Group 1 - The investment approach has received over 500 five-star reviews, indicating high satisfaction among members who are experiencing benefits [1] - The company invests significant resources, over $100,000 annually, into researching profitable real estate investment opportunities [1] - The strategy involves using bank financing to purchase properties and utilizing rental income from tenants to repay the bank [2] Group 2 - Jussi Askola, the leader of the High Yield Landlord investing group, shares real-time transactions and maintains three distinct portfolios: core, retirement, and international [2] - The group offers buy/sell alerts and a chat room for direct interaction with Jussi and his team of analysts [2] - Leonberg Capital, led by Jussi Askola, is a value-oriented investment boutique that provides consulting services to hedge funds, family offices, and private equity firms focused on REIT investing [2]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Financial Data and Key Metrics Changes - The company reported an AFFO per share of $0.48 for Q3 2025, representing a 12% increase compared to Q3 2024 [16] - Total AFFO for the quarter was $96.2 million, up 24% from the same period in 2024 [16] - Cash G&A expenses were approximately $6.7 million, consistent with the guidance range for the full year [17] - The company declared a cash dividend of $0.30, resulting in an AFFO payout ratio of 63% [17] - The pro forma net debt to annualized adjusted EBITDAre remained low at 3.8 times as of quarter end [20] Business Line Data and Key Metrics Changes - The company executed $370 million in investments during the quarter, with a weighted average initial cash yield of 8% and a strong average gap yield of 10% [7][13] - Same-store rent growth was reported at 1.6%, an increase from 1.4% in the previous quarter [11] - The overall portfolio rent coverage increased to 3.6 times from 3.4 times last quarter [11] - The percentage of annual base rent under one times rent coverage declined by 120 basis points [11] Market Data and Key Metrics Changes - The company ended the quarter with investments in 2,266 properties leased to over 400 tenants, maintaining a weighted average lease term of approximately 14 years [10] - The investment pipeline remains strong, with cap rates in the mid to high 7% range expected [15][54] Company Strategy and Development Direction - The company continues to focus on middle-market sale-leasebacks with growing operators, sourcing 70% of its $370 million investments from existing relationships [7] - The company is targeting an AFFO per share growth of 6% to 8% for 2026, with an initial guidance range of $1.98 to $2.04 [9][21] - The company aims to maintain a well-capitalized balance sheet with low leverage and significant liquidity to support growth [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the investment market and capital markets, noting that the interest rate environment is more stable, contributing to lower cap rates [25][54] - The company anticipates continued strong portfolio performance and a pace of investments consistent with historical averages [9] - Management highlighted that credit loss assumptions remain consistent with previous years, reflecting a disciplined investment strategy [42][102] Other Important Information - The company successfully executed a $400 million 10-year unsecured bond offering, improving its weighted average debt maturity by approximately 18% to 4.5 years [18] - The company expects to utilize funds from the bond offering to support investment activities and maintain balance sheet flexibility [19] Q&A Session Summary Question: Expectations for cap rates going forward - Management indicated that lower cap rates are expected due to a stable interest rate environment and strong competition, but they can compete effectively in the market [25] Question: New industrial assets and future investments - Management confirmed ongoing investments in industrial outdoor storage sites and expects to continue this trend, focusing on granular, fungible assets [27] Question: Credit loss assumptions for 2026 - Management stated that credit loss assumptions for 2026 are consistent with previous years, based on a deep dive into the portfolio [42][102] Question: Activity in the fourth quarter - Management expects fourth-quarter activity to align with historical averages, estimating around $300 million in investments [48] Question: Tenant credit watch list update - The tenant credit watch list has improved, with the current coverage at 1.2 times, down 40 basis points quarter over quarter [91] Question: Differences in yields between retail and industrial properties - Management noted that cap rate compression is expected across all property types, driven by credit and real estate pricing rather than property type [118]

Financial Data and Key Metrics Changes - The company reported an AFFO per share of $0.48 for Q3 2025, representing a 12% increase compared to Q3 2024 [16] - Total AFFO for the quarter was $96.2 million, up 24% from the same period in 2024 [16] - The company increased its 2025 AFFO per share guidance to a range of $1.87-$1.89 and established initial 2026 guidance of $1.98-$2.04, implying a growth rate of 6% to 8% [9][21] Business Line Data and Key Metrics Changes - The company executed $370 million in investments during the quarter, with a weighted average initial cash yield of 8% and a strong average gap yield of 10% [7][13] - Same-store rent growth was reported at 1.6%, an increase from 1.4% in the previous quarter, with overall portfolio rent coverage increasing to 3.6x from 3.4x [8][11] - The percentage of annual base rent (ABR) under one times rent coverage declined by 120 basis points [11] Market Data and Key Metrics Changes - The company ended the quarter with investments in 2,266 properties leased to over 400 tenants, maintaining a weighted average lease term of approximately 14 years [10] - The company expects to invest between $1 billion and $1.4 billion in 2026, with cap rates expected to compress modestly due to a stable interest rate environment [9][20] Company Strategy and Development Direction - The company continues to focus on middle-market sale-leasebacks with growing operators, highlighting a balanced investment sourcing strategy [7] - The company aims to maintain a well-capitalized balance sheet with low leverage and significant liquidity to support growth and tenant relationships [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the investment market and capital markets, noting that the interest rate environment is more stable, contributing to lower cap rates [25][22] - The company anticipates continued strong portfolio performance and a pace of investments consistent with historical averages [9][21] Other Important Information - The company successfully executed a $400 million unsecured bond offering with a 5.4% coupon, improving its weighted average debt maturity by approximately 18% to 4.5 years [18] - The company declared a cash dividend of $0.30 in the quarter, resulting in an AFFO payout ratio of 63% [17] Q&A Session Summary Question: Expectations for lower cap rates and competition - Management indicated that lower cap rates are primarily driven by a stable interest rate environment and expressed confidence in sourcing sale-leaseback opportunities despite competition [25] Question: Industrial assets acquisition and future expectations - Management confirmed ongoing investment in industrial outdoor storage sites and expects growth in this asset type, focusing on granular, fungible assets [27] Question: Cap rate expectations and guidance - Management expects cap rates to compress modestly, with a potential static spread in the future, and noted that current assumptions are similar to those from the previous year [30][41] Question: Credit loss assumptions and portfolio performance - Management stated that credit loss assumptions for 2026 are consistent with previous years, with a focus on specific operators rather than macro trends [102] Question: Tenant credit watch list update - The tenant credit watch list has improved, currently sitting at 1.2x coverage, down 40 basis points quarter over quarter [91] Question: Investment opportunities by region - Management indicated that investment opportunities are prioritized based on tenant relationships rather than specific geographic regions [95] Question: Lease escalation risks - Management acknowledged that higher rent escalations could introduce credit risk but emphasized the importance of ensuring tenants can meet their obligations [96]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported an AFFO per share of $0.48, representing a 12% increase compared to 2024, with total AFFO reaching $96.2 million, up 24% year-over-year [15][17] - The company increased its 2025 AFFO per share guidance to a range of $1.87 to $1.89 and established initial 2026 guidance of $1.98 to $2.04, implying a growth rate of 6% to 8% [7][21] - Total G&A expenses for Q3 2025 were $10.2 million, up from $8.6 million in the same period of 2024, primarily due to increased compensation expenses [15][16] Business Line Data and Key Metrics Changes - The company executed $370 million in investments during the quarter, with a weighted average initial cash yield of 8% and a strong average GAAP yield of 10% [6][13] - Same store rent growth was reported at 1.6%, an increase from 1.4% in the previous quarter, with overall portfolio rent coverage rising to 3.6 times [10][11] - The company sold seven properties for $11.5 million in net proceeds, highlighting the importance of maintaining a liquid portfolio [11][12] Market Data and Key Metrics Changes - The company ended the quarter with investments in 2,266 properties leased to over 400 tenants, maintaining a weighted average lease term of approximately 14 years [9] - The percentage of ABR under one times rent coverage declined by 120 basis points, indicating improved tenant credit trends [10][11] Company Strategy and Development Direction - The company continues to focus on middle market sale leasebacks with growing operators, aiming to balance new operator additions with existing relationships [6][10] - The investment pipeline remains strong, with expectations to invest between $1 billion and $1.4 billion in 2026, supported by a stable interest rate environment [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the investment market and capital markets, noting that the interest rate environment is more stable, contributing to lower cap rates [28][61] - The company anticipates modest cap rate compression in the coming quarters, driven by a stable interest rate environment [7][36] Other Important Information - The company successfully executed a $400 million unsecured bond offering with a 5.4% coupon, improving its weighted average debt maturity to 4.5 years [18][19] - The company declared a cash dividend of $0.30 in the quarter, resulting in an AFFO payout ratio of 63% [17] Q&A Session Summary Question: Expectations for cap rates going forward - Management indicated that lower cap rates are expected due to a stable interest rate environment and a strong pipeline of sale leaseback opportunities [28][29] Question: New industrial assets and future expectations - The company has been investing in industrial outdoor storage sites and expects to continue this trend, focusing on granular fungible assets [30][31] Question: Credit loss assumptions for 2026 - Management stated that credit loss assumptions for 2026 are consistent with previous years, with a focus on specific assets and tenants [46][47] Question: Watch list update - The watch list for tenants with coverage less than one time has improved to 1.2 times, down 40 basis points quarter-over-quarter [96] Question: Investment opportunities by state - The company prioritizes investment opportunities based on tenant relationships rather than specific geographies, indicating a broad range of opportunities across the U.S. [100] Question: Impact of increased competition - Management acknowledged increased competition but emphasized their ability to execute and maintain a good reputation as a reliable capital provider [86][121]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported an AFFO per share of $0.48, representing a 12% increase compared to Q3 2024 [13] - Total AFFO for the quarter was $96.2 million, up 24% from the same period in 2024 [13] - The company increased its 2025 AFFO per share guidance to a range of $1.87 to $1.89 and established initial 2026 guidance of $1.98 to $2.04, implying a growth rate of 6% to 8% [7][19] Business Line Data and Key Metrics Changes - The company executed $370 million in investments during the quarter, with a weighted average initial cash yield of 8% and a strong average gap yield of 10% [5][11] - Same-store rent growth was reported at 1.6%, an increase from 1.4% in the previous quarter, with overall portfolio rent coverage increasing to 3.6 times [6][9] - The percentage of annual base rent (ABR) under one times rent coverage declined by 120 basis points [9] Market Data and Key Metrics Changes - The company ended the quarter with investments in 2,266 properties leased to over 400 tenants, maintaining a weighted average lease term of approximately 14 years [8] - The company sold seven properties for $11.5 million in net proceeds, executed at a 6.6% weighted average cash yield [10] Company Strategy and Development Direction - The company continues to focus on middle-market sale-leasebacks with growing operators, highlighting a balanced investment sourcing strategy [5] - The company aims to maintain a well-capitalized balance sheet with low leverage and significant liquidity to support growth and tenant relationships [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the investment market and capital markets, noting that the interest rate environment is more stable, contributing to lower cap rates [23][46] - The company anticipates modest cap rate compression in the coming quarters, driven by a stable interest rate environment [7][28] Other Important Information - The company successfully executed a $400 million 10-year unsecured bond offering with a 5.4% coupon, improving its weighted average debt maturity by approximately 18% to 4.5 years [16] - Cash G&A expenses were approximately $6.7 million for the quarter, consistent with the guidance range for the full year [14] Q&A Session Summary Question: Expectations for cap rates going forward - Management indicated that lower cap rates are expected due to a stable interest rate environment and a strong pipeline of sale-leaseback opportunities [23] Question: New industrial assets and future expectations - The company has been investing in industrial outdoor storage sites and expects to continue this trend, focusing on granular, fungible assets [25] Question: Cap rate expectations and guidance - Management confirmed that cap rate assumptions are similar to the previous year, with expectations for a modest downtick [35] Question: Credit loss assumptions for 2026 - Management stated that credit loss assumptions for 2026 are consistent with previous years, based on a deep dive into the portfolio [74] Question: Update on tenant credit watch list - The watch list currently sits at 1.2 times coverage, down 40 basis points quarter over quarter [68] Question: Differences in yields between retail and industrial properties - Management noted that there is no significant differentiation in cap rates across property types, with expectations for compression across the entire opportunity set [85]

Portfolio Performance - The portfolio is 99.8% leased, demonstrating stability[11] - Same-store rent growth has averaged 1.5% over the last four quarters, indicating consistent performance[11] - Unit-level coverage is strong at 3.6x, with approximately 99% of ABR required to report unit-level P&Ls, reflecting healthy tenant performance[11] - Only 4.5% of ABR is expiring through 2029, with a coverage of 4.0x, indicating low lease expiration risk[11] Balance Sheet & Liquidity - The company issued $400 million of 5.400% senior unsecured notes due 2035, strengthening the balance sheet[11] - Approximately $14 million of common equity was raised through the ATM Program[11] - Proforma Net Debt / Annualized Adjusted EBITDAre is 3.8x at 3Q'25-end, indicating low leverage[11] - The company has ~$1.4 billion of pro forma liquidity, providing excellent financial flexibility[11] Investment & Disposition Activity - Investments of approximately $370 million were closed at an initial cash yield of approximately 8.0%[11] - Dispositions of approximately $11 million were closed at a 6.6% cash yield, demonstrating accretive capital recycling[11]

Core Insights - Essential Properties (EPRT) reported quarterly funds from operations (FFO) of $0.48 per share, matching the Zacks Consensus Estimate and showing an increase from $0.43 per share a year ago [1] - The company achieved revenues of $144.93 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 1.94% and up from $117.13 million year-over-year [2] - The stock has underperformed the S&P 500, gaining about 1.1% since the beginning of the year compared to the S&P 500's 14.5% increase [3] Financial Performance - FFO for the previous quarter was expected to be $0.47 per share, but the actual result was $0.46, resulting in a surprise of -2.13% [1] - Over the last four quarters, the company has consistently failed to surpass consensus FFO estimates [1] - The current consensus FFO estimate for the upcoming quarter is $0.49, with projected revenues of $148.1 million, and for the current fiscal year, the estimate is $1.89 on revenues of $556.69 million [7] Market Outlook - The estimate revisions trend for Essential Properties was unfavorable prior to the earnings release, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The REIT and Equity Trust - Retail industry is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents unaudited consolidated financial statements and management's discussion of financial performance [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q3 2025 and FY2024, with detailed notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time | ASSETS (in thousands) | Sep 30, 2025 | Dec 31, 2024 | | :---------------------- | :----------- | :----------- | | Total real estate investments, net | $5,952,362 | $5,190,522 | | Loans and direct financing lease receivables, net | $403,347 | $352,066 | | Cash and cash equivalents | $23,842 | $40,713 | | Total assets | $6,610,027 | $5,798,682 | | LIABILITIES AND EQUITY (in thousands) | Sep 30, 2025 | Dec 31, 2024 | | :---------------------- | :----------- | :----------- | | Unsecured term loans, net | $1,724,055 | $1,721,114 | | Senior unsecured notes, net | $786,312 | $396,403 | | Revolving credit facility | $120,000 | — | | Total liabilities | $2,765,545 | $2,226,555 | | Total stockholders' equity | $3,836,505 | $3,563,678 | | Total equity | $3,844,482 | $3,572,127 | | Total liabilities and equity | $6,610,027 | $5,798,682 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income over specific reporting periods | (in thousands, except per share data) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | **Revenues:** | | | | | | Rental revenue | $136,544 | $110,512 | $387,444 | $313,392 | | Interest on loans and direct financing lease receivables | $8,129 | $6,477 | $23,228 | $16,075 | | Total revenues | $144,934 | $117,132 | $411,352 | $329,901 | | **Expenses:** | | | | | | Total expenses | $52,559 | $46,979 | $158,603 | $132,216 | | Income from operations | $93,736 | $69,910 | $261,170 | $199,087 | | Interest expense | $(28,348) | $(21,627) | $(77,139) | $(54,586) | | Net income attributable to stockholders | $65,620 | $49,140 | $184,942 | $147,629 | | Basic net income per share | $0.33 | $0.28 | $0.95 | $0.85 | | Diluted net income per share | $0.33 | $0.27 | $0.94 | $0.84 | [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) This section presents net income and other comprehensive income (loss) components, reflecting total equity changes | (in thousands) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income | $65,800 | $49,293 | $185,453 | $148,089 | | Total other comprehensive loss | $(2,845) | $(51,329) | $(37,629) | $(29,951) | | Comprehensive income (loss) attributable to stockholders | $62,783 | $(2,030) | $147,424 | $117,781 | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in common stock, additional paid-in capital, and retained earnings over time | (in thousands, except share data) | Balance at Dec 31, 2024 | Common Stock Issuance | Dividends Declared | Net Income | Balance at Sep 30, 2025 | | :-------------------------------- | :---------------------- | :-------------------- | :----------------- | :--------- | :---------------------- | | Common Stock (Par Value) | $1,875 | $105 | — | — | $1,981 | | Additional Paid-In Capital | $3,658,219 | $298,809 | — | — | $3,967,376 | | Distributions in Excess of Cumulative Earnings | $(113,302) | $(6,307) | $(177,455) | $184,940 | $(112,224) | | Accumulated Other Comprehensive (Loss) Income | $16,886 | — | — | $(37,629) | $(20,628) | | Total Stockholders' Equity | $3,563,678 | $292,502 | $(177,455) | $184,940 | $3,836,505 | | Non-controlling Interests | $8,449 | — | $(772) | $511 | $7,977 | | Total Equity | $3,572,127 | $292,502 | $(178,227) | $185,451 | $3,844,482 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes cash inflows and outflows from operating, investing, and financing activities | (in thousands) | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------------------------------ | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $275,933 | $221,415 | | Net cash used in investing activities | $(916,785) | $(848,489) | | Net cash provided by financing activities | $619,716 | $616,822 | | Net decrease in cash and cash equivalents and restricted cash | $(21,136) | $(10,252) | | Cash and cash equivalents and restricted cash, end of period | $23,842 | $38,711 | - Cash paid for interest, net of amounts capitalized, **increased from $54,225 thousand in 2024 to $72,354 thousand in 2025** for the nine months ended September 30[27](index=27&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements [Note 1. Organization](index=10&type=section&id=Note%201.%20Organization) This note describes the company's legal structure, REIT business model, and stock exchange listing - Essential Properties Realty Trust, Inc. is an internally managed REIT that acquires, owns, and manages primarily single-tenant, net-leased properties for middle-market companies in service-oriented or experience-based businesses[30](index=30&type=chunk) - The Company was organized on January 12, 2018, elected REIT taxation status from December 31, 2018, and its common stock is listed on the NYSE under 'EPRT'[31](index=31&type=chunk)[32](index=32&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines key accounting principles and methods used in preparing the financial statements - The financial statements are prepared in accordance with GAAP and SEC rules, with all intercompany accounts eliminated in consolidation[33](index=33&type=chunk) - The Company held a **99.7% ownership interest** in its Operating Partnership as of September 30, 2025, and December 31, 2024[34](index=34&type=chunk) - The Company operates in one reportable segment, aggregating real estate owned and leased properties, and loans/direct financing lease receivables[36](index=36&type=chunk)[37](index=37&type=chunk) - Real estate investments are carried at cost less accumulated depreciation and impairment losses, with purchase prices allocated to tangible and intangible assets/liabilities based on fair values[38](index=38&type=chunk)[40](index=40&type=chunk) - Depreciation is computed using the straight-line method over estimated useful lives (up to **40 years for buildings**, **15 years for site improvements**)[45](index=45&type=chunk) - The Company uses a real estate loss estimate model (RELEM) to calculate allowances for credit losses on loans and direct financing lease receivables, evaluating credit deterioration quarterly[52](index=52&type=chunk)[53](index=53&type=chunk) - The Company elected to be taxed as a REIT, generally not subject to U.S. federal income tax, but may be subject to state and local taxes[79](index=79&type=chunk) - The Operating Partnership is identified as a Variable Interest Entity (VIE) where the Company is the primary beneficiary, consolidating its assets and liabilities[87](index=87&type=chunk) - Recent accounting developments include ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03/2024-09 (Expense Disaggregation Disclosures), with the Company currently evaluating their impact[90](index=90&type=chunk)[91](index=91&type=chunk) [Note 3. Investments](index=18&type=section&id=Note%203.%20Investments) This note details real estate and loan investments, including acquisition, disposition, and impairment activities | Investment Type | Sep 30, 2025 | Dec 31, 2024 | | :---------------- | :----------- | :----------- | | Owned properties | 2,103 | 1,946 | | Properties securing mortgage loans | 153 | 150 | | Ground lease interests | 10 | 8 | | Total number of investments | 2,266 | 2,104 | | Gross Investment Value (in thousands) | Sep 30, 2025 | Dec 31, 2024 | | :------------------------------------ | :----------- | :----------- | | Real estate investments, at cost | $6,529,729 | $5,667,349 | | Loans and direct financing lease receivables, net | $403,347 | $352,066 | | Real estate investments held for sale, net | $1,359 | $10,018 | | Total gross investments | $6,934,435 | $6,029,433 | | Investment Activity (9 Months Ended Sep 30, in thousands) | 2025 | 2024 | | :---------------------------------------- | :----------- | :----------- | | Acquisitions of and additions to real estate investments | $948,084 | $782,067 | | Sales of investments in real estate | $(81,857) | $(35,667) | | Investments in loans receivable | $81,508 | $120,599 | | Provision for impairment of real estate | $(7,934) | $(12,259) | - The Company's loans receivable portfolio had an aggregate carrying amount of **$403.1 million** as of September 30, 2025, with the maximum loss exposure limited to this amount[100](index=100&type=chunk) | Allowance for Credit Losses (in thousands) | 2025 | 2024 | | :--------------------------------------- | :----------- | :----------- | | Balance at January 1 | $896 | $666 | | Current period provision for expected credit losses | $83 | $249 | | Balance at September 30 | $979 | $915 | - Real estate investments held for sale decreased significantly from **$10.0 million (5 properties)** at December 31, 2024, to **$1.4 million (3 properties)** at September 30, 2025[110](index=110&type=chunk) - Texas was the only state representing **10% or more of total rental revenue**, contributing **11.7%** for the three months and **12.4%** for the nine months ended September 30, 2025[112](index=112&type=chunk) [Note 4. Leases](index=25&type=section&id=Note%204.%20Leases) This note describes lease arrangements, future minimum receipts, and lease revenue recognition - The Company's investment properties are primarily leased under long-term triple-net operating leases, where tenants are responsible for all property operating expenses[116](index=116&type=chunk)[117](index=117&type=chunk) | Future Minimum Receipts (in thousands) | Operating Leases | Loans and Direct Financing Leases | Total Future Minimum Receipts | | :------------------------------------- | :--------------- | :-------------------------------- | :---------------------------- | | October 1 - December 31, 2025 | $126,223 | $8,445 | $134,668 | | 2026 | $509,662 | $33,973 | $543,635 | | Thereafter | $6,417,955 | $379,910 | $6,797,865 | | Total | $8,613,256 | $523,292 | $9,136,548 | | Lease Revenues (in thousands) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :---------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Fixed lease revenues | $137,002 | $110,135 | $387,320 | $311,663 | | Variable lease revenues | $1,427 | $1,457 | $4,352 | $2,952 | | Total lease revenues | $138,429 | $111,592 | $391,672 | $314,615 | - As of September 30, 2025, the Company's right-of-use (ROU) assets and lease liabilities were **$8.8 million** and **$9.0 million**, respectively, with a weighted average remaining lease term of **24.2 years** and a discount rate of **6.86%**[123](index=123&type=chunk)[126](index=126&type=chunk) [Note 5. Long-Term Debt](index=28&type=section&id=Note%205.%20Long-Term%20Debt) This note provides details on unsecured term loans, senior notes, and the revolving credit facility | (in thousands) | Maturity Date | Principal Outstanding Sep 30, 2025 | Principal Outstanding Dec 31, 2024 | Weighted Average Interest Rate Sep 30, 2025 | | :------------- | :------------ | :--------------------------------- | :--------------------------------- | :------------------------------------------ | | Unsecured term loans | | $1,730,000 | $1,730,000 | 5.3% | | Senior unsecured notes | | $800,000 | $400,000 | 4.2% | | Revolving Credit Facility | Feb 2030 | $120,000 | — | 4.9% | | Total principal outstanding | | $2,650,000 | $2,130,000 | 4.9% | | Scheduled Principal Payments (in thousands) | 2027 Term Loan | 2028 Term Loan | 2029 Term Loan | 2030 Term Loan | Senior Unsecured Notes | Revolving Credit Facility | Total | | :---------------------------------------- | :------------- | :------------- | :------------- | :------------- | :--------------------- | :------------------------ | :------ | | 2027 | $430,000 | — | — | — | — | — | $430,000 | | 2028 | — | $400,000 | — | — | — | — | $400,000 | | 2029 | — | — | $450,000 | — | — | — | $450,000 | | Thereafter | — | — | — | $450,000 | $800,000 | $120,000 | $1,370,000 | | Total | $430,000 | $400,000 | $450,000 | $450,000 | $800,000 | $120,000 | $2,650,000 | - The Revolving Credit Facility was amended in February 2025, increasing its maximum aggregate principal amount to **$1.0 billion** and maturing in February 2029 (with two six-month extension options)[130](index=130&type=chunk)[131](index=131&type=chunk) - In August 2025, the Company completed a public offering of **$400.0 million** aggregate principal amount of 5.400% Senior Notes due 2035, generating net proceeds of **$390.7 million**[151](index=151&type=chunk) [Note 6. Derivative and Hedging Activities](index=32&type=section&id=Note%206.%20Derivative%20and%20Hedging%20Activities) This note explains the use of interest rate swaps to manage interest rate risk on the company's debt - The Company uses interest rate swaps as cash flow hedges to protect against adverse fluctuations in interest rates on its floating-rate debt, recording them at fair value in other comprehensive income (loss)[156](index=156&type=chunk)[157](index=157&type=chunk) | Associated Debt Instrument | Fixed Rate Paid by Company | Maturity Date | Aggregate Notional Value (in thousands) | Fair Value of Asset/(Liability) Sep 30, 2025 (in thousands) | | :------------------------- | :------------------------- | :------------ | :-------------------------------------- | :-------------------------------------------------------- | | 2027 Term Loan | 1.41% | Nov 2026 | $430,000 | $10,443 | | 2028 Term Loan | 3.66% | Jan 2028 | $400,000 | $(3,065) | | 2029 Term Loan | 4.40% | Feb 2029 | $450,000 | $(16,149) | | 2030 Term Loan | 3.82% | Dec 2029 | $450,000 | $(9,099) | | Total | | | $1,730,000 | $(17,870) | - For the nine months ended September 30, 2025, the Company realized a **gain of $12.7 million** on the change in fair value of its interest rate swaps, reducing interest expense[164](index=164&type=chunk) [Note 7. Equity](index=33&type=section&id=Note%207.%20Equity) This note details common stock issuances, equity offerings, and dividends declared by the company - In March 2025, the Company completed a follow-on primary offering of **9,430,000 shares of common stock** at **$31.00 per share**, with expected net proceeds of **$284.9 million** from forward sale agreements to be settled by September 2026[169](index=169&type=chunk) - The Company established an October 2024 ATM Program authorizing sales of common stock up to **$750 million**, replacing prior programs[170](index=170&type=chunk) - As of September 30, 2025, **$232.2 million** in gross sales were made under this program[171](index=171&type=chunk) | Dividends Declared on Common Stock | Dividend per Share | Total Dividend (in thousands) | | :--------------------------------- | :----------------- | :---------------------------- | | Sep 5, 2025 | $0.30 | $59,543 | | May 30, 2025 | $0.30 | $59,544 | | Mar 7, 2025 | $0.295 | $58,368 | | Sep 5, 2024 | $0.29 | $50,964 | | May 31, 2024 | $0.29 | $50,965 | | Mar 7, 2024 | $0.285 | $50,079 | [Note 8. Non-controlling Interests](index=35&type=section&id=Note%208.%20Non-controlling%20Interests) This note describes ownership interests held by external parties in the operating partnership - As of September 30, 2025, the Company held a **99.7% limited partner interest** in the Operating Partnership (**198,144,552 OP Units**), with external parties holding the remaining **0.3% (553,847 OP Units)** as non-controlling interests[176](index=176&type=chunk) - OP Unit holders receive distributions equal to common stock dividends and can redeem units for cash or common stock on a one-for-one basis after one year[177](index=177&type=chunk) [Note 9. Equity-Based Compensation](index=35&type=section&id=Note%209.%20Equity-Based%20Compensation) This note outlines the company's equity incentive plan and the associated compensation costs - The Company's 2023 Equity Incentive Plan, approved in May 2023, replaced the 2018 plan, authorizing grants of various equity awards up to **4,300,808 shares of common stock**[178](index=178&type=chunk) | (in thousands) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Compensation cost recognized in general and administrative expense | $3,553 | $2,618 | $11,017 | $8,205 | | Fair value of units vested during the period | $242 | $61 | $15,497 | $10,465 | - As of September 30, 2025, total unrecognized compensation cost was **$17.2 million**, to be recognized over a weighted average period of **2.1 years**[187](index=187&type=chunk) [Note 10. Net Income Per Share](index=38&type=section&id=Note%2010.%20Net%20Income%20Per%20Share) This note provides the calculation of basic and diluted net income per share for reporting periods | (in thousands, except share data) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income available for common stockholders: basic | $65,393 | $49,022 | $184,260 | $147,277 | | Weighted average shares outstanding used in basic net income per share | 198,141,272 | 175,330,976 | 194,753,085 | 172,656,778 | | Weighted average shares outstanding used in diluted net income per share | 199,875,244 | 179,610,599 | 196,853,561 | 175,365,280 | [Note 11. Commitments and Contingencies](index=38&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) This note discloses future financial obligations and potential legal liabilities of the company - As of September 30, 2025, the Company had future commitments of **$118.6 million** to tenants for development, construction, and renovation costs[190](index=190&type=chunk) - The Company provides a **100% matching contribution** on the first **6% of eligible compensation** to its 401(k) Plan, totaling **$369 thousand** for the nine months ended September 30, 2025[194](index=194&type=chunk)[195](index=195&type=chunk) - The Company is subject to various lawsuits and claims in the ordinary course of business, but management does not believe any will have a material adverse effect[192](index=192&type=chunk) [Note 12. Fair Value Measurements](index=39&type=section&id=Note%2012.%20Fair%20Value%20Measurements) This note explains methodologies and inputs used to determine fair value of financial instruments and assets - The Company measures the fair value of its Senior Notes and derivative financial instruments on a recurring basis, primarily using **Level 2 inputs** for interest rate swaps and **Level 1** for Senior Unsecured Notes[203](index=203&type=chunk) | (in thousands) | Net Carrying Value Sep 30, 2025 | Fair Value Sep 30, 2025 | Level 1 | Level 2 | Level 3 | | :------------- | :------------------------------ | :---------------------- | :------ | :------ | :------ | | Senior unsecured notes | $(786,312) | $(762,244) | $(762,244) | — | — | | Interest rate swaps | $(17,870) | $(17,870) | — | $(17,870) | — | - Impaired real estate investments are measured at fair value on a nonrecurring basis, classified as **Level 3**, using inputs like non-binding sales agreements[205](index=205&type=chunk)[208](index=208&type=chunk) [Note 13. Subsequent Events](index=41&type=section&id=Note%2013.%20Subsequent%20Events) This note reports significant events occurring after the reporting period but before financial statements were issued - Subsequent to September 30, 2025, the Company invested **$5.4 million** in two real estate properties and **$0.8 million** in construction/reimbursements, while selling two properties for **$0.6 million**[210](index=210&type=chunk)[211](index=211&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, operational results, and growth strategies [Special Note Regarding Forward-Looking Statements](index=42&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This note cautions readers about forward-looking statements and inherent risks causing actual results to differ - The report contains forward-looking statements regarding business strategies, investments, financing, leasing, and market trends, identified by words like 'estimate,' 'anticipate,' and 'expect'[213](index=213&type=chunk) - Actual results may differ materially due to known and unknown risks, including economic conditions, real estate business risks, tenant performance, market volatility, interest rates, and regulatory changes[214](index=214&type=chunk) [Overview](index=43&type=section&id=Overview) This section introduces the company's REIT business model, portfolio composition, and key operational attributes - Essential Properties Realty Trust, Inc. is an internally managed REIT focused on acquiring, owning, and managing single-tenant, net-leased properties for middle-market service-oriented or experience-based businesses[217](index=217&type=chunk) - As of September 30, 2025, the portfolio comprised **2,266 properties**, with **$537.0 million** in annualized base rent and **99.8% occupancy**[217](index=217&type=chunk)[219](index=219&type=chunk) - **92.1% of annualized base rent** was from service-oriented and experience-based businesses[219](index=219&type=chunk) - Key portfolio attributes include diversification (no tenant >**3.5% of ABR**), a weighted average remaining lease term of **14.4 years**, **94% sale-leaseback transactions**, **66.0% master leases**, **97.7% contractual rent escalation (1.8% average annual rate)**, average investment of **$3.1 million per property**, and a weighted average rent coverage ratio of **3.6x**[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) [Our Competitive Strengths](index=44&type=section&id=Our%20Competitive%20Strengths) This section highlights the company's diversified portfolio, differentiated investment strategy, and experienced management - The Company's portfolio is strategically diversified across **645 concepts in 48 states**, with a focus on service-oriented or experience-based tenants, reducing e-commerce exposure[225](index=225&type=chunk)[226](index=226&type=chunk) - A differentiated investment strategy targets unrated middle-market companies, offering attractive real estate financing solutions for smaller, fungible properties (**$2M-$100M aggregate purchase price**)[227](index=227&type=chunk)[228](index=228&type=chunk) - The senior management team possesses significant experience in net lease, driving a scalable platform with strong origination, underwriting, and asset management capabilities, including **94% internally originated sale-leaseback transactions** in 9M 2025[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk) - Extensive tenant financial reporting (**99.0% of ABR**) supports active asset management, credit risk monitoring, and proactive portfolio adjustments[232](index=232&type=chunk) [Our Business and Growth Strategies](index=45&type=section&id=Our%20Business%20and%20Growth%20Strategies) This section outlines the company's approach to maximizing stockholder value through focused underwriting and risk management - The Company aims to maximize stockholder value through focused underwriting, risk management, and maintaining a diversified portfolio with long-term leases, attractive rent escalations, and healthy rent coverage ratios[233](index=233&type=chunk)[234](index=234&type=chunk) - Growth is driven by relationship-based sourcing, originating sale-leaseback transactions (**94% of new investments** in 9M 2025), and opportunistically acquiring net-leased properties[236](index=236&type=chunk) - Strategic focus on middle-market companies in service-oriented or experience-based businesses (e.g., car washes, restaurants, education, medical/dental) to mitigate e-commerce pressure[237](index=237&type=chunk)[238](index=238&type=chunk) - Active asset management includes regular property reviews, use of Moody's Analytics RiskCalc for credit deterioration, and selective dispositions to optimize portfolio and returns[240](index=240&type=chunk) - Balance sheet management targets pro forma net debt generally less than **5.5 times annualized adjusted EBITDAre**, utilizing diverse debt capital sources and hedging strategies to limit interest rate sensitivity[241](index=241&type=chunk)[253](index=253&type=chunk) [Historical Investment and Disposition Activity](index=47&type=section&id=Historical%20Investment%20and%20Disposition%20Activity) This section provides a quarterly breakdown of the company's real estate acquisition and sale transactions | Investment Activity (in thousands) | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | | :------------------------------- | :----------- | :----------- | :----------- | :----------- | | Investment activity | $333,435 | $307,706 | $334,041 | $369,848 | | Number of transactions | 37 | 21 | 25 | 35 | | Property count | 78 | 48 | 77 | 87 | | Avg. investment per unit | $3,281 | $5,453 | $3,971 | $3,849 | | Cash cap rate | 8.0% | 7.8% | 7.9% | 8.0% | | GAAP cap rate | 9.2% | 9.4% | 9.7% | 10.0% | | Master lease percentage | 69% | 71% | 69% | 76% | | Sale-leaseback percentage | 100% | 90% | 93% | 97% | | Existing relationship percentage | 79% | 86% | 88% | 70% | | Rent coverage ratio | 3.4x | 3.0x | 3.4x | 5.9x | | Lease term (years) | 17.7 | 17.5 | 19.5 | 18.6 | | Disposition Activity (in thousands) | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | | Disposition volume | $60,449 | $24,338 | $46,193 | $11,455 | | Cash cap rate on leased assets | 7.0% | 6.9% | 7.3% | 6.6% | | Leased properties sold | 24 | 10 | 18 | 6 | | Vacant properties sold | — | 1 | 5 | 1 | [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet financial obligations and its funding sources - As of September 30, 2025, the Company's income property portfolio totaled **$6.4 billion** across **2,266 properties**, generating **$537.0 million** in annualized base rent[247](index=247&type=chunk) - Short-term liquidity needs include funding investment activities, servicing debt, and covering G&A/dividends[248](index=248&type=chunk) - The Company expects to fund **$118.6 million** in tenant construction/renovation reimbursements by June 30, 2026[249](index=249&type=chunk) - Long-term liquidity will be met through operating cash flows, Revolving Credit Facility borrowings, future debt financings, common stock sales, and property dispositions[251](index=251&type=chunk) - The Company targets net debt less than **5.5 times annualized adjusted EBITDAre**[253](index=253&type=chunk) - As of September 30, 2025, all long-term debt was fixed-rate or effectively fixed through hedging, with a weighted average debt maturity of **4.5 years**[254](index=254&type=chunk) [Supplemental Guarantor Information](index=50&type=section&id=Supplemental%20Guarantor%20Information) This section clarifies the company's guarantee of its operating partnership's senior notes - The Company fully and unconditionally guarantees the Operating Partnership's **$800.0 million** outstanding senior notes[256](index=256&type=chunk) - Separate financial statements for the Operating Partnership are not presented due to consolidation and immaterial differences[257](index=257&type=chunk) [Description of Certain Debt](index=50&type=section&id=Description%20of%20Certain%20Debt) This section provides details on the company's unsecured term loans, senior notes, and revolving credit facility | (in thousands) | Maturity Date | Principal Outstanding Sep 30, 2025 | Principal Outstanding Dec 31, 2024 | Weighted Average Interest Rate Sep 30, 2025 (1) | | :------------- | :------------ | :--------------------------------- | :--------------------------------- | :------------------------------------------ | | Unsecured term loans | | $1,730,000 | $1,730,000 | 4.5% | | Senior unsecured notes | | $800,000 | $400,000 | 4.2% | | Revolving Credit Facility | Feb 2030 | $120,000 | — | 4.9% | | Total principal outstanding | | $2,650,000 | $2,130,000 | 4.3% | - The Revolving Credit Facility has a fully-extended maturity of **February 6, 2030**[261](index=261&type=chunk) - The CF Term Loans (2028, 2029, 2030) have principal amounts fully drawn as of September 30, 2025, with extended maturities up to **January 2030**[262](index=262&type=chunk) - The Company was in compliance with all financial covenants under the Amended Credit Agreement and 2027 Term Loan as of September 30, 2025[264](index=264&type=chunk)[268](index=268&type=chunk) [Cash Flows](index=52&type=section&id=Cash%20Flows) This section analyzes the changes in cash from operating, investing, and financing activities | Cash Flow Summary (in thousands) | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $275,933 | $221,415 | | Net cash used in investing activities | $(916,800) | $(848,500) | | Net cash provided by financing activities | $619,700 | $616,800 | | Net decrease in cash and cash equivalents and restricted cash | $(21,136) | $(10,252) | - Operating cash flow increased by **$54.5 million** YoY, driven by higher net income and non-cash adjustments[273](index=273&type=chunk) - Investing activities used **$916.8 million**, primarily for real estate investments and construction, partially offset by **$80.5 million** from asset sales[274](index=274&type=chunk) - Financing activities provided **$619.7 million**, including **$298.8 million** from common stock issuance and **$390.7 million** from senior unsecured notes, partially offset by **$174.1 million** in dividends and **$545.0 million** in Revolving Credit Facility repayments[275](index=275&type=chunk) [Off-Balance Sheet Arrangements](index=53&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any material off-balance sheet arrangements for the company - The Company had no off-balance sheet arrangements as of September 30, 2025[276](index=276&type=chunk) [Contractual Obligations](index=53&type=section&id=Contractual%20Obligations) This section details the company's future payment commitments for debt, leases, and tenant financing | (in thousands) | Total | Oct 1 - Dec 31, 2025 | 2026-2027 | 2028-2029 | Thereafter | | :------------- | :----------- | :------------------- | :----------- | :----------- | :----------- | | Unsecured term loans | $1,730,000 | — | $430,000 | $850,000 | $450,000 | | Senior unsecured notes | $800,000 | — | — | — | $800,000 | | Revolving Credit Facility | $120,000 | — | — | — | $120,000 | | Tenant construction financing and reimbursement obligations | $118,641 | $118,641 | — | — | — | | Operating lease obligations | $21,982 | $347 | $1,855 | $1,766 | $18,014 | | Total | $2,790,623 | $118,988 | $431,855 | $851,766 | $1,388,014 | [Critical Accounting Policies and Estimates](index=53&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses key accounting policies and estimates requiring significant management judgment - The Company's critical accounting policies and estimates, including judgments on fair values, useful lives, collectability, and impairment, remain consistent with those disclosed in the Annual Report on Form 10-K for fiscal year ended December 31, 2024, with no material changes in the current period[279](index=279&type=chunk)[281](index=281&type=chunk) [Our Real Estate Investment Portfolio](index=54&type=section&id=Our%20Real%20Estate%20Investment%20Portfolio) This section provides a detailed overview of the company's diversified real estate portfolio - As of September 30, 2025, the portfolio included **2,266 properties** across **48 states**, with **$537.0 million** in annualized base rent[282](index=282&type=chunk) - No single tenant contributed more than **3.5% of ABR**, and the top ten tenants accounted for **16.9%**[283](index=283&type=chunk) - The portfolio is diversified across **645 concepts**, with EquipmentShare (**3.5% of ABR**) and Crunch Fitness (**2.7% of ABR**) being the top two concepts[287](index=287&type=chunk) | Tenant Industry | % of Annualized Base Rent | | :-------------- | :------------------------ | | Car Washes | 14.2% | | Medical / Dental | 12.4% | | Early Childhood Education | 11.2% | | Quick Service | 8.9% | | Automotive Service | 8.0% | | Convenience Stores | 6.8% | | Casual Dining | 6.1% | | Equipment Rental and Sales | 4.8% | | Other Services | 2.7% | | Pet Care Services | 1.3% | | Family Dining | 1.2% | | Entertainment | 9.2% | | Health and Fitness | 4.4% | | Movie Theatres | 0.8% | | Other Industrial | 4.2% | | Building Materials | 0.9% | | Grocery | 2.6% | | Home Furnishings | 0.3% | - Texas is the largest geographic concentration, accounting for **11.9% of annualized base rent** and **240 properties**[292](index=292&type=chunk) - The weighted average remaining lease term is **14.4 years**, with only **4.5% of annualized base rent** expiring before January 1, 2030[293](index=293&type=chunk) | Unit-Level Coverage Ratio | % of Total (by ABR) | | :------------------------ | :------------------ | | ≥ 2.00x | 70.5% | | 1.50x to 1.99x | 16.2% | | 1.00x to 1.49x | 9.9% | | < 1.00x | 2.7% | | Not reported | 0.7% | [Results of Operations](index=60&type=section&id=Results%20of%20Operations) This section analyzes the company's revenues, expenses, and net income for the reported periods | (in thousands) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | Change ($) | Change (%) | | :------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Rental revenue | $136,544 | $110,512 | $26,032 | 23.6% | | Interest on loans and direct financing lease receivables | $8,129 | $6,477 | $1,652 | 25.5% | | Total revenues | $144,934 | $117,132 | $27,802 | 23.7% | | Total expenses | $52,559 | $46,979 | $5,580 | 11.9% | | Income from operations | $93,736 | $69,910 | $23,826 | 34.1% | | Interest expense | $(28,348) | $(21,627) | $(6,721) | 31.1% | | Net income attributable to stockholders | $65,620 | $49,140 | $16,480 | 33.5% | | (in thousands) | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | Change ($) | Change (%) | | :------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Rental revenue | $387,444 | $313,392 | $74,052 | 23.6% | | Interest income on loans and direct financing lease receivables | $23,228 | $16,075 | $7,153 | 44.5% | | Total revenues | $411,352 | $329,901 | $81,451 | 24.7% | | Total expenses | $158,603 | $132,216 | $26,387 | 19.9% | | Income from operations | $261,170 | $199,087 | $62,083 | 31.2% | | Interest expense | $(77,139) | $(54,586) | $(22,553) | 41.3% | | Net income attributable to stockholders | $184,942 | $147,629 | $37,313 | 25.3% | - The increase in rental revenue and interest income on loans was primarily driven by the growth in the real estate investment portfolio, which expanded by **209 rental properties (11%)** since September 30, 2024[299](index=299&type=chunk)[300](index=300&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk) - General and administrative expenses increased due to higher salary expense and professional fees[302](index=302&type=chunk)[304](index=304&type=chunk)[315](index=315&type=chunk)[317](index=317&type=chunk) - Provision for impairment of real estate decreased significantly, from **$5.7 million to $1.4 million** for the three months, and from **$12.3 million to $7.9 million** for the nine months, reflecting fewer impairment charges[305](index=305&type=chunk)[318](index=318&type=chunk) [Non-GAAP Financial Measures](index=64&type=section&id=Non-GAAP%20Financial%20Measures) This section presents and reconciles non-GAAP financial measures used to assess operating performance - The Company discloses non-GAAP measures like FFO, Core FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Annualized Adjusted EBITDAre, Net Debt, NOI, Cash NOI, and Cash G&A to provide investors with supplemental information on operating performance, excluding non-cash items and certain other costs[325](index=325&type=chunk)[326](index=326&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk)[331](index=331&type=chunk)[334](index=334&type=chunk)[338](index=338&type=chunk)[340](index=340&type=chunk)[342](index=342&type=chunk) | (in thousands) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income | $65,800 | $49,293 | $185,453 | $148,089 | | FFO attributable to stockholders and non-controlling interests | $104,814 | $86,070 | $297,401 | $248,157 | | Core FFO attributable to stockholders and non-controlling interests | $104,814 | $86,070 | $297,401 | $248,157 | | AFFO attributable to stockholders and non-controlling interests | $96,213 | $77,892 | $274,939 | $226,122 | | (in thousands) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | EBITDAre attributable to stockholders and non-controlling interests | $132,790 | $106,727 | $373,242 | $300,824 | | Annualized Adjusted EBITDAre attributable to stockholders and non-controlling interests (Q3 2025) | $552,044 | | | | | Net Debt Reconciliation (in thousands) | Sep 30, 2025 | Dec 31, 2024 | | :------------------------------------- | :----------- | :----------- | | Total debt | $2,630,367 | $2,117,517 | | Gross debt | $2,650,001 | $2,130,000 | | Net debt | $2,626,159 | $2,085,022 | | (in thousands) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | NOI attributable to stockholders and non-controlling interests | $143,084 | $115,596 | $405,748 | $326,216 | | Cash NOI attributable to stockholders and non-controlling interests | $130,153 | $105,171 | $370,992 | $296,667 | | Cash G&A | $6,658 | $6,005 | $21,405 | $18,486 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily interest rate risk, and management strategies - The Company aims to match cash inflows from long-term leases/loans with outflows for long-term debt, using senior unsecured notes, revolving credit, and term loans[345](index=345&type=chunk) | (in thousands) | Maturity Date | Principal Outstanding Sep 30, 2025 | Weighted Average Interest Rate Sep 30, 2025 (1) | | :------------- | :------------ | :--------------------------------- | :------------------------------------------ | | Unsecured term loans | | $1,730,000 | 4.5% | | Senior unsecured notes | | $800,000 | 4.2% | | Revolving Credit Facility | Feb 2030 | $120,000 | 4.9% | | Total principal outstanding | | $2,650,000 | 4.3% | - Interest rates on variable-rate term loans are effectively fixed through interest rate swap agreements[348](index=348&type=chunk) - The aggregate liability for early termination of swaps was **$18.1 million** as of September 30, 2025[348](index=348&type=chunk) - A **100 basis point adverse change** in interest rates would result in an estimated market risk exposure of **$1.2 million** for variable-rate borrowings under the Revolving Credit Facility[349](index=349&type=chunk) | (in thousands) | Carrying Value | Estimated Fair Value | | :------------- | :------------- | :------------------- | | Senior unsecured notes | $800,000 | $762,244 | [Item 4. Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and reports no material changes in internal control - The Company's disclosure controls and procedures were effective as of September 30, 2025, providing reasonable assurance of compliance with SEC reporting requirements[355](index=355&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[356](index=356&type=chunk) [PART II. OTHER INFORMATION](index=70&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not covered in financial statements, including legal proceedings and risks [Item 1. Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) This section discusses ongoing legal proceedings and management's assessment of their potential financial impact - Management does not believe current legal or regulatory proceedings will have a material adverse effect on the Company's business, financial condition, results of operations, or liquidity[359](index=359&type=chunk) - Third parties, such as tenants, are contractually obligated to indemnify and defend the Company in some matters, but their ability to satisfy these obligations could impact the Company[359](index=359&type=chunk) [Item 1A. Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[360](index=360&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - None[361](index=361&type=chunk) [Item 3. Defaults Upon Senior Securities](index=70&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[362](index=362&type=chunk) [Item 4. Mine Safety Disclosures](index=70&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Not applicable[363](index=363&type=chunk) [Item 5. Other Information](index=70&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended September 30, 2025[364](index=364&type=chunk) [Item 6. Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents and certifications - The exhibits include Articles of Amendment and Restatement, Amended and Restated Bylaws, Indentures for Senior Notes, Certifications of Principal Executive and Financial Officers, and Inline XBRL documents[366](index=366&type=chunk)

[Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) The company reported strong Q3 and year-to-date 2025 financial and operating results, marked by significant investments, increased per-share metrics, strategic capital raising, and positive CEO outlook [Third Quarter 2025 Financial and Operating Highlights](index=1&type=section&id=Third%20Quarter%202025%20Financial%20and%20Operating%20Highlights) Essential Properties reported strong third-quarter 2025 results, with significant investment activity, increased net income, FFO, and AFFO per share, alongside strategic debt issuance and equity raising | Operating Results (compared to Third Quarter 2024): | | | | :--- | :--- | :--- | | • Investments (87 properties) | $ Invested | $369.8 million | | | Weighted Avg Cash Cap Rate | 8.0% | | • Dispositions (7 properties) | Net Proceeds | $11.5 million | | | Weighted Avg Cash Cap Rate | 6.6% | | • Net Income per Share | Increased by 22% | $0.33 | | • Funds from Operations ("FFO") per Share | Increased by 8% | $0.52 | | • Adjusted Funds from Operations ("AFFO") per Share | Increased by 12% | $0.48 | | Debt, Equity & Leverage Update: | | | | • Public Debt Issuance (August 21, 2025) | 10 years; 5.40% coupon | $400.0 million | | • Equity Raised (Gross) - ATM Program | $31.35/share | $13.8 million | | • Pro Forma Net Debt to Annualized Adjusted EBITDAre | As of Quarter End | 3.8x | [Year to Date 2025 Financial and Operating Highlights](index=1&type=section&id=Year%20to%20Date%202025%20Financial%20and%20Operating%20Highlights) For the nine months ended September 30, 2025, the Company invested $1.0 billion across 212 properties, with notable increases in per-share metrics and substantial equity raised through a follow-on offering and ATM program | Operating Results (compared to 2024): | | | | :--- | :--- | :--- | | • Investments (212 properties) | $ Invested | $1.0 billion | | | Weighted Avg Cash Cap Rate | 7.9% | | • Dispositions (41 properties) | Net Proceeds | $82.0 million | | | Weighted Avg Cash Cap Rate | 7.1% | | • Net Income per share | Increased by 12% | $0.94 | | • FFO per share | Increased by 7% | $1.51 | | • AFFO per share | Increased by 8% | $1.39 | | Debt & Equity Activity: | | | | • Public Debt Issuance (August 21, 2025) | 10 years; 5.40% coupon | $400.0 million | | • Equity Raised (Gross) - Follow-On Offering (March 20, 2025) | (1) $31.00/share | $292.3 million | | • Equity Raised (Gross) - ATM Program | $32.35/share | $153.3 million | [CEO Comments](index=2&type=section&id=CEO%20Comments) The CEO highlighted favorable operating trends, resilient tenant credit performance, and strong investment origination, leading to increased guidance. A record 10.0% GAAP Cap Rate on investments underscored attractive risk-adjusted returns, supporting strategic growth ambitions for 2026 - Operating trends remained **favorable** with resilient tenant credit performance and strong origination activity[5](index=5&type=chunk) - The Company **increased guidance** due to strong performance[5](index=5&type=chunk) - Achieved a company record **10.0% GAAP Cap Rate** on investments for the quarter, indicating attractive risk-adjusted returns[5](index=5&type=chunk) [Portfolio Performance and Activity](index=2&type=section&id=Portfolio%20Performance%20and%20Activity) The company's portfolio demonstrates strong performance with high occupancy and long lease terms, supported by active investment, disposition, and loan repayment strategies [Portfolio Highlights](index=2&type=section&id=Portfolio%20Highlights) As of September 30, 2025, the Company's portfolio comprised 2,266 properties with a strong weighted average lease term of 14.4 years and high occupancy, primarily focused on service-oriented or experience-based businesses | | September 30, 2025 | | :--- | :--- | | Number of properties | 2,266 | | Weighted average lease term (WALT) | 14.4 years | | Weighted average rent coverage ratio | 3.6x | | Top 10 tenant concentration (% of cash ABR) | 16.9% | | Top 20 tenant concentration (% of cash ABR) | 27.6% | | Weighted average occupancy | 99.8% | | Total square feet of rentable space | 25.2 million | | Service-oriented or experience-based (% of cash ABR) | 92.1% | | Properties subject to master lease (% of cash ABR) | 66.0% | [Investment Activity](index=2&type=section&id=Investment%20Activity) The Company invested $369.8 million in Q3 2025 and $1.0 billion year-to-date, primarily through sale-leaseback transactions with existing relationships, maintaining attractive weighted average cash and GAAP cap rates | | Quarter Ended | Year to Date | | :--- | :--- | :--- | | | September 30, 2025 | September 30, 2025 | | Investments: | | | | Investment volume | $369.8 million | $1.0 billion | | Number of transactions | 35 | 81 | | Property count | 87 | 212 | | Weighted average cash / GAAP cap rate | 8.0%/10.0% | 7.9%/9.7% | | Weighted average lease escalation | 2.3% | 2.2% | | % Subject to master lease | 76% | 72% | | % Sale-leaseback transactions | 97% | 94% | | % Existing relationship | 70% | 81% | | % Required financial reporting (tenant/guarantor) | 100% | 100% | | WALT | 18.6 years | 18.6 years | [Disposition Activity](index=3&type=section&id=Disposition%20Activity) The Company completed dispositions totaling $11.5 million in net proceeds from 7 properties in Q3 2025, and $82.0 million from 41 properties year-to-date, realizing a net gain on sales | | Quarter Ended | Year to Date | | :--- | :--- | :--- | | | September 30, 2025 | September 30, 2025 | | Dispositions: | | | | Net proceeds | $11.5 million | $82.0 million | | Number of properties sold | 7 | 41 | | Net gain / (loss) | $1.4 million | $8.4 million | | Weighted average cash cap rate (excluding vacant properties and sales subject to a tenant purchase option ) | 6.6% | 7.1% | [Loan Repayments](index=3&type=section&id=Loan%20Repayments) Loan repayments generated $13.9 million in principal proceeds from 4 properties in Q3 2025, and $19.8 million from 9 properties year-to-date, with a weighted average interest rate of 9.1% for the quarter | | Quarter Ended | Year to Date | | :--- | :--- | :--- | | | September 30, 2025 | September 30, 2025 | | Loan Repayments: | | | | Proceeds—Principal | $13.9 million | $19.8 million | | Number of properties | 4 | 9 | | Weighted average interest rate | 9.1% | 8.5% | [Capital Structure and Liquidity](index=3&type=section&id=Capital%20Structure%20and%20Liquidity) The company maintains a strong capital structure with low leverage and substantial liquidity, supported by ongoing equity raising activities [Leverage and Liquidity](index=3&type=section&id=Leverage%20and%20Liquidity) As of September 30, 2025, the Company maintained a healthy pro forma net debt to annualized adjusted EBITDAre of 3.8x and robust total available liquidity of $1.4 billion, including significant unused revolving credit facility capacity and unsettled forward equity sales | | | (1) Pro Forma | | :--- | :--- | :--- | | | September 30, 2025 | September 30, 2025 | | Leverage: | | | | Net debt to Annualized Adjusted EBITDAre | 4.8x | 3.8x | | Liquidity: | | | | Cash and cash equivalents and restricted cash | $23.8 million | $424.4 million | | Unused revolving credit facility capacity | $880.0 million | $1.0 billion | | Forward equity sales - unsettled | $520.6 million | — | | Total available liquidity | $1.4 billion | $1.4 billion | | ATM Program: | | | | October 2024 ATM Program initial availability | $750.0 million | | | Aggregate gross sales under the October 2024 ATM Program | $232.2 million | | | Availability remaining under the October 2024 ATM Program | $517.8 million | | [Equity Activity](index=4&type=section&id=Equity%20Activity) The Company's equity activity during Q3 2025 included the sale of 438,703 shares under the ATM Program, generating $13.6 million in net proceeds, with 16,951,624 forward shares remaining unsettled for estimated net proceeds of $520.6 million | | Primary Offering | | ATM Program | | Total | | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | | | | | | | Net | | | Shares | Price (1) (Net) | Shares | Price (1) (Net) | Shares | Price (1) (Net) | Proceeds (000s) | | Forward Shares Unsettled - June 30, 2025 | 9,430,000 | $30.26 | 7,082,921 | $31.30 | 16,512,921 | $30.70 | $507,007 | | Shares Sold - Current Quarter | — | — | 438,703 | 30.95 | 438,703 | 30.95 | 13,578 | | Shares Settled - Current Quarter | — | — | — | — | — | — | — | | Forward Shares Unsettled - September 30, 2025 | 9,430,000 | | 7,521,624 | | 16,951,624 | $30.71 | $520,584 | [Financial Guidance](index=4&type=section&id=Financial%20Guidance) The company provided initial 2026 guidance and updated 2025 guidance, reflecting strong performance and anticipated investment volumes [2026 Guidance](index=4&type=section&id=2026%20Guidance) The Company issued its initial 2026 guidance, projecting AFFO per share between $1.98 and $2.04, with anticipated investment volume of $1.0 billion to $1.4 billion - Expected 2026 AFFO per share on a fully diluted basis: **$1.98 to $2.04**[14](index=14&type=chunk) - Estimated investment volume for 2026: **$1.0 billion to $1.4 billion**[14](index=14&type=chunk) - Estimated Cash G&A expense for 2026: **$31 million to $35 million**[14](index=14&type=chunk) [2025 Guidance Update](index=4&type=section&id=2025%20Guidance%20Update) The Company increased its 2025 AFFO per share guidance to a range of $1.87 to $1.89, reflecting strong performance, while maintaining investment volume estimates - Increased 2025 AFFO per share guidance on a fully diluted basis: **$1.87 to $1.89** (previously lower)[15](index=15&type=chunk) - Estimated investment volume for 2025: **$1.2 billion to $1.4 billion**[15](index=15&type=chunk) - Estimated Cash G&A expense for 2025: **$28 million to $31 million**[15](index=15&type=chunk) [Shareholder Information](index=4&type=section&id=Shareholder%20Information) This section details the company's dividend declaration and provides information for upcoming conference calls and supplemental materials for shareholders [Dividend Information](index=4&type=section&id=Dividend%20Information) Essential Properties declared a cash dividend of $0.30 per share for Q3 2025, representing an annualized dividend of $1.20 per share - Declared a cash dividend of **$0.30 per share** for the quarter ended September 30, 2025[17](index=17&type=chunk) - The Q3 2025 dividend represents an annualized dividend of **$1.20 per share**[17](index=17&type=chunk) - Dividend paid on October 14, 2025, to stockholders of record as of September 30, 2025[17](index=17&type=chunk) [Conference Call and Supplemental Materials](index=4&type=section&id=Conference%20Call%20and%20Supplemental%20Materials) The Company will host a conference call on October 23, 2025, to discuss results, with webcast and replay options available. Supplemental materials are accessible on the investor relations website - Conference call to discuss results on Thursday, October 23, 2025, at 10:00 a.m. ET[18](index=18&type=chunk) - Live webcast available in the Investor Relations section at www.essentialproperties.com[18](index=18&type=chunk) - Supplemental Information—Third Quarter 2025 is available on Essential Properties' website at investors.essentialproperties.com[21](index=21&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's strong revenue growth, increased net income, and a robust balance sheet with growing assets and equity [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations show a significant increase in total revenues and net income for both the three and nine months ended September 30, 2025, compared to the prior year, driven by higher rental and interest income | (in thousands, except share and per share data) | | | Three months ended September 30, | | | | Nine months ended September 30, | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | 2025 | | 2024 | | 2025 | | 2024 | | Revenues: | | | | | | | | | | Rental revenue | $ 136,544 | | $ 110,512 | | $ 387,444 | | $ 313,392 | | Interest on loans and direct financing lease receivables | 8,129 | | 6,477 | | 23,228 | | 16,075 | | Total revenues | 144,934 | | 117,132 | | 411,352 | | 329,901 | | Expenses: | | | | | | | | | | General and administrative | 10,211 | | 8,623 | | 32,423 | | 26,691 | | Depreciation and amortization | 38,976 | | 30,879 | | 112,559 | | 89,332 | | Total expenses | 52,559 | | 46,979 | | 158,603 | | 132,216 | | Income from operations | 93,736 | | 69,910 | | 261,170 | | 199,087 | | Interest expense | (28,348) | | (21,627) | | (77,139) | | (54,586) | | Net income attributable to stockholders | $ 65,620 | | $ 49,140 | | $ 184,942 | | $ 147,629 | | Diluted net income per share | $ 0.33 | | $ 0.27 | | $ 0.94 | | $ 0.84 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets show an increase in total assets to $6.61 billion as of September 30, 2025, from $5.79 billion at December 31, 2024, primarily driven by growth in real estate investments and an increase in senior unsecured notes | (in thousands, expect share and per share amounts) | | September 30, 2025 | | December 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | ASSETS | | | | | | Total real estate investments, net | | 5,952,362 | | 5,190,522 | | Loans and direct financing lease receivables, net | | 403,347 | | 352,066 | | Net investments | | 6,357,068 | | 5,552,606 | | Cash and cash equivalents | | 23,842 | | 40,713 | | Total assets | $ | 6,610,027 | $ | 5,798,682 | | LIABILITIES AND EQUITY | | | | | | Unsecured term loans, net of deferred financing costs | $ | 1,724,055 | $ | 1,721,114 | | Senior unsecured notes, net | | 786,312 | | 396,403 | | Revolving credit facility | | 120,000 | | — | | Total liabilities | | 2,765,545 | | 2,226,555 | | Total stockholders' equity | | 3,836,505 | | 3,563,678 | | Total equity | | 3,844,482 | | 3,572,127 | | Total liabilities and equity | $ | 6,610,027 | $ | 5,798,682 | [Non-GAAP Financial Measures and Definitions](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Definitions) This section provides reconciliations of GAAP to non-GAAP financial measures like FFO, AFFO, and EBITDAre, along with definitions of key operational metrics for comprehensive performance analysis [Reconciliation of Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) The Company provides reconciliations of GAAP net income to FFO, Core FFO, and AFFO, demonstrating improved performance across these key REIT metrics for both the quarter and year-to-date periods. Additionally, reconciliations for EBITDA, EBITDAre, and Adjusted EBITDAre are presented, highlighting operational performance before certain non-cash and non-recurring items FFO, Core FFO, and AFFO Reconciliation | (unaudited, in thousands except per share amounts) | | | Three months ended September 30, | | | | Nine months ended September 30, | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | | 2025 | | 2024 | | 2025 | | 2024 | | Net income | $ | 65,800 | $ | 49,293 | $ | 185,453 | $ | 148,089 | | Funds from Operations | | 104,814 | | 86,070 | | 297,401 | | 248,157 | | Core Funds from Operations | | 104,814 | | 86,070 | | 297,401 | | 248,157 | | Adjusted Funds from Operations | $ | 96,213 | $ | 77,892 | $ | 274,939 | $ | 226,122 | | Diluted FFO per share | $ | 0.52 | $ | 0.48 | $ | 1.51 | $ | 1.41 | | Diluted Core FFO per share | $ | 0.52 | $ | 0.48 | $ | 1.51 | $ | 1.41 | | Diluted AFFO per share | $ | 0.48 | $ | 0.43 | $ | 1.39 | $ | 1.29 | EBITDAre and Adjusted EBITDAre Reconciliation (Q3 2025) | (in thousands) | | Three months ended September 30, 2025 | | :--- | :--- | :--- | | Net income | $ | 65,800 | | EBITDA | | 132,712 | | EBITDAre | | 132,790 | | Adjusted EBITDAre - Current Estimated Run Rate | | 138,011 | | Annualized EBITDAre | $ | 531,160 | | Annualized Adjusted EBITDAre | $ | 552,044 | | Annualized Adjusted NOI | $ | 594,212 | | Annualized Adjusted Cash NOI | $ | 533,784 | Pro Forma Net Debt and TEV | (dollars in thousands, except share and per share amounts) | September 30, 2025 | | Rate | Wtd. Avg. Maturity | | :--- | :--- | :--- | :--- | :--- | | Total unsecured debt | | 2,650,000 | 4.3% | 4.5 years | | Net debt | | 2,626,158 | | | | Total enterprise value ("TEV") | $ | 8,539,422 | | | | Pro forma net debt | | 2,105,574 | | | | Pro forma TEV | $ | 8,523,318 | | | | Net Debt / Annualized Adjusted EBITDAre | | 4.8x | | | | Pro Forma Net Debt / Annualized Adjusted EBITDAre | | 3.8x | | | [Non-GAAP Financial Measures and Certain Definitions](index=13&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Certain%20Definitions) This section defines various non-GAAP financial measures used by the Company, including FFO, Core FFO, AFFO, EBITDA, EBITDAre, Net Debt, NOI, and Cash NOI, explaining their relevance for investors and analysts in assessing REIT operating performance. It also provides definitions for key operational metrics like Cash ABR, Cash Cap Rate, GAAP Cap Rate, and Rent Coverage Ratio - **FFO, Core FFO, and AFFO** are non-GAAP measures used to compare REIT operating performance by adjusting GAAP net income for items like real estate depreciation and gains/losses on sales[43](index=43&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk) - **EBITDA and EBITDAre** provide supplemental information on operating performance, exclusive of certain non-cash items and other costs, by adjusting earnings before interest, taxes, depreciation, and amortization[48](index=48&type=chunk)[49](index=49&type=chunk) - **Net Debt** is calculated as gross debt less cash and cash equivalents and restricted cash, providing an estimate of the net contractual amount of borrowed capital[51](index=51&type=chunk) - **NOI and Cash NOI** reflect property-level revenues and expenses on an unlevered basis, with Cash NOI further excluding non-cash items[52](index=52&type=chunk) - **Adjusted EBITDAre, NOI, and Cash NOI** are annualized estimates reflecting investment and disposition activity as if they occurred on the first day of the quarter, excluding certain non-core items[54](index=54&type=chunk) - Key definitions include **Cash ABR** (annualized cash base rent), **Cash Cap Rate** (annualized cash base rent divided by purchase/sale price), **GAAP Cap Rate** (annualized GAAP rental income divided by purchase price), and **Rent Coverage Ratio** (tenant EBITDA to annualized base rental obligation)[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) [Company Information and Legal Disclosures](index=5&type=section&id=Company%20Information%20and%20Legal%20Disclosures) This section provides an overview of Essential Properties Realty Trust, Inc., includes important forward-looking statement disclaimers, and lists investor and media contact information [About Essential Properties Realty Trust, Inc.](index=5&type=section&id=About%20Essential%20Properties%20Realty%20Trust%2C%20Inc.) Essential Properties Realty Trust, Inc. is an internally managed REIT specializing in acquiring, owning, and managing single-tenant, net-leased properties for service-oriented or experience-based businesses, with a portfolio of 2,266 properties across 48 states - Essential Properties Realty Trust, Inc. is an **internally managed REIT**[22](index=22&type=chunk) - Focuses on acquiring, owning, and managing primarily single-tenant properties net leased on a long-term basis to service-oriented or experience-based businesses[22](index=22&type=chunk) - As of September 30, 2025, the portfolio consisted of **2,266 freestanding net lease properties**, **99.8% leased** to tenants operating 645 different concepts across 48 states, with a weighted average lease term of **14.4 years** and a rent coverage ratio of **3.6x**[22](index=22&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section serves as a disclaimer regarding forward-looking statements, highlighting that they involve risks and uncertainties and are not guarantees of future performance. It advises against undue reliance and notes that actual results may differ materially from forecasts - The press release contains forward-looking statements identified by words like "estimate," "anticipate," "expect," and similar phrases[23](index=23&type=chunk) - Forward-looking statements involve numerous risks and uncertainties and should not be relied upon as predictions of future events[23](index=23&type=chunk) - The Company undertakes no obligation to publicly release revisions to these statements, except as required by law[23](index=23&type=chunk) [Investor/Media Contact](index=12&type=section&id=Investor%2FMedia%20Contact) Contact information for investor and media inquiries is provided, directing interested parties to Robert W. Salisbury, CFA, Senior Vice President, Head of Corporate Finance & Strategy - Contact for Investor/Media inquiries: **Robert W. Salisbury, CFA, Senior Vice President, Head of Corporate Finance & Strategy**[42](index=42&type=chunk) - Contact email: **investors@essentialproperties.com**[42](index=42&type=chunk)