NetSTREIT Corp.

Greetings. Welcome to NetStreetCorp third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A 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. Please note this conference is being recorded. I will now turn the conference over to Amy Ann, Investor Relations. Thank you. You may begin.

We thank you for joining us for NetStreet's third 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 uncertainties 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 SEC 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. But before I turn the call over to Mark, I want to take a moment to make an ESG announcement. As many of you are aware, there has been more push for companies to provide disclosures related to environmental, social, and governance in recent years. We are putting together a webpage to showcase our company's commitment to environmental stewardship, social responsibility, as well as good governance. We expect to put out a press release announcing the launch of our ESG webpage in the coming weeks, and we welcome you all to visit our website. Now I'll turn the call over to Mark to discuss our third quarter activity. Mark?

Good morning, everyone, and welcome to NetStreet's third 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 further detail on our results and balance sheet. For the third quarter, we were consistent with our publicly stated strategic growth plans. We believe that growing our portfolio with high quality tenants while further diversifying our tenant base and geographical and industry mix is critical to generating the best risk adjusted returns for our shareholders. As of quarter end, NetStreet has one of the highest credit quality portfolios in the net lease space. And we'll endeavor to continue to create a best in class portfolio as we grow into next year and beyond. In the third quarter, we completed gross acquisition volume of $90 million and an additional $4 million of development spending. The $90 million of acquisitions for this quarter were at an initial cash capitalization rate of 6.2% inclusive of all closing costs and had a weighted average remaining lease term of 12.4 years. Nearly 90% of our third quarter acquisitions were with investment grade rated tenants or tenants with investment grade profiles. Similar to the past few quarters, our financial results for the quarter were impacted by the timing of acquisitions, many of which closed near quarter end. As we grow our portfolio, we expect the quarter-to-quarter timing of acquisitions to have a diminished impact on our quarterly financial results. But we will not sacrifice the quality of assets that we add to our portfolio or our due diligence and underwriting criteria, which remain paramount. Also in the quarter, we provided approximately $4 million of development funding which included two new development projects with total costs expected to be $5.4 million. With a total of five development projects in the pipeline, we anticipate that we will begin to collect rent from four of these projects by the end of the first half of 2022. Finally, in the quarter, we sold four assets for $19 million at a weighted average cash capitalization rate of 6.3%. With these dispositions, we've decreased our casual dining exposure to less than 1%, decreased exposure to bank branches, and we no longer have exposure to RV sales. The continued curating of our portfolio will remain an integral part of the NetStreet strategy, but this quarter we executed a few more dispositions than what is typical, reflecting attractive opportunities to cull assets that didn't meet our long-term investment objectives at attractive pricing. As a result of our acquisition and disposition activity during the third quarter, our exposure to Walgreens was 7.5% of our total portfolio ABR, up from 2.5% in the previous quarter. Northern Tool and Equipment, which made up 1.4% of our portfolio ABR, entered our top 20 tenant list. While 7-11 remains our top tenant, our ABR exposure to 7-11 was 8.2%, down from 9.3%. We will continue to see the 7-11 exposure decrease over time as we continue to grow our portfolio. Moving on to our quarter end portfolio metrics, our portfolio contained 290 properties comprised of 5.5 million square feet in 40 states with a diversified tenant roster of 60 tenants in 22 industries. Total ABR, our primary earnings driver, increased to $59.8 million with a weighted average lease term of 10 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 70.5% investment grade with an additional 14.5% classified as investment grade profile. Subsequent to quarter end through October 28th, the company completed over $90 million of acquisitions, including closing costs, and no additional dispositions, bringing our year-to-date net acquisition volume to $354 million. As a result, we are raising our 2021 net acquisitions guidance to at least $400 million. We continue to source attractive opportunities that meet our target criteria. We are reviewing a wide range of opportunities, including investments in stabilized properties, blend and extend opportunities, that lease back transactions and development projects. While quarterly acquisitions volumes may vary quarter to quarter, we will stay true to our strategic focus on high quality tenants with great access to capital and attractive real estate fundamentals. While we continue to enhance the overall diversification of our portfolio, We continue to believe that this is the best way to produce sector-leading earnings growth with very limited tenant credit risk in the coming years. I'll now turn the call over to Andy to discuss the balance sheet and our capital markets activities. Andy?