Essential Properties

Essential Properties Realty Trust, Inc. (NYSE: EPRT) is a real estate investment trust (REIT) structured to acquire, own, and manage a diversified portfolio of single-tenant properties across the United States. The company, founded in 2016 and headquartered in Princeton, New Jersey, operates under a net-lease model, primarily with middle-market companies. This structure means tenants are responsible for most property-related expenses, providing a predictable revenue stream for the trust. The company completed its initial public offering in June 2018.

The firm's strategic direction is guided by a seasoned executive team with extensive experience in the net-lease industry. President and CEO Peter M. Mavoides has been in his role since 2018, having held similar positions at the company's predecessor LLC since March 2016. His career spans approximately 20 years in the single-tenant, net-lease sector, including a significant tenure as President and Chief Operating Officer of Spirit Realty Capital (SRC). At Spirit, he was instrumental in its transformation from a private enterprise to a public company. Gregg A. Seibert, the Executive Vice President and Chief Operating Officer since May 2016, also came from Spirit Realty Capital, where he served as Executive Vice President and Chief Investment Officer. Their long-standing professional relationship, spanning about a decade in various capacities, has been central to developing Essential Properties' investment and operational functions.

Essential Properties' business model focuses on providing capital to middle-market companies through sale-leaseback transactions. This allows client companies to unlock capital from their real estate for growth or other corporate purposes. The trust's target clients are operators in service-oriented or experience-based industries, which are generally considered less vulnerable to e-commerce pressures. The portfolio is deliberately diversified across various sectors, including restaurants, car washes, automotive services, medical and dental services, convenience stores, and early childhood education. This diversification, combined with a focus on tenants with stable operating histories and attractive credit characteristics, aims to ensure a resilient income stream. As a REIT, the company must distribute at least 90% of its taxable income to stockholders, which in turn exempts it from most federal corporate income taxes.

The core of the business involves long-term, triple-net leases, which contribute to a stable revenue base. As of late 2023, the company's portfolio included over 1,800 properties across 48 states, demonstrating a high occupancy rate of 99.8% and a weighted average lease term of 14 years. A significant portion of the annualized base rent comes from master lease agreements, which bundle multiple properties under a single lease, further enhancing financial stability. The firm emphasizes its straightforward legal agreements and ability to close transactions quickly as key benefits for its clients.

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