Essential Properties Realty Trust, Inc.

Good morning, ladies and gentlemen, and welcome to Essential Properties Realty Trust's third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. This call is recorded, and a replay will be available two hours after the completion of the call for the next two weeks. The dial-in details for the replay can be found in today's press release. Additionally, there will be an audio webcast available on Essential Properties' webcast at www.essentialproperties.com, an archive of which will be available for 90 days. It is now my pleasure to turn the call over to Dan Donlan, Senior Vice President and Head of Capital Markets at Essential Properties. Thank you. You may begin.

Thank you, Operator, and good morning, everyone. We appreciate you joining us today for Essential Properties' third quarter conference call. Here with me today to discuss our third quarter and full year results are Pete Mavoides, our president and CEO, Greg Seibert, our COO, and Mark Patton, our CFO. During this call, we'll make certain statements that may be considered forward-looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we may not release revisions to these forward-looking statements to reflect changes after the statements were made. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail and the company's fines at the SEC and yesterday's earnings press release. With that, Pete, please go ahead.

Thank you, Dan, and thank you to everyone who is joining us today for your interest in essential properties. During the third quarter, we experienced a marked improvement in rent collections as our tenants reopened their properties for business. In addition to this positive operating trend, we saw a stabilization in our cost of capital and a constructive capital markets environment that was conducive towards maintaining a conservative balance sheet. As we stated on prior calls, we wanted to see these circumstances occur before deciding to resume our external growth plans. As such, we began looking for attractive investment opportunities early in the third quarter, which allowed us to invest $149 million this quarter and another $73 million to date in the fourth quarter. Looking at our third quarter investments, 92% were direct sale leasebacks and 98% were transactions that involved an existing relationship. We believe these direct opportunities were a tangible output of the accommodative and relationship-based approach that we used to navigate the pandemic with our tenant base. While our short-term collections may have been higher had we taken a more aggressive posture, Our deliberate actions have strengthened our tenant relationships, which should benefit the company over the longer term. In order to maintain financial flexibility and appropriately fund our pipeline of opportunities, we raised $210 million of net equity in the quarter, including our overnight offering that raised $184 million of net proceeds in mid-September. we would like to thank those existing and new investors that demonstrated continued confidence in our country for supporting us. In terms of portfolio stabilization, approximately 99% of our portfolio as a percent of ABR is opened and operating today, which compares to 93% back in early August and just 66% in mid-April. In terms of rent collections, We collected approximately 90% of contractual cash rent owed to us in the third quarter, including 88% in July, 91% in August, and 91% in September. For October, we collected 91% of contractual cash rent and have another 3% attributable to recognized rental deferrals, which are scheduled to end after December. The remaining 6% of contractual cash rent is allocated as follows. 2.5% is non-recognized rent deferrals, which is mostly attributable to our five movie theaters that are leased to AMC theaters. 2.5% is unresolved, which is mostly attributable to Town Sports and Ruby Tuesdays. In the case of Town Sports, the tenant rejected our master lease on September 29th. while Ruby's Tuesdays is currently in Chapter 11 bankruptcy proceedings. The remaining 1% is attributable to lost or temporarily abated rent. Turning to the portfolio, we ended the quarter with investments in 1,096 properties that were 99.4% leased to 214 tenants operating in 16 different industries. We had seven vacant properties at quarter end, including the three fitness centers that were formerly leased to Town Sports International. As we have stated before, the value of our company does not reside in our leases. It resides in our properties and our ability to keep them consistently leased. Therefore, we see high and stable occupancy as a key indicator of that value. More specifically, we have seen solid demand for our vacant properties and we expect to find replacement tenants or come to an agreement with the current tenants in the near term. Our weighted average lease term stood at 14.6 years at quarter's end, with only 0.1% of our AVR expiring over the next year and 3.5% expiring over the next five years. Our weighted average unit level coverage ratio was 2.8 times, which includes the full impact of second quarter tenant financials. We would expect our coverage ratio to continue to migrate lower, albeit at a moderating pace as the pandemic continues to have lingering impacts on certain industries. Turning to the balance sheet, we finished the quarter with leverage of four times net debt to annualized adjusted EBITDA RE and excellent liquidity of nearly $600 million. Looking forward, With the pandemic causing a more negative impact on smaller tenants, many of our experienced middle market operators are seeing opportunities to purchase smaller operators and increase market share. This is generating an attractive opportunity set and growing investment pipeline for our company. While we are confident in our future prospects as we look to grow alongside these operators, we recognize that the pandemic is by no means behind us. As such, we remain diligent in our underwriting and highly focused on industries that have experienced minimal to no impact from the current pandemic. With that, I'd like to turn the call over to Mark Patton, our CFO, who will take you through the balance sheet and financials for the Corps. Mark?