Essential Properties announces 8 million share forward sale

PRINCETON, N.J. - Essential Properties Realty Trust, Inc. (NYSE: EPRT), a real estate investment trust with a market capitalization of $6 billion and a "GREAT" financial health score according to InvestingPro, has launched an underwritten public offering of 8 million shares of its common stock on a forward basis, with Wells Fargo Securities and BofA Securities serving as the underwriters. The company disclosed that it plans to enter forward sale agreements with these financial institutions regarding the shares.

The underwriters have the option to purchase up to an additional 1.2 million shares within a 30-day period. If this option is exercised, Essential Properties will engage in additional forward sale agreements corresponding to the number of shares purchased.

The forward purchasers, or their affiliates, are expected to borrow and sell the shares to the underwriters. However, the company notes that if the forward purchasers encounter difficulties in borrowing the shares or if borrowing costs are too high, they are not obligated to proceed with the sale. In such cases, Essential Properties will sell the equivalent number of shares directly to the underwriters, reducing the total number of shares in the forward sale agreements.

Essential Properties anticipates physically settling the forward sale agreements, along with any additional agreements, within roughly 18 months from the date of the prospectus supplement related to the offering. The company will not receive any proceeds from the initial sale of shares by the forward purchasers. Instead, it intends to use the net proceeds from eventual settlement to fund its operating partnership, which will allocate the funds for general corporate purposes, including potential future investments.

The offering is made under the company’s shelf registration statement filed with the Securities and Exchange Commission (SEC). A preliminary prospectus supplement and accompanying prospectus will be filed with the SEC and made available from the underwriters.

This press release contains forward-looking statements as defined by federal securities laws and cautions investors not to place undue reliance on these statements, which are subject to risks and uncertainties. The actual events may differ from those projected.

Essential Properties Realty Trust specializes in acquiring, owning, and managing single-tenant properties net leased to service-oriented or experience-based businesses. The company has demonstrated strong performance with a 25% revenue growth in the last twelve months and maintains a healthy 3.7% dividend yield, having raised its dividends for seven consecutive years. According to InvestingPro’s Fair Value analysis, the stock is currently trading near its Fair Value. As of December 31, 2024, the company’s portfolio included 2,104 properties across 49 states, leased to 413 tenants in 16 industries, with an impressive 98.8% gross profit margin.For investors seeking deeper insights, InvestingPro offers comprehensive analysis with additional ProTips and detailed metrics in its Pro Research Report, available as part of the subscription.

This article is based on a press release statement from Essential Properties Realty Trust, Inc.

In other recent news, Essential Properties Realty Trust has seen its outlook revised to positive from stable by S&P Global Ratings, highlighting strong growth and solid credit metrics. The company’s investment volume in 2024 reached $1.2 billion, expanding its asset base to $6.3 billion, up from $3.5 billion in 2021. S&P Global Ratings expects the company’s debt to EBITDA ratio to remain in the low- to mid-5x range over the next 12 to 24 months, indicating a stable financial position. Meanwhile, Citi analysts have increased the stock’s price target to $35, maintaining a Buy rating, based on revised financial projections and anticipated earnings. They project the company’s 2025 core Funds From Operations (FFO) to be $2.01 and Adjusted Funds From Operations (AFFO) to be $1.89. In contrast, B.Riley analysts downgraded Essential Properties from Buy to Neutral, citing valuation concerns and aligning operations with industry averages. They adjusted the price target to $33.50, up from $29.50, reflecting the company’s recent performance. Despite differing opinions, Essential Properties’ financial health and strategic growth remain focal points for investors.

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