Greetings and welcome to the NETSTREIT Corp Second Quarter 2021 Earnings Call. It is now my pleasure to introduce your host, Amy An. Thank you, Amy. You may begin. We thank you for joining us for NETSTREIT's Second Quarter 2021 Earnings Conference Call. In addition to the press release distributed yesterday after market close, we posted a supplemental package and an updated investor presentation. Both can be found in the investor relations section of the company's website at www.netstreit.com. On today's call, management's remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. For more information about these risk factors, we encourage you to review our Form 10-K for the year ended December 31st, 2020, and other SEC filings. All forward-looking statements are made as of the date hereof, and NETSTREIT assumes no obligation to update any forward-looking statements in the future. In addition, certain financial information presented on this call includes non-GAAP financial measures. Please refer to our earnings release and supplemental package for definitions, GAAP reconciliations, and an explanation of why we believe such non-GAAP financial measures are useful to investors. Today's conference call is hosted by NETSTREIT's Chief Executive Officer, Mark Manheimer, and Chief Financial Officer, Andy Blocher. They will make some prepared remarks, and then we will open the call for your questions. Now, I will turn the call over to Mark. Good morning, everyone, and thank you for joining us today for NETSTREIT's Second Quarter 2021 Earnings Conference Call. I will begin with a review of our investment activity and portfolio metrics for the quarter, and Andy will then provide detail on our second quarter results and balance sheet. To begin, our core focus is on strategic growth with high-quality tenants and pursuing opportunities where we see the best risk-adjusted returns. We continue to target tenants whose physical locations are critical to their cash flow generation, making them more resistant to e-commerce competitive pressures. More importantly, we focus on tenants with strong balance sheets and proven access to capital. During the quarter, we achieved acquisition and development volume totaling approximately $121 million, making it our largest quarterly volume since our IPO last August. We completed approximately $117 million of acquisitions at an initial cash capitalization rate of 6.5% inclusive of all closing costs and a weighted average remaining lease term of 9.7 years. Over 93% of our second quarter acquisitions were with investment-grade rated tenants or tenants with investment-grade profiles. In the quarter, we provided $4 million of development funding, which included two new projects with total costs expected to be $6 million. Both of these developments are with tenants with investment-grade profiles. We anticipate that we will begin to collect rent from these projects by second quarter of 2022. In the quarter, we sold five assets for $13 million at a weighted average cash capitalization rate of 6.7%. With these dispositions, we've decreased our casual dining exposure from 1.9% to 1.2%. We will continue to look for opportunities to decrease our exposure to industries that are more at risk from retail disruptions from technological advances or shifting consumer behavior. We will continue to look at dispositions as a portfolio management tool to recycle capital into better long-term opportunities. Moving on to our portfolio metrics. As of June 30th, 2021, our portfolio contained 267 leases, comprised of 5.2 million sq ft in 39 states, with a diversified tenant roster of 59 tenants in 23 industries. Total ABR, our primary earnings driver, increased to $55.3 million, with a weighted average lease term of 9.9 years. At quarter end, we were 100% occupied with no lease expirations until 2023 and less than 1% of ABR expiring before 2025. Based on ABR, our tenancy is 70% investment-grade, with an additional 13.5% classified as investment-grade profile. As a result of our tenant credit quality and the defensive nature of the portfolio, we are proud to report 100% rent collections for 11 straight months through July. Our pipeline continues to grow in size, and we are excited about our ability to execute on our external growth strategy. We continue to review a wide range of opportunities, including investments in stabilized assets, blend-and-extend opportunities, sale-leaseback transactions, and development projects. We will stay true to our strategic focus on investment-grade and other high-quality tenants while we continue to enhance the overall diversification of our portfolio. As we look to the balance of the year and beyond, we are truly excited by the opportunity ahead of us. Our portfolio continues to perform well, and our acquisition processes are proactive and proven. We continue to target at least $360 million in net acquisitions for the full year 2021, supported by our strong balance sheet and liquidity that was bolstered last quarter with our transformational $203.6 million follow-on equity offering. Before I turn the call over to Andy, I want to provide some perspective on NETSTREIT's accomplishments since we went public just under a year ago. We grew our asset base from 163 properties to 267. Investment-grade assets grew from 64% of our portfolio to 70%. When you include investment-grade profile tenants, that metric grew from 72% to over 83%. As a result, our ABR has increased from $34.5 million to $55.3 million while improving the already strong quality of our portfolio. I couldn't be prouder of the team we have in place that has been integral in achieving these accomplishments, and we remain focused on these same key drivers, which I believe will further advance NETSTREIT's platform and create significant value for our shareholders. I'll now turn the call over to Andy to discuss the balance sheet and our capital markets activities. Andy? Thanks, Mark, and once again, thank you all for your time with us this morning. Let me begin with our results for the second quarter of 2021. Yesterday in our press release, we reported a net loss of $0.07, core FFO of $0.18, and AFFO of $0.20 per diluted share for the second quarter. I want to note that these per-share results reflect the impact of the equity offering completed in April, and while we set a post-IPO record for investment volumes in the second quarter, those acquisitions were on our balance sheet for an average of only 19 days in the quarter. In April, we issued 10.9 million shares of common stock in our first follow-on offering, raising $203.6 million in proceeds, including the exercise in full of the underwriter's option to purchase additional shares. Proceeds from the offering were used to pay off the $13 million outstanding balance on the credit facility and fund investments in the quarter, with the remainder being held as our $88 million cash balance as of quarter end. We believe this offering was a key step for NETSTREIT as we continue to demonstrate our business strategy. Moving on to our balance sheet, as of June 30th, we had $88 million in cash, and our $250 million revolving line of credit was fully undrawn. We have no debt maturities until the maturity of our revolver in December 2023, which is subject to a one-year extension option, which would match the December 2024 maturity of our $175 million term loan. Our net debt to annualized adjusted EBITDA ratio was 2.1 x at quarter end, well below our 4.5x-5.5 x long-term target. Finally, with respect to the balance sheet, in early September, we will be eligible to file a new universal shelf, which among other things, would provide greater options and efficiency for future capital raising. With respect to dividends, early this week the board declared a $0.20 regular quarterly cash dividend to be payable on September 15th to shareholders of record as of September 1st, reflecting an annualized dividend rate of $0.80 per share. As previously disclosed, we're maintaining full-year 2021 AFFO guidance in the range of $0.95-$0.99 per share. We expect to complete at least $360 million of net acquisitions this year, up from our original guidance of $320 million. We continue to see this as back-end weighted in each quarter and at cap rates consistent with our recent activity. For our cash G&A, we continue to expect to be in the range of $11 million-$12 million. While the follow- on offering was a significant positive for NETSTREIT, our larger market capitalization will require us to report as a large accelerated filer beginning in 2022. Our team is well prepared to handle the change and are already working to enhance our strong control environment to ensure compliance from a SOX perspective. The result of that impact is to pull forward some incremental internal control expense, which, when coupled with additional travel expenses associated with business development and diligence as a greater number of our employees are venturing out of Dallas, makes it more likely for us to be on the higher rather than a lower end of our 2021 G&A guidance range. In addition, our cash G&A includes recurring transaction costs, which are listed in our financial statement as a separate line item. Non-cash compensation expense will be in the range of $3 million-$4 million. We expect our cash interest expense, including unused line of credit fees, of $3 million-$3.5 million and an additional $600,000 of non-cash deferred financing fee amortization. We expect to incur taxes in the range of $200,000-$300,000. Lastly, we expect fully diluted weighted average shares outstanding to be in the range of 38 million-39 million shares for the year. To wrap up, we're very pleased with our strong second quarter activity, building off the momentum from the first quarter. We're well-positioned with ample capital and a strong pipeline of opportunities for accretive investments. As always, we want to acknowledge our entire team for their hard work and contributions to our strong performance so far this year. This concludes our prepared remarks. We'll now open the line for your questions. Operator? Our first question comes from Nate Crossett with Berenberg. Please proceed with your question. Hey, good morning, guys, and congrats on a strong quarter. I was hoping to maybe comment on the activity so far in 3Q. What's the size of the pipeline right now? Then maybe if you could just touch on competition and pricing. It sounds like you're expecting the yields to be close to what you did this quarter, but any color you could give would be helpful. Yeah, sure. Thanks, Nate. I think having been public for just about one year now, starting to do a little bit more repeat business, whether it be on the development side or blend-and-extend and some sellers that we've had a pretty good experience with. We are seeing a little bit more on the repeat business side, which I think is really helping the pipeline. Again, as we've discussed in the past we like to use our size as an advantage, and really lay out our opportunity set and tick off the assets where we're getting we think better than market pricing. The more inefficiently priced assets and the repeat business is really where we see more and more of that. We've been able to continue to achieve the same cap rates. I think, this quarter, the cap rate was the same as our first quarter, as a public company. We've been pretty pleased with being able to continue to generate similar types of returns quarter in and quarter out. That being said, there is a lot of competition for the types of assets that we're looking for. Certainly, the high-quality, investment-grade side, they're easier to finance. I think, using our relationships the way that we have and really building out a larger pipeline quarter in and quarter out has allowed us to continue to get similar types of cap rates, and we expect the same here in the future. Okay. That's helpful. Thanks. I noticed that the 7-Eleven concentration went up, and I think that was one that you were selling down before. I'm just curious. Obviously, it's a great credit, but if you could give a little color on that might be helpful as well. Yeah, sure. That's right. I think as we scale the business and the asset base gets a little bit larger, maybe more than $2 billion we think that we should be able to get all tenant concentrations below 5%, and that's kind of more of a long-term goal. We also don't want to turn away great acquisitions. We had the opportunity to do a sale-leaseback in California with 7-Eleven, where we got brand-new 15-year absolute net leases, at pretty attractive pricing with attractive bumps. We kind of looked at that as additive to the quality of the portfolio. We will look to decrease exposure mostly through increasing the size of the portfolio over time. We also don't think it's likely that we're going to have many more opportunities with 7-Eleven at the pricing that we achieve. Okay. That's helpful. Thank you, guys. Thank you, Nate. Thank you. Our next question comes from Todd Thomas with KeyBanc Capital Markets. Please proceed with your question. Hi, thanks. Good morning. First question, just wanted to follow up on investments and as we think about the year winding down 2022, I realize you're not giving guidance, but the company's installed base is increasing, and I'm just wondering more broadly how we should think about external growth going forward, whether the strategy is to acquire and grow by sort of a certain percent of the base each year, or would you expect to keep the pace constant? Just curious if you could comment on investment activity for the company more broadly as we move forward. Yeah, sure. I think in general, I wouldn't expect to see us drastically ramp acquisitions. I think over time we'll steadily increase our acquisitions and most of that is going to come from our opportunity set. I think, like I mentioned at the top with repeat business increasing those opportunities where we're seeing outsized pricing and inefficiently priced assets, we'd like to kind of continue with that similar path. Understanding as we grow the asset base, the acquisitions appetite is going to need to increase. Really at our size, call it $1 billion or so of assets adding $90 million net of dispositions per quarter really does allow us to grow AFFO at a pretty favorable clip, as compared to our peer set. For the balance of the year, you maintain guidance of at least $360 million. You're running a little bit ahead of that pace, it seems. Just curious with some potential tax policy changes late in the year or otherwise, and sort of in light of the improvement in the company's cost of capital, is there potential to see sort of a larger pace of acquisitions and investments late in the year heading into 2022? We're really going to, I think, just stick to our knitting and stick to what's been working for us. I think getting the pricing that we have is really important. The only thing more important than that to us at this point is the quality of the assets that we've been able to put into the portfolio. I think we will continue to increase acquisitions on the margin over time as we increase our opportunity set. We don't want to get too far over our skis and start really ramping growth just for the sake of growth and because we can. Just because we can doesn't necessarily mean that we should. I think we're pretty comfortable with the approach that we've been taking over the last several quarters. All right. Andy, you talked about leverage and the balance sheet in your prepared remarks. I'm just curious, the ATM language was removed from the guidance. No change to the share count there or anything. Just wondering what the view around ATM usage was as the company nears shelf eligibility. Yeah. We said 38 million-39 million shares. That would indicate the potential for some additional shares. Yeah, and we'll be eligible to file the shelf in the next several weeks, early September. The benefit there is it gives us greater optionality with respect to capital sources. It gives us the opportunity to potentially put in an ATM program, so on and so forth. As Mark talked about diligence on the asset side of the balance sheet, we're going to practice that same diligence on the right side of the balance sheet, utilizing all the sources that we have available to us. All right. Thank you. Thanks, Todd. Thank you. Our next question comes from Katie McConnell with Citi. Please proceed with your question. Hey, guys. This is Parker actually on for Katie. I guess my first question just has to do with the $4 million of development that you gave out during the quarter. I was just wondering from a yield perspective, how that is relative to what you guys are acquiring today. Yeah, sure. I do think we pick up a little bit on the development side versus acquiring existing assets. It's really just a great opportunity for us to get brand-new leases with credit tenants, which sometimes is a little bit more difficult to just go out and source in the open market. Those two p articular transactions are with investment-grade profile tenants, and are in kind of the low to mid-seven cap rate range, going into cash cap rate. A little bit more yield than typically what we're getting even on the development side. Remember, on the development side, we're not taking any lease-up risk. We're only going to move forward with those transactions if we have a lease in hand, and we're not taking any cost-overrun risk as well. Got it. Okay, thanks. Just my second question is just about Best Buy. I think you guys acquired a few stores this quarter. Yep. How willing are you guys to push sort of the needle on that and continue to grow with them? Are you guys comfortable sort of sitting at where you are now? Yeah. No, we certainly like Best Buy's business. I think they've been making some changes, as it relates to how they are thinking about their footprint within their store. We're extraordinarily cautious with our Best Buy exposure in terms of which ones we're willing to add to the portfolio. We're looking at cellphone data and really trying to get the best foot traffic data locations that we can get with Best Buy and have conversations with Best Buy and see how committed they are to those locations. We just happen to have, I believe it was three in the quarter, opportunities to add to our Best Buy portfolio. Quite frankly, we don't have any more in our current pipeline. Not to say that we wouldn't add more. I think the locations that we did add, while we did get three in the quarter, are somewhat rare, so I wouldn't expect to see us add much more to our Best Buy portfolio. Got it. If I can, what cap rate were you guys able to get those three assets at just during the quarter? Yeah. We don't usually give specific cap rates on individual deals. It was slightly higher than the average cap rate for the quarter. Okay. Thank you. Thank you. Our next question comes from Greg McGinniss with Scotiabank. Please proceed with your question. Hey, good morning. Mark, I know you mentioned not passing up some great deals with top tenants. I'm just curious if there's any issue sourcing investment opportunities with new companies that meet your investment criteria, and maybe said a bit differently, how many potential net lease tenants fit your investment criteria versus those you do business with today? Yeah, sure. It is a bit of a limited universe because we are very stringent on the types of credits that we're willing to add to the portfolio and the real estate quality. Which most of retail, quite frankly, is not investable. It is a somewhat finite universe. We are constantly looking for more tenants that we like that are maybe not investment grade, maybe investment-grade profile. We've added a few of those over time. I would expect to see a couple of new tenants pop into the portfolio over the next quarter or two. We are seeing plenty of opportunity for us to grow with the tenants that are in the portfolio. We've got exceptional relationships with most of the tenants that you see us continue to add to the portfolio, which is certainly helpful in getting insight into how they're thinking about their real estate and their growth. We're pretty comfortable that we're going to continue to be able to add to the portfolio with very similar tenants, as well as very high-quality assets. Okay, thanks. Another one on development for you. I apologize as I believe you made a comment in the opening remarks regarding Q2 2022, but I kind of missed it. Just curious, how much traction you're gaining on the development side and how you're thinking about the longer-term potential investment size, looking forward into the next few years from the $4 million today to whatever it might be in the future. Yeah. No, sure. We are starting to pick up a little bit more. We've got a lot of different ways that we acquire properties. That's been a focus for us, really even going back to when we were private, of building those relationships and trying to get kind of the programmatic type transactions dealing with tenants that we like, and we're starting to get more and more traction there. I do think it'll grow albeit on the margin, with what we're acquiring quarter in and quarter out. We just really like the fact that we're getting a new 10, 15 year lease, depending on who the tenant is, at a location that they're committed to, and typically getting better pricing. We kind of view that as a great way of kind of adding more output to the portfolio without taking more beta. I would expect on the margin for that to be a bigger chunk of what we do in the future. Okay. Just appreciate that color. Just a final question from me is on the decision to use at least $360 million as the acquisition guidance number. Just curious why you used the at least instead of maybe a more traditional net investment range. No, obviously, I think throughout the organization we want to underpromise and overdeliver, we wanted to make sure that we were going to be able to do at least $360 million. Obviously you can expect us to do a number north of $360 million. We felt like that gave us comfort that we would not be on calls underachieving. Depending on what the opportunity set is that comes in, we're pretty confident that we're going to be able to hit that number. We really only have 60, 75 days of the sight into what we're actually going to be closing. It is a little bit difficult to really give a really firm number beyond at least $360 million. Greg, if I could just add to that, I think as Mark talked about in his prepared remarks, as we've been executing and as we continue to prioritize the components of the acquisitions, right. I think what you're seeing is quality is always coming first and 11 consecutive months of 100% rent collections. Economics relative to that quality is really a close second, and then the timing of those comes third. We're really trying to build as bulletproof of a triple net retail portfolio as we can out there. From our perspective, we're very confident in our ability. We're very focused on ABR, right. Almost somewhat less confident on the inter-quarter impact of those deals because we're so focused on quality. Those are the types of things that kind of drive us to something that says at least $360 million, as opposed to, oh, the traditional, we're increasing our guidance by 10%. Right. Okay. Well, thanks, Andy. Appreciate that. Thank you. Our next question comes from Ki Bin Kim with Truist. Please proceed with your question. Thanks. Good morning. Just going back to the acquisition questions. Are you finding that your bullseye for the types of assets and investment-grade is probably not built all the same, right? There's probably even a range within that. Are you having to move your bullseye at all because of competitive pressures, or are you still finding all the deals that are typically what you would want to own? No, it's a great question, Ki Bin. We are seeing maybe a little bit more competition, a little bit higher expectations from some of the sellers. I do think that is offset with the repeat business that we're doing and really kind of sourcing more acquisitions than we did quarter in and quarter out, and then laying them out in a bell curve and trying to figure out which ones are priced the most inefficiently. That's allowed us to continue to keep the same types of cap rates since we've gone public, and I think you've seen some of our peers have. You've seen that drop quarter by quarter. I do think that becomes more of a challenge if we want to start doing a lot more acquisitions. If we want to really ramp the acquisitions, I do think that you might see cap rates drop a little bit on the margin. We're very focused on our sourcing channels, and really getting the deals first and creating our own deals or providing some type of value, whether it's capital to a developer or a blend-and-extend type opportunity. Those are the areas where we feel like we can continue to get the same sets of yields that we have each quarter. Yeah, to your point, I do think there is a lot of competition out there because they are very attractive opportunities, very easy to finance. I do think, over time, as we grow, that may become a little bit more difficult, but I don't think we're there yet. That actually brings me to my second question. You're hitting a run rate of about $100 million of acquisitions a quarter. What does it take to go to $150 million? Is it as simple as hiring more people or, like you mentioned, trying to expand the addressable universe of what you really want to own? Just how are you thinking about that as you look out year two, three? Yeah. That's something that we talk about a lot internally. There's a couple different ways we can increase to $150 million. We could sacrifice quality, which I don't think we're willing to do. I think, the more likely avenue if we were to want to do a lot more in acquisitions, in the near term, I think, as we lay out that bell curve of efficiently priced assets, we'd have to eat a little bit more into that bell curve and buy some assets that are a little bit more efficiently priced. I think on the margin, you'd see, if it was using your example, $150 million, I think you'd probably see a slight difference in the overall cap rate. Okay. Thank you. Thank you. Thank you. Our next question comes from Linda Tsai with Jefferies. Please proceed with your question. Hi. It looks like average weighted term went down a little on your acquisitions. Any additional color you could provide? Is this something you'd expect going forward? No, we are focused on keeping around 10 years of weighted average lease terms. We've been in some conversations with our current tenants, especially as we're looking at acquiring more assets and doing blend-and-extends externally on the acquisitions front. We started to include some of the assets that we own within the portfolio to potentially get some early executions on locations that are performing very well. Yeah, I do think that a challenge with investment-grade and high-quality tenants, typically the lease terms are a little bit shorter than if we were out just doing sale-leasebacks, where you see a lot of 20-year lease terms. It is something that is a challenge, but fortunately, I guess one thing I can give you some color on the current pipeline, the lease term is a little bit longer as that is an area that we've added a little bit more focus in. Can you talk about how the net lease environment has changed since you went public about a year ago, acknowledging that it was in the middle of a pandemic, and maybe just what you've learned along the way as you've been building and executing upon your pipeline? Yeah, sure. At the very beginning, I think we were just starting to come out of the pandemic a little bit. You still had a number of buyers on the sidelines. You had a lot of people kind of trying to figure out what they wanted to do. In the areas that we focus that haven't been as impacted by the first round of COVID, hopefully we're not about to face the second round. I would say on the margin, we've seen a little bit more competition with the small family offices and individual buyers. We still feel like we're going to be able to execute on our strategy. Yeah. Then just last one. Oh. If I could just add in. It's just really important to note that despite the changes from our 144A, where we are in a giant risk-on environment to COVID, giant risk off and back currently, we've remained steadfast to our strategy, right? We've been able to execute. I kind of feel like despite the fact that Mark and I and the team have only been together for call it 18, 19 months, the reality is we've been through a complete cycle of risk, and feel really, really confident of the direction that we're going and our ability to continue to produce results. Thanks. Just one last one. You're at 70% IG tenancy, and then another 11% in IG-like tenancy, and the rest is more yield-driven. Do you have a long-term view on what the right balance is for being high quality but also driving yield at the same time? Yeah, sure. I don't think we're gonna change quarter-to-quarter, but we are subject to what the opportunity set is on a quarter-to-quarter basis. We don't see a giant difference, at least in our mind, versus an investment-grade profile to investment-grade, like a BBB - credit versus a BB + credit other than it has the delineation of investment-grade or not investment-grade. I do think you could see us do some BB-type credits or some investment-grade profile credits and see those percentages move around a little bit on the margin. I think in the past, we've stated the investment-grade percentage of the portfolio is likely to stay between 65%-75%. We're kind of right in the middle of that right now. We are seeing a little bit more alpha that we feel like we can pick up with really not taking any more risk on the investment-grade profile side. We'd like to find some more names and add more to that particular bucket. Thanks. Thank you. Thanks, Linda. Thank you. There are no further questions at this time. I would like to turn the floor back over to Mark Manheimer for any closing comments. Yeah. Thanks, everyone. We look forward to discussing our progress in the future, hopefully in person. All right. Take care. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful week.