NetSTREIT(US:NTST)2022-02-25 19:37Financial Data and Key Metrics Changes - For Q4 2021, the company reported net income of $0.05, core FFO of $0.25, and AFFO of $0.27 per diluted share. For the full year 2021, net income was $0.08, core FFO was $0.87, and AFFO was $0.94 per diluted share [19][24] - The balance sheet at year-end showed total debt of $239 million, with a net debt to annualized adjusted EBITDA ratio of 4.2x, below the targeted leverage range of 4.5x to 5.5x [20][21] Business Line Data and Key Metrics Changes - The portfolio's annual base rent (ABR) grew to over $71 million, up from $42 million at the end of 2020, with 327 properties across 41 states and 67 tenants in 23 different industries [9][10] - The weighted average lease term remaining at year-end was 9.9 years, with a combined investment grade and investment grade profile tenancy of 81.6% [11] Market Data and Key Metrics Changes - The company completed a record high quarterly net investment activity of $160 million in Q4 2021, including $151 million of acquisitions and over $9 million in ongoing development funding [11][13] - The largest state concentration is in Texas at approximately 11%, with the largest industry being home improvement at 15% [9] Company Strategy and Development Direction - The company aims to grow its portfolio with high-quality assets and diversify holdings, targeting no state or industry to exceed 15% of total ABR and no tenant to exceed 5% [9][16] - Future asset sales will occur to improve credit quality and diversification, with a focus on maintaining a strong tenant base [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the pipeline for acquisitions and development, with expectations to achieve at least $480 million in net acquisition activity for 2022 [24][46] - The company is committed to enhancing its ESG disclosures and maintaining a strong operational environment as employees return to the office [17][26] Other Important Information - The Board declared a $0.20 regular quarterly cash dividend, payable on March 30, 2022 [24] - The company has established 2022 AFFO per share guidance in the range of $1.13 to $1.17 [25] Q&A Session Summary Question: Update on investment activity and acquisition pipeline - Management indicated a strong pipeline with expectations to add new tenants and maintain a comfortable acquisition pace in Q1 [29] Question: Plans for issuing debt this year - Management is considering turning out some of the credit facility balance towards the end of the year, depending on market conditions [30][32] Question: 2022 goals for portfolio diversification - Management aims to reduce tenant concentration below 5% by the end of 2023, with current exposure to Walgreens at 7.3% [36][38] Question: Expected cap rates for 2022 investments - Management expects cap rates to range between 6.2% to 7%, with a blended expectation around 6.5% [41][42] Question: Development projects and partnership opportunities - Management is optimistic about development projects, expecting to bring two or three online per quarter, enhancing the growth strategy [53] Question: Dividend outlook - Management indicated that while the decision on dividends lies with the board, there is potential for increases in the future based on portfolio performance [72]