– Completed $480.5 Million of Gross
Investment Activity at 7.2% Blended Cash Yield for 2023 –
– Reaffirms 2023 Adjusted Funds from
Operations ("AFFO") Per Share Guidance of $1.21 to $1.23 –
– Provides 2024 AFFO Per Share Guidance of
$1.24 to $1.28 –
NETSTREIT Corp. (NYSE: NTST) (the “Company”) today
provided an update on the Company's fourth quarter and full year
2023 business activities.
“With the Company completing $431.0 million of net investment
activity in 2023, we were pleased to meet our investment objectives
for the year and maintain our focus on owning high quality net
lease properties leased to tenants with exceptional credit
profiles. Coupled with the $76.7 million of equity raised during
the fourth quarter, NETSTREIT is well positioned to capitalize on
future growth opportunities while continuing to provide a secure
cash flow stream to investors. Despite persistent capital markets
volatility and lingering economic uncertainty, we are confident in
our business plan, and therefore, we are introducing our 2024 AFFO
per share guidance range at $1.24 to $1.28,” said Mark Manheimer,
Chief Executive Officer of NETSTREIT.
INVESTMENT ACTIVITY
The following tables summarize the Company's investment and
disposition activities (dollars in thousands) for the three months
and year ended December 31, 2023.
Three Months Ended December
31, 2023
Year Ended
December 31, 2023
Number of Investments
Amount
Number of Investments
Amount
Investments
57
$
119,128
196
$
480,519
Dispositions1
6
15,995
22
49,506
Net Investment Activity
$
103,133
$
431,013
Investment Activity
Cash Yield
7.2
%
7.2
%
% of ABR derived from Investment Grade
Tenants
94.3
%
81.4
%
% of ABR derived from Investment Grade
Profile Tenants
4.4
%
11.8
%
Weighted Average Lease Term (years)
10.9
10.7
Disposition Activity
Cash Yield1
7.2
%
6.9
%
Weighted Average Lease Term (years)
11.2
7.8
1. Includes mortgage loan payoffs.
CAPITAL MARKETS AND BALANCE SHEET
The following tables summarize the Company's balance sheet,
liquidity, ATM issuances, and settlement of our forward equity
offerings (dollars in thousands, except per share data) as of and
for December 31, 2023.
Liquidity
As of December 31,
2023
Unused Unsecured Revolver Capacity
$
319,850
Cash, Cash Equivalents and Restricted
Cash
29,929
Value of Outstanding Forward Equity1
98,612
Total Liquidity
$
448,391
Plus: Remaining Available Principal of
2029 Term Loan
100,000
Total Proforma Liquidity
$
548,391
ATM Program
Shares Issued During Quarter
4,478,539
Weighted Average Price Per Share
$
17.27
Net Proceeds
$
76,667
Forward Equity
Shares Outstanding as of December 31,
2023
5,983,711
Weighted Average Price Per Share
$
16.48
Value of Outstanding Forward Equity1
$
98,612
1. Reflects 5,983,711 of unsettled forward equity shares under
the ATM program at the December 31, 2023 available net settlement
price of $16.48.
2023 GUIDANCE
The Company is reaffirming its full year 2023 AFFO per share
guidance range of $1.21 to $1.23.
2024 GUIDANCE
The Company is providing its initial full year 2024 AFFO per
share guidance in the range of $1.24 to $1.28 per share. The
Company also expects cash G&A to be in the range of $13.5
million to $14.5 million (exclusive of transaction costs).
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.
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 guidance about our 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 funds from
operations (“FFO”). Our FFO is net 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, gain on insurance proceeds,
and loss on debt extinguishments and other related costs.
AFFO is a non-GAAP financial measure defined as Core FFO
adjusted for GAAP net 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.
We further consider AFFO to be useful in determining funds
available for payment of distributions. AFFO does not represent net
income or cash flows from operations as defined by GAAP. You should
not consider AFFO to be an alternative to net income as a reliable
measure of our operating performance nor should you consider AFFO
to be an alternative to cash flows from operating, investing or
financing activities (as defined by GAAP) as measures of
liquidity.
AFFO does not measure whether cash flow is sufficient to fund
our cash needs, including principal amortization, capital
improvements and distributions to stockholders. AFFO does not
represent cash flows from operating, investing or financing
activities as defined by GAAP. Further, AFFO as disclosed by other
REITs might not be comparable to our calculations of AFFO.
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
opportunities and our fourth quarter of 2023 and 2024 guidance.
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, 2022 filed with
the Securities and Exchange Commission (the “SEC”) on February 23,
2023 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.
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Investor Relations ir@netstreit.com 972-597-4825
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