EPRT - Earnings call transcript Q4 2021 | Essential Properties Realty Trust, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to Essential Properties Realty Trust Fourth Quarter 2021 Earnings Conference Call. [Operator Instructions]. This conference is being recorded, and a replay of the call will be available 2 hours after the completion of the call for the next 2 weeks. The dial-in details for the replay can be found in today's press release.

Additionally, there will be an audio webcast available on Essential Properties' website at www.essentialproperties.com, an archive of which will be available for 90 days. pleasure Vice the Capital President Essential my Dan over Markets now Properties. Senior Donlan, and is to call turn to at It Head of Dan. you, Thank

You may go ahead.

Daniel Donlan

joining good XXXX Quarter Call. We operator, Properties' Conference morning, you, for Essential and appreciate Thank you us today Fourth everyone.

our and me with Mark CFO. Mavoides, Patten, discuss CEO; Gregg results are our our Here and operating Seibert, to Pete today President our COO;

differ time certain The the from statements under made. changes statements press During actual materially that not be and forward-looking and greater that this in will reflect those please conference differ Factors statements expectations laws. call, were we statements that, to could earnings considered yesterday's matters ahead. are these may SEC in release. federal with time results the make risks securities the With discussed company's filings disclosed we Pete, the future results forward-looking in may company's from to after forward-looking revisions and from to detail may to cause actual significantly go release in statements,

Peter Mavoides

And $XXX Dan. in fourth us out in the for quarter records Essential on who $XXX both closed for is note Properties. you for investments Properties. your you, Thank interest to today Essential strong a invested million XXXX million We thank of with everyone joining and the full year,

growth XX% a COVID-related adjustments, midpoint closed and projected into year-to-date, has in the XXXX, XXXX momentum growth us onetime fourth this year-over-year continued guidance XXXX XX% per our $X.XX. new the in to year-over-year of and led the a follows with which, finish, to coupled a using same AFFO year $XXX our investments increase positive fees to Our $X.XX has Using over of quarter which translates with million to of range methodology. share earnings strong excluding

continued current pipeline the nature we of to the our continue the to remains is our the our strengthening differentiated quarter, in of capital to footprint economic in on X% increased and market for their expand has XXXX, properties deployment which strong our robust investment our middle the yields last that mind, of guidance diverse moderate evidenced backdrop. predicated marketplace to cash us As strategies leased tenants our X.X% which operators in desire due on, expect and discussed and relationships, while focus averaging With amidst competition, trajectory our from by unrated and the to is vast in XXXX. XXXX initial a insulated

more in at quarter Looking the detail.

term average weighted of yield million weighted had of and X.X%. bumps X.X%, $XXX investments average of years cash weighted a annual Our lease of average XX.X rent

were our these on though, importantly investments lease were and XX% derived XX% More direct form. prior relationships of sale-leasebacks from

tenants industries. leased XXX Turning X,XXX to with ended operating investments in the the properties quarter in to XX distinct We portfolio.

average lease at Our years XXXX. term through weighted with X.X% XX just stood expiring of ABR

Our coverage was improved average level quarter's unit coverage versus of weighted last X.Xx. X.Xx, which

and solid the early country. certain focus shutdown quarter, While well capacity on remain in negatively areas credit which theaters industries level for these state spring our and experienced skewed statistics improvement childhood XXXX of and credit statistics, coverage, unit-level this which of traditional ratings like into sequential education, faced implied restrictions

us for statistics to with Given another these to financials expect that we trailing our months quarter levels of report quarters. most couple XX lag, not of tenants to X do return a pre-COVID

our prudently year, you COO, to AFFO through in portfolio Gregg? will the investors the believe combined investment of to greater take to who Gregg Seibert, and compelling like offer portfolio total our commitment risks, our balance detail. dividend growth the to our turn continue a opportunity. managing well-covered return balance to the that, activity over I'd our With call we and sheet yield and potential, Looking with out strong

Gregg Seibert

Pete. Thanks,

dining. our our was contained investments close different reporting investments granular properties rental during mind, weighted our years. Pete were at and yield average we rent XX% investment weighted equipment of industry washes medical believe relationships with average financial of lease dental were this childhood lease and separate continue to early The direct and XX% quarterly weighted a advantage grocery, we and XX.X% numerous auto of of small-sized existing investment sales, With in was fourth attractive Consistent early $XXX These X.X%. through X.Xx, quarter. coming returns transactions XX.X%, ongoing average level The originated lease million. to and ability average with per at provisions. service, education in produces XX from to our weighted As XX% restaurants with casual quarter that ABR, and term strategy, investments XX.X are master perspective, education requirements is XX.X% quarter, unit form cash process sale-leasebacks our was made car largest The coverage X.X%. through invested at subject escalation risk-adjusted which our that at XX%. annual was our strong From remains leasebacks, unit industry sale quick-service closely followed million average each with indicated, by industries at property a the competitive XX of childhood an of the activity $X that

for X.X% fully end, and for just we Essential perspective, spring. year tenant in the and profitable as ABR they note, casual both dining remain economy locations represented tenant no view for to likely accounts X Of more ABR. generate quarter of industries of at X higher of in are expect future. concentration top continue to proven Properties, entertainment our industries, Tier to selectively concentration profits and than our which this to the XX business as highest these continue therefore, our operators industries From a XX.X% and revenues reopens this invest segments foreseeable We the

significantly large By and set credits on middle strategies in tenant risk a we mitigation rated is companies unrated on greater and investment-grade market As Essential and publicly differentiator opportunity tool focusing past, concentrated the credits. for businesses, noted diversity important traded an invest in and Properties.

real In that a to we us in at addition, are basis estate market. acquire the closer attractive to this rents enables procure more

of dispositions, properties excluding million achieved tenant terms we costs properties X% we When average transaction subject cash quarter In buyback X and options, weighted this in on to dispositions. a for proceeds. net sold $X those yield sold

within in sheet. who industry, mentioned will and through properties we call is manage to turn the owning and investment important With take the to Mark us over our our liquid you unit-level of the portfolio. As past, discipline Patten, it to that, proactively aspect balance I'd CFO, allows as financials like tenants risk the an

Mark Patten

morning, and good everyone. Greg, Thanks,

quarter million us, for income out and closed the record the As year. fourth a in was over $XX a was Pete million quarter record just full for quarter noted, $XX the which Net year.

share. nominal $X.XX full the for diluted FFO per $XX fully of $X.XX year XX%, totaled an $XXX quarter XX% per or for the Our share respectively. and or fully increase million diluted million That's and

Our nominal AFFO $XX XX% basis which totaled quarter. $XX was per XXXX. over a versus QX up the $X.XX, diluted million fully share That's million on an for XXXX, increase of

versus million AFFO diluted totaled $X.XX. year, an on was up $XX share a over per nominal which of the XXXX, That's XXXX. for basis XX% full increase fully $XXX Our million

fourth of the portfolio. Some and fourth fees of of in payoff results for with quarter following: million approximately full we the connection $XX quarter were year reported the prepayment approximately the million notable our elements included XXXX our operating in for paid of Other the include loan $X of principal early the revenue of

annualized EBITDAre, You this income exclude should adjusted from not calculation disclosure. our be fee expect which item. a of in revenue supplemental presented recurring to this our We did is

$X.XX million, year. Our reimbursable this property operating This totaled our quarter expenses highest fourth to largely expenses. due in was the quarter increased

Our of of operating total it's reflective was in QX which of the the G&A in change to of all reversal in reimbursable challenging versus QX was that XXXX. the XXXX expenses, The been quarter, year majority XXXX, expense year. record was contrast $XXX,XXX in due in net our QX bonus XXXX lowest accrual for approximately our the our XXXX with year a was

total basis year, you generated in significant service X.X% our year-over-year noncash up, importantly, the were of efficiencies basically total stock QX we some was X.X% we relationships. our down flat of but versus continues increasing for favorably. our notably, to cash percentage a G&A rationalize XXXX as For scale, full compensation which QX while trend our on Most G&A, for to just against and XXXX was G&A revenue should expect third-party

an perspective, million $XX and all generating million of efficient program of provide quarter gross to to I'll closing balance The our highlight to a investment at income-producing the From Turning an equity assets billion underwriting ATM during close $XXX strong during capital year-end. XXXX. $X.X continued gross fourth elements sheet. are our of following: source XXXX proceeds proceeds to grew gross our teams, our With the in by

reduced million, things, Importantly, which, last ratings applicable the under $XXX other amended you'll in of opt future. the points last credit by accordion facility the note increased in the should our that million, increased the levels leverage across that the we night credit revolver all the XX grid into basis grid release week, to reduced capacity our and to grid we $XXX among margin

we We also complete basis our of of mention the extended loan repricing coming XX debt cost will X-year a XXXX. the expect also The our by term extend I'll repricing should maturity the revolver that early X-year term into to into maturity in that loan the points. to weeks, XXXX. benefit this

with our at to As net noted, X.Xx balance equaling Pete strong annualized debt year-end. sheet remains EBITDAre our adjusted

improved with total of Our at year-end, liquidity which our $XXX $XXX the million by upsizing was million revolver. obviously

and pipeline. sheet balance liquidity of our highly supportive position remains investment Our

outlook loan tenants revenue of the Pete. related basis quarter XX% strong and adjustment our performance range into guidance important note to noted, $X.XX $X.XX, on the the to portfolio particularly call back brought fee continuing that, Lastly, XXXX AFFO to implies accrual to us the turn at With QX reiterate provided of Pete a as fourth Pete's our the I'll we back our the to current excluding pipeline, first the in increase and with year-over-year prepayment the now accounting. XXXX investment our I'll over XXXX, which, a that midpoint share quarter per during growth and

Peter Mavoides

growth. We're environment opportunities, Mark. well-positioned encouraged the have accretive our investment our which earnings Thanks, allowed the and balance capitalize operating to on sheet driver predominant us of are that

as differentiated attractive grow With More the believe incredibly importantly, continue returns net we that, the call and an into strategy has future. investment questions. disciplined lease open generate for operator, risk-adjusted that to portfolio should our resilient we please created

Operator

[Operator Instructions].

the Nate Berenberg. with first Crossett question Our from is of line

Nathan Crossett

moderate. wanted Just of on your kind maybe word thoughts get the to

for guidance what think had you of a can I I What's used question kind in give competition? more quantify you've help just then now. rates? just causing And just times a what's kind means? us of Maybe it of on color underwritten that a it? cap your pricing. can Is us it couple on Maybe you little

Peter Mavoides

moderate Generally, Yes. fourth clearly, listen, that Sure. using heightened that it. we Nate, think under we've clear level. a as to see in level say point really our word to I has connection quarter tried $XXX that trailing perspective. expect to just investment from And to data we've a our X been a indicator an in would the point, to what And definition a of quarter moderate roughly print. heightened you people average good that, good million. remains

discussed hard why our is to it's we got full, heightened, by XXXX. as see transacting off and more great about we've last just market last from remain to call, we and we're heightened normalized were out and we what and can quarter, there. the level optimistic has deals transactional in moderate level so pretty we're that that and seeing a pipeline first All a the that great said, on back divorce in start you half at And the of expect we that year, the

precise if a of than on counterparties able the As leasebacks And really band XX point a we focusing range transact sale get are provider, us say it we're to and pertains I assumptions. you hold our year cap to to range. rates, avoid basis purely out prior and as it's over band valuing transacted competing that on in we've reliable relationships capital by pretty direct narrow that. cap we and would there's a any And rates. look guidance, rate in plus, hard in cap And more the last where

Nathan Crossett

one that from be And guess, taking should just loan the of Maybe I the in we, Is away of have? we should helpful. just there the rest any the about that That's repayments on portfolio quarter. trend kind loan that? thinking be Okay. how more you

Peter Mavoides

that overall was relative of Listen, size sizable portfolio. our loan Yes. to the

Our chunky. current $XXX under number loan million, material. not clearly terribly nothing represents is portfolio $XXX of loans, so That a million

have don't we to prepayment at we fourth with through that and the at for expect built notice that have I us period But once. loans prepare them. -- those of quarter, Some into options manage to think And ample come all as that. back

certainly, with So And of manage back. it's come the not it business kind have those material. when ability our to we loans to deal

Operator

question Our [indiscernible] with of from comes the next of Bank America. line

Unidentified Analyst

tenants I was the little color a more to wondering acquired and and subsequent if you just around provide the the quarter? could speak that to bit properties more

Peter Mavoides

by say our Yes, -- activity, notable there's design, it Lizzy, I tends about very would investment and be nothing there's to ratable. terribly

and prior We that have at looks an it from prior sourcing a we our done across assume deals where lot think that you activity. awful with about people And all industries, relationships, are can coming relationships. activities like you portfolio we're have transacting investment and XX%-plus the level deals doing our of we've our if

going within on is distinguishable granular, industries, be going predominantly from overall with form core incremental lease from our portfolio. to very XX our escalations. it's nothing asset And and there's complexion to from So our going be investments long-dated leases sale-leasebacks be really it's to an our

Unidentified Analyst

Okay. historically cap this like going specific looks rate at that you talk is weighted in result time the a Great. that. this any acquisitions, acquired down of expect cash deals trend if looking a or just cap how bringing Can on forward? Appreciate the below rate average just quarter. it you this to X% more to your you then first was And

Peter Mavoides

Yes.

a range, in Really, XX in quarters, I and range swings we've I to lot it's over tight last overall pretty earlier, a year, relative said a the the a rates point said several little particularly As last of of on basis as capital. think, there's market. the the competition interest cost

best are. not feel hold about to cap to X% the about we hold confident when to X%, cap do really and our by trying rate really good the ability rates think relationships X%, you material returns can. within that where is material you existing but focusing we risk-adjusted it's and business that rates in it's we're of to on hurdle, And going when certainly, Certainly, cap into repeat And psychological we continue forward. not our a that business. stay And get GAAP translate We so the ability with range. to

Operator

Our from line next Katy with of question McConnell comes the Citi.

Mary McConnell

pace I about a bit just more. wanted acquisition little talk to the

up expect ended prepandemic you'd the moderate Given to back that. last quarter, to but acquisitions levels, greatly exceeding

you led wondering moderating about just here? any of to much a we in could how then detail First, of provide should more quarter? normal frame you the a share deals And on from pace stronger what if aside can help your quarterly new think comment, anything from else terms to

Peter Mavoides

more is have And current levels. the record I Listen, M&A at I much really a said, discussion markets that record forward the pipeline, And guidance. board much think think been look -- in indicative is today. Transaction like a was we're doing like robust. around activity Yes. across it's at I that levels. moderation a certainly with was and the outlook coupled we embedded strong of

creates plan growing it Our us basing And to rapidly, for are very everything rosy. remaining great a a tenants on capital. that forward opportunity not we're deploy business and

now, rates, so I I increasing think current was which discussing looking And the out And the normalized a couple in volatility the and listen, from quarters context environment. interest that it that the right I quarters markets, be expecting we the a think in were of several with call. more really think will

right good And we date, over about activity pipeline. a our the which around good I our clearly, $XXX X-quarter $XXX as about continue trailing think As indicator, as to current point said little quarter we to million of to million. subsequent average feel a you earlier, is

Mary McConnell

company's then are and Okay. more of the specific just results? larger per the to what pipelines providing your that with Street now latest guidance some curious sort thoughts around a And more driver of significant acquisition much share much become

Peter Mavoides

our underserved, becoming share largely and can results our relationships Yes. growth on market bring where than focusing our to has volume. and XX, our shave purely basis grow way on to And opportunities public. reliant in that's per we're external in as sale-leasebacks us Listen, And focused such, different invest relationship. the to driver massive increase a existing existing We very since with of continue our disciplined points XX you a XX, new source to competing auction much and is ability relationships. your that been

relationships So we their transact and deploy reluctant trajectory guidance way given control new our don't and because we've is the finding to we long a relationships capital, been provide with investment to growth process.

we more pretty we're and backwards, a number. of disclosure and be forced that's to good going purely give looking expect to than be think so reluctant forward, what And hit and that transact I to indicator good specific a to

Michael Bilerman

Pete, difficulty speaking. think I Well, Michael the though, Bilerman

with You're now billion of you're on public, of acquisitions. $X year billion being north of X $X

So size, if accretion know becoming not it you're includes really big numbers. to driving the you because don't doesn't willing contribution from a you're what's represents, then outline really quickly that as help that, the your guidance deals. But

without the Why built company. not give and guidance. no numbers, Street yields, repayments, like So But going trying into now you've accretion, your in the and you're guidance $X.XX. being what wouldn't provide on X us not the not to you embarking details the is do get this if reverse at acquisitions loan telling one-timers number embedding accretion year doesn't target. you're rather in level Or you're the to embedded number, your I'd you the some you? say, a you FFO outlining guidance, And including how our we're there's guidance the timing, of public of but there of almost just how really get do into acquisition provide to but much assumptions of the are impact the that amount, the because

Peter Mavoides

to to we want forced a thesis We've... meet wouldn't explain to to in Street. don't I a manner with inconsistent because our investment that communicated why Well, number transact be The purely we've we

Michael Bilerman

the include the You accretion in right? transactions the volume accretion that don't number, you're yield. is or from Street the Then transaction what can't not telling include The

You can't have it both ways.

accretion, If and then the how It's include The you there. get FFO even same. one and to the can not tell going Street you're

Peter Mavoides

we expect good us. think expect but to without about once very a Street what Listen, guidance. I very clearly we relates communicate And to providing it And to investment missed what The has Street of The public. being since specific understanding haven't as from

And Certainly the way us. what understanding this is down on. number when to do clarity And able of the of was the operate so was and rarely and of we which to don't what's do, at we or going communicated than shut to managing coming the that there was We that think The We to investments relative XQ growth that disappointing a our were more and expect business. very of And that. good number. given we have like XXXX communicated we've weren't visibility performing I XX days to in much a we what that pipeline. thing right to Street control

And of way guidance. a this to respect your we there's lot to so that. provide and I and operate. ways the predictability we're And think going approach opinion We clarity excellent on is

Michael Bilerman

guidance -- in could additional is is Your range, just you're But -- how clarity that earlier. including what and haven't driving by So accretion, telling amount I buying including right? Street but The your right? not how be accretion that accretion, just by heard accretion

in accretion to there it don't then and your you're guidance to it you their not you're sort -- you, what there's it's be in from run may come get let for at it just and or going this for but the put Street all you from numbers, quarterly if include So how tell community, The pieces. with investment we them. to number. people good of good hear missing intending But up I have are And think own

floor. So leave the I'll

Peter Mavoides

thank you Florida. Michael, Yes, forward to seeing you. in Look

Operator

Bin with line comes Our Truist. Kim Ki from next question the of

Ki Bin Kim

months and of before. lot today rates, priced the market to rates you several a pricing happening the going what's are that the Just cap environment, transaction back times, given with see

rise a how long your that best rate, little what your assets? calculus bit real-time your pricing? work from what's like about for sense of mindset higher if So And into rates to does pay

Peter Mavoides

correlation tends Ki and rates cost Listen, cap lagging Bin, and correlation of a interest that between rates to be rates there's a Yes. overall and on capital, basis. certainly cap

but trails down And rise. we so they our cap rates, -- I declining. normalize. to ability and when we keep when the to movement competitive time, But interest a think up And the underlying way in while. benefit to hard and it try in will static become correlation move on market Conversely, But a rates, over takes rates it environment. adjust hard it's rates accustomed that are the sellers to

Ki Bin Kim

deals, any But all deals have seen that the just not changes and -- all participants, see spot terms you your haven't pricing? kind but in and of you of in you the trends seen

Peter Mavoides

Listen, our in yet, there's Ki we on deals, we would crosswinds to that, there's cap new that expect the down. entrants, driving rates competition it. broader anticipate but and that's market new focus seen Bin, haven't I would

I to overall, against in expect balance increase rising would the So out rates. which stay cap would flat, competition rates the

Ki Bin Kim

last And Okay. question for just me.

company, lease months a that any common your around size been spreads, terms rate drove the -- XX% the of it's at like the lower that? what recovery And pool XX but color recognize was kind around in that I any obvious for of to denominator recovery of you relative more there's of leases. if small trailing Looking rate?

Peter Mavoides

see there. our the only sample that in Yes. Generally, given Listen, activity going set. and through are that is through take of lease those reason, through, through investments, and distress, bankruptcy it assets termination back are small or or assets for releasing that's what distressed vintage the a we are you assets a

so X,XXX-plus to distressed recover think and at about that our assets think ability you positive. pretty our level. back high that of a in the XX is kind XX% When rents were took And I generally, we

Operator

Sachs. Goldman next Burrows Our comes question Caitlin from of with the line

Caitlin Burrows

I coverage Maybe coverage can vary that up rent side, the is tenant just but mentioned with credit again, industries. you've rent on know your

and just metrics you're thinking So through that tenant's right your which out? figure be focused you on wondering of now quality how should could credit to we if go

Peter Mavoides

our Overall, And assume credit. our like I rating to underlying supported market the covering fully sizing is supplement, the and by adequately you're the really, fact a we to disclosure start essentially strong as that intersects with risk. unit is it property, how vacant third unit what real really the where of a very everyone it rent the referring we really trying our credit is then which subperforming corporate shows and Page Yes. our of is implied not XX understand level X And on intersection doing coverage take and is lens credit distribution that's at its not of really tenants. we only to and estate really where is that look the always basis unit with to and I relative portfolio have well. current leased paying that of

the call. those disclosed on really I basis, a are so lagging And as on numbers

mitigate in We time. to coverages expect buckets those those over

So well in we our really portfolio the the in good is doing feel credit are great risk and overall portfolio. shape, tenants about

Caitlin Burrows

actual assumes you go what 'XX compares And just Great. 'XX a credit events how in there. that in to through historically? follow-up and impact Could yes, guidance or maybe just or for the

Peter Mavoides

make as where we then specific a look to look generic and sit down portfolio we're our top tenants the issues. guidance, assets on reserved. in at and as individual and of to specific And it model into at in We assumption When credit also, credit bake we we potential assumption and would make what risks. Yes. we another known that, loss qualify credit historical our appropriately sure recovery to rate see try do relates the on we we layer

Caitlin Burrows

of pieces much? you so any Could quantify or not those

Peter Mavoides

-- much. basis It's asset XX listen, Not per the historically, XX to about a has credit so loss class point annum.

more back asset I look class, and think that. the we're that's and conservative than certainly, you If

Caitlin Burrows

it. Got

then It thinking like And is one active follow-on you year about maybe How issuance mentioned, ATM the guys you've a pretty larger you Like are your doing ATM. with looks leverage this deal? Okay. on equity now versus X.Xx. at been issuance last side.

Mark Patten

like us to very think of it. future. we've done a do the meet pretty I We mean that's oftentimes, how capital It's the I efficient the in see for kind what you'll it as been a what execution We've is probably past. our in measured we've follow-on ATM. we'll used way about do needs, us. and approach But the

Operator

line the comes Massocca Our of next John question Ladenburg with Thalmann. from

John Massocca

question quarter the What acquisition cap the rate of investments $XXX activity on closed? or the sort kind A was the subsequent million detailed to of of end. on rough specific a you

Peter Mavoides

the I would consistent say -- prior cap rate is quarters. with it's generally rough

John Massocca

Okay.

significantly basically, what XQ? did So in divergent nothing you from

Peter Mavoides

No.

John Massocca

I overall then couple car particularly kind opportunity so hearing kind maybe And car larger We've assets, perspective have on mean of I your went down, pricing mix list. top picture, for a around of in you tight wash some especially the add that to been industry. some bigger noticed of from new a tenants of wash carwash of to entering exposure those stuff tenant What the some are the relatively from kind perspective. portfolio operators given pricing investments? you seeing a probably

color helpful. any would be there Just

Peter Mavoides

in current -- the both that's perspective. estate market it's of business car washes a Yes. capital from And is and astounding. Listen, the real chasing amount a

becoming activity of increasing That the of but incremental there's exposure the assets that appreciation decrease space. an space it's provider been of an trusted space investment to where in space the the flows. a activities, meets from in is transaction gap our good have said, in where I and lack a the class partner asset but think the the assets. the our relationships can we're sell sellers buy a you to the and willing parameters, for We've are we to not versus in and find capital durability underwriting And carwash assume willing increasing to cash struggle. we continue for

John Massocca

versus -- kind I results, of we kind typical XQ probably guidance volume obviously, factors we XQ the of to -- the have you're compare into terms else your either kind of kind the go-forward other be did Okay. that versus understand to anything basis. And in acquisition year in may of might of won't guidance aware then income going there not this guidance. guidance or yield, a activity, of should markets capital Outside prepayment of year translate in is XXXX number be that you out be onetime what of next additive on that

Peter Mavoides

I No. are I within range. the buy really certainly think big noise we we And rest listen, drivers how and the capitalize mean, Yes. is of those I the what it. guidance think

there So of. should aware there's unusual be nothing in that you

Operator

of Omotayo next comes Okusanya Crédit line Our from question the with Suisse.

Tayo Okusanya

schools. Yes. early Quick question the childhood around

us outlook could of mandates, general both you of kind of and mandates, give of with that that of demand-wise sense kind and mask curious business, kind you're health on going industry? and the teachers for how that of given a children vaccine what if to everything Just the seeing

Peter Mavoides

Yes. those to a we early do And is Those And if considering a get you well, expect better doing on it's as clearly, the only better space. guys we are still industry. that. our and only expect some it. all call, as said good There's of that them very And great to things some going of -- think assets, it demand our are assets, our bucket great forward. doing about in But well, guys mitigate lower-covering forward. we recovering it's childhood the going for currently

Tayo Okusanya

then at you any Are of kind kind fixed leases And the think regards or and rent high your of inflation you. on bumps Got resetting to very of do also I from bumps were point those that like numbers? benefit to kind X.X%. earlier in and high CPI-type you leases, mentioned

Peter Mavoides

escalators, competitive That's don't. And we standard we the extent pure that were not Unfortunately, CPI to be it demanding market. the to in wouldn't the market.

that good favorably fixed a that our profitability rent our sales thing and in have than underwriting. initial from into grows these time, and assets faster further our of a higher we as our over tenant's such is profitability, credit level generally, get from perspective, we further which, So bumps and season coverage

outsized inflationary fixed. get it the growth would So expect tends an standard not to not we in industry, rent and environment. is be to CPI in

Operator

comes Our of Sheila with Evercore. next line question from McGrath the

Sheila McGrath

with more Holdings, to Equipment top list. few Whitewater tenant Share. Pete, Edge, some changes you Express and new the there interesting added Drivers XX were entries, Mammoth A

on XX opportunity grow their Just could you there's continue the and those business wondered if to some top about to with of the new tenants? if to comment tenants

Peter Mavoides

Sure. Thanks, Sheila.

we a transacting growing of tenants and the then we our Driver's as X with churn with with Auto. that's GB them as our XX When Edge more the as Water. -- top grow White follow-on tenants, Edge, We've specifically which of why is we been great we're a XX, you lot you see -- tend that, grow example and have doing Driver's and business fall in We you're to business, is XX% bottom is have those others. top into out can do

top think car car to like wash actually with a a and a like bought we'd tenants. been see opportunity been wash our to continuing rapidly growing Mammoth and there's What's job, business we and has White great another so that that's that with been what wash them. they with. car you fortunate And with able had transactions smaller all which XX doing operator operator, chain to we've hope be White interesting do we But to Holdings, has clearly, growth with Water done Water. is

merged for well. they to that top time creditworthy time our happens into XX, and which as tenant So from sizable more a creates us

relationships our bigger be and And our where relationships, get tend the and the bigger so opportunities. they look growth to are we growers the to create

Operator

[Operator Instructions].

the Scotiabank. from Greg line comes McGinniss question next with of Our

Greg McGinniss

quick of couple a here. Just ones

And then question here environment? longer-term back the you kind to lead idea Going near-term higher growth. escalators I understand the on But able circling industry. of for CPIs inflation are atypical to is given inflationary are can to whether escalators. secure the the

Peter Mavoides

Yes. and doing follow-on that fact of what layer commentary -- repeat is business on top the struck. XX% cap already leases the that around we're would of my when with kind where particularly rates business of have coupled been I

on trying the And package so and to, rates. cap as initial extent do when we're very that uncompetitive; outsized doing entire the going pressure deal, escalators, much to us we two, economic one, the tenants get make our look to create and a at we're it's potentially

to don't best deal that an we're for win economic I business. the current while So that we assured, we environment, can the our see push in get to but trying really rest shareholders opportunity the

Greg McGinniss

need quick. raise expect access the Mark, do the a to debt I unsecured debt real Where year? on market All anticipate do company the then, want touch you you and right. unsecured debt And could today this to

Mark Patten

could market. Whether think first, We very the comment inaugural it or we on. access like today. about first is I'd would efficient the it's last guess think not think is I we way certainly now we June, we that our I not something say, a obviously market market. offering I'd debt But unsecured we that executed

So be at market utilize I we'd to the this need include extent to year point. some inclined that we to think

Greg McGinniss

do of of in And terms think rates? you rate, what

Mark Patten

pretty been has know. as you it Look, volatile,

bit that's think a it mid- be high of bag. would So a was probably to to I I Xs. look, But mixed try a if range,

Operator

This like Pete over comments. floor concludes our back I'd the turn to closing for session. question-and-answer to

Peter Mavoides

Well, great that your and really participation outlook a to quarter start a have a today. strong we're Great. excited and great happy year report all about. and to the you for were year we thank a We great

So with the in thank care. to future. look you for your time today, Take engaging forward we and you

Operator

today's concludes teleconference. This

You at participation, may disconnect your a and time. your day. have wonderful lines you for this Thank

Essential Properties Realty Trust (EPRT) 17 Feb 222021 Q4 Earnings call transcript