Essential Properties Realty Trust, Inc.

Good morning, ladies and gentlemen, and welcome to Essential Property Realty Trust's third quarter 2021 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 conference is being recorded, and a replay of the call will be available two hours after the completion of the call for the next two weeks. The dial-in numbers for the replay can be found on today's press release. Additionally, there will be an audio webcast available on Essential Properties' website 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, Operator, and good morning, everyone. We appreciate you joining us today for Essential Properties' third quarter 2021 conference call. Here with me to discuss our operating results are Pete Mavoides, our president and CEO, Greg Seibert, our COO, and Mark Patton, our CFO. During this conference 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 will not release revisions to those 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 in the company's funds for the SEC and in yesterday's earnings 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. The third quarter was another strong quarter for us on all fronts as we saw a continuation of the trends that have been present throughout the year. including strong portfolio performance, a robust and attractive investment environment, and supportive capital markets. In terms of the portfolio, with collections at 100% and only one vacant property today, our portfolio has fully stabilized. In fact, over the trailing 12 months ended September 30, we experienced recovery of 87% on all releasing activities. which is a strong indicator of the quality of our real estate and our disciplined underwriting. Two, in terms of investments, similar to past quarters, our industry relationships drove the bulk of our growth as over 80% of our investments in the quarter were prior relationships. During the quarter, we invested $231 million into 85 properties at a weighted average cash yield of 7%, with 84% of investments originated through direct sale leasebacks and 80% containing master lease provisions. While we expect this high level of investment activity relative to our historical averages to persist into the fourth quarter, our future investment activity levels are likely to moderate for three main reasons. One, activity paused during the pandemic demand has largely been recaptured. Two, Product from sellers motivated by potential changes in the tax laws should dissipate next year. And three, pandemic-induced M&A activity moderates back to more normalized levels. Lastly, in terms of the capital markets, we remain active on the equity issuance front with approximately 103 million of gross ATM issuance during the quarter, which helped lower our leverage sequentially. As such, we continue to have ample capacity to capitalize on our investment pipeline. Turning to the portfolio more specifically, we ended the quarter with investments in 1,397 properties that were 99.9% leased to 297 tenants operating in 17 industries. Our weighted average lease term stood at 13.9 years, with 3.8% of our ABR expiring through 2025. Our weighted average unit level coverage ratio was 3.5 times, which improved versus last quarter's coverage of 3.2 times. While our traditional credit statistics, which focus on implied credit ratings and unit level coverage, experienced solid sequential improvement this quarter, these statistics remain negatively skewed for certain industries like movie theaters, early childhood education, and health and fitness, which face continued state-level shutdowns and capacity restrictions well into the spring of 2021 in certain areas of the country. However, with most of our tenants reporting to us on a trailing 12-month financial basis with a one-quarter lag, we expect these statistics to continue to experience solid sequential improvement over the next few quarters. Looking out to the balance of the year, we expect these positive trends to continue and we are reaffirming our 2021 AFFO per share guidance range of $1.30 to $1.32. In addition, we are establishing our 2022 AFFO per share guidance at a range of $1.46 to $1.50 per share. We continue to believe our strong ASFO growth potential, combined with our well-covered dividend and our commitment to prudently manage our balance sheet and portfolio risks, offers investors a compelling total return opportunity. With that, I'd like to turn the call over to Greg, our COO, who will take you through the portfolio and investment activities in greater detail.