Q3 2024 Essential Properties Realty Trust Inc Earnings Call Transcript
Key Points
- Essential Properties Realty Trust Inc (EPRT) reported strong portfolio performance with high occupancy and healthy same-store growth.
- The company maintained a low leverage ratio of 3.5 times and liquidity of $1.2 billion, positioning it well for future growth.
- EPRT established a 2025 AFFO per share guidance range of $1.84 to $1.89, implying a growth rate of over 7% at the midpoint.
- The company achieved a weighted average cash yield of 8.1% on investments during the quarter, reflecting strong investment performance.
- EPRT's tenant base is diverse, with the largest tenant representing only 4.3% of annual base rent, reducing concentration risk.
- Five properties reported damage due to hurricanes, causing substantial disruption and warranting insurance claims.
- The company anticipates modest cap rate compression due to increased competition as capital markets normalize.
- There is a potential headwind to AFFO per share due to the treasury stock method on unsettled forward equity, estimated at $0.02 for the full year 2024.
- The company expects cash G&A expenses to increase slightly in 2025, driven by investments in infrastructure and staffing.
- EPRT's exposure to the car wash industry is above its soft ceiling of 15%, prompting proactive management to reduce concentration.
Good morning, ladies and gentlemen, and welcome to the Essential Properties Realty Trust third-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded and a replay of the call will be available three hours after completion of the call for the next two weeks.
The dial in details for the replay can be found in yesterday's press release. Additionally, there will be an audio webcast available on Essential Properties' website at www.essentialproperties.com. An archive of which will be available for 90 days.
On the call this morning are Pete Mavoides, President and Chief Executive Officer; Mark Patten, Chief Financial Officer; Rob Salisbury, Head of Capital Markets; Max Jenkins, Head of Investments; and AJ Peil, Head of Asset Management. It is now my pleasure to turn the call over to Rob Salisbury. Please proceed, sir.
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