Essential Properties Raises 2026 AFFO and Investment Floors

The Tip Desk · October 27, 2026 · 3 min read

The net-lease REIT lifted 2026 AFFO guidance to $2.02–$2.05 a share and issued 2027 AFFO of $2.10–$2.18 after $342.2 million of third-quarter investments.

Essential Properties Realty Trust (EPRT) raised its 2026 adjusted funds from operations outlook to $2.02 to $2.05 a share, from $2.01 to $2.05, and lifted the floor on 2026 investment volume to $1.3 billion from $1.2 billion, after closing $342.2 million of third-quarter investments.

The internally managed REIT, which acquires primarily single-tenant properties net leased to service-oriented and experience-based operators, also issued 2027 AFFO guidance of $2.10 to $2.18 a share on a fully diluted basis. That 2027 range includes an estimate for investment volume of $1.0 billion to $1.5 billion and Cash G&A of $32.0 million to $37.0 million.

Investment volume in the three months ended September 30, 2026 was $342.2 million across 100 properties, compared with $332.4 million across 103 properties in the second quarter and $388.6 million across 126 properties in the first quarter. The weighted average cash cap rate was 7.7% and the GAAP cap rate 9.4%. Sale-leaseback transactions accounted for 91% of the quarter’s activity, 65% was subject to master lease, and 60% involved existing relationships. Weighted average lease escalation was 2.3% and the weighted average lease term on new investments was 17.9 years.

Disposition net proceeds were $17.9 million on 11 properties, versus $54.3 million on 17 properties in the second quarter and $10.2 million on 6 properties in the first quarter. The company recorded a $4.2 million net gain on those sales. Loan repayments returned $1.8 million of principal on two properties.

Diluted net income per share was $0.27, down 18% from $0.33 a year earlier. Diluted AFFO was $0.51, up 6% from $0.48 a year earlier. Diluted FFO was $0.54 and Core FFO was $0.55. Total revenues were $168.7 million, including $157.8 million of rental revenue and $10.5 million of interest on loans and direct financing lease receivables. A $15.0 million provision for impairment of real estate, versus $1.4 million a year earlier, weighed on GAAP earnings.

The portfolio held 2,580 properties and 29.3 million square feet of rentable space as of September 30, 2026, versus 2,493 properties and 28.5 million square feet at June 30. Weighted average occupancy was 99.6% with 11 vacant properties. Properties subject to master lease were 67.4% of cash ABR. Service-oriented or experience-based tenants were 91.7% of cash ABR. The weighted average lease term was 14.2 years and the unit-level rent coverage ratio 3.5x.

Pro forma net debt to annualized adjusted EBITDAre was 3.8x as of September 30, 2026, versus 3.5x at June 30 and March 31. Unused revolving credit facility capacity was $1.3 billion after a credit-facility amendment that upsized capacity and reduced the spread by 5 basis points. Forward equity sales unsettled were $482.8 million on 15,828,249 shares. Cash and cash equivalents and restricted cash were $29.6 million.

Chief Executive Officer Pete Mavoides said the company delivered a strong third quarter supported by portfolio performance and investment momentum, and that the balance sheet and capital position provide flexibility to execute on the pipeline. Looking toward 2027, he said the company expects to remain disciplined in its investment approach so that cap rates reflect the evolving cost of capital.

The board declared a cash dividend of $0.32 a share for the quarter ended September 30, 2026, an annualized $1.28 a share, paid October 14.