NETSTREIT reports Q2 AFFO of $0.35/share, raises guidance, increases dividend 2.3%

NETSTREIT reported Q2 2026 net income of $0.06 per diluted share, up 50% year-over-year, and AFFO of $0.35 per diluted share, up 6.1% year-over-year. The company's core operating metrics showed consistent growth across FFO, Core FFO, and AFFO, reflecting improved property-level performance and portfolio expansion.

The company completed $298.9 million in gross acquisitions during Q2 2026 at a 7.4% blended cash yield, with 93 new investments. After dispositions and loan repayments, net investment activity totaled $229.6 million for the quarter and $442.9 million year-to-date. The 7.4% cash yield on new investments represents attractive returns in the current net lease market.

During Q2 2026, NETSTREIT sold 9.0 million shares under its ATM program at a weighted average gross price of $20.48 per share on a forward basis, adding to substantial unsettled forward equity. As of June 30, 2026, the company had 38.9 million unsettled forward shares representing $714.2 million in net proceeds available for future settlement. The company also settled 4.3 million forward shares during the quarter, generating $70.8 million in net proceeds. Total pro forma liquidity stood at $1.09 billion.

For the three months ended June 30, 2026, NETSTREIT reported net income of $6.3 million ($0.06 per diluted share), FFO of $34.6 million ($0.34 per share), Core FFO of $34.2 million ($0.33 per share), and AFFO of $35.5 million ($0.35 per share). The company paid a quarterly dividend of $0.22 per share, representing 63% of AFFO.

During Q2 2026, NETSTREIT acquired 93 investments for $298.9 million at a 7.4% cash yield with a weighted average lease term of 9.8 years. Investment grade and investment grade profile tenants represented 44.9% of these acquisitions. The company also disposed of 16 investments for $49.1 million at a 6.8% cash yield.

As of June 30, 2026, NETSTREIT's portfolio consisted of 859 investments totaling 15.4 million square feet with 100% occupancy and a weighted average remaining lease term of 10.0 years. Investment grade and investment grade profile tenants represented 56.5% of annualized base rent, down from 68.7% a year earlier, reflecting a shift in tenant credit quality mix.

As of June 30, 2026, NETSTREIT had total debt of $1.41 billion at a weighted average fixed interest rate of 3.27% (4.30% all-in) with 3.6 years remaining term. The company had $1.09 billion in total liquidity, including $301.4 million of unused revolver capacity, $20.0 million in cash, $714.2 million net value of unsettled forward equity, and $50.0 million undrawn term loan balance. Net debt to annualized adjusted EBITDAre was 6.5x, improving to 3.2x on an adjusted basis after accounting for unsettled forwards.

NETSTREIT has six development projects underway with $18.6 million funded to date and $22.7 million in estimated remaining costs.

NETSTREIT acquired 93 properties in Q2 2026 for $298.9 million at a 7.4% cash cap rate, marking the fourth consecutive quarter exceeding $200 million in gross investments. The acquired properties have a 9.8-year weighted average lease term and 44.9% are investment grade or investment grade profile tenants.

The company sold $184 million of forward equity in Q2 2026 and has $719 million of unsettled forward equity as of July 2026. Combined with $301 million of unused revolver capacity and $20 million of cash, total pro forma liquidity stands at $1.1 billion to fund future acquisitions.

As of June 30, 2026, NETSTREIT's portfolio consists of 56.5% investment grade and investment grade profile tenants with 100% occupancy, a 10.0-year weighted average lease term, and 3.8x unit-level rent coverage. The company has experienced only 3 basis points of annual credit loss over six years, significantly below peer averages of 25-75 basis points.

NETSTREIT achieved an 87.5% lease acceptance rate (7 of 8 leases) in the Big Lots bankruptcy, substantially outperforming the overall 15% acceptance rate across Big Lots' store base. This outcome demonstrates the quality of NETSTREIT's real estate selection and underwriting, as Big Lots retained only approximately 200 stores from 1,400 pre-bankruptcy. Note: these figures were previously disclosed in the company's Jun 16, 2026 8-K.

Pro forma adjusted net debt to annualized adjusted EBITDAre stands at 3.1x with no term loan maturities until 2028. Pro forma adjusted net debt represents 20.5% of undepreciated gross assets, reflecting a conservative balance sheet with substantial capacity for growth.