Spirit Realty Capital — Q3 2023 Earnings Presentation
28 slides from Spirit Realty Capital's earnings presentation, Nov 2, 2023
Slide 1: Supplemental Investor Presentation Q3 2023
Supplemental Investor Presentation NOVEMBER 2023 Q3 2023 Exhibit 99.2
Slide 2: Q3 2023 Overview
35% Top 20 Tenant Concentration1 Note: Data as of or for the quarter ended September 30, 2023. 1Based on ABR. 2Represents corporate-level reporting of revenues of our tenants or their affiliated companies, excluding non-reporting tenants. 3As of September 30, 2023, liquidity was comprised of $134.2
Slide 3: Spirit's underwriting approach
Spirit’s underwriting approach Utilizing proprietary tools and underwriting expertise to invest in high-quality, single-tenant, operationally essential real estate with a focus on industry relevance, tenant credit quality, and real estate strength Industry Relevance Tenant Credit Quality Real Estate
Slide 4: Capital recycling & portfolio shaping through dispositions
Sub Asset Type Properties Sold Disposition Cap Rate Service Retail 128 6.56% Non-Discretionary Retail 17 6.19% Office 4 6.14% Discretionary Retail 5 7.98% Data Center 1 5.37% Total 155 6.47% Sub Asset Type Properties Sold Disposition Cap Rate Distribution 10 6.00% Manufacturing 4 4.22% Total 14 5.32
Slide 5: Portfolio Composition
Portfolio Composition
Slide 6: Top 20 Tenants and Current Portfolio Composition
Tenant Concept Number of Properties % of ABR Life Time Fitness 13 4.3% Invited Clubs 21 3.1% BJ's Wholesale Club 11 2.3% At Home 16 2.1% Dave & Buster’s / Main Event 15 1.9% Church’s Chicken 160 1.9% Dollar Tree / Family Dollar 133 1.9% Circle K / Clean Freak 75 1.8% Home Depot 8 1.7% GPM 105 1.5% Z
Slide 7: Industrial investment Overview
Industrial investment Overview Note: Percentages based on Q3 2023 Industrial ABR of $185.4 million, unless otherwise noted. 1Excludes Industrial Outdoor Storage properties. 2Represents corporate-level reporting of revenues of our tenants or their affiliated companies. 3Spin-off occurred on June 1, 2
Slide 8: Industrial assets in growing markets
Industrial assets in growing markets Properties Distribution Manufacturing Industrial Outdoor Storage (IOS) Flex Note: Percentages based on Q3 2023 Industrial ABR of $185.4 million. Regions Sunbelt Northeast Midwest Southwest Northwest Grand Total Sub-Asset Type # % # % # % # % # % # % Distribution
Slide 9: Retail portfolio highlights
Retail portfolio highlights Our retail assets are granular properties leased to sophisticated operators, with 82.8% generating over $100 million in revenue1, located in markets with strong demand drivers Note: Data as of September 30, 2023. 1Based on ABR. Represents corporate-level reporting of reve
Slide 10: Significant retail tenant overlap with high quality net lease peers
Source: Public company information and CoStar data available as of September 30, 2023. Note: Overlap percentages based on Tenant and for retail assets only. Excludes retail tenants not available in Costar. 1Represents the percentage of Spirit’s top 20 retail tenants that is a top 20 tenant of peers.
Slide 11: Portfolio Health
18.5% Actual Investment Grade Rated1 Note: Data as of September 30, 2023. Percentages are based on ABR. 1Investment Grade Ratings represent the credit rating of our tenants, their subsidiaries or affiliated companies. Actual ratings based on S&P or Moody’s are used. 2Represents corporate-level repor
Slide 12: Lease structure, expirations and escalations
LEASE STRUCTURE, EXPIRATIONS AND ESCALATIONS $ in thousands Year Number of Owned Properties Square Feet (in thousands) Annualized Base Rent Contractual Rent Annualized (1) % of ABR Remainder of 2023 4 123 $ 1,473 0.2% 2024 32 1,012 11,516 1.7 2025 51 2,388 21,315 3.1 2026 111 4,756 42,564 6.2 2027 1
Slide 13: Portfolio diversification
Note: Data as of September 30, 2023. *Represent less than 0.1% of ABR. PORTFOLIO DIVERSIFICATION Northwest 2.5% of ABR Northeast 21.7% of ABR Midwest 19.2% of ABR Southwest 11.9% of ABR State % of ABR TX 15.3% TN 3.8% AZ 2.5% NY 2.3% PA 1.7% KY 1.6% AK 0.8% IA 0.6% RI 0.3% SD 0.2% FL 6.6% CA 3.7% CO
Slide 14: Capital Deployment Highlights
Capital Deployment Highlights
Slide 15: Capital deployment activity
Note: Revenue Producing Expenditures represent expenditures for development transactions, tenant property improvements, and investments in tenant loans, debt securities or similar instruments that provide a return on investment. 1Includes a $33.0 million loan provided as financing in conjunction wit
Slide 16: Trailing four-quarter acquisitions
Trailing four-quarter acquisitions Note: Percentages based on Gross Investment of acquisitions and excludes Revenue Producing Expenditures. Retail industries reflect the underlying Tenant operations, and Industrial and Other industries represent the underlying property use. Q1 2023 | $183.9M Gross I
Slide 17: Disposition activity
1Includes the sale of four movie theaters for $44.0 million, of which $33.0 million relates to a loan provided as financing. Excluding this movie theater sale, the Disposition Capitalization Rate is 6.13%. DISPOSITION activity Improving portfolio diversification and increasing returns on capital thr
Slide 18: Financial Information and Non-GAAP Reconciliations
Financial Information and Non-GAAP Reconciliations
Slide 19: Consolidated Balance Sheets
(Unaudited) September 30, 2023 March 31, 2019 December 31, 2022 December 31, 2018 Assets: Real estate assets held for investment: Land and improvements $ 2,742,072 $ 2,740,250 Buildings and improvements 6,081,378 5,892,117 Less: accumulated depreciation (1,354,807) (1,211,061 ) Total real estate ass
Slide 20: Consolidated Statements of Operations
CONSOLIDATED STATEMENTS OF OPERATIONS $ IN THOUSANDS (Unaudited) Three Months Ended September 30, Three Months Ended March 31, Nine Months Ended September 30, Three Months Ended March 31, 2023 2019 2022 2018 2023 2019 2022 2018 Revenues: Rental income1 $ 104,067 188,205 $ 98,236 180,296 $ 104,067 56
Slide 21: Funds and Adjusted Funds from Operations
1Costs related to COVID-19 are included in general and administrative expense and primarily relate to legal fees for executing rent deferral or abatement agreements. 2Dividends paid and undistributed earnings allocated, if any, to unvested restricted stockholders are deducted from FFO and AFFO for t
Slide 22: Annualized Adjusted EBITDAre, FCCR and Cash NOI
Annualized Adjusted EBITDAre Q3 2023 Q1 2019 Net income $ 38,468 Interest 36,919 Depreciation and amortization 79,370 Income tax expense 235 Gain on disposition of assets (3,661) Portfolio impairments 19,258 EBITDAre 170,589 Adjustments to revenue producing acquisitions and dispositions 777 Deal pur
Slide 23: Capital structure and debt summary
Note: Data as of September 30, 2023. 1Borrowings bear interest at a 1-Month adjusted SOFR rate plus an applicable margin of 0.775% per annum. As of September 30, 2023, $1.2 billion of borrowing capacity was available. 2Includes the impact of the Company’s interest rate swaps. The stated rate as of S
Slide 24: Net Asset Value (NAV) Components
Net Asset Value (NAV) Components Note: Data as of September 30, 2023. Market Value of Real Estate $4.0B Debt and Equity $269.8M Other Assets $200.5M Other Liabilities $690.1M Annualized Base Rent $106.4M Net Book Value for Vacant Assets $3.8B Debt Principal Outstanding $172.5M Preferred Equity Liqui
Slide 25: Appendix
Appendix
Slide 26: Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)
Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) FFO is calculated in accordance with the standards established by NAREIT as net income (loss) attributable to common stockholders (computed in accordance with GAAP), excluding real estate-related depreciation and amortization, imp
Slide 27: Definitions and credit facility terms
2019 Credit Facility refers to the $1.2 billion unsecured credit facility which matures on March 31, 2026. 2022 Term Loans refers to the $800.0 million senior unsecured term loan facility, comprised of a $300.0 million tranche which matures on August 22, 2025 and a $500.0 million tranche which matur
Slide 28: Forward-looking statements and risk factors
FORWARD-LOOKING STATEMENTS AND RISK FACTORS The information in this presentation should be read in conjunction with the accompanying earnings press release, as well as the Company's Annual Report on Form 10-K and other information filed with the Securities and Exchange Commission. This presentation
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