NETSTREIT Raises Investment Outlook as Property Income Climbs
The real-estate investment trust lifted its 2026 net investment forecast to $700 million-$800 million.
NETSTREIT (NTST), a real-estate investment trust focused on single-tenant retail properties, reported a 29.1% increase in property-level net operating income as portfolio expansion lifted second-quarter results.
The quarter extended an acquisition push while introducing a tighter balance between growth and funding. Net investment activity climbed for a second consecutive quarter to $229.6 million, from $211.1 million in the first quarter and $198.3 million in the fourth quarter.
Revenue rose 26.9% from a year earlier to $61.3 million, driven by a 28.0% increase in rental revenue. Net income attributable to common stockholders nearly doubled to $6.3 million, while diluted earnings increased to $0.06 a share from $0.04.
Adjusted funds from operations rose 29.2% to $35.5 million, though a 24.6% increase in diluted weighted-average shares limited AFFO growth to 6.1% on a per-share basis. AFFO reached $0.35 a share, up from $0.34 in the first quarter and $0.33 in the fourth quarter.
Gross investment activity accelerated to $298.9 million across 93 investments, compared with $239.0 million across 58 investments in the first quarter. Investment-grade tenants accounted for 30.3% of acquired annualized base rent, up from 20.3%, while the blended cash yield eased to 7.4% from 7.5%. The portfolio grew to 859 investments with 100% occupancy, though the investment-grade share of total portfolio rent declined for a second consecutive quarter to 40.7%.
NETSTREIT now expects 2026 AFFO of $1.37 to $1.39 a share after raising the low end by one cent, following an earlier increase to the outlook in the first quarter. The company also raised its net investment forecast by $150 million at each end, while expected dilution from outstanding forward equity increased to $0.05-$0.08 a share.
Headline net leverage rose to 6.5 times annualized adjusted EBITDAre from 6.3 times in the first quarter, while adjusted leverage held at 3.2 times. Liquidity slipped to $1.086 billion as unused revolver capacity declined, even as unsettled forward-equity value increased. NETSTREIT raised its quarterly dividend 2.3% to $0.225 a share, extending shareholder payouts as it pursued the higher investment target.