NetSTREIT Corp.

And welcome to the NetStreetCorp first quarter 2023 earnings conference call. Today, all participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. If you would like to ask a question, you may press star then one on your telephone keypad. Two, withdraw your question. please press star then two. Please note that today's event is being recorded. At this time, I would like to turn the conference over to Amy Ahn, Director of Investor Relations. Please go ahead.

We thank you for joining us for NetStreet's first quarter 2023 earnings conference call. In addition to the press release distributed yesterday after market close, 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, 2022, and our 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 of our non-GAAP measures reconciliations to the most comparable gap measure, and an explanation of why we believe such non-gap financial measures are useful to investors. Today's conference call is hosted by NetStreet's Chief Executive Officer, Mark Manheimer, and Chief Financial Officer, Dan Donlan. They will make some prepared remarks, and then we will open the call for your questions. Now, I'll turn the call over to Mark. Mark?

Good morning, everyone, and welcome to our first quarter 2023 earnings conference call. Before we begin, I am pleased to welcome our new CFO and Treasurer, Dan Donlan, to the NetStreet team. Dan brings strong corporate finance, capital markets, and operational read experience to our platform, and he is committed to helping the company generate sustainable, long-term value for shareholders. Welcome aboard, Dan. Turning to our first quarter results, we had an active start to the year despite the volatile capital markets environment and an uncertain macroeconomic backdrop. Our best-in-class portfolio continues to perform exceptionally well in the face of persistent inflation, recession concerns, interest rate increases, and higher volatility. We have maintained 100% occupancy, 100% rent collections, and any disruption to our tenant sales and profitability has been minimal. Having spent a good portion of 2022 locking in significant portions of our capital structure by prudently accessing the capital when conditions were supportive, we started 2023 with ample dry powder to make investments that meet our quality and return thresholds. During the quarter, we completed net investments of $112.7 million, including the acquisition of 20 properties for $67.7 million at a weighted average cash yield of 6.9%, two senior loan investments, which are secured by 49 properties, for $46.1 million at a weighted average cash yield of 9.3%, Two completed development projects for $14.8 million and $4.5 million of additional funding to support ongoing development projects. And eight dispositions for $15.8 million at a weighted average cash yield of 6.8%. Notably, based on total ABR, 95% of these first quarter investments were with investment grade and investment grade profile tenants. Overall, while the net lease industry transaction market remains less active today than this time last year, we are seeing a healthy pace of opportunities at attractive prices with better terms as financing contingent and levered buyers remain sidelined. While our first quarter net investment activity has a slightly ahead of pace versus our 2023 target, we have taken and will continue to take a judicious approach to the investments we pursue. We are extremely mindful when it comes to capital deployment, and we are staying disciplined in our credit underwriting standards and the pricing of assets. As we have demonstrated over the past three years through a variety of macroeconomic environments, we can be nimble and capitalize on opportunities as they arise. Currently, stress in the regional banking sector has created dislocations in the net lease transaction market, which has provided us with opportunities to maintain our growth strategy momentum. We remain in constant communication with existing tenants, developers, and other landlords to provide financing solutions where we see the best risk-adjusted returns. This solutions-based approach with a growing number of counterparties has helped expand our industry relationships while increasing the number of opportunities for NetStreet. With that in mind, we have seen an increase in alternative investment structures, including mortgage loans. In the first quarter, we funded $46 million of loans for our borrower's purchase of 49 convenience stores leased to Speedway, a subsidiary of 7-Eleven. The loan-to-value of the underlying collateral is approximately 60%, and we're in first lien position with no capital ahead of us. The loans have a three-year term and a weighted average interest rate of 9.3%. While this is a larger loan exposure for us, it provides outsized risk-adjusted value to NetStreet, in addition to demonstrating our creativity in deploying capital. At March 31st, our 100% occupied portfolio was comprised of 488 investments with 83 tenants, contributing $108.9 million of annualized base rent. Tenants with investment grade ratings or investment grade profiles represented 82% of ABR. A key part of our execution is recycling capital where the risk value or return no longer meets our criteria. And in the first quarter, we accretively sold eight properties for $15.8 million. Excluding investments associated with mortgage and loans receivable, the portfolio has a weighted average lease term of 9.4 years with no lease expirations in 2023, and only 0.3% of total ABR expiring through 2024. As we look to the balance of 2023, we will continue to focus on scaling our portfolio of high-quality tenants while prudently managing our balance sheet and liquidity position. Furthermore, despite ongoing economic uncertainty, we continue to believe our durable cash flow stream and attractive growth profile offer compelling total return potential for investors. With that, I'll turn the call over to Dan to go over our first quarter financial results and 2023 guidance.