Essential Properties Realty Trust, Inc. operates as a real estate company.
The company acquires, owns, and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience-based businesses. It invests in and leases freestanding, single-tenant commercial real estate facilities.
The company has assembled a diversified portfolio using a strategy that focuses on properties leased to tenants in businesses, such a...
Essential Properties Realty Trust, Inc. operates as a real estate company.
The company acquires, owns, and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience-based businesses. It invests in and leases freestanding, single-tenant commercial real estate facilities.
The company has assembled a diversified portfolio using a strategy that focuses on properties leased to tenants in businesses, such as early childhood education, car washes, restaurants (primarily quick service restaurants), medical and dental services, automotive services, convenience stores, entertainment, health and fitness, equipment rental, and grocery.
As of December 31, 2021, the company’s portfolio consisted of 1,451 properties, inclusive of 126 properties, which secure its investments in mortgage loans receivable.
As of December 31, 2021, the company’s portfolio was 99.9% occupied by 311 tenants operating 433 different concepts (i.e., generally brands) in 16 industries across 46 states, with none of its tenants contributing more than 3.3% of its annualized base rent.
As of December 31, 2021, the company’s leases had a weighted average remaining lease term of 14.0 years (based on annualized base rent), with only 5.4% of its annualized base rent attributable to leases expiring prior to January 1, 2027.
Target Market
The company is an active investor in single-tenant, net leased commercial real estate. Its target properties are freestanding commercial real estate facilities where a middle-market tenant conducts activities on property that are essential to the generation of its sales and profits.
Within this market, the company focuses its investment activities on properties leased to tenants engaged in a targeted set of 13 service-oriented or experience-based businesses. It focuses on properties leased to middle-market companies, which it defines as regional and national operators with between 10 and 250 locations and $20 million to $500 million in annual revenue, and it opportunistically invests in properties leased to smaller companies, which it defines as regional operators with fewer than 10 locations and less than $20 million in annual revenue.
Strategy
The key elements of the company's strategy are to structure and manage its diverse portfolio with focused and disciplined underwriting and risk management; focus on relationship-based sourcing to grow its portfolio by originating sale-leaseback transactions; focus on middle-market companies in service-oriented or experience-based businesses; and enter into long-term (typically with initial terms of 15 years or more and tenant renewal options), triple-net leases that provide for periodic contractual rent escalations.
Environmental Matters
Before completing any property acquisition, the company obtains environmental assessments in order to identify potential environmental concerns at the property. These assessments are carried out in accordance with the Standard Practice for Environmental Site Assessments (ASTM Practice E 1527-13) as set by ASTM International and include a physical site inspection, a review of relevant federal, state and local environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of the property's chain of title and review of historical aerial photographs and other information on past uses of the property.
Tax Status
The company has elected to be taxed as a real estate investment trust (REIT) under sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the ‘Code’). As a REIT, the company will not be subject to the U.S. federal income tax to the extent that it meets the organizational and operational requirements and its distributions equal or exceed REIT taxable income.
History
Essential Properties Realty Trust, Inc. was founded in 2016.