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NETSTREIT Reports Fourth Quarter and Full Year 2021 Financial and Operating Results

February 24, 2022

– Reports Net Income of $0.05 and $0.08 and Adjusted Funds from Operations (“AFFO”) of $0.27 and $0.94 per diluted share, for the Fourth Quarter and Full Year 2021, respectively –

– Completed $413.7 Million of Net Acquisitions in 2021 –

– Subsequent to Year End, Completed Forward Common Stock Offering of 10,350,000 Shares –

DALLAS--(BUSINESS WIRE)-- NETSTREIT (NYSE: NTST) (the “Company”), today announced financial and operating results for the fourth quarter and full year ended December 31, 2021.

“We are extremely proud of our accomplishments in 2021. We grew our portfolio to 327 properties, increased our annual base rent by more than 70% from the previous year, to $71.2 million, and increased our combined investment grade and investment grade profile to 81.6% of the portfolio,” said Mark Manheimer, Chief Executive Officer of NETSTREIT. “Further, over the past 12 months, we have completed over $500 million of equity issuances to both maintain our strong balance sheet and fuel accretive growth. We continue to see vast opportunities in the market and are optimistic for continued expansion in 2022.”

FOURTH QUARTER AND FULL YEAR 2021 HIGHLIGHTS

  • Reported net income per diluted share of $0.05, Core Funds from Operations (“Core FFO”)1 per diluted share of $0.252 and AFFO per diluted share of $0.272 for the fourth quarter of 2021
  • Reported net income per diluted share of $0.08, Core FFO per diluted share of $0.873 and AFFO per diluted share of $0.943 for the full year 2021

PORTFOLIO UPDATE

As of December 31, 2021, the NETSTREIT portfolio was comprised of 327 leases with 67 total tenants, contributing $71.2 million of annualized base rent4, with a weighted-average remaining lease term of 9.9 years, of which 65.2% were leased to investment grade rated tenants and 16.4% were leased to tenants with investment grade profiles5. The portfolio was 100.0% occupied as of December 31, 2021. During the year, the Company increased its ABR over 70% from $41.8 million to $71.2 million, and increased its combined investment grade and investment grade profile percentage from 78.0% to 81.6%. The Company added 15 new tenants and three new states to its portfolio during the year.

INVESTMENT ACTIVITY

During the quarter ended December 31, 2021, the Company had total net investment activity of $159.8 million, which includes acquisitions of $150.5 million and ongoing development funding of $9.3 million. The Company completed $150.5 million of acquisitions in 32 properties at an initial cash capitalization rate of 6.5%. Acquisitions completed during the quarter had a weighted-average remaining lease term of 10.4 years, with 39.5% occupied by investment grade rated tenants and 18.4% occupied by tenants with investment grade profiles. The Company provided $9.3 million of ongoing development funding including funding to support five new developments for two investment grade tenants and three tenants with investment grade profiles, with estimated total project costs of $23.0 million. The Company had no dispositions in the fourth quarter.

During the year ended December 31, 2021, the Company completed $445.6 million of acquisitions in 124 properties at an initial cash capitalization rate, including acquisitions costs, of 6.5%. Acquisitions completed during the year had a weighted-average remaining lease term of 10.3 years, with 60.4% of properties occupied by investment grade rated tenants and 21.6% occupied by tenants with investment grade profiles. The Company provided $18.8 million of total development funding in 2021 for 10 projects during the year, with nine of the projects for investment grade tenants or tenants with investment grade profiles. During the same period, the Company sold nine properties for total proceeds of $31.9 million, at a cash capitalization rate of 6.5%.

BALANCE SHEET AND LIQUIDITY

During the year ended 2021, the Company completed the following equity issuances:

  • In April, the Company issued 10,915,688 shares of common stock in a public offering at a price of $18.65 per share, resulting in gross proceeds of approximately $203.6 million
  • In November, the Company issued 3,852,436 of common stock at a weighted average price of $23.36 per share for gross proceeds of approximately $90.0 million. Almost all of the ATM activity was the result of a reverse inquiry by a REIT dedicated investor.

At quarter end, total debt outstanding was $239.0 million, with a weighted average term of 2.7 years and a contractual interest rate, including the impact of the fixed rate swap, of 1.35% (excluding the impact of deferred fee amortization). The Company’s net debt to annualized adjusted EBITDA ratio was 4.2x, and the ending cash balance was $7.6 million.

SUBSEQUENT ACTIVITY

In January, the Company completed its forward offering of 10,350,000 shares of common stock, which includes the full exercise of underwriters' option to purchase additional shares, at a price to the public of $22.25 per share. The Company will have until January 10, 2023 to settle its forward sales agreement. As of the date of this press release, the Company has not settled on any shares from the forward offering.

DIVIDEND

On February 22, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share for the first quarter of 2022, which will be paid on March 30, 2022 to shareholders of record on March 15, 2022.

2022 OUTLOOK

On January 5, 2022, the Company announced its full year 2022 AFFO per share guidance in the range of $1.13 to $1.17 per share. This AFFO guidance is based on the following assumptions:

  • The Company expects acquisition activity, including completed developments and net of dispositions, to be at least $480.0 million in 2022
  • The Company expects cash G&A to be in the range of $14.5 million to $15.0 million (inclusive of transaction costs), and expects non-cash compensation expense to be in the range of $5.0 million to $5.5 million
  • The Company expects cash interest expense to be in the range of $5.0 million to $5.5 million, with approximately $0.6 million of additional non-cash deferred financing fee amortization
  • Full year 2022 diluted weighted average shares outstanding, which includes the impact of OP units, are expected to be in the range of 52.0 million to 54.0 million shares

EARNINGS WEBCAST AND CONFERENCE CALL

A conference call will be held on Friday, February 25, 2022 at 10:00 AM ET. During the conference call the Company’s officers will review fourth quarter performance, discuss recent events, and conduct a question and answer period.

The webcast will be accessible on the “Investor Relations” section of the Company’s website at www.NETSTREIT.com. To listen to the live webcast, please go to the site at least fifteen minutes prior to the scheduled start time to register, as well as download and install any necessary audio software. A replay of the webcast will be available for 90 days on the Company’s website shortly after the call.

The conference call can also be accessed by dialing 1-877-451-6152 for domestic callers or 1-201-389-0879 for international callers. A dial-in replay will be available starting shortly after the call until March 4, 2022, which can be accessed by dialing 1-844-512-2921 for domestic callers or 1-412-317-6671 for international callers. The passcode for this dial-in replay is 13725918.

SUPPLEMENTAL PACKAGE

The Company’s supplemental package will be available prior to the conference call in the Investor Relations section of the Company’s website at www.investors.netstreit.com.

About NETSTREIT

NETSTREIT is an internally managed real estate investment trust (REIT) based in Dallas, Texas that specializes in acquiring single-tenant net lease retail properties nationwide. The growing portfolio consists of high-quality properties leased to e-commerce resistant tenants with healthy balance sheets. Led by a management team of seasoned commercial real estate executives, NETSTREIT’s strategy is to create the highest quality net lease retail portfolio in the country with the goal of generating consistent cash flows and dividends for its investors.

(1) Non-GAAP financial measure. See "Non-GAAP Financial Measures".

(2) Per share amounts include weighted average common shares of 41,859,168 and weighted average operating partnership units of 1,125,712 for the three-months ended December 31, 2021.

(3) Per share amounts include weighted average common shares of 36,999,459 and weighted average operating partnership units of 1,377,335 for the twelve-months ended December 31, 2021.

(4) Annualized base rent, or ABR, is calculated by multiplying (i) cash rental payments (a) for the month ended December 31, 2021 (or, if applicable, the next full month's cash rent contractually due in the case of rent abatements, rent deferrals, recently acquired properties and properties with contractual rent increases, other than properties under development) for leases in place as of December 31, 2021, plus (b) for properties under development, the first full month's permanent cash rent contractually due after the development period by (ii) 12).

(5) Unrated tenants with more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x.

NON-GAAP FINANCIAL MEASURES

This press release contains non-GAAP financial measures, including FFO, Core FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, NOI, and Cash NOI. A reconciliation from net income available to common shareholders to each non-GAAP financial measure, and definitions of each non-GAAP measure, are included below.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements concerning our business and growth strategies, investment, financing and leasing activities and trends in our business, including trends in the market for single-tenant, retail commercial real estate. Words such as “expects,” “anticipates,” “intends,” “plans,” “likely,” “will,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this press release may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. For a further discussion of these and other factors that could impact future results, performance or transactions, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2021 and other reports filed with the SEC from time to time. Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release. New risks and uncertainties may arise over time and it is not possible for us to predict those events or how they may affect us. Many of the risks identified herein and in our periodic reports have been and will continue to be heightened as a result of the ongoing and numerous adverse effects arising from the novel coronavirus (COVID-19). We expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law.

 

NETSTREIT CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(Unaudited)

 

December 31,

 

 

2021

 

 

 

2020

 

Assets

 

 

 

Real estate, at cost:

 

 

 

Land

$

299,935

 

 

$

189,373

 

Buildings and improvements

 

626,457

 

 

 

358,360

 

Total real estate, at cost

 

926,392

 

 

 

547,733

 

Less accumulated depreciation

 

(30,669

)

 

 

(10,111

)

Property under development

 

17,896

 

 

 

 

Real estate held for investment, net

 

913,619

 

 

 

537,622

 

Assets held for sale

 

2,096

 

 

 

14,802

 

Cash, cash equivalents and restricted cash

 

7,603

 

 

 

92,643

 

Lease intangible assets, net

 

124,772

 

 

 

75,024

 

Other assets, net

 

20,351

 

 

 

5,724

 

Total assets

$

1,068,441

 

 

$

725,815

 

Liabilities and equity

 

 

 

Liabilities:

 

 

 

Term loan, net

$

174,330

 

 

$

174,105

 

Revolving credit facility

 

64,000

 

 

 

 

Lease intangible liabilities, net

 

23,316

 

 

 

16,930

 

Liabilities related to assets held for sale

 

 

 

 

399

 

Accounts payable, accrued expenses and other liabilities

 

16,980

 

 

 

6,308

 

Total liabilities

 

278,626

 

 

 

197,742

 

Commitments and contingencies

 

 

 

Equity:

 

 

 

Stockholders’ equity

 

 

 

Common stock, $0.01 par value, 400,000,000 shares authorized; 44,223,050 and 28,203,545 shares issued and outstanding as of December 31, 2021 and 2020, respectively

 

442

 

 

 

282

 

Additional paid-in capital

 

809,724

 

 

 

501,045

 

Distributions in excess of retained earnings

 

(35,119

)

 

 

(7,464

)

Accumulated other comprehensive income

 

4,123

 

 

 

235

 

Total stockholders’ equity

 

779,170

 

 

 

494,098

 

Noncontrolling interests

 

10,645

 

 

 

33,975

 

Total equity

 

789,815

 

 

 

528,073

 

Total liabilities and equity

$

1,068,441

 

 

$

725,815

 

 

NETSTREIT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except share and per share data)
(Unaudited)

 

 

Successor

 

Predecessor

 

Year Ended December 31,

 

For the Period from
December 23
to December 31,

 

For the Period from
January 1 to
December 22,

 

 

2021

 

 

 

2020

 

 

 

 

2019

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Rental revenue (including reimbursable)

$

59,140

 

 

$

33,727

 

 

$

513

 

 

$

19,805

 

Operating expenses

 

 

 

 

 

 

 

Property

 

5,803

 

 

 

2,569

 

 

 

52

 

 

 

1,113

 

General and administrative

 

14,810

 

 

 

11,340

 

 

 

49

 

 

 

3,555

 

Depreciation and amortization

 

30,807

 

 

 

15,459

 

 

 

195

 

 

 

10,422

 

Provisions for impairment

 

3,539

 

 

 

2,690

 

 

 

 

 

 

7,186

 

Transaction costs

 

700

 

 

 

3,169

 

 

 

2

 

 

 

535

 

Total operating expenses

 

55,659

 

 

 

35,227

 

 

 

298

 

 

 

22,811

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense, net

 

(3,700

)

 

 

(4,741

)

 

 

(173

)

 

 

(10,712

)

Gain on sales of real estate, net

 

2,997

 

 

 

6,213

 

 

 

 

 

 

5,646

 

Gain on forfeited earnest money deposit

 

 

 

 

250

 

 

 

 

 

 

 

Other income (expense), net

 

431

 

 

 

(10

)

 

 

 

 

 

 

Total other income (expense), net

 

(272

)

 

 

1,712

 

 

 

(173

)

 

 

(5,066

)

Net income (loss) before income tax expense

 

3,209

 

 

 

212

 

 

 

42

 

 

 

(8,072

)

Income tax expense

 

(59

)

 

 

 

 

 

 

 

 

 

Net income (loss)

 

3,150

 

 

 

212

 

 

 

42

 

 

 

(8,072

)

Net income (loss) attributable to noncontrolling interests

 

104

 

 

 

(518

)

 

 

14

 

 

 

 

Preferred stock dividends

 

 

 

 

42

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders

$

3,046

 

 

$

688

 

 

$

28

 

 

$

(8,072

)

Amounts available to common stockholders per common share:

 

 

 

 

 

 

 

Basic

$

0.08

 

 

$

0.04

 

 

$

 

 

 

N/A

 

Diluted

$

0.08

 

 

$

0.01

 

 

$

 

 

 

N/A

 

Weighted average common shares:

 

 

 

 

 

 

 

Basic

 

36,999,459

 

 

 

17,322,182

 

 

 

8,860,760

 

 

 

N/A

 

Diluted

 

38,672,565

 

 

 

21,157,996

 

 

 

8,860,760

 

 

 

N/A

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

Net income (loss)

$

3,150

 

 

$

212

 

 

$

42

 

 

$

(8,072

)

Change in value on derivatives, net

 

4,057

 

 

 

253

 

 

 

 

 

 

55

 

Total comprehensive income (loss)

$

7,207

 

 

$

465

 

 

$

42

 

 

$

(8,017

)

Comprehensive income (loss) attributable to noncontrolling interests

 

273

 

 

 

(500

)

 

 

14

 

 

 

 

Comprehensive income (loss) attributable to common stockholders

$

6,934

 

 

$

965

 

 

$

28

 

 

$

(8,017

)

 

NETSTREIT CORP. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO FFO, CORE FFO AND ADJUSTED FFO
(in thousands, except share and per share data)
(Unaudited)

 

Successor

 

Year Ended December 31,

 

 

2021

 

 

 

2020

 

Net income

$

3,150

 

 

$

212

 

Depreciation and amortization of real estate

 

30,491

 

 

 

15,154

 

Provisions for impairment

 

3,539

 

 

 

2,690

 

Gain on sales of real estate, net

 

(2,997

)

 

 

(6,213

)

FFO

 

34,183

 

 

 

11,843

 

Adjustments:

 

 

 

Gain on forfeited earnest money deposit

 

 

 

 

(250

)

144A and IPO transaction costs (1)

 

 

 

 

2,170

 

Gain on insurance proceeds

 

(438

)

 

 

 

Core FFO

 

33,745

 

 

 

13,763

 

Adjustments:

 

 

 

Straight-line rental revenue

 

(1,082

)

 

 

(1,688

)

Amortization of deferred financing costs

 

627

 

 

 

621

 

Amortization of above/below market lease intangibles

 

(808

)

 

 

(504

)

Amortization of lease incentives

 

122

 

 

 

 

Capitalized interest expense

 

(78

)

 

 

 

Non-cash compensation expense

 

3,703

 

 

 

2,452

 

AFFO

$

36,229

 

 

$

14,644

 

 

 

 

 

Weighted average common shares outstanding, basic

 

36,999,459

 

 

 

17,322,182

 

Weighted average operating partnership units outstanding

 

1,377,335

 

 

 

3,807,022

 

Weighted average dilutive securities

 

295,771

 

 

 

28,792

 

Weighted average common shares outstanding, diluted

 

38,672,565

 

 

 

21,157,996

 

 

 

 

 

FFO per common share, diluted

$

0.88

 

 

$

0.56

 

Core FFO per common share, diluted

$

0.87

 

 

$

0.65

 

AFFO per common share, diluted

$

0.94

 

 

$

0.69

 

 

NETSTREIT CORP. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO EBITDA, EBITDAre AND ADJUSTED EBITDAre
(in thousands, except share and per share data)
(Unaudited)

 

Successor

 

Year Ended December 31,

 

 

2021

 

 

 

2020

 

Net income

$

3,150

 

 

$

212

 

Depreciation and amortization of real estate

 

30,491

 

 

 

15,154

 

Amortization of above/below market lease intangibles

 

(808

)

 

 

(504

)

Amortization of lease incentives

 

122

 

 

 

 

Non-real estate depreciation and amortization

 

316

 

 

 

305

 

Interest expense, net

 

3,700

 

 

 

4,741

 

Income tax expense

 

59

 

 

 

 

EBITDA

 

37,030

 

 

 

19,908

 

Adjustments:

 

 

 

Provisions for impairment

 

3,539

 

 

 

2,690

 

Gain on sales of real estate, net

 

(2,997

)

 

 

(6,213

)

EBITDAre

 

37,572

 

 

 

16,385

 

Adjustments:

 

 

 

Straight-line rental revenue

 

(1,082

)

 

 

(1,688

)

Gain on forfeited earnest money deposit

 

 

 

 

(250

)

144A and IPO transaction costs (1)

 

 

 

 

2,170

 

Gain on insurance proceeds

 

(438

)

 

 

 

Non-cash compensation expense

 

3,703

 

 

 

2,452

 

Adjusted EBITDAre

$

39,755

 

 

$

19,069

 

 

NETSTREIT CORP. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO NOI AND CASH NOI
(in thousands, except share and per share data)
(Unaudited)

 

Successor

 

Year Ended December 31,

 

 

2021

 

 

 

2020

 

Net income

$

3,150

 

 

$

212

 

General and administrative

 

14,810

 

 

 

11,340

 

Depreciation and amortization

 

30,807

 

 

 

15,459

 

Provisions for impairment

 

3,539

 

 

 

2,690

 

Transaction costs

 

700

 

 

 

3,169

 

Interest expense, net

 

3,700

 

 

 

4,741

 

Gain on sales of real estate, net

 

(2,997

)

 

 

(6,213

)

Gain on forfeited earnest money deposit

 

 

 

 

(250

)

Income tax expense

 

59

 

 

 

 

Other income (expense), net

 

(431

)

 

 

10

 

NOI

 

53,337

 

 

 

31,158

 

Straight-line rental revenue

 

(1,082

)

 

 

(1,688

)

Amortization of above/below market lease intangibles

 

(808

)

 

 

(504

)

Amortization of lease incentives

 

122

 

 

 

 

Cash NOI

$

51,569

 

 

$

28,966

 

 

NON-GAAP FINANCIAL MEASURES

FFO, Core FFO and AFFO

FFO is a non-GAAP financial measure defined by NAREIT as net income (computed in accordance with GAAP), excluding real estate-related expenses including, but not limited to, gains (losses) from sales, impairment adjustments, and depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our calculation of FFO is consistent with FFO as defined by NAREIT.

Core FFO is a non-GAAP financial measure defined as FFO adjusted for gains from forfeited earnest money deposits, non-recurring public company costs, and gains on insurance proceeds. We believe the presentation of Core FFO provides investors with a metric to assist in their evaluation of our operating performance across multiple periods because it removes the effect of unusual and non-recurring items that are not expected to impact our operating performance on an ongoing basis.

AFFO is a non-GAAP financial measure defined as Core FFO adjusted for GAAP net income related to non-cash revenues and expenses, such as straight-line rent, amortization of above- and below-market lease-related intangibles, amortization of lease incentives, capitalized interest expense, non-cash compensation expense, and amortization of deferred financing costs.

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. In fact, real estate values historically have risen or fallen with market conditions. FFO is intended to be a standard supplemental measure of operating performance that excludes historical cost depreciation and valuation adjustments from net income. We consider FFO to be useful in evaluating potential property acquisitions and measuring operating performance. We further consider Core FFO and AFFO to be useful in determining funds available for payment of distributions. FFO, Core FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. You should not consider FFO, Core FFO and AFFO to be alternatives to net income as a reliable measure of our operating performance; nor should you consider FFO, Core FFO and AFFO to be alternatives to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.

FFO, Core FFO and AFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization, capital improvements and distributions to stockholders. FFO, Core FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP. Further, FFO, Core FFO and AFFO as disclosed by other REITs might not be comparable to our calculations of FFO, Core FFO and AFFO.

EBITDA, EBITDAre and Adjusted EBITDAre

We compute EBITDA as earnings before interest, income taxes and depreciation and amortization. In 2017, NAREIT issued a white paper recommending that companies that report EBITDA also report EBITDAre. We compute EBITDAre in accordance with the definition adopted by NAREIT. NAREIT defines EBITDAre as EBITDA (as defined above) excluding gains (or losses) from the sales of depreciable property and real estate impairment losses.

Adjusted EBITDAre is a non-GAAP financial measure defined as EBITDAre further adjusted to exclude straight-line rent, gains from forfeited earnest money deposits, non-recurring public company costs, representing consulting fees that we incurred in preparing to become a public company, gains on insurance proceeds, and non-cash compensation expense.

We present EBITDA, EBITDAre and Adjusted EBITDAre as they are measures commonly used in our industry. We believe that these measures are useful to investors and analysts because they provide supplemental information concerning our operating performance, exclusive of certain non-cash items and other costs. We use EBITDA, EBITDAre and Adjusted EBITDAre as measures of our operating performance and not as measures of liquidity.

EBITDA, EBITDAre and Adjusted EBITDAre do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, our computation of EBITDA, EBITDAre and Adjusted EBITDAre may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs.

NOI and Cash NOI

NOI and Cash NOI are non-GAAP financial measures which we use to assess our operating results. We compute NOI as net income (loss) (computed in accordance with GAAP), excluding general and administrative expenses, interest expense (or income), income tax expense, depreciation and amortization, gains (or losses) on sales of depreciable property, gain from forfeited earnest money deposits, real estate impairment losses, and other income (or expense). We further adjust NOI for non-cash revenue components of straight-line rent and amortization of lease intangibles and lease incentives to derive Cash NOI. We believe NOI and Cash NOI provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis.

NOI and Cash NOI are not measurements of financial performance under GAAP, and our NOI and Cash NOI may not be comparable to similarly titled measures of other companies. You should not consider our NOI and Cash NOI as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

(1) These expenses represent a subset of transaction costs as presented on the consolidated statements of operations and comprehensive income (loss).

Investor Relations
ir@netstreit.com
972-597-4825

Source: NETSTREIT

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