Company: Essential Properties Realty Trust, Inc.
Symbol: EPRT
Description: They are an internally managed real estate company that acquires, owns and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience-based businesses.
Trade Date: 6/21
Shares: 32.5 million
Price Range: $14.00-$17.00
Underwriter(s): Goldman Sachs, Citigroup, Barclays, BofA Merrill Lynch, Credit Suisse
Co-Manager: RBC Capital, SunTrust Robinson, Evercore ISI, Ladenburg Thalmann
Terms Added: 6-11-18
Business: They are an internally managed real estate company that acquires, owns and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience-based businesses. They have assembled a diversified portfolio using an investment strategy that focuses on properties leased to tenants in businesses such as restaurants (including quick service and casual and family dining), car washes, automotive services, medical services, convenience stores, entertainment, early childhood education and health and fitness. They believe that properties leased to tenants in these businesses are essential to the generation of the tenants’ sales and profits and that these businesses exhibit favorable growth characteristics and are generally insulated from e-commerce pressure. As of March 31, 2018, 87.6% of their $75.7 million of annualized base rent was attributable to properties operated by tenants in service-oriented and experience-based businesses.
Financials: For the year ended December 31, 2017, their pro forma net income was $27.9 million and their pro forma earnings before interest, taxes, depreciation and amortization for real estate, gains (or losses) on the sales of depreciable property and real estate impairment losses, or EBITDAre, was $87.9 million. For the three months ended March 31, 2018, their pro forma net income was $5.7 million, their pro forma EBITDAre was $20.9 million and their pro forma ratio of net debt to annualized EBITDAre was 4.3x.
Distributions: They intend to make a pro rata distribution with respect to the period commencing upon the completion of this offering and ending on September 30, 2018, based on a distribution rate of $0.21 per share of common stock for a full quarter. On an annualized basis, this would be $0.84 per share of common stock, or an annualized distribution rate of approximately 5.42% based on the mid-point of the price range set forth on the front cover of this prospectus. They estimate that this initial annual distribution rate will represent approximately 97.2% of their estimated cash available for distribution to stockholders for the twelve months ending March 31, 2019.
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