– Net loss of $(0.07) and Adjusted Funds
from Operations ("AFFO") of $0.32 Per Diluted Share –
– Completed Record Gross Investment Activity
of $151.6 Million at a 7.5% Blended Cash Yield –
– 2024 AFFO Per Share Guidance Midpoint
Maintained –
– Lori Wittman Appointed as Chair of the
Board of Directors –
NETSTREIT Corp. (NYSE: NTST) (the “Company”) today
announced financial and operating results for the third quarter
ended September 30, 2024.
“We are pleased to announce our highest quarterly investment
activity in the Company's history with $151.6 million in gross
investments at a blended cash yield of 7.5%. Our 100% occupied
portfolio remains in excellent condition to support our growing
earnings base and attractive dividend yield. Looking forward, we
remain focused on identifying quality investment opportunities that
further enhance our portfolio diversification while elevating our
internal growth profile to generate consistent AFFO per share
growth and deliver sustained value for shareholders,” said Mark
Manheimer, Chief Executive Officer of NETSTREIT.
THIRD QUARTER 2024 HIGHLIGHTS
The following table summarizes the Company's select financial
results1 for the three and nine months ended September 30,
2024.
Three Months Ended September
30,
2024
2023
% Change
(Unaudited)
Net (Loss) Income per Diluted Share
$
(0.07
)
$
0.06
(217
)%
Funds from Operations per Diluted
Share
$
0.32
$
0.31
3
%
Core Funds from Operations per Diluted
Share
$
0.32
$
0.31
3
%
Adjusted Funds from Operations per Diluted
Share
$
0.32
$
0.31
3
%
Nine Months Ended September
30,
2024
2023
% Change
(Unaudited)
Net (Loss) Income per Diluted Share
$
(0.09
)
$
0.08
(213
)%
Funds from Operations per Diluted
Share
$
0.87
$
0.87
—
%
Core Funds from Operations per Diluted
Share
$
0.93
$
0.88
6
%
Adjusted Funds from Operations per Diluted
Share
$
0.94
$
0.91
3
%
- Funds from operations ("FFO"), core funds from operations
("Core FFO"), and adjusted funds from operations ("AFFO") are
non-GAAP financial measures. See "Non-GAAP Financial
Measures."
INVESTMENT ACTIVITY
The following tables summarize the Company's investment,
disposition, and loan repayment activities (dollars in thousands)
for the three and nine months ended September 30, 2024.
Three Months Ended
September 30, 2024
Nine Months Ended
September 30, 2024
Number of
Investments
Amount
Number of
Investments
Amount
Investments
33
$
151,555
103
$
396,496
Dispositions
8
24,105
26
58,406
Loan Repayments
4
8,857
5
11,181
Net Investment Activity
$
118,593
$
326,909
Investment Activity
Cash Yield
7.5
%
7.5
%
% of ABR derived from Investment Grade
Tenants
37.3
%
52.4
%
% of ABR derived from Investment Grade
Profile Tenants
15.1
%
6.6
%
Weighted Average Lease Term (years)
12.5
13.4
Disposition Activity
Cash Yield
7.3
%
7.0
%
Weighted Average Lease Term (years)
9.9
10.1
Loan Repayments
Cash Yield
8.7
%
9.0
%
The following table summarizes the Company's ongoing development
projects and estimated development costs (dollars in thousands) as
of and for the three months ended September 30, 2024.
Developments
Three Months Ended
September 30, 2024
Amount Funded During the Quarter
$
5,085
As of September 30,
2024
Number of Developments
8
Amount Funded to Date
$
14,554
Estimated Funding Remaining on
Developments
7,386
Total Estimated Development
Cost
$
21,940
PORTFOLIO UPDATE
The following table summarizes the Company's real estate
portfolio (weighted by ABR, dollars in thousands) as of September
30, 2024.
As of September 30,
2024
Number of Investments
671
ABR
$
156,999
States
45
Square Feet
12,076,093
Tenants
93
Industries
26
Occupancy
100.0
%
Weighted Average Lease Term (years)
9.5
Investment Grade %
60.9
%
Investment Grade Profile %
14.4
%
CAPITAL MARKETS AND BALANCE SHEET
The following tables summarize the Company's leverage, balance
sheet, liquidity, ATM sales, and settlement of our forward equity
offerings (dollars in thousands, except per share data) as of and
for the three months ended September 30, 2024.
Leverage
As of September 30,
2024
Net Debt / Annualized Adjusted
EBITDAre
5.3 x
Adjusted Net Debt / Annualized Adjusted
EBITDAre
4.0 x
Liquidity
Unused Unsecured Revolver Capacity
$
249,850
Cash, Cash Equivalents and Restricted
Cash
28,750
Net Value of Unsettled Forward Equity
185,474
Total Liquidity
$
464,074
Forward Equity Settlement
Activity
As of September 30,
2024
Shares Settled During Quarter
4,183,711
Weighted Average Price Per Share
(Gross)
$
17.29
Net Value of Settled Forward Equity
$
70,449
ATM Activity
Shares Sold During Quarter
152,547
Weighted Average Price Per Share
(Gross)
$
17.13
Net Value of Unsettled Forward Equity
$
2,589
2024 ATM Program Initial Capacity
$
300,000
ATM Capacity Remaining as of September 30,
2024
$
297,387
Unsettled Forward Equity
Shares Unsettled as of September 30,
20241
10,735,647
Weighted Average Price Per Share
(Gross)
$
17.93
Net Value of Unsettled Forward Equity
$
185,474
- Includes 152,547 of forward equity shares sold under ATM
Program during the quarter.
DIVIDEND
On October 18, 2024, the Company’s Board of Directors declared a
quarterly cash dividend of $0.21 per share for the fourth quarter
of 2024. On an annualized basis, the dividend of $0.84 per share of
common stock represents an increase of $0.02 per share over the
prior year annualized dividend. The dividend will be paid on
December 13, 2024 to shareholders of record on December 2,
2024.
2024 GUIDANCE
The Company is maintaining its full year 2024 AFFO per share
guidance midpoint and updating the range to $1.26 to $1.27 from its
prior range of $1.25 to $1.28. The Company now expects cash G&A
to be in the range of $12.8 million to $13.2 million (exclusive of
transaction costs and severance payments).
The Company's 2024 guidance is based on a number of assumptions
that are subject to change and many of which are outside the
Company's control. If actual results vary from these assumptions,
the Company's expectations may change. There can be no assurance
that the Company will achieve these results.
AFFO is a non-GAAP financial measure. The Company does not
provide a reconciliation of such forward-looking non-GAAP measure
to the most directly comparable financial measures calculated and
presented in accordance with GAAP because to do so would be
potentially misleading and not practical given the difficulty of
projecting event driven transactional and other non-core operating
items in any future period. The magnitude of these items, however,
may be significant.
BOARD GOVERNANCE CHANGES
Effective October 1, 2024, the Company appointed Lori Wittman as
the Chair of its Board of Directors. Ms. Wittman has been a Board
member since December 2019 and has served as the Chair of the Audit
Committee since the Company's initial public offering in August
2020, other than during the period when she served as the Company's
interim Chief Financial Officer from November 2022 to April
2023.
As a result of the transition of Ms. Wittman to Chair of the
Board, Michael Christodolou has been appointed Chair of the Audit
Committee and Todd Minnis has been appointed to serve on the
Nominating and Corporate Governance Committee, each effective
October 1, 2024.
EARNINGS CONFERENCE CALL
A conference call will be held on Tuesday, November 5, 2024 at
11:00 AM ET. During the conference call the Company’s officers will
review third quarter performance, discuss recent events, and
conduct a question and answer period.
The webcast will be accessible on the “Investor Relations”
section of the Company’s website at www.NETSTREIT.com. To listen to
the live webcast, please go to the site at least fifteen minutes
prior to the scheduled start time to register, as well as download
and install any necessary audio software. A replay of the webcast
will be available for 90 days on the Company’s website shortly
after the call.
The conference call can also be accessed by dialing
1-877-451-6152 for domestic callers or 1-201-389-0879 for
international callers. A dial-in replay will be available starting
shortly after the call until November 12, 2024, which can be
accessed by dialing 1-844-512-2921 for domestic callers or
1-412-317-6671 for international callers. The passcode for this
dial-in replay is 13749106.
SUPPLEMENTAL PACKAGE
The Company’s supplemental package will be available prior to
the conference call in the Investor Relations section of the
Company’s website at www.investors.netstreit.com.
About NETSTREIT Corp.
NETSTREIT Corp. is an internally managed real estate investment
trust (REIT) based in Dallas, Texas that specializes in acquiring
single-tenant net lease retail properties nationwide. The growing
portfolio consists of high-quality properties leased to e-commerce
resistant tenants with healthy balance sheets. Led by a management
team of seasoned commercial real estate executives, NETSTREIT’s
strategy is to create the highest quality net lease retail
portfolio in the country with the goal of generating consistent
cash flows and dividends for its investors.
NON-GAAP FINANCIAL MEASURES
This press release contains non-GAAP financial measures,
including FFO, Core FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre,
Annualized Adjusted EBITDAre, Property-Level NOI, Property-Level
Cash NOI, Property-Level Cash NOI Estimated Run Rate, Total
Property-Level Cash NOI Estimated Run Rate, Net Debt, and Adjusted
Net Debt. A reconciliation of each non-GAAP financial measure to
the most comparable GAAP measure, and definitions of each non-GAAP
measure, are included below.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements include, without
limitation, statements concerning our business and growth
strategies, investment, financing and leasing activities, including
estimated development costs, and trends in our business, including
trends in the market for single-tenant, retail commercial real
estate. Words such as “expects,” “anticipates,” “intends,” “plans,”
“likely,” “will,” “believes,” “seeks,” “estimates,” and variations
of such words and similar expressions are intended to identify such
forward-looking statements. Such statements involve known and
unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially
different from the results of operations or plans expressed or
implied by such forward-looking statements. Although we believe
that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be
inaccurate, and therefore such statements included in this press
release may not prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as
a representation by us or any other person that the results or
conditions described in such statements or our objectives and plans
will be achieved. For a further discussion of these and other
factors that could impact future results, performance or
transactions, see the information under the heading “Risk Factors”
in our Form 10-K for the year ended December 31, 2023 filed with
the Securities and Exchange Commission (the “SEC”) on February 14,
2024 and other reports filed with the SEC from time to time.
Forward-looking statements and such risks, uncertainties and other
factors speak only as of the date of this press release. New risks
and uncertainties may arise over time and it is not possible for us
to predict those events or how they may affect us. Many of the
risks identified herein and in our periodic reports have been and
will continue to be heightened as a result of the ongoing and
numerous adverse effects arising from macroeconomic conditions,
including inflation, interest rates and instability in the banking
system. We expressly disclaim any obligation or undertaking to
update or revise any forward-looking statement contained herein, to
reflect any change in our expectations with regard thereto, or any
other change in events, conditions or circumstances on which any
such statement is based, except to the extent otherwise required by
law.
NETSTREIT CORP. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share and
per share data)
(Unaudited)
September 30,
2024
December 31,
2023
Assets
Real estate, at cost:
Land
$
525,485
$
460,896
Buildings and improvements
1,346,095
1,149,809
Total real estate, at cost
1,871,580
1,610,705
Less accumulated depreciation
(136,528
)
(101,210
)
Property under development
9,361
29,198
Real estate held for investment, net
1,744,413
1,538,693
Assets held for sale
45,712
52,451
Mortgage loans receivable, net
142,171
114,472
Cash, cash equivalents and restricted
cash
28,750
29,929
Lease intangible assets, net
164,905
161,354
Other assets, net
59,298
49,337
Total assets
$
2,185,249
$
1,946,236
Liabilities and equity
Liabilities:
Term loans, net
$
622,239
$
521,912
Revolving credit facility
150,000
80,000
Mortgage note payable, net
7,861
7,883
Lease intangible liabilities, net
23,341
25,353
Liabilities related to assets held for
sale
732
1,158
Accounts payable, accrued expenses and
other liabilities
33,752
36,498
Total liabilities
837,925
672,804
Commitments and contingencies
Equity:
Stockholders’ equity
Common stock, $0.01 par value, 400,000,000
shares authorized; 81,583,917 and 73,207,080 shares issued and
outstanding as of September 30, 2024 and December 31, 2023,
respectively
816
732
Additional paid-in capital
1,507,170
1,367,505
Distributions in excess of retained
earnings
(165,421
)
(112,276
)
Accumulated other comprehensive (loss)
income
(2,453
)
8,943
Total stockholders’ equity
1,340,112
1,264,904
Noncontrolling interests
7,212
8,528
Total equity
1,347,324
1,273,432
Total liabilities and equity
$
2,185,249
$
1,946,236
NETSTREIT CORP. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except share and
per share data)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenues
Rental revenue (including
reimbursable)
$
38,172
$
31,167
$
110,226
$
89,347
Interest income on loans receivable
3,272
2,244
8,458
5,145
Other revenue
—
550
—
550
Total revenues
41,444
33,961
118,684
95,042
Operating expenses
Property
4,494
3,883
12,578
11,350
General and administrative
4,287
5,133
15,266
15,299
Depreciation and amortization
20,438
15,804
56,522
46,599
Provisions for impairment
9,838
1,538
17,336
4,374
Transaction costs
26
143
201
267
Total operating expenses
39,083
26,501
101,903
77,889
Other (expense) income
Interest expense, net
(7,965
)
(3,946
)
(21,749
)
(13,412
)
(Loss) gain on sales of real estate,
net
(132
)
373
874
669
Loss on debt extinguishment
—
—
—
(128
)
Other income (expense), net
416
367
(2,451
)
586
Total other (expense) income, net
(7,681
)
(3,206
)
(23,326
)
(12,285
)
Net (loss) income before income taxes
(5,320
)
4,254
(6,545
)
4,868
Income tax (expense) benefit
(2
)
(15
)
(31
)
60
Net (loss) income
(5,322
)
4,239
(6,576
)
4,928
Net (loss) income attributable to
noncontrolling interests
(27
)
24
(35
)
32
Net (loss) income attributable to
common stockholders
$
(5,295
)
$
4,215
$
(6,541
)
$
4,896
Amounts available to common stockholders
per common share:
Basic
$
(0.07
)
$
0.06
$
(0.09
)
$
0.08
Diluted
$
(0.07
)
$
0.06
$
(0.09
)
$
0.08
Weighted average common shares:
Basic
77,610,680
67,112,587
74,822,286
62,123,334
Diluted
77,610,680
68,048,369
74,822,286
62,897,957
NETSTREIT CORP. AND
SUBSIDIARIES
RECONCILIATION OF NET (LOSS)
INCOME TO FFO, CORE FFO AND ADJUSTED FFO
(In thousands, except share and
per share data)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
Net (loss) income
$
(5,322
)
$
4,239
$
(6,576
)
$
4,928
Depreciation and amortization of real
estate
20,360
15,726
56,286
46,379
Provisions for impairment
9,838
1,538
17,336
4,374
Loss (gain) on sales of real estate,
net
132
(373
)
(874
)
(669
)
FFO
25,008
21,130
66,172
55,012
Adjustments:
Non-recurring executive transition costs,
severance and related charges
14
62
1,495
276
Loss on debt extinguishment and other
related costs
—
—
—
223
Other non-recurring (gain) loss, net
(115
)
(1
)
3,077
(47
)
Core FFO
24,907
21,191
70,744
55,464
Adjustments:
Straight-line rent adjustments
(749
)
(245
)
(1,829
)
(707
)
Amortization of deferred financing
costs
558
578
1,673
1,165
Amortization of above/below-market assumed
debt
29
29
86
86
Amortization of loan origination costs and
discounts
(265
)
26
(242
)
83
Amortization of lease-related
intangibles
(170
)
(121
)
(363
)
(517
)
Earned development interest
259
189
962
189
Capitalized interest expense
(130
)
(404
)
(709
)
(688
)
Non-cash interest expense
(990
)
(1,134
)
(2,948
)
(1,134
)
Non-cash compensation expense
1,376
1,280
4,128
3,559
AFFO
$
24,825
$
21,389
$
71,502
$
57,500
Weighted average common shares
outstanding, basic
77,610,680
67,112,587
74,822,286
62,123,334
Operating partnership units
outstanding
433,942
501,987
450,952
507,014
Unvested restricted stock units
115,703
173,001
117,761
167,215
Unsettled shares under open forward equity
contracts
10,219
260,794
311,475
100,394
Weighted average common shares
outstanding, diluted
78,170,544
68,048,369
75,702,474
62,897,957
FFO per common share, diluted
$
0.32
$
0.31
$
0.87
$
0.87
Core FFO per common share, diluted
$
0.32
$
0.31
$
0.93
$
0.88
AFFO per common share, diluted
$
0.32
$
0.31
$
0.94
$
0.91
RECONCILIATION OF NET (LOSS)
INCOME TO EBITDA, EBITDAre AND ADJUSTED EBITDAre
(In thousands)
(Unaudited)
Three Months Ended
September 30,
2024
2023
(Unaudited)
Net (loss) income
$
(5,322
)
$
4,239
Depreciation and amortization of real
estate
20,360
15,726
Amortization of lease-related
intangibles
(170
)
(121
)
Non-real estate depreciation and
amortization
78
78
Interest expense, net
7,965
3,946
Income tax expense (benefit)
2
15
Amortization of loan origination costs and
discounts
(265
)
26
EBITDA
22,648
23,909
Adjustments:
Provisions for impairment
9,838
1,538
Loss (gain) on sales of real estate,
net
132
(373
)
EBITDAre
32,618
25,074
Adjustments:
Straight-line rent adjustments
(749
)
(245
)
Non-recurring executive transition costs,
severance and related charges
14
62
Other non-recurring (gain) loss, net
(115
)
(1
)
Other non-recurring expenses, net
523
—
Lease termination fees
—
(550
)
Non-cash compensation expense
1,376
1,280
Adjustment for construction in process
(1)
258
720
Adjustment for intraquarter investment
activities (2)
1,921
1,341
Adjusted EBITDAre
$
35,846
$
27,681
Annualized Adjusted EBITDAre (3)
$
143,384
Net Debt
September 30,
Principal amount of total debt
$
783,245
Less: Cash, cash equivalents and
restricted cash
(28,750
)
Net Debt
754,495
Less: Net value of unsettled forward
equity (4)
(185,474
)
Adjusted Net Debt
$
569,021
Leverage
Net Debt / Annualized Adjusted
EBITDAre
5.3 x
Adjusted Net Debt / Annualized Adjusted
EBITDAre
4.0 x
(1)
Adjustment reflects the estimated cash
yield on developments in process as of September 30, 2024.
(2)
Adjustment assumes all re-leasing
activity, investments in and dispositions of real estate, including
developments completed during the three months ended September 30,
2024 and 2023, had occurred on July 1, 2024 and 2023,
respectively.
(3)
We calculate Annualized Adjusted EBITDAre
by multiplying Adjusted EBITDAre by four.
(4)
Reflects 10,735,647 of unsettled forward
equity shares at the September 30, 2024 available net settlement
price of $17.28.
RECONCILIATION OF NET (LOSS)
INCOME TO NOI AND CASH NOI
(In thousands)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
Net (loss) income
$
(5,322
)
$
4,239
$
(6,576
)
$
4,928
General and administrative
4,287
5,133
15,266
15,299
Depreciation and amortization
20,438
15,804
56,522
46,599
Provisions for impairment
9,838
1,538
17,336
4,374
Transaction costs
26
143
201
267
Interest expense, net
7,965
3,946
21,749
13,412
Loss (gain) on sales of real estate,
net
132
(373
)
(874
)
(669
)
Income tax expense (benefit)
2
15
31
(60
)
Loss on debt extinguishment
—
—
—
128
Interest income on mortgage loans
receivable
(3,272
)
(2,244
)
(8,458
)
(5,145
)
Lease termination fees
—
(550
)
—
(550
)
Other expense (income), net
107
(367
)
2,451
(586
)
Property-Level NOI
34,201
27,284
97,648
77,997
Straight-line rent adjustments
(749
)
(245
)
(1,829
)
(707
)
Amortization of lease-related
intangibles
(170
)
(121
)
(363
)
(517
)
Property-Level Cash NOI
$
33,282
$
26,918
$
95,456
$
76,773
Adjustment for intraquarter acquisitions,
dispositions and completed development (1)
1,722
Property-Level Cash NOI Estimated Run
Rate
35,004
Interest income on mortgage loans
receivable
3,272
Adjustments for intraquarter mortgage loan
activity (2)
199
Total Cash NOI - Estimated Run Rate
$
38,475
(1)
Adjustment assumes all re-leasing
activity, investments in and dispositions of real estate, including
developments completed during the three months ended September 30,
2024, had occurred on July 1, 2024.
(2)
Adjustment assumes all loan activity
completed during the three months ended September 30, 2024, had
occurred on July 1, 2024.
NON-GAAP FINANCIAL MEASURES
FFO, Core FFO and AFFO
The National Association of Real Estate Investment Trusts
("NAREIT"), an industry trade group, has promulgated a widely
accepted non-GAAP financial measure of operating performance known
as FFO. Our FFO is net (loss) income in accordance with GAAP,
excluding gains (or losses) resulting from dispositions of
properties, plus depreciation and amortization and impairment
charges on depreciable real property.
Core FFO is a non-GAAP financial measure defined as FFO adjusted
to remove the effect of unusual and non-recurring items that are
not expected to impact our operating performance or operations on
an ongoing basis. These include non-recurring executive transition
costs, severance and related charges, non-recurring other loss
(gain), net, and loss on debt extinguishments and other related
costs.
AFFO is a non-GAAP financial measure defined as Core FFO
adjusted for GAAP net (loss) income related to non-cash revenues
and expenses, such as straight-line rent, amortization of above-
and below-market lease-related intangibles, amortization of lease
incentives, capitalized interest expense, earned development
interest, non-cash interest expense, non-cash compensation expense,
amortization of deferred financing costs, amortization of
above/below-market assumed debt, and amortization of loan
origination costs.
Historical cost accounting for real estate assets implicitly
assumes that the value of real estate assets diminishes predictably
over time. In fact, real estate values historically have risen or
fallen with market conditions. FFO is intended to be a standard
supplemental measure of operating performance that excludes
historical cost depreciation and valuation adjustments from net
(loss) income. We consider FFO to be useful in evaluating potential
property acquisitions and measuring operating performance.
We further consider FFO, Core FFO and AFFO to be useful in
determining funds available for payment of distributions. FFO, Core
FFO and AFFO do not represent net (loss) income or cash flows from
operations as defined by GAAP. You should not consider FFO, Core
FFO and AFFO to be alternatives to net (loss) income as a reliable
measure of our operating performance nor should you consider FFO,
Core FFO and AFFO to be alternatives to cash flows from operating,
investing or financing activities (as defined by GAAP) as measures
of liquidity.
FFO, Core FFO and AFFO do not measure whether cash flow is
sufficient to fund our cash needs, including principal
amortization, capital improvements and distributions to
stockholders. FFO, Core FFO and AFFO do not represent cash flows
from operating, investing or financing activities as defined by
GAAP. Further, FFO, Core FFO and AFFO as disclosed by other REITs
might not be comparable to our calculations of FFO, Core FFO and
AFFO.
EBITDA, EBITDAre, Adjusted EBITDAre, and
Annualized Adjusted EBITDAre
We compute EBITDA as earnings before interest expense, income
tax expense, and depreciation and amortization. In 2017, NAREIT
issued a white paper recommending that companies that report EBITDA
also report EBITDAre. We compute EBITDAre in accordance with the
definition adopted by NAREIT. NAREIT defines EBITDAre as EBITDA (as
defined above) excluding gains (or losses) from the sales of
depreciable property and impairment charges on depreciable real
property.
Adjusted EBITDAre is a non-GAAP financial measure defined as
EBITDAre further adjusted to exclude straight-line rent, non-cash
compensation expense, non-recurring executive transition costs,
severance and related charges, loss on debt extinguishment and
other related costs, non-recurring other loss (gain), net, other
non-recurring expenses (income), lease termination fees, adjustment
for construction in process, and adjustment for intraquarter
activities.
Annualized Adjusted EBITDAre is Adjusted EBITDAre multiplied by
four.
We present EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized
Adjusted EBITDAre as they are measures commonly used in our
industry. We believe that these measures are useful to investors
and analysts because they provide supplemental information
concerning our operating performance, exclusive of certain non-cash
items and other costs. We use EBITDA, EBITDAre, Adjusted EBITDAre,
and Annualized Adjusted EBITDAre as measures of our operating
performance and not as measures of liquidity.
EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted
EBITDAre do not include all items of revenue and expense included
in net (loss) income, they do not represent cash generated from
operating activities and they are not necessarily indicative of
cash available to fund cash requirements; accordingly, they should
not be considered alternatives to net (loss) income as a
performance measure or cash flows from operations as a liquidity
measure and should be considered in addition to, and not in lieu
of, GAAP financial measures. Additionally, our computation of
EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted
EBITDAre may differ from the methodology for calculating these
metrics used by other equity REITs and, therefore, may not be
comparable to similarly titled measures reported by other equity
REITs.
Net Debt and Adjusted Net Debt
We calculate our Net Debt as our principal amount of total debt
outstanding excluding deferred financing costs, net discounts and
debt issuance costs less cash, cash equivalents and restricted cash
available for future investment. We believe excluding cash, cash
equivalents and restricted cash available for future investment
from our principal amount, all of which could be used to repay
debt, provides an estimate on the net contractual amount of
borrowed capital to be repaid. We believe these adjustments are
additional beneficial disclosures to investors and analysts.
We further adjust Net Debt by the net value of unsettled forward
equity as period end to derive Adjusted Net Debt.
Property-Level NOI, Property-Level Cash
NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash
NOI - Estimated Run Rate
Property-Level NOI, Property-Level Cash NOI, Property-Level Cash
NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate
are non-GAAP financial measures which we use to assess our
operating results. We compute Property-Level NOI as net (loss)
income (computed in accordance with GAAP), excluding general and
administrative expenses, interest expense (or income), income tax
expense, transaction costs, depreciation and amortization, gains
(or losses) on sales of depreciable property, real estate
impairment losses, interest income on mortgage loans receivable,
loss on debt extinguishment, lease termination fees, and other
expense (income), net. We further adjust Property-Level NOI for
non-cash revenue components of straight-line rent and amortization
of lease-intangibles to derive Property-Level Cash NOI. We further
adjust Property-Level Cash NOI for intraquarter acquisitions,
dispositions and completed developments to derive Property-Level
Cash NOI - Estimated Run Rate. We further adjust Property-Level
Cash NOI - Estimated Run Rate for interest income on mortgage loans
receivable and intraquarter mortgage loan activity to derive Total
Cash NOI - Estimated Run Rate. We believe Property-Level NOI,
Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run
Rate, and Total Cash NOI - Estimated Run Rate provide useful and
relevant information because they reflect only those income and
expense items that are incurred at the property level and present
such items on an unlevered basis.
Property-Level NOI, Property-Level Cash NOI, Property-Level Cash
NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate
are not measurements of financial performance under GAAP, and may
not be comparable to similarly titled measures of other companies.
You should not consider our measures as alternatives to net (loss)
income or cash flows from operating activities determined in
accordance with GAAP.
OTHER DEFINITIONS
ABR is annualized base rent as of
September 30, 2024, for all leases that commenced and annualized
cash interest on mortgage loans receivable in place as of that
date.
Cash Yield is the annualized base
rent contractually due from acquired properties and completed
developments, and interest income from mortgage loans receivable,
divided by the gross investment amount, gross proceeds in the case
of dispositions, or loan repayment amount.
Investments are lease agreements in
place at owned properties, properties that have leases associated
with mortgage loans receivable, developments where rent commenced,
or in the case of master lease arrangements each property under the
master lease is counted as a separate lease.
Investment Grade are investments,
or investments that are subsidiaries of a parent entity, with a
credit rating of BBB- (S&P/Fitch), Baa3 (Moody's) or NAIC2
(National Association or Insurance Commissioners) or higher.
Investment Grade Profile are
investments with investment grade credit metrics (more than $1.0
billion in annual sales and a debt to adjusted EBITDA ratio of less
than 2.0x), but do not carry a published rating from S&P,
Fitch, Moody's, or NAIC.
Occupancy is expressed as a
percentage, and is the number of economically occupied properties
divided by the total number of properties owned, excluding mortgage
loans receivable and properties under development.
Weighted Average Lease Term is
weighted by the annualized base rent, excluding lease extension
options and investments associated with mortgage loans
receivable.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241104800462/en/
Investor Relations ir@netstreit.com 972-597-4825
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