NetSTREIT(NTST) - 2024 Q3 - Quarterly Report

Property Investments and Developments - As of September 30, 2024, the company owned or had investments in 671 single-tenant retail net leased properties, generating an annualized base rent (ABR) of $157.0 million, with 61$302.3 million, with a weighted average remaining lease term (WALT) of approximately 13.2 years[174]. - The company invested $27.9 million in property developments during the nine months ended September 30, 2024, completing 16 projects and expecting rent to commence for 14 of them[175]. - The company sold eight properties for a total sales price of$23.0 million during the three months ended September 30, 2024, recognizing a net loss of $0.1 million[176]. Financial Performance - Total revenues for the three months ended September 30, 2024, increased by$7.4 million to $41.4 million compared to$34.0 million for the same period in 2023, driven by an increase in operating leases and properties securing mortgage loans[182]. - The company recognized a net loss of $5.3 million for the three months ended September 30, 2024, compared to a net income of$4.2 million for the same period in 2023[180]. - Total revenues for the nine months ended September 30, 2024, increased by $23.7 million to$118.7 million from $95.0 million for the same period in 2023[191]. - Net loss for the nine months ended September 30, 2024, decreased by$11.5 million to a net loss of $6.6 million from net income of$4.9 million for the same period in 2023[200]. Operating Expenses - Total operating expenses increased by $12.6 million to$39.1 million for the three months ended September 30, 2024, compared to $26.5 million for the same period in 2023[183]. - Total operating expenses increased by$24.0 million to $101.9 million for the nine months ended September 30, 2024, compared to$77.9 million for the same period in 2023[192]. - General and administrative expenses decreased by $0.8 million to$4.3 million for the three months ended September 30, 2024, from $5.1 million for the same period in 2023[184]. - Depreciation and amortization expense increased by$4.6 million to $20.4 million for the three months ended September 30, 2024, from$15.8 million for the same period in 2023[185]. Impairment and Provisions - Provisions for impairment recorded were $9.8 million on 18 properties for the three months ended September 30, 2024, compared to$1.5 million on seven properties for the same period in 2023[186]. - Provisions for impairment for the nine months ended September 30, 2024, were $17.3 million on 40 properties, compared to$4.4 million on 10 properties for the same period in 2023[197]. Debt and Financing - The company borrowed $251.0 million at a weighted average interest rate of 6.49$181.0 million on its Revolver[204]. - The principal amount of total debt outstanding as of September 30, 2024, was $783,245,000[235]. - Total indebtedness as of September 30, 2024, was approximately$175.0 million under the 2027 Term Loan, $200.0 million under the 2028 Term Loan, and$250.0 million under the 2029 Term Loan[241]. - The company entered into five interest rate hedges for its 2027 Term Loan, fixing the base interest rate at 1.87% effective November 27, 2023, and 2.40% thereafter[206]. Cash Flow - Net cash provided by operating activities increased by $10.6 million to$62.13 million for the nine months ended September 30, 2024, compared to $51.51 million for the same period in 2023, primarily due to a$20.2 million increase in rental receipts[208]. - Net cash used in investing activities decreased by $26.3 million to$(319.38) million for the nine months ended September 30, 2024, compared to $(345.73) million for the same period in 2023[209]. - Net cash provided by financing activities increased by$24.5 million to $256.07 million for the nine months ended September 30, 2024, compared to$231.61 million for the same period in 2023, mainly due to an increase in net borrowings of $141.0 million under the Revolver[211]. Earnings Metrics - FFO for the three months ended September 30, 2024, was$25,008,000, compared to $21,130,000 for the same period in 2023, representing an 18.3$70,744,000, up from $55,464,000 in 2023, indicating a 27.6$24,825,000, compared to $21,389,000 in 2023, reflecting a 16.4$22,648,000, slightly down from $23,909,000 in 2023, a decrease of 5.3$4.1 million to $8.0 million for the three months ended September 30, 2024, from$3.9 million for the same period in 2023[187]. - Estimated market risk exposure due to a 1% adverse change in interest rates was approximately $0.9 million as of September 30, 2024[244]. - Interest income on mortgage loans receivable was$(3,272) million for the three months ended September 30, 2024, compared to $(2,244) million for the same period in 2023[240]. Regulatory and Compliance - The company intends to make sufficient distributions during 2024 to qualify as a REIT and avoid corporate U.S. federal or state income tax[212]. - The company emphasizes that FFO, Core FFO, and AFFO are not alternatives to net income as reliable measures of operating performance[221].