NETSTREIT Corp
For the period ended Dec 31, 2024. Filed Feb 24, 2025.
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FY2024 · Filed Feb 24, 2025
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Item 2. Properties
During the year ended December 31, 2024, we acquired 115 single-tenant retail net lease properties with an aggregate purchase price of $479.0 million. As of December 31, 2024, we owned or had investments in 687 properties spanning 45 states, with 98 different tenants represented across 26 retail sectors. As of December 31, 2024, our portfolio consisted of 12.6 million square feet and was 99.9% occupied.
As of December 31, 2024, our portfolio generated ABR of $165.1 million. As of December 31, 2024, our portfolio consisted of approximately 56% and 15% of investment grade tenants and investment grade profile tenants, respectively, by ABR, and had a WALT of 9.8 years (exclusive of mortgage loans receivable). As of December 31, 2024, none of our tenants represented more than 9.0% of our portfolio by ABR, and our top 10 largest tenants represented, in aggregate, 46.4% of our ABR. Nine 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, an investment grade profile tenant.
Tenant Diversification
As of December 31, 2024, our 687 investments were operated by 98 different tenants, each representing a distinct brand or concept, with no one tenant representing more than 9.0% of our portfolio by ABR. The following table details information about our tenants as of December 31, 2024:
| Tenant (1) | Number of Properties (2) | % of Annualized Base Rent (3) |
|---|---|---|
| Dollar General Corporation | 125 | 9.0% |
| CVS Health Corporation | 33 | 6.2% |
| Dollar Tree Stores, Inc. / Family Dollar Stores, Inc. | 75 | 5.2% |
| The Home Depot, Inc. | 5 | 5.0% |
| Walgreen Co. | 24 | 4.3% |
| Hobby Lobby Stores, Inc. | 17 | 4.2% |
| Koninklijke Ahold Delhaize N.V. (Food Lion / Stop & Shop) | 8 | 3.9% |
| Walmart Inc. | 7 | 3.0% |
| Tractor Supply Company | 17 | 2.8% |
| Speedway, LLC | 49 | 2.6% |
| 7-Eleven, Inc. | 18 | 2.5% |
| Life Time Inc. | 2 | 2.5% |
| Best Buy Co., Inc. | 7 | 2.4% |
| Aldi Inc. | 7 | 2.4% |
| MDSFEST, Inc. (Festival Foods) | 3 | 2.3% |
| Advance Stores Company, Inc. (Advance Auto Parts) | 37 | 2.2% |
| Lowe's Companies, Inc. | 4 | 2.2% |
| The Kroger Co. | 7 | 2.1% |
| Subtotal of Tenants with ABR greater than 2.0% | 445 | 65.0% |
| Other | 241 | 35.0% |
| Total / Weighted Average | 686 | 100.0% |
(1) Represents tenant or guarantor.
(2) Excludes one vacant property.
(3) Certain figures in this table may not foot due to rounding.
Tenant Industry Diversification
The majority of our portfolio is comprised of properties leased to tenants operating in defensive retail industries, with 87.5% of our ABR as of December 31, 2024 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, 2024 is set forth below:
| Tenant Industry and Sector | Number of Leases (1) | % of Total ABR (2) | % of Total Gross Leasable Area (2) (3) |
|---|---|---|---|
| Necessity-Based Retail | |||
| Grocery | 35 | 13.6% | 15.0% |
| Home Improvement | 30 | 11.2% | 12.6% |
| Drug Stores & Pharmacies (4) | 57 | 10.6% | 6.0% |
| Farm Supplies | 19 | 3.6% | 4.1% |
| Auto Parts | 59 | 3.2% | 3.7% |
| General Retail | 7 | 3.0% | 8.2% |
| Healthcare | 14 | 2.0% | 0.9% |
| Wholesale Warehouse Club | 1 | 0.3% | 0.9% |
| Banking | 3 | 0.3% | 0.1% |
| Total Necessity-Based Retail | 225 | 47.6% | 51.5% |
| Service-Oriented Industry | |||
| Convenience Stores | 98 | 9.4% | 2.4% |
| Automotive Service | 42 | 3.7% | 2.3% |
| Health and Fitness | 4 | 3.7% | 2.1% |
| Quick-Service Restaurants | 33 | 3.2% | 0.7% |
| Casual Dining | 7 | 0.7% | 0.3% |
| Equipment Rental and Leasing | 5 | 0.4% | 0.4% |
| Total Service-Oriented Industry | 189 | 21.1% | 8.1% |
| Discount-Focused Industry | |||
| Dollar Stores | 200 | 14.3% | 16.9% |
| Discount Retail | 30 | 4.5% | 8.4% |
| Total Discount-Focused Industry | 230 | 18.8% | 25.3% |
| Defensive Retail Industries | 644 | 87.5% | 85.0% |
| Other, Non-Defensive Industries | |||
| Arts & Crafts | 16 | 4.2% | 7.0% |
| Sporting Goods | 6 | 3.2% | 3.1% |
| Consumer Electronics | 7 | 2.4% | 2.7% |
| Specialty | 2 | 1.0% | 0.4% |
| Apparel | 5 | 0.7% | 1.3% |
| Furniture Stores | 2 | 0.6% | 0.4% |
| Telecommunications | 2 | 0.2% | 0.1% |
| Gift, Novelty, and Souvenir Shops | 1 | 0.1% | 0.1% |
| Home Furnishings | 1 | 0.1% | 0.0% |
| Total Other, Non-Defensive | 42 | 12.5% | 15.0% |
| Total, All Industries | 686 | 100.0% | 100.0% |
(1)Excludes one vacant property.
(2)Certain figures in this table may not foot due to rounding.
(3)Square feet.
(4)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, 2024:
| Tenant State | Number of Leases (1) | % of Total ABR | % of Total Gross Leasable Area (2) |
|---|---|---|---|
| Texas | 70 | 12.3% | 7.9% |
| Illinois | 43 | 10.1% | 8.3% |
| New York | 36 | 7.4% | 7.2% |
| Georgia | 36 | 6.2% | 9.1% |
| Wisconsin | 23 | 5.7% | 7.3% |
| North Carolina | 72 | 5.0% | 4.5% |
| Alabama | 50 | 4.6% | 4.4% |
| Ohio | 42 | 4.0% | 5.5% |
| Pennsylvania | 30 | 3.9% | 3.9% |
| Virginia | 11 | 3.6% | 2.2% |
| Indiana | 20 | 3.6% | 3.6% |
| Florida | 30 | 3.4% | 2.6% |
| Louisiana | 16 | 3.2% | 3.4% |
| Michigan | 18 | 2.5% | 3.4% |
| Mississippi | 21 | 2.4% | 4.0% |
| California | 12 | 2.4% | 1.7% |
| Oregon | 3 | 2.0% | 1.2% |
| South Carolina | 11 | 1.3% | 1.7% |
| New Jersey | 6 | 1.2% | 0.7% |
| Washington | 5 | 1.1% | 1.1% |
| Other (3) | 131 | 14.1% | 16.3% |
| Total | 686 | 100.0% | 100.0% |
(1)Excludes one vacant property.
(2)Square feet.
(3)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, 2024, the leases in our portfolio had a WALT of 9.8 years (exclusive of mortgage loans receivable). The following table illustrates contractual lease expirations within the Company’s portfolio as of December 31, 2024, assuming no exercise of contractual extension options (dollars in thousands):
| ABR · Gross Leasable Area | |||||
|---|---|---|---|---|---|
| Year | Number of Leases (1) | Amount | % of Total (2) | Square Feet | % of Total |
| 2025 | 4 | $1,215 | 0.8% | 238,918 | 2.0% |
| 2026 | 9 | 2,459 | 1.6% | 275,967 | 2.3% |
| 2027 | 12 | 4,077 | 2.7% | 364,935 | 3.0% |
| 2028 | 25 | 10,094 | 6.6% | 770,829 | 6.4% |
| 2029 | 41 | 9,602 | 6.3% | 833,668 | 6.9% |
| 2030 | 32 | 11,046 | 7.2% | 1,106,203 | 9.1% |
| 2031 | 53 | 12,260 | 8.0% | 1,177,377 | 9.7% |
| 2032 | 39 | 10,582 | 6.9% | 1,536,491 | 12.7% |
| 2033 | 52 | 11,520 | 7.5% | 883,568 | 7.3% |
| 2034 | 71 | 18,040 | 11.8% | 1,014,302 | 8.4% |
| 2035 | 36 | 9,681 | 6.3% | 562,621 | 4.7% |
| 2036 | 19 | 5,797 | 3.8% | 354,613 | 2.9% |
| 2037 | 21 | 7,265 | 4.7% | 577,962 | 4.8% |
| 2038 | 63 | 8,420 | 5.5% | 752,191 | 6.2% |
| 2039 | 47 | 9,916 | 6.5% | 762,249 | 6.3% |
| Thereafter | 86 | 21,421 | 14.0% | 882,156 | 7.3% |
| Total | 610 | $153,395 | 100.0% | 12,094,050 | 100.0% |
(1) Excludes one vacant property and 76 investments that secure mortgage loans receivable.
(2)Certain figures in this table may not foot due to rounding.
Developments
During 2024, rent commenced on 23 completed property developments. As of December 31, 2024, we had five property developments with rent expected to commence at various dates throughout 2025. The following table illustrates actual and anticipated rent commencement of those developments.
| Tenant Industry | Location | Lease Term (Years) | Actual or Anticipated Rent Commencement |
|---|---|---|---|
| Dollar Stores (multiple programs) | Various (9 completed) | 10 to 15 | Commenced 1Q'24 |
| Farm Supplies | Malakoff, TX | 20 | Commenced 1Q'24 |
| Dollar Stores (multiple programs) | Various (5 completed) | 15 | Commenced 2Q'24 |
| Automotive Service (multiple locations) | Various (1 completed) | 10 to 15 | Commenced 2Q'24 |
| Home Improvement | Butte, MT | 15 | Commenced 3Q'24 |
| Dollar Stores (multiple programs) | Various (2 completed) | 15 | Commenced 3Q'24 |
| Automotive Service (multiple locations) | Various (1 completed) | 15 | Commenced 3Q'24 |
| Dollar Stores (multiple programs) | Various (2 completed) | 10 to 15 | Commenced 4Q'24 |
| Automotive Service (multiple locations) | Various (1 completed) | 15 | Commenced 4Q'24 |
| Dollar Stores (multiple programs) | Various (1 in progress) | 10 | 1Q'25 to 2Q'25 |
| Automotive Service (multiple locations) | Various (3 in progress) | 15 | 1Q'25 to 2Q'25 |
| Pet Supplies | Sumter, SC | 10 | 1Q'25 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.