NETSTREIT Corp
For the period ended Dec 31, 2023. Filed Feb 14, 2024.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2023 · Filed Feb 14, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Item 2. Properties
During the year ended December 31, 2023, we acquired 103 single-tenant retail net lease properties with an aggregate purchase price of $345.1 million. As of December 31, 2023, our diversified portfolio consisted of 598 single-tenant retail net leased properties spanning 45 states, with 85 different tenants represented across 26 retail sectors. As of December 31, 2023, our portfolio consisted of 10.6 million square feet and was 100% occupied.
As of December 31, 2023, our portfolio generated ABR of $131.9 million. As of December 31, 2023, our portfolio consisted of approximately 71% and 14% of investment grade tenants and investment grade profile tenants, respectively, by ABR, and had a WALT of 9.5 years (exclusive of mortgage loans receivable). As of December 31, 2023, none of our tenants represented more than 10.9% of our portfolio by ABR, and our top 10 largest tenants represented in aggregate 53.7% of our ABR. Eight of our top 10 tenants are publicly traded companies, or are subsidiaries of publicly traded companies, that have investment grade credit ratings, in addition to Hobby Lobby and Festival Foods, investment grade profile tenants.
Tenant Diversification
As of December 31, 2023, our 598 properties were operated by 85 different tenants, each representing a distinct brand or concept, with no one tenant representing more than 10.9% of our portfolio by ABR. The following table details information about our tenants as of December 31, 2023 (dollars in thousands):
| Tenant(1) | Number of Properties | Square Feet | ABR | % of ABR | ABR per Square Foot |
|---|---|---|---|---|---|
| Dollar General Corporation | 134 | 1,386,713 | $14,350 | 10.9% | $10.35 |
| CVS Health Corporation | 33 | 403,949 | 10,246 | 7.8% | 25.36 |
| Walgreen Co. | 28 | 413,227 | 9,047 | 6.9% | 21.89 |
| Dollar Tree Stores, Inc. / Family Dollar Stores, Inc. | 59 | 633,308 | 6,540 | 5.0% | 10.33 |
| Home Depot U.S.A, Inc. | 4 | 483,134 | 6,197 | 4.7% | 12.83 |
| Koninklijke Ahold Delhaize N.V. (Food Lion / Stop & Shop) | 7 | 362,103 | 5,808 | 4.4% | 16.04 |
| Hobby Lobby Stores, Inc. | 15 | 825,816 | 5,531 | 4.2% | 6.70 |
| 7-Eleven, Inc. | 20 | 69,968 | 4,611 | 3.5% | 65.90 |
| Speedway, LLC | 49 | 106,627 | 4,288 | 3.3% | 40.21 |
| MDSFEST, Inc. (Festival Foods) | 3 | 268,787 | 3,955 | 3.0% | 14.71 |
| Advance Stores Company, Inc. (Advance Auto Parts) | 40 | 286,706 | 3,900 | 3.0% | 13.60 |
| Wal-Mart Stores, Inc. | 6 | 813,688 | 3,770 | 2.9% | 4.63 |
| Lowe's Companies, Inc. | 4 | 501,771 | 3,578 | 2.7% | 7.13 |
| The Kroger Co. | 7 | 396,089 | 3,407 | 2.6% | 8.60 |
| Best Buy Stores, L.P. | 6 | 285,495 | 3,188 | 2.4% | 11.17 |
| Floor & Décor Outlets of America, Inc. | 2 | 164,770 | 2,615 | 2.0% | 15.87 |
| Ollie's Bargain Outlet, Inc. | 10 | 373,976 | 2,435 | 1.8% | 6.51 |
| Winn-Dixie Stores, Inc. | 4 | 213,830 | 2,356 | 1.8% | 11.02 |
| Dick's Sporting Goods, Inc. | 2 | 133,247 | 2,186 | 1.7% | 16.41 |
| Big Lots Stores, Inc. / PNS Stores, Inc. (Big Lots) | 8 | 302,587 | 2,011 | 1.5% | 6.65 |
| Top 20 Subtotal | 441 | 8,425,791 | 100,019 | 75.9% | 11.87 |
| Other | 157 | 2,198,392 | 31,842 | 24.1% | 14.48 |
| Total / Weighted Average | 598 | 10,624,183 | $131,861 | 100.0% | $12.41 |
(1) Represents tenant or guarantor.
Tenant Industry Diversification
The majority of our portfolio is comprised of properties leased to tenants operating in defensive retail industries, with 87.7% of our ABR as of December 31, 2023 coming from necessity, service-oriented, and/or discount industries. Necessity-based industries are those that are considered essential by consumers and include sectors such as home improvement, auto parts, drug stores, general retail, and grocers. Service-oriented industries consist of retailers that provide services rather than goods, including, for example, convenience stores, quick service and casual dining restaurants, and tire and auto services. Discount retailers offer a low price point and consist of off-price and dollar stores.
The breakdown of our necessity-based retail, service-oriented, discount-focused, and other, non-defensive retail industries by sector and by percentage of ABR as of December 31, 2023 is set forth below (dollars in thousands):
| ABR(1) · Gross Leasable Area | |||||
|---|---|---|---|---|---|
| Tenant Industry and Sector | Number of Leases | Dollars | % of Total | Square Feet | % of Total |
| Necessity-Based Retail | |||||
| Grocery | 31 | $20,261 | 15.4% | 1,589,648 | 15.0% |
| Drug Stores & Pharmacies (2) | 61 | 19,294 | 14.6% | 817,176 | 7.7% |
| Home Improvement | 29 | 15,269 | 11.6% | 1,424,030 | 13.4% |
| Auto Parts | 61 | 5,526 | 4.2% | 481,156 | 4.5% |
| General Retail | 6 | 3,753 | 2.8% | 829,233 | 7.8% |
| Healthcare | 12 | 2,366 | 1.8% | 87,126 | 0.8% |
| Farm Supplies | 7 | 1,615 | 1.2% | 172,446 | 1.6% |
| Banking | 3 | 467 | 0.4% | 9,668 | 0.1% |
| Wholesale Warehouse Club | 1 | 417 | 0.3% | 110,858 | 1.0% |
| Total Necessity-Based Retail | 211 | 68,968 | 52.3% | 5,521,341 | 52.0% |
| Service-Oriented Industry | |||||
| Convenience Stores | 73 | 9,641 | 7.3% | 201,697 | 1.9% |
| Quick Service Restaurants | 22 | 3,170 | 2.4% | 64,215 | 0.6% |
| Automotive Service | 18 | 2,038 | 1.5% | 117,803 | 1.1% |
| Casual Dining | 7 | 1,066 | 0.8% | 39,490 | 0.4% |
| Health and Fitness | 1 | 985 | 0.7% | 33,616 | 0.3% |
| Equipment Rental and Leasing | 5 | 687 | 0.5% | 49,275 | 0.5% |
| Total Service-Oriented Industry | 126 | 17,587 | 13.3% | 506,096 | 4.8% |
| Discount-Focused Industry | |||||
| Dollar Stores | 193 | 20,890 | 15.8% | 2,020,021 | 19.0% |
| Discount Retail | 32 | 8,134 | 6.2% | 1,113,096 | 10.5% |
| Total Discount-Focused Industry | 225 | 29,024 | 22.0% | 3,133,116 | 29.5% |
| Defensive Retail Industries | 562 | 115,579 | 87.7% | 9,160,553 | 86.2% |
| Other, Non-Defensive Industries | |||||
| Arts & Crafts | 14 | 5,475 | 4.2% | 767,816 | 7.2% |
| Sporting Goods | 4 | 3,841 | 2.9% | 251,669 | 2.4% |
| Consumer Electronics | 6 | 3,188 | 2.4% | 285,495 | 2.7% |
| Specialty | 2 | 1,719 | 1.3% | 46,593 | 0.4% |
| Furniture Stores | 2 | 932 | 0.7% | 47,101 | 0.4% |
| Apparel | 4 | 481 | 0.4% | 39,126 | 0.4% |
| Telecommunications | 2 | 314 | 0.2% | 13,635 | 0.1% |
| Gift, Novelty, and Souvenir Shops | 1 | 200 | 0.2% | 8,081 | 0.1% |
| Home Furnishings | 1 | 132 | 0.1% | 4,114 | —% |
| Total Other, Non-Defensive | 36 | 16,282 | 12.3% | 1,463,629 | 13.8% |
| Total, All Industries | 598 | $131,861 | 100.0% | 10,624,183 | 100.0% |
(1)Certain figures in this table may not foot due to rounding.
(2)The Drug Stores & Pharmacies industry has one property that resides in NETSTREIT Management TRS, LLC (“NETSTREIT TRS”), representing approximately 0.3% of ABR.
Geographic Diversification
The following table presents ABR by state for our portfolio as of December 31, 2023 (dollars in thousands):
| ABR · Gross Leasable Area | |||||
|---|---|---|---|---|---|
| Tenant State | Number of Leases | Dollars | % of Total | Square Feet | % of Total |
| Illinois | 26 | $11,391 | 8.6% | 752,941 | 7.1% |
| Texas | 43 | 10,063 | 7.6% | 591,104 | 5.6% |
| Wisconsin | 24 | 9,507 | 7.2% | 920,831 | 8.7% |
| New York | 25 | 8,609 | 6.5% | 728,008 | 6.9% |
| North Carolina | 70 | 7,721 | 5.9% | 531,814 | 5.0% |
| Georgia | 36 | 7,056 | 5.4% | 815,324 | 7.7% |
| Alabama | 45 | 6,698 | 5.1% | 536,199 | 5.0% |
| Ohio | 42 | 6,685 | 5.1% | 690,087 | 6.5% |
| Virginia | 11 | 5,892 | 4.5% | 281,363 | 2.6% |
| Pennsylvania | 28 | 5,697 | 4.3% | 405,328 | 3.8% |
| Indiana | 20 | 5,184 | 3.9% | 407,252 | 3.8% |
| Louisiana | 13 | 4,447 | 3.4% | 347,985 | 3.3% |
| Mississippi | 23 | 4,186 | 3.2% | 516,243 | 4.9% |
| California | 13 | 4,174 | 3.2% | 190,390 | 1.8% |
| Florida | 29 | 3,965 | 3.0% | 280,914 | 2.6% |
| Michigan | 19 | 3,616 | 2.7% | 376,373 | 3.5% |
| Oregon | 3 | 3,343 | 2.5% | 148,422 | 1.4% |
| New Mexico | 8 | 1,658 | 1.3% | 97,292 | 0.9% |
| Iowa | 12 | 1,488 | 1.1% | 239,596 | 2.3% |
| Kentucky | 5 | 1,479 | 1.1% | 167,479 | 1.6% |
| Other(1) | 103 | 19,002 | 14.4% | 1,599,238 | 15.1% |
| Total | 598 | $131,861 | 100.0% | 10,624,183 | 100.0% |
(1) Includes 25 states.
Lease Terms and Expirations
Our leases typically have initial lease terms of approximately 10 years and contain two or more options for the tenant to extend the lease term, most often for additional five-year periods. As of December 31, 2023, the leases in our portfolio had a WALT of 9.5 years (exclusive of mortgage loans receivable). The following table illustrates contractual lease expirations within the Company's portfolio as of December 31, 2023, assuming no exercise of contractual extension options (dollars in thousands):
| ABR · Gross Leasable Area | |||||
|---|---|---|---|---|---|
| Year | Number of Leases | Dollars | % of Total | Square Feet | % of Total |
| 2024 | 13 | $4,056 | 3.1% | 329,292 | 3.1% |
| 2025 | 65 | 7,653 | 5.8% | 491,842 | 4.6% |
| 2026 | 10 | 2,563 | 1.9% | 282,727 | 2.7% |
| 2027 | 17 | 4,602 | 3.5% | 429,665 | 4.0% |
| 2028 | 26 | 10,128 | 7.7% | 817,615 | 7.7% |
| 2029 | 43 | 9,759 | 7.4% | 760,148 | 7.2% |
| 2030 | 39 | 9,896 | 7.5% | 1,052,878 | 9.9% |
| 2031 | 64 | 12,187 | 9.2% | 1,150,824 | 10.8% |
| 2032 | 34 | 9,085 | 6.9% | 1,236,792 | 11.6% |
| 2033 | 61 | 12,590 | 9.5% | 1,015,117 | 9.6% |
| 2034 | 39 | 11,095 | 8.4% | 441,606 | 4.2% |
| 2035 | 28 | 8,861 | 6.7% | 499,310 | 4.7% |
| 2036 | 21 | 4,977 | 3.8% | 269,010 | 2.5% |
| 2037 | 23 | 6,666 | 5.1% | 533,383 | 5.0% |
| 2038 | 91 | 11,441 | 8.7% | 1,048,698 | 9.9% |
| Thereafter | 24 | 6,302 | 4.8% | 265,276 | 2.5% |
| Total | 598 | $131,861 | 100.0% | 10,624,183 | 100.0% |
Developments
During 2023, rent commenced on 22 completed property developments. As of December 31, 2023, we had 24 property developments with rent expected to commence at various dates throughout 2024. The following table illustrates actual and anticipated rent commencement of those developments.
| Tenant Industry | Location | Lease Term (Years) | Actual/ Anticipated Rent Commencement |
|---|---|---|---|
| Arts & Craft | D'Iberville | 15 | Commenced 1Q'23 |
| Arts & Craft | Winder, GA | 15 | Commenced 1Q'23 |
| Arts & Craft | Sheboygan, WI | 10 | Commenced 2Q'23 |
| Home Improvement | Bossier City, LA | 12 | Commenced 3Q'23 |
| Discount Retail | Alpena, MI | 10 | Commenced 3Q'23 |
| Dollar Stores (multiple programs) | Various (3 completed) | 10 | Commenced 3Q'23 |
| Dollar Stores (multiple programs) | Various (13 completed) | 10 to 15 | Commenced 4Q'23 |
| Automotive Service (multiple programs) | Various (1 completed) | 15 | Commenced 4Q'23 |
| Dollar Stores (multiple programs) | Various (15 in progress) | 10 to 15 | 1Q'24 to 3Q'24 |
| Automotive Service (multiple programs) | Various (6 in progress) | 15 | 1Q'24 to 3Q'24 |
| Farm Supplies | Malakoff, TX | 20 years | 1Q'24 |
| Home Improvement | Butte, MT | 15 years | 3Q'24 |
| Pet Supplies | Sumter, SC | 10 years | 4Q'24 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.