– Net loss of $(0.07) and Adjusted Funds
from Operations ("AFFO") of $0.32 Per Diluted Share for Fourth
Quarter –
– Completed Gross Investment Activity of
$195.1 Million at 7.4% Blended Cash Yield for Fourth Quarter
–
– Introduces 2025 AFFO Per Share Guidance of
$1.27 to $1.30 –
– Closed $275.0 Million in Additional
Financing Commitments in January 2025 –
NETSTREIT Corp. (NYSE: NTST) (the “Company”) today
announced financial and operating results for the fourth quarter
and year ended December 31, 2024.
“I am pleased to report that NETSTREIT delivered solid 2024
results, which included a Company record $195.1 million of
investments at a 7.4% cash yield in the fourth quarter.
Furthermore, we accretively recycled capital with record
dispositions of $59.3 million in the fourth quarter and made
significant progress towards our portfolio diversification goals.
While our balance sheet remains well positioned for future growth,
we are adopting a measured approach towards capital deployment to
start 2025 with a continued focus on quality net lease investments
that enhance our tenant diversity and strengthen our internal
growth profile,” said Mark Manheimer, Chief Executive Officer of
NETSTREIT.
FOURTH QUARTER AND FULL YEAR 2024 HIGHLIGHTS
The following table summarizes the Company's select financial
results1 for the three months and year ended December 31, 2024.
Three Months Ended December
31,
2024
2023
% Change
(Unaudited)
Net (Loss) per Diluted Share
$
(0.07
)
$
0.03
(333.3
)%
Funds from Operations per Diluted
Share
$
0.32
$
0.30
6.7
%
Core Funds from Operations per Diluted
Share
$
0.32
$
0.30
6.7
%
Adjusted Funds from Operations per Diluted
Share
$
0.32
$
0.31
3.2
%
Year Ended December
31,
2024
2023
% Change
(Unaudited)
Net (Loss) per Diluted Share
$
(0.16
)
$
0.11
(245.5
)%
Funds from Operations per Diluted
Share
$
1.20
$
1.18
1.7
%
Core Funds from Operations per Diluted
Share
$
1.26
$
1.19
5.9
%
Adjusted Funds from Operations per Diluted
Share
$
1.26
$
1.22
3.3
%
1.
Funds from operations ("FFO"), core funds
from operations ("Core FFO"), and adjusted funds from operations
("AFFO") are non-GAAP financial measures. See "Non-GAAP Financial
Measures."
INVESTMENT ACTIVITY
The following tables summarize the Company's investment,
disposition, and loan repayment activities (dollars in thousands)
for the three months and year ended December 31, 2024.
Three Months Ended
December 31, 2024
Year Ended
December 31, 2024
Number of Investments
Amount
Number of Investments
Amount
Investments
52
$
195,079
155
$
591,574
Dispositions
30
59,337
56
117,744
Loan Repayments
6
13,627
11
24,808
Net Investment Activity
$
122,115
$
449,023
Investment Activity
Cash Yield
7.4
%
7.5
%
% of ABR derived from Investment Grade
Tenants
34.7
%
46.6
%
% of ABR derived from Investment Grade
Profile Tenants
13.9
%
9.0
%
Weighted Average Lease Term (years)
14.0
13.6
Disposition Activity
Cash Yield
7.1
%
7.0
%
Weighted Average Lease Term (years)
11.4
10.8
Loan Repayments
Cash Yield
9.3
%
9.2
%
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 December 31, 2024.
Developments
Three Months Ended
December 31, 2024
Amount Funded During the Quarter
$
1,789
As of December 31,
2024
Number of Developments
5
Amount Funded to Date
$
7,883
Estimated Funding Remaining on
Developments
6,718
Total Estimated Development
Cost
$
14,601
PORTFOLIO UPDATE
The following table summarizes the Company's real estate
portfolio (weighted by ABR, dollars in thousands) as of December
31, 2024.
As of December 31,
2024
Number of Investments
687
ABR
$
165,070
States
45
Square Feet
12,609,612
Tenants
98
Industries
26
Occupancy
99.9
%
Weighted Average Lease Term (years)
9.8
Investment Grade %
55.8
%
Investment Grade Profile %
15.0
%
CAPITAL MARKETS AND BALANCE SHEET
The following tables summarize the Company's leverage, balance
sheet, ATM sales, and settlement of our forward equity offerings
(dollars in thousands, except per share data) as of and for the
three months ended December 31, 2024.
Leverage
As of December 31,
2024
Net Debt / Annualized Adjusted
EBITDAre
5.8x
Adjusted Net Debt / Annualized Adjusted
EBITDAre
4.5x
Forward Equity Settlement
Activity
As of December 31,
2024
Shares Settled During Quarter
—
Weighted Average Price Per Share
(Gross)
$
—
Net Value of Settled Forward Equity as of
December 31, 2024
$
—
ATM Program
As of December 31,
2024
Shares Sold During Quarter
—
Weighted Average Price Per Share
(Gross)
$
—
ATM Program Total Capacity
$
300,000
ATM Capacity Remaining as of December 31,
2024
$
297,387
Unsettled Forward Equity
As of December 31,
2024
Shares Unsettled as of December 31,
2024
10,735,647
Weighted Average Price Per Share
(Gross)
$
17.93
Net Value of Unsettled Forward Equity as
of December 31, 2024
$
185,063
SUBSEQUENT DEBT ACTIVITY
On January 15, 2025, the Company closed on $275.0 million in
additional financing commitments and amendments to its existing
credit facilities, which includes a new $175.0 million senior
unsecured term loan (the "2030 Term Loan B") and an upsized, $500.0
million revolving credit facility (the "Revolving Facility"),
increased from $400.0 million. The 2030 Term Loan B and the
Revolving Facility initially mature in January 2029 and each
include a one-year option to extend the maturity to January 2030 at
the Company's discretion. The 2030 Term Loan B was fully funded at
close and the Company hedged the entire $175.0 million at an all-in
fixed interest rate of 5.12% through January 2030.
In addition, the Company extended the maturity date of the
existing $175.0 million senior unsecured term loan from January
2027 to January 2029 with an option to extend the maturity to
January 2030 at the Company's discretion, and amended existing
credit agreements to remove certain financial covenants and provide
for revised, improved pricing when the Company meets certain
investment grade rating and leverage targets.
The following tables summarize the terms of the 2030 Term Loan B
(dollars in thousands), and the Company's proforma liquidity as of
December 31, 2024.
2030 Term Loan B
Fully Extended Maturity Date
January 2030
Maximum Available Principal (Fully
Drawn)
$
175,000
All-In Fixed Interest Rate
5.12
%
Proforma Liquidity
As of December 31,
2024
Unused unsecured revolver capacity(1)
$
435,850
Cash, cash equivalents and restricted
cash
14,320
Net value of unsettled forward equity
185,063
Total Proforma Liquidity
$
635,233
1.
Assumes the entry into the 2030
Term Loan B, which was used to pay down our Revolving Facility, and
the concurrent increase in our revolver capacity to $500.0 million
occurred on December 31, 2024.
DIVIDEND
On February 21, 2025, the Company’s Board of Directors declared
a quarterly cash dividend of $0.21 per share for the first quarter
of 2025. 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 March
31, 2025 to shareholders of record on March 14, 2025.
2025 GUIDANCE
The Company is initiating its full year 2025 AFFO per share
guidance in the range of $1.27 to $1.30. The Company also expects
2025 net investment activity to be in the range of $75.0 million to
$125.0 million and cash G&A to be in the range of $14.5 million
to $15.5 million (exclusive of transaction costs and severance
payments).
The Company's 2025 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.
EARNINGS CONFERENCE CALL
A conference call will be held on Tuesday, February 25, 2025 at
11:00 AM ET. During the conference call the Company’s officers will
review fourth quarter and full year 2024 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 15 minutes prior
to the scheduled start time to register, as well as download and
install any necessary audio software.
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 March 4, 2025, 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
13751303.
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, 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
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share and
per share data)
(Unaudited)
December 31,
2024
2023
Assets
Real estate, at cost:
Land
$
571,272
$
460,896
Buildings and improvements
1,400,393
1,149,809
Total real estate, at cost
1,971,665
1,610,705
Less accumulated depreciation
(143,422
)
(101,210
)
Property under development
6,118
29,198
Real estate held for investment, net
1,834,361
1,538,693
Assets held for sale
48,637
52,451
Mortgage loans receivable, net
139,409
114,472
Cash, cash equivalents, and restricted
cash
14,320
29,929
Lease intangible assets, net
164,392
161,354
Other assets, net
58,227
49,337
Total assets
$
2,259,346
$
1,946,236
Liabilities and equity
Liabilities:
Term loans, net
$
622,608
$
521,912
Revolving credit facility
239,000
80,000
Mortgage note payable, net
7,853
7,883
Lease intangible liabilities, net
20,177
25,353
Liabilities related to assets held for
sale
1,912
1,158
Accounts payable, accrued expenses, and
other liabilities
29,664
36,498
Total liabilities
921,214
672,804
Commitments and contingencies
Equity:
Stockholders’ equity
Common stock, $0.01 par value, 400,000,000
shares authorized; 81,602,232 and 73,207,080 shares issued and
outstanding as of December 31, 2024 and 2023, respectively
816
732
Additional paid-in capital
1,507,995
1,367,505
Distributions in excess of retained
earnings
(188,046
)
(112,276
)
Accumulated other comprehensive income
10,206
8,943
Total stockholders’ equity
1,330,971
1,264,904
Noncontrolling interests
7,161
8,528
Total equity
1,338,132
1,273,432
Total liabilities and equity
$
2,259,346
$
1,946,236
NETSTREIT CORP. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except share and
per share data)
(Unaudited)
Year Ended December
31,
2024
2023
2022
Revenues
Rental revenue (including
reimbursable)
$
150,823
$
123,967
$
93,934
Interest income on loans receivable
11,561
7,388
2,345
Other revenue
400
550
—
Total revenues
162,784
131,905
96,279
Operating expenses
Property
17,422
16,413
11,695
General and administrative
19,722
20,176
19,053
Depreciation and amortization
76,871
63,677
50,075
Provisions for impairment
29,969
7,083
1,114
Transaction costs
359
456
839
Total operating expenses
144,343
107,805
82,776
Other (expense) income
Interest expense, net
(30,324
)
(19,058
)
(9,181
)
Gain on sales of real estate, net
1,876
1,175
4,148
Loss on debt extinguishment
—
(128
)
—
Other (expense) income, net
(1,944
)
752
131
Total other expense, net
(30,392
)
(17,259
)
(4,902
)
Net (loss) income before income taxes
(11,951
)
6,841
8,601
Income tax (expense) benefit
(49
)
49
(396
)
Net (loss) income
(12,000
)
6,890
8,205
Net (loss) income attributable to
noncontrolling interests
(63
)
53
88
Net (loss) income attributable to
common stockholders
$
(11,937
)
$
6,837
$
8,117
Amounts available to common stockholders
per common share:
Basic
$
(0.16
)
$
0.11
$
0.16
Diluted
$
(0.16
)
$
0.11
$
0.16
Weighted average common shares:
Basic
76,517,767
63,922,973
49,517,977
Diluted
76,517,767
64,665,439
50,431,822
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)
Year Ended December
31,
2024
2023
Net (loss) income
$
(12,000
)
$
6,890
Depreciation and amortization of real
estate
76,560
63,379
Provisions for impairment
29,969
7,083
Gain on sales of real estate, net
(1,876
)
(1,175
)
FFO
92,653
76,177
Adjustments:
Non-recurring executive transition costs,
severance and related charges
1,643
362
Loss on debt extinguishment and other
related costs
—
223
Other non-recurring loss (gain), net
2,934
(78
)
Core FFO
97,230
76,684
Adjustments:
Straight-line rent adjustments
(2,949
)
(1,163
)
Amortization of deferred financing
costs
2,230
1,730
Amortization of above/below-market assumed
debt
114
114
Amortization of loan origination costs and
discounts
(365
)
163
Amortization of lease-related
intangibles
(458
)
(611
)
Earned development interest
1,072
515
Capitalized interest expense
(806
)
(1,060
)
Non-cash interest expense
(3,789
)
(2,124
)
Non-cash compensation expense
5,126
4,822
AFFO
$
97,405
$
79,070
Weighted average common shares
outstanding, basic
76,517,767
63,922,973
Weighted average operating partnership
units outstanding
444,435
501,751
Weighted average dilutive securities
123,992
165,420
Weighted average unsettled shares under
forwards
233,606
75,295
Weighted average common shares
outstanding, diluted
77,319,800
64,665,439
FFO per common share, diluted
$
1.20
$
1.18
Core FFO per common share, diluted
$
1.26
$
1.19
AFFO per common share, diluted
$
1.26
$
1.22
NETSTREIT CORP. AND
SUBSIDIARIES
RECONCILIATION OF NET (LOSS)
INCOME TO EBITDA, EBITDAre AND ADJUSTED EBITDAre
(In thousands)
(Unaudited)
Three Months Ended December
31,
2024
2023
Net (loss) income
$
(5,424
)
$
1,962
Depreciation and amortization of real
estate
20,275
17,000
Amortization of lease-related
intangibles
(95
)
(93
)
Non-real estate depreciation and
amortization
75
78
Interest expense, net
8,576
5,646
Income tax expense
18
10
Amortization of loan origination costs and
discounts
(123
)
80
EBITDA
23,302
24,683
Adjustments:
Provisions for impairment
12,633
2,709
Gain on sales of real estate, net
(1,002
)
(506
)
EBITDAre
34,933
26,886
Adjustments:
Straight-line rent adjustments
(1,120
)
(456
)
Non-recurring executive transition costs,
severance and related charges
148
86
Other non-recurring gain, net
(142
)
(31
)
Other non-recurring expenses, net
438
—
Transaction costs
158
189
Non-cash compensation expense
999
1,264
Lease termination fees
(400
)
—
Adjustment for construction in process
(1)
152
719
Adjustment for intraquarter investment
activities (2)
1,910
820
Adjusted EBITDAre
$
37,076
$
29,477
Annualized Adjusted EBITDAre(3)
$
148,304
Net Debt
As of December 31,
2024
Principal amount of total debt
$
872,205
Less: Cash, cash equivalents and
restricted cash
(14,320
)
Net Debt
857,885
Less: Net value of unsettled forward
equity(4)
(185,063
)
Adjusted Net Debt
$
672,822
Leverage
Net Debt / Annualized Adjusted
EBITDAre
5.8 x
Adjusted Net Debt / Annualized Adjusted
EBITDAre
4.5 x
1.
Adjustment reflects the estimated
cash yield on developments in process as of December 31, 2024.
2.
Adjustment assumes all re-leasing
activity, investments in and dispositions of real estate, including
developments completed during the three months ended December 31,
2024, had occurred on October 1, 2024.
3.
We calculate Annualized Adjusted
EBITDAre by multiplying Adjusted EBITDAre by four.
4.
Reflects 10,735,647 of unsettled
forward equity shares at the December 31, 2024, available weighted
average net settlement price of $17.24 per share.
NETSTREIT CORP. AND
SUBSIDIARIES
RECONCILIATION OF NET (LOSS)
INCOME TO NOI AND CASH NOI
(in thousands)
(Unaudited)
Three Months Ended December
31,
2024
2023
Net (loss) income
$
(5,424
)
$
1,962
General and administrative
4,456
4,876
Depreciation and amortization
20,349
17,078
Provisions for impairment
12,633
2,709
Transaction costs
158
189
Interest expense, net
8,576
5,646
Gain on sales of real estate, net
(1,002
)
(506
)
Income tax expense
18
10
Amortization of loan origination costs and
discounts
(123
)
80
Interest income on mortgage loans
receivable
(3,103
)
(2,243
)
Lease termination fees
(400
)
—
Other expense, net
103
(166
)
Property-Level NOI
36,241
29,635
Straight-line rent adjustments
(1,120
)
(456
)
Amortization of lease-related
intangibles
(95
)
(93
)
Property-Level Cash NOI
$
35,026
$
29,086
Adjustment for intraquarter acquisitions,
dispositions, and completed development(1)
1,817
Property-Level Cash NOI Estimated Run
Rate
36,843
Interest income on mortgage loans
receivable
3,103
Adjustments for intraquarter mortgage loan
activity(2)
93
Total Cash NOI - Estimated Run Rate
$
40,039
1.
Adjustment assumes all re-leasing
activity, investments in and dispositions of real estate, including
developments completed during the three months ended December 31,
2024, had occurred on October 1, 2024.
2.
Adjustment assumes all loan activity
completed during the three months ended December 31, 2024, had
occurred on October 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, other non-recurring loss (gain), net, other
non-recurring expenses (income), transaction costs, 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 income, they do not represent cash generated from operating
activities and they are not necessarily indicative of cash
available to fund cash requirements; accordingly, they should not
be considered alternatives to net income as a performance measure
or cash flows from operations as a liquidity measure and should be
considered in addition to, and not in lieu of, GAAP financial
measures. Additionally, our computation of EBITDA, EBITDAre,
Adjusted EBITDAre and Annualized Adjusted EBITDAre may differ from
the methodology for calculating these metrics used by other equity
REITs and, therefore, may not be comparable to similarly titled
measures reported by other equity REITs.
Net Debt 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 of 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, amortization of loan origination costs and discounts,
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
December 31, 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,
interest earning developments, 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 leased investments divided by the
total number of investments owned, excluding 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/20250224345787/en/
Investor Relations ir@netstreit.com 972-597-4825
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