NETSTREIT Reports Second Quarter 2023 Financial and Operating Results

NETSTREIT Corp. (NYSE: NTST) (the “Company”), today announced financial and operating results for the second quarter ended June 30, 2023.

“NETSTREIT had a strong second quarter completing $115 million in net investment activity at a blended cash yield of 6.8%. Our defensive net lease portfolio is benefiting from our focus on the highest credit quality U.S. retailers, which continue to provide us with ample investment opportunities via a variety of sourcing channels,” said Mark Manheimer, Chief Executive Officer of NETSTREIT. “In addition, we recently completed several debt transactions, which allowed us to substantially increase our liquidity profile, extend our nearest term debt maturity to 2027, and fix the interest rate on all our term loan facilities. With an improved balance sheet and a strong investment pipeline, we are increasing our 2023 AFFO per share guidance midpoint and our 2023 net investment activity guidance. Lastly, our board of directors has approved a 2.5% increase in our quarterly dividend to $0.205 per share.”

SECOND QUARTER 2023 HIGHLIGHTS

The following table summarizes the Company's select financial results² for the three and six months ended June 30, 2023.

INVESTMENT ACTIVITY

The following table summarizes the Company's investment and disposition activities (dollars in thousands) for the three and six months ended June 30, 2023.

The following tables summarize the Company's on-going development projects and estimated development costs (dollars in thousands) as of June 30, 2023.

PORTFOLIO UPDATE

The following table summarizes the Company's real estate portfolio (weighted by ABR, dollars in thousands) as of June 30, 2023.

CAPITAL MARKETS AND BALANCE SHEET

The following table summarizes the Company's leverage, balance sheet, liquidity, ATM issuances, and settlement of our forward equity offerings (dollars in thousands, except per share data) as of and for June 30, 2023.

DEBT ACTIVITY

On June 15, 2023, the Company closed on the amendment and restatement of its existing $175.0 million senior unsecured term loan to extend the maturity to January 2026 from December 2024, with a one-year extension option to further extend the maturity to January 2027, at the Company's discretion.

SUBSEQUENT DEBT ACTIVITY

Subsequent to quarter end, the Company closed a new three-year $250.0 million sustainability-linked senior unsecured term loan facility with a delayed draw option (the "Term Loan"). The Term Loan initially matures in July 2026 and includes two one-year options and one six-month option to extend the maturity to January 2029 (5.5-year term) at the Company's discretion, and an accordion feature that allow the Company to increase the aggregate availability under the Term Loan to $400.0 million. At close on July 3, 2023, the initial amount drawn on the Term Loan was $150.0 million.

The following table summarizes the terms of the Term Loan (dollars in thousands).

DIVIDEND

On July 24, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.205 per share for the third quarter of 2023. On an annualized basis, the dividend of $0.82 per share of common stock represents an increase of $0.02 per share over the previous annualized dividend. The dividend will be paid on September 15, 2023 to shareholders of record on September 1, 2023.

2023 GUIDANCE

The Company is updating its full year 2023 AFFO per share guidance range to $1.20 to $1.23 from the prior range of $1.17 to $1.23. The Company is also increasing its 2023 net investment activity guidance to at least $450.0 million, from $400.0 million as previously announced.

Certain of the forward-looking financial measures above are provided on a non-GAAP basis. The Company does not provide a reconciliation of such forward-looking measures 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 Thursday, July 27, 2023 at 11:00 AM ET. During the conference call the Company’s officers will review second quarter 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 fifteen minutes prior to the scheduled start time to register, as well as download and install any necessary audio software. A replay of the webcast will be available for 90 days on the Company’s website shortly after the call.

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 August 3, 2023, 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 13739741.

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 and 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, and 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, 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.