortgage as of September 30, 2023; excludes (i) percentage rent that is subject to sales breakpoints per the lease and (ii) redevelopment properties in a free rent period. 1.3% 2.0% 1.9% 1.7% 1.6% 1.6% 1.5% 1.2% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 Trailing 8 Qtr. Avg. Same-Store Rent Growth1

 
Supplemental Information | As of September 30, 202314 Contractual Fixed 96.1% CPI 2.5% Flat 1.4% Leasing Summary Lease Escalations 1. Based on cash ABR as of September 30, 2023. 2. Represents the weighted average annual escalation rate of the entire portfolio as if all escalations occur annually. For leases in which rent escalates by the greater of a stated fixed percentage or CPI, we have assumed an escalation equal to the stated fixed percentage in the lease. As any future increase in CPI is unknowable at this time, we have not included an increase in the rent pursuant to these leases in the weighted average annual escalation rate presented. Lease Escalation Frequency Lease Escalation Type Weighted Average Lease Escalation Frequency % of Cash ABR Annual Escalation Rate1,2 Annually 79.7% 1.7% Every 2 years 1.2 1.5 Every 3 years 0.2 0.0 Every 4 years 0.2 1.0 Every 5 years 13.2 1.8 Other escalation frequencies 4.1 1.0 Flat 1.4 0.0 Total / Weighted Average 100.0% 1.6%

 
Supplemental Information | As of September 30, 202315 Glossary Supplemental Reporting Measures FFO, Core FFO and AFFO Our reported results are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). We also disclose funds from operations (“FFO”), core funds from operations (“Core FFO”) and adjusted funds from operations (“AFFO”), each of which is a non-GAAP financial measures. We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO is used by management, and may be useful to investors and analysts, to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains and losses on sales (which are dependent on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions). We compute Core FFO by adjusting FFO, as defined by NAREIT, to exclude certain GAAP income and expense amounts that we believe are infrequent and unusual in nature and/or not related to our core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Core FFO provides investors with a metric to assist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of our peers, because it removes the effect of unusual items that are not expected to impact our operating performance on an ongoing basis. Core FFO is used by management in evaluating the performance of our core business operations. Items included in calculating FFO that may be excluded in calculating Core FFO include items like certain transaction related gains, losses, income or expense or other non-core amounts as they occur. To derive AFFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to certain items that we believe are not indicative of our operating performance, including straight- line rental revenue, non-cash interest expense, non-cash compensation expense, other amortization expense, other non-cash charges and capitalized interest expense. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We believe that AFFO is an additional useful supplemental measure for investors to consider to assess our operating performance without the distortions created by non-cash and certain other revenues and expenses. FFO, Core FFO and AFFO 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 FFO, Core FFO and AFFO 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.

 
Supplemental Information | As of September 30, 202316 Glossary Supplemental Reporting Measures We also present our earnings before interest, taxes and depreciation and amortization for real estate (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) on sales of depreciable property and real estate impairment losses (“EBITDAre”), net debt, net operating income (“NOI”) and cash NOI (“Cash NOI”), all of which are non-GAAP financial measures. We believe these non-GAAP financial measures are accepted industry measures used by analysts and investors to compare the operating performance of REITs. EBITDA and EBITDAre We compute EBITDA as earnings before interest, income taxes 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 real estate impairment losses. We present EBITDA and EBITDAre as they are measures commonly used in our industry and we believe that these measures are useful to investors and analysts because they provide important supplemental information concerning our operating performance, exclusive of certain non-cash and other costs. We use EBITDA and EBITDAre as measures of our operating performance and not as measures of liquidity. EBITDA and 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, the 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 and 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 gross debt (defined as total debt plus net deferred financing costs on our secured borrowings) less cash and cash equivalents and restricted cash available for future investment. We believe excluding cash and cash equivalents and restricted cash available for future investment, all of which could be used to repay debt, provides an estimate of the net contractual amount of borrowed capital to be repaid, which we believe is a beneficial disclosure to investors and analysts. NOI and Cash NOI We compute NOI as total revenues less property expenses. NOI excludes all other items of expense and income included in the financial statements in calculating net income or loss. Cash NOI further excludes non-cash items included in total revenues and property expenses, such as straight- line rental revenue and other amortization and non-cash charges. We believe NOI and Cash NOI 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. NOI and Cash NOI are not measurements of financial performance under GAAP. You should not consider our NOI and Cash NOI as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. Additionally, our computation of NOI and Cash NOI 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.

 
Supplemental Information | As of September 30, 202317 Glossary Supplemental Reporting Measures Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI We further adjust EBITDAre, NOI and Cash NOI i) based on an estimate calculated as if all re-leasing, investment and disposition activity that took place during the quarter had been made on the first day of the quarter, ii) to exclude certain GAAP income and expense amounts that we believe are infrequent and unusual in nature and iii) to eliminate the impact of lease termination or loan prepayment fees and contingent rental revenue from our tenants which is subject to sales thresholds specified in the lease. We then annualize these estimates for the current quarter by multiplying them by four, which we believe provides a meaningful estimate of our current run rate for all investments as of the end of the current quarter. You should not unduly rely on these measures, as they are based on assumptions and estimates that may prove to be inaccurate. Our actual reported EBITDAre, NOI and Cash NOI for future periods may be significantly less than these estimates of current run rates. Cash ABR Cash ABR means annualized contractually specified cash base rent in effect as of the end of the current quarter for all of our leases (including those accounted for as direct financing leases) commenced as of that date and annualized cash interest on our mortgage loans receivable as of that date. Rent Coverage Ratio Rent coverage ratio means the ratio of tenant-reported or, when unavailable, management’s estimate based on tenant-reported financial information, annual EBITDA and cash rent attributable to the leased property (or properties, in the case of a master lease) to the annualized base rental obligation as of a specified date. Initial Portfolio Initial Portfolio means our acquisition of a portfolio of 262 net leased properties on June 16, 2016, consisting primarily of restaurants, that were being sold as part of the liquidation of General Electric Capital Corporation for an aggregate purchase price of $279.8 million (including transaction costs). GAAP Cap Rate GAAP Cap Rate means annualized rental income computed in accordance with GAAP for the first full month after investment divided by the purchase price, as applicable, for the property. Cash Cap Rate Cash Cap Rate means annualized contractually specified cash base rent for the first full month after investment or disposition divided by the purchase or sale price, as applicable, for the property.

 
v3.23.3
Cover
Oct. 25, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 25, 2023
Entity Registrant Name Essential Properties Realty Trust, Inc.
Entity Incorporation, State or Country Code MD
Entity File Number 001-38530
Entity Tax Identification Number 82-4005693
Entity Address, Address Line One 902 Carnegie Center Blvd.
Entity Address, Address Line Two Suite 520
Entity Address, City or Town Princeton
Entity Address, State or Province NJ
Entity Address, Postal Zip Code 08540
City Area Code 609
Local Phone Number 436-0619
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.01 par value
Trading Symbol EPRT
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001728951
Essential Properties Rea... (NYSE:EPRT)
Historical Stock Chart
From Oct 2024 to Nov 2024 Click Here for more Essential Properties Rea... Charts.
Essential Properties Rea... (NYSE:EPRT)
Historical Stock Chart
From Nov 2023 to Nov 2024 Click Here for more Essential Properties Rea... Charts.