Netstreit Corp is structured as an umbrella partnership real estate investment trust. The company acquires, owns, and manages single-tenant, retail commercial real estate subject to long-term net leases with high-credit quality tenants across the United States. It focuses on tenants in industries where a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including home improvement, auto parts, drug stores and pharmacies, general retail, grocers, convenience stores, discount stores, and quick-service restaurants.
Performance Overview
Netstreit Corp (NTST, Financial) reported a net loss of $(0.03) per diluted share for Q2 2024, missing the analyst estimate of $0.04. However, the company achieved Adjusted Funds from Operations (AFFO) of $0.32 per diluted share, surpassing the previous year's $0.30 per diluted share by 7%. The company also completed $115.7 million of gross investment activity at a 7.5% blended cash yield.
Financial Achievements
Netstreit Corp (NTST, Financial) maintained its 2024 AFFO per share guidance range of $1.25 to $1.28 and increased its quarterly dividend by 2.4% to $0.21 per share. The company’s portfolio remains strong with a 100% occupancy rate and a weighted average lease term of 9.5 years.
Income Statement Highlights
| Three Months Ended June 30 | 2024 | 2023 | % Change |
|---|---|---|---|
| Net Loss per Diluted Share | $(0.03) | $(0.01) | (200)% |
| Funds from Operations per Diluted Share | $0.27 | $0.28 | (4)% |
| Core Funds from Operations per Diluted Share | $0.31 | $0.29 | 7% |
| Adjusted Funds from Operations per Diluted Share | $0.32 | $0.30 | 7% |
Investment Activity
| Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 |
|---|---|
| Number of Investments: 28 | Number of Investments: 70 |
| Amount: $115,734 | Amount: $244,941 |
| Dispositions: $12,707 | Dispositions: $34,301 |
| Loan Repayments: $2,324 | Loan Repayments: $2,324 |
| Net Investment Activity: $100,703 | Net Investment Activity: $208,316 |
Portfolio Update
As of June 30, 2024, Netstreit Corp (NTST, Financial) had 649 investments across 45 states, with an annualized base rent (ABR) of $148.3 million. The portfolio spans 11.7 million square feet and includes 90 tenants across 26 industries.
Capital Markets and Balance Sheet
Netstreit Corp (NTST, Financial) reported a net debt to annualized adjusted EBITDAre ratio of 5.3x and an adjusted net debt to annualized adjusted EBITDAre ratio of 3.4x. The company has a total liquidity of $569.2 million, including $301.9 million in unused unsecured revolver capacity and $253.6 million in net value of unsettled forward equity.
Other Events
During the quarter, Netstreit Corp (NTST, Financial) experienced a $2.8 million loss due to a criminal scheme involving a business email compromise. The company has since taken measures to ensure such an event does not recur.
Dividend and Guidance
On July 23, 2024, the Board of Directors declared a quarterly cash dividend of $0.21 per share for Q3 2024, representing an annualized increase of $0.02 per share over the prior year. The dividend will be paid on September 13, 2024, to shareholders of record on September 3, 2024.
Netstreit Corp (NTST, Financial) is maintaining its full-year 2024 AFFO per share guidance range of $1.25 to $1.28.
“I am pleased to report we completed $116 million in investments at a blended cash yield of 7.5% for the second quarter, and have completed approximately $245 million year to date. As we head into the second half of 2024, we remain disciplined in identifying strategic and accretive transactions to further diversify our portfolio while maintaining one of the strongest portfolios in the net lease space,” said Mark Manheimer, Chief Executive Officer of NETSTREIT.
For more detailed information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Netstreit Corp for further details.
