Business Context and Reporting Period
This Form 8-K is a current report filed by Essential Properties Realty Trust, Inc. (EPRT) on June 22, 2021. The filing provides updates on recent capital raising activities and operational performance metrics for the period ending in May 2021.
Key Financial Metrics and Capital Activities
- April 2021 Equity Offering: Completed a follow-on offering of 8,222,500 shares (including 1,072,500 shares from the underwriters' option) at $23.50 per share, generating gross proceeds of $193.2 million.
- ATM Program Activity: Between April 1, 2021, and June 18, 2021, sold 102,608 shares under the $250.0 million at-the-market program at a weighted average price of $23.45, raising $2.4 million.
- ABR Collection Rates: Collected approximately 98% of Annualized Base Rent (ABR) in April 2021 and 99% in May 2021.
- Deferrals: Recognized deferrals of approximately 1% of ABR in April 2021 and less than 1% in May 2021.
Material Changes and Portfolio Characteristics
The filing highlights strong rent collection recovery in April and May 2021 compared to prior pandemic-impacted periods. As of March 31, 2021, 99.4% of leases (based on ABR) included future rent increases with a weighted average rate of 1.5% per year (assuming no CPI growth). Approximately 95% of leases have fixed escalation provisions, 4% are CPI-linked, and 1% have no escalation.
Guidance, Outlook, and Risks
The filing does not provide specific forward-looking financial guidance or updated outlook figures. Management commentary focuses on the successful execution of equity offerings and the stabilization of rent collection rates. The document notes that future CPI increases are uncertain and were not included in the calculation of the weighted average annual escalation rate for CPI-linked leases.
Investor Verification Checklist
- Verify the net proceeds from the April 2021 offering after deducting underwriting discounts and offering expenses.
- Confirm the remaining capacity available under the $250.0 million ATM Program.
- Review the specific terms of the 1% of leases with no rent escalation provisions to assess long-term revenue growth risks.
- Monitor future filings for updates on the deferral amounts recognized in April and May 2021 and their impact on cash flow.