Essential Properties Realty Trust Inc
NYSE:EPRT
Essential Properties Realty Trust Inc
Founded to capitalize on the evolving real estate landscape, Essential Properties Realty Trust Inc. has emerged as a significant player in the net lease real estate market. This company focuses its attention on the acquisition and management of single-tenant properties, primarily leased to tenants operating in service-oriented or experience-based sectors. It is a strategic choice, one that leans on the inherent resilience of these businesses even amid economic fluctuations. By entering into long-term contracts and agreements with tenants, Essential Properties helps them focus on their core business, while it gains stable, predictable cash flows.
The modus operandi is both simple and effective: acquire desirable real estate assets, lease them back to business operators, and generate income in the form of rents. The company's tenants span numerous industries, from car washes and quick-service restaurants to medical and entertainment facilities, diversifying its revenue streams and minimizing risk. Essential Properties leverages these leases' triple-net structure, where tenants shoulder the burden of taxes, insurance, and maintenance costs. This financial model minimizes unexpected expenses, yielding a robust and reliable revenue engine that appeals to investors seeking exposure to commercial real estate with steady returns. Through this focused strategy, Essential Properties not only sustains but also scales its operations, reflecting its adeptness at navigating the intricacies of the modern property market.
Founded to capitalize on the evolving real estate landscape, Essential Properties Realty Trust Inc. has emerged as a significant player in the net lease real estate market. This company focuses its attention on the acquisition and management of single-tenant properties, primarily leased to tenants operating in service-oriented or experience-based sectors. It is a strategic choice, one that leans on the inherent resilience of these businesses even amid economic fluctuations. By entering into long-term contracts and agreements with tenants, Essential Properties helps them focus on their core business, while it gains stable, predictable cash flows.
The modus operandi is both simple and effective: acquire desirable real estate assets, lease them back to business operators, and generate income in the form of rents. The company's tenants span numerous industries, from car washes and quick-service restaurants to medical and entertainment facilities, diversifying its revenue streams and minimizing risk. Essential Properties leverages these leases' triple-net structure, where tenants shoulder the burden of taxes, insurance, and maintenance costs. This financial model minimizes unexpected expenses, yielding a robust and reliable revenue engine that appeals to investors seeking exposure to commercial real estate with steady returns. Through this focused strategy, Essential Properties not only sustains but also scales its operations, reflecting its adeptness at navigating the intricacies of the modern property market.
AFFO Growth: AFFO per share in Q4 was $0.49, up 9% year-over-year, at the high end of expectations.
Raised Guidance: 2026 AFFO per share guidance increased to $1.99–$2.04, implying 7–8% growth; bottom end of range was removed due to improving portfolio credit.
Strong Investments: Q4 investments totaled $296 million at a 7.7% average cash yield; 85% sourced from existing relationships.
Portfolio Resilience: Portfolio occupancy remained high at 99.7% with only 6 vacancies, and rent coverage stayed robust at 3.6x.
Cap Rate Stability: Cap rates are stable across industries, with management expecting only modest compression later in 2026.
Healthy Balance Sheet: Leverage is low at 3.8x net debt to annualized adjusted EBITDA RE, with $1.4 billion in liquidity.
Dividend & Free Cash Flow: Q4 dividend declared at $0.31 per share with a 63% AFFO payout ratio; nearly $40 million in free cash flow retained for growth.
Diversified Tenancy: Top 10 tenants comprise only 16.5% of ABR, reflecting industry-leading tenant diversity.
