NetSTREIT Corp.

Ladies and gentlemen, good morning and welcome to the NetStreetCorp first quarter 2024 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 and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Amy Ann, Investor Relations. Please go ahead.

We thank you for joining us for NetStreet's first quarter 2024 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 31, 2023, 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 GAAP measure, 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, 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?

Thank you, Amy, and thank you all for taking the time to join us this morning on our first quarter 2024 earnings call. First, I want to extend my thanks to the NetStreet team. Our strong start to the year would not have been possible without their fantastic work. We kicked off the year as one of only two REITs to raise follow-on equity in January while also remaining active on our ATM program. We have raised nearly $230 million of equity year-to-date, which gives the team ample dry powder to transact at our current investment pace through year-end. Due to a drastic decrease in competition, we are continuing to pursue investment opportunities at attractive prices. The team remains diligently focused on investing in properties with the strongest tenants in defensive retail sectors that heavily rely on their physical locations to make profit. We continue to see great opportunities with not only investment-grade tenants, which now make up a sector-leading 71.1% of our portfolio, but also with investment-grade profile tenants and low-risk, sub-investment-grade and unrated tenants. And while the buyer pool has thinned, we also continue to execute on strategic dispositions to lower our concentration in certain tenants and or recycle the capital into investments with longer leases and better rent escalations. In the first quarter, we completed over $129 million of gross investment activity at a blended cash yield of 7.5%, a 30 basis point sequential quarter-over-quarter increase. Acquisitions closed in the quarter were with strong nationally recognized tenants such as Tractor Supply, Dollar General, and Bridgestone Firestone, to name a few. From a tenant perspective, 84.8% of our investments completed in the quarter were with investment-grade tenants, which includes the completion of 10 new developments. Moving to our disposition activity, we sold 12 properties for $21.6 million at a 6.8% cash yield in the quarter. These properties were leased to tenants in the dollar store, drugstore pharmacy, discount retail, and convenience store industries. At quarter end, our portfolio consisted of 628 investments with an ABR of $140.3 million. Our 88 tenants operate in 26 industries across 45 states, with 84.4% of our portfolio leased to investment-grade or investment-grade profile tenants. Our focus on long-term leases and high-quality tenants has provided us with a favorable lease expiration schedule. For example, subsequent to quarter end, we renewed the one lease that was expiring in 2024 for a 12.5% increase in rent. Looking out to 2025, We have 1.8% of ABR expiring, which our team is actively addressing. We currently expect these expirations to have a positive impact on our cash flow and our portfolio weighted average lease term. We believe our high credit quality and minimal lease expiration risk in the near term provides stability of our cash flows. Turning to recent tenant headlines, I wanted to provide some commentary as it relates to Dollar Tree and their concentration within our portfolio. In March of this year, Dollar Tree, who acquired Family Dollar in 2015, announced that they intend to close several stores across the country, the bulk of which will be Family Dollar branded stores. This was not a surprise to us, as we have been addressing our Family Dollar locations via asset sales and proactive lease extensions over the past few years. With that in mind, we currently own 19 Family Dollar branded stores, which comprise 1.4% of our ABR. Two of those stores, or 13 basis points of our ABR, have a lease that expires within five years. We would also note that in the last 12 months, we extended the initial lease terms of 10 stores, with the seven remaining stores having leases that were already long-term in nature. As such, we are confident in the productivity of our stores, and we were pleased to see none of our locations among the 103 Family Dollar stores on the initial closure list. Our relationship with Dollar Tree is strong, and we plan to continue working with them to minimize risk and maximize cash flows for our investors. Before I turn the call over to Dan, I wanted to reiterate a couple points as it pertains to our balance sheet portfolio and tenancy. While there are multiple reported cross-currents as it pertains to the health of the economy and the U.S. consumer, we believe our portfolio and tenant focus are well positioned to weather a prolonged negative impact in consumer spending, as well as provide a robust opportunity set from which to grow should economic growth remain stable. Similarly, our low leverage and well-capitalized balance sheet provides us with sufficient capacity to grow externally should the capital markets remain volatile, while also allowing us to remain highly competitive and opportunistic on the investment front should the environment for spread investing improve from current levels. With that, I'm going to turn the call over to Dan to discuss our key financial highlights for the quarter.