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IPO Profile

NETSTREIT Corp. (NTST)

Offer Price
$18.00
Offer Size
12,500,000
3-Year Outlook
Positive
Volatility
High
First Day Turnover
34.86%

Description

We are an internally-managed real estate company that acquires, owns and manages a diversified portfolio of single-tenant, retail commercial real estate subject to long-term net leases with high credit quality tenants across the United States. Our growth and diversification strategy focuses on tenants in industries where a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including discount stores, grocers, drug stores and pharmacies, home improvement, automotive service and quick-service restaurants, which we refer to as defensive retail industries. We believe these characteristics make our tenants' businesses e-commerce resistant and resilient through all economic cycles. The majority of our portfolio is comprised of properties leased to tenants operating in these defensive retail industries, with 88.5% of our ABR stemming from necessity, discount and/or service-oriented industries. We generally target properties with a purchase price between $1 million and $10 million, a segment of the market that we believe is undercapitalized and where we can maintain a consistent pipeline of relatively small assets to acquire on attractive terms without the threat of broad competition. We also selectively review larger properties with a purchase price in excess of $10 million, which we typically lease to investment grade tenants like Walmart and Home Depot, when we believe the acquisition will be accretive to the quality of our portfolio. The average purchase price of a property in our portfolio is $3.2 million, and our leases typically have initial lease terms of at least 10 years and contain two or more options for the tenant to extend the lease term, most often for additional five-year periods.

Approximately 64.0% of our ABR is from investment grade credit rated tenants, which historically have exhibited a strong track record of making scheduled rental payments, showing resilience during times of economic downturn. We believe that our multi-faceted acquisition strategy, combined with our disciplined underwriting approach, highlighted by a dual focus on tenant credit and real estate fundamentals, and supported by a conservative, flexible balance sheet to enable accretive growth from the outset, will allow us to maximize stockholder value while generating attractive risk-adjusted returns with an emphasis on stable rental revenue.

          Our diversified portfolio consists of 163 single-tenant retail net leased properties spanning 34 states, with tenants representing 53 different brands or concepts across 23 retail sectors. Our portfolio generates ABR of $34.5 million and is 100% occupied, with a WALT of 11.2 years and consisting of approximately 64.0% investment grade tenants by ABR, which we believe provides us with a strong, stable source of recurring cash flow from which to grow our portfolio. None of our tenants represent more than 12.7% of our portfolio by ABR, and our top 10 largest tenants represent in aggregate 56.8% of our ABR. Our top 10 tenants are 7-Eleven, Walmart, CVS, Ollie's Bargain Outlet, Lowe's, Advance Auto Parts, Dollar General, Walgreens, Home Depot and Kohl's. More than 91% of the leases in our portfolio are triple-net, with the remaining leases double-net. As a result of this net lease structure, we do not expect to incur significant capital expenditures relating to our portfolio. 
 

Investors Pre-IPO Holdings (%)
Google Ventures 30
Intel Ventures 20
Patricoff Ventures 5
Kleiner Perkins 18

Deal Highlights

Deal Tracker

Filing Date   12 Aug, 2020
Price Date   13 Aug, 2020
Offer Price $18.00
Offer Size 12M
Look Up Expiry Date   13 Feb, 2021
Earnings Release Date   Nov 1, 2018