NetSTREIT Corp.

Greetings and welcome to the NetStreetCorp second quarter 2021 earnings 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Amy Ann. Thank you, Amy. You may begin.

We thank you for joining us for NetStreet's second quarter 2021 earnings conference call. In addition to the press release distributed yesterday after market closed, we posted a supplemental package and an updated investor presentation. Both can be found in the investor relations section of the company's website at www.netstreet.com. On today's call, management's remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risk and uncertainty that may cause actual results to differ from those discussed today. For more information about these risk factors, we encourage you to review our Form 10-K for the year ended December 31st, 2020, and other FEC filings. All forward-looking statements are made as of the date hereof, and NetStreet assumes no obligation to update any forward-looking statements in the future. In addition, certain financial information presented on this call includes non-GAAP financial measures. Please refer to our earnings release and supplemental package for definitions, GAAP reconciliations, and an explanation of why we believe such non-GAAP financial measures are useful to investors. Today's conference call is hosted by NetStreet's Chief Executive Officer, Mark Manheimer, and Chief Financial Officer, Andy Blocker. They will make some prepared remarks, and then we will open the call for your questions. Now I will turn the call over to Mark.

Good morning, everyone, and thank you for joining us today for NetStreet's second quarter 2021 earnings conference call. I will begin with a review of our investment activity and portfolio metrics for the quarter, and Andy will then provide detail on our second quarter results and balance sheet. To begin, our core focus is on strategic growth with high-quality tenants and pursuing opportunities where we see the best risk-adjusted returns. We continue to target tenants whose physical locations are critical to their cash flow generation, making them more resistant to e-commerce competitive pressures. More importantly, we focus on tenants with strong balance sheets and proven access to capital. During the quarter, we achieved acquisition and development volume totaling approximately $121 million, making it our largest quarterly volume since our IPO last August. We completed approximately $117 million of acquisitions at an initial cash capitalization rate of 6.5% inclusive of all closing costs and a weighted average remaining lease term of 9.7 years. Over 93% of our second quarter acquisitions were with investment grade rated tenants or tenants with investment grade profiles. Also in the quarter, we provided $4 million of development funding, which included two new projects with total cost expected to be $6 million. Both of these developments are with tenants with investment-grade profiles. We anticipate that we will begin to collect rent from these projects by second quarter of 2022. Finally, in the quarter, we sold five assets for $13 million at a weighted average cash capitalization rate of 6.7%. With these dispositions, we've decreased our casual dining exposure from 1.9% to 1.2%. We will continue to look for opportunities to decrease our exposure to industries that are more at risk from retail disruptions, from technological advances, or shifting consumer behavior. Moreover, we will continue to look at dispositions as a portfolio management tool to recycle capital into better long-term opportunities. Moving on to our portfolio metrics, as of June 30, 2021, our portfolio contains 267 leases, comprised of 5.2 million square feet in 39 states, with a diversified tenant roster of 59 tenants in 23 industries. Total ABR, our primary earnings driver, increased to $55.3 million with a weighted average lease term of 9.9 years. At quarter end, we were 100% occupied with no lease expirations until 2023 and less than 1% of ABR expiring before 2025. Based on ABR, our tenancy is 70% investment grade with an additional 13.5% classified as investment grade profile. As a result of our tenant credit quality and the defensive nature of the portfolio, we are proud to report 100% rent collections for 11 straight months through July. Our pipeline continues to grow in size, and we are excited about our ability to execute on our external growth strategy. We continue to review a wide range of opportunities, including investments in stabilized assets, blend and extend opportunities, satellite SPAC transactions, and development projects. We will stay true to our strategic focus on investment grade and other high quality tenants while we continue to enhance the overall diversification of our portfolio. As we look to the balance of the year and beyond, we are truly excited by the opportunity ahead of us. Our portfolio continues to perform well and our acquisition processes are proactive and proven. We continue to target at least $360 million in net acquisitions for the full year 2021, supported by our strong balance sheet and liquidity that was bolstered last quarter with our transformational $203.6 million follow-on equity offering. Before I turn the call over to Andy, I want to provide some perspective on NetStreet's accomplishments since we went public just under a year ago. We grew our asset base from 163 properties to 267. Investment-grade assets grew from 64% of our portfolio to 70%, and when you include investment-grade profile tenants, that metric grew from 72% to over 83%, As a result, our ABR has increased from $34.5 million to $55.3 million, while improving the already strong quality of our portfolio. I couldn't be prouder of the team we have in place that has been integral in achieving these accomplishments. And we remain focused on these same key drivers, which I believe will further advance NetStreet's platform and create significant value for our shareholders. I'll now turn the call over to Andy to discuss the balance sheet and our capital markets activities. Andy?