Essential Properties Realty Trust, Inc. (EPRT): Business Model Canvas [Dec-2025 Updated]

You're looking to crack the code on how Essential Properties Realty Trust, Inc. (EPRT) consistently generates reliable income, and honestly, their business model is a surprisingly straightforward, high-yield machine focused squarely on the middle market. We're talking about a strategy built on sourcing single-tenant sale-leaseback deals, securing them with long-term triple-net leases-meaning tenants handle the big operating costs-and maintaining an almost perfect 99.8% occupancy. If you want to see exactly how they pair that with a 14.0 year weighted average lease term and manage the rising interest expense that hit them in Q3 2025, dive into the full Business Model Canvas breakdown below.

Essential Properties Realty Trust, Inc. (EPRT) - Canvas Business Model: Key Partnerships

Investment banks and underwriters for capital raising.

• Essential Properties Realty Trust, Inc. raised approximately $119 million of equity through its ATM Program in Q2 2025.
• An upsized underwritten public offering priced on March 18, 2025, was expected to yield aggregate gross proceeds of approximately $254.2 million.
• Wells Fargo Securities and BofA Securities acted as underwriters for the March 2025 offering.
• Wells Fargo Securities, LLC and BofA Securities, Inc. served as joint bookrunners for the credit facility amendment.
• Firms participating in the Q2 2025 Earnings Call included UBS Investment Bank, Deutsche Bank AG, Barclays Bank PLC, and Citigroup Inc..

Middle-market private equity sponsors for deal sourcing.

• 86% of Q1 2025 investments supported existing relationships, underscoring recurring business.
• Investment per property in Q3 2025 was $3.8 million.
• In Q3 2025, 97% of closed transactions (comprising 87 properties) were sale-leasebacks.

Commercial real estate brokers for property acquisition.

• Institutional investors like CBRE and Cbre Investment Management Listed Real Assets LLC are noted as significant holders/investors.

Financial institutions for the $2.3 billion unsecured credit facility.

The amended and restated senior unsecured credit facility totals $2.3 billion. The lending group participation highlights the breadth of Essential Properties Realty Trust, Inc.'s capital partners.

As of Q2 2025, Essential Properties Realty Trust, Inc. reported liquidity of $1.3 billion and pro forma leverage of 3.5x. This facility replaced the previous $600 million unsecured revolving credit facility set to mature in February 2026.

Essential Properties Realty Trust, Inc. (EPRT) - Canvas Business Model: Key Activities

You're looking at the core engine of Essential Properties Realty Trust, Inc. (EPRT) as of late 2025-the activities management executes daily to drive returns. It's all about disciplined acquisition, active stewardship, and smart financing.

Sourcing and underwriting single-tenant sale-leaseback transactions is the primary deal flow driver. The focus remains on service-oriented or experience-based businesses, which management sees as resilient. For instance, in the third quarter of 2025 alone, Essential Properties Realty Trust, Inc. closed investments totaling $369.8 million across 87 properties, achieving a Weighted Average Cash Cap Rate of 8.0%. This quarter even saw a company record GAAP Cap Rate of 10.0% on investments. Looking at the year-to-date through Q3 2025, the total investment volume reached $1.0 billion across 212 properties, maintaining a strong Weighted Avg Cash Cap Rate of 7.9%. The preference for the sale-leaseback structure is clear; in Q1 2025, 90% of investments were sale-leasebacks, and 86% were sourced from repeat tenant relationships.

The investment engine is detailed below, showing the consistent deployment of capital:

Active asset management and portfolio risk mitigation ensure the income stream remains stable. This involves continuous monitoring of tenant health. As of September 30, 2025, the overall portfolio rent coverage increased to 3.6x from 3.4x the prior quarter. Furthermore, the percentage of Annual Base Rent (ABR) under one times rent coverage declined by 120 basis points during Q3 2025. Same-store rent growth for the third quarter was 1.6%, up from 1.4% the previous quarter. Dispositions are also a key activity; in Q3 2025, Essential Properties Realty Trust, Inc. sold 7 properties for net proceeds of $11.5 million at a 6.6% Weighted Avg Cash Cap Rate.

Essential Properties Realty Trust, Inc. actively manages its capital structure through raising debt and equity capital to fund growth without over-leveraging. A significant recent debt action was the pricing of a public offering in August 2025:

• Priced $400 million aggregate principal amount of 5.400% Senior Notes due 2035 on August 18, 2025.
• The Notes were priced at 98.317% of the principal amount.
• The offering settled on August 21, 2025, with net proceeds intended for revolving credit facility repayment and future investment activity.
• Year to date 2025 equity raised through the ATM Program totaled $13.8 million.
• Pro Forma Net Debt to Annualized Adjusted EBITDAre as of the end of Q3 2025 stood at 3.8x.

Maintaining high occupancy is a direct result of the quality of the underlying assets and tenant base. As of September 30, 2025, the portfolio was 99.8% leased. This near-perfect occupancy covers 2,266 freestanding net lease properties. The portfolio is highly diversified, with tenants operating 645 different concepts across 48 states.

Essential Properties Realty Trust, Inc. (EPRT) - Canvas Business Model: Key Resources

When you look at the core assets Essential Properties Realty Trust, Inc. (EPRT) relies on to execute its strategy, it really boils down to the quality and structure of its real estate holdings and the team managing them. These aren't just buildings; they are the engine for their net-lease cash flow.

The foundation is definitely the physical portfolio. As of the end of the third quarter of 2025, the company held a substantial, diversified collection of assets. They were operating with 2,266 freestanding net lease properties across 48 states. This scale helps spread risk, which is key in this sector.

The lease structure is what locks in that long-term revenue stability you're looking for. The weighted average lease term (WALT) across the portfolio was sitting at 14.4 years as of September 30, 2025. That's a long runway for predictable income, and honestly, that long-term view is what makes this model work so well.

Here's a quick snapshot of the portfolio metrics from that Q3 2025 reporting period:

Next up, the balance sheet. You need dry powder to keep acquiring, and EPRT showed strength there. They reported approximately $1.4 billion in total liquidity near the end of 2025. This liquidity position is supported by a disciplined approach to debt; their pro forma net debt to annualized Adjusted EBITDAre was 3.8x as of the third quarter end. That leverage ratio is definitely conservative for a REIT, giving them flexibility.

The operational backbone is the team itself. Essential Properties Realty Trust, Inc. is an internally managed real estate company. This means they don't outsource core functions like acquisition sourcing, underwriting, asset management, and property administration; it's all done in-house. This internal platform is designed to streamline execution and optimize asset performance. While I can't give you a specific dollar figure for the proprietary data analytics platform, the reliance on an integrated internal platform suggests they use their own systems to underwrite deals, like the $369.8 million they invested in 87 properties during the third quarter of 2025 alone.

You can see the team's focus in their investment profile:

• Focus on freestanding, single-tenant properties.
• Targeting tenants in service-oriented or experience-based businesses.
• Collective net lease experience of over 60+ years among professionals.
• Achieved an average gap yield of 10% on investments during Q3 2025.

Finance: draft 13-week cash view by Friday.

Essential Properties Realty Trust, Inc. (EPRT) - Canvas Business Model: Value Propositions

You're looking at the core value Essential Properties Realty Trust, Inc. (EPRT) delivers to its partners, which is fundamentally about providing real estate capital solutions to middle-market operators. The structure is designed to be low-touch for EPRT while maximizing stability for the tenant.

Reliable, long-term capital for middle-market companies via sale-leasebacks.

The primary mechanism for delivering this capital is the sale-leaseback transaction. For the third quarter of 2025, a massive 97% of the $369.8 million Essential Properties Realty Trust, Inc. invested was through sale-leasebacks. This strategy lets the operator monetize their real estate and deploy that cash into their core business, securing long-term, fixed-rate financing. The resulting leases are built for the long haul; new investments in Q3 2025 carried a weighted average initial lease term of 18.6 years. This focus on middle-market companies is broad, as the portfolio as of September 30, 2025, served tenants operating 645 different concepts across 48 states.

Triple-net (NNN) lease structure, minimizing landlord operating expenses.

The NNN lease is key to keeping Essential Properties Realty Trust, Inc.'s role as a landlord lean. Under this structure, the tenant takes on the responsibility for the major operating costs associated with the property. Honestly, this means the tenant pays for:

• Property tax.
• Insurance.
• Common area maintenance (CAM).

This structure transfers the variable costs of property ownership directly to the operator who controls the day-to-day business, which is a core element of the value proposition for Essential Properties Realty Trust, Inc..

High unit-level profitability, with a weighted average rent coverage of 3.6x.

The credit quality of the underlying business is paramount. Essential Properties Realty Trust, Inc. quantifies this health using the rent coverage ratio, which shows how easily the tenant's unit-level earnings can cover the rent payment. As of September 30, 2025, the entire portfolio maintained a strong weighted average rent coverage ratio of 3.6x. This metric is up from 3.4x in the prior quarter, showing improving tenant financial health. Furthermore, the percentage of annual base rent (ABR) under one times rent coverage declined by 120 basis points in Q3 2025.

Predictable, contractual rent growth through fixed escalators.

You want to know what the rent check will look like years down the road, and Essential Properties Realty Trust, Inc. builds that predictability in upfront. While the overall portfolio's weighted average lease term stood at 14.4 years as of September 30, 2025, the new deals being signed offer strong built-in growth. The average annual rent escalation on new investments closed during the third quarter of 2025 was 2.3%. This contractual growth provides a reliable, compounding return stream, which is definitely more dependable than relying on market-rate adjustments.

Here's a quick look at the portfolio metrics supporting these value propositions as of the end of Q3 2025:

Finance: draft 13-week cash view by Friday.

Essential Properties Realty Trust, Inc. (EPRT) - Canvas Business Model: Customer Relationships

Essential Properties Realty Trust, Inc. (EPRT) focuses on direct, relationship-driven origination, sourcing opportunities primarily through middle-market sale leasebacks with growing operators in targeted industries.

The reliance on established connections is a core driver of investment volume. For the second quarter of 2025, 88% of investments closed came from existing tenant relationships.

Long-term landlord-tenant relationship management is evidenced by the structure of the current portfolio as of June 30, 2025:

Proactive portfolio management supports tenant credit health. The company maintains a high level of portfolio leasing and strong coverage metrics.

Key portfolio health indicators include:

• Leased to tenants operating 606 different concepts.
• Top 10 tenants represented only 17.3% of Annual Base Rent (ABR) as of Q1 2025.
• The weighted average rent coverage ratio was 3.4x as of June 30, 2025.
• Portfolio occupancy stood at 99.6% as of June 30, 2025.

Management emphasizes offering more compelling and certain capital to counterparties based on reliability and the ability to service those relationships reliably.

Essential Properties Realty Trust, Inc. (EPRT) - Canvas Business Model: Channels

Essential Properties Realty Trust, Inc. (EPRT) focuses its direct origination efforts on middle-market companies operating service-oriented or experience-based businesses. As of September 30, 2025, the company reported that 90.6% of its transactions were Internally Originated Sale-Leaseback Transactions, and 78.6% of business came through Existing Relationships.

The sale-leaseback structure is the core of the investment vehicle, as shown by the high percentage across recent quarters:

Investment banking relationships are used to fuel external growth and manage the balance sheet, evidenced by recent capital markets actions. For instance, in Q2 2025, Essential Properties Realty Trust, Inc. raised approximately $119 million of equity through its ATM Program. The company's pro forma net debt to annualized adjusted EBITDAre was 3.5x at the end of Q2 2025, supported by $1.3 billion of liquidity. The 2025 AFFO per share guidance was increased to a range of $1.86 to $1.89, with initial 2026 guidance set between $1.98 to $2.04 per share.

Investor relations activities communicate financial health and dividend policy to public equity and bond holders. The cash dividend declared in Q3 2025 represented an AFFO payout ratio of 63%. As of December 5, 2025, the stock price was $30.55.

Key financial metrics relevant to stakeholders include:

• Q3 2025 Total AFFO: $96.2 million
• Q3 2025 AFFO per share increase year-over-year: 12%
• Portfolio Occupancy as of Q3 2025: 99.8%
• Portfolio size as of Q3 2025 end: Nearly $7 billion in income-producing gross assets
• 2025 Cash G&A guidance range: $28 million to $31 million

Essential Properties Realty Trust, Inc. (EPRT) - Canvas Business Model: Customer Segments

You're looking at the core of Essential Properties Realty Trust, Inc. (EPRT)'s strategy: who they lease to. It's all about targeting specific types of operators to build a resilient income stream. This focus on the middle market is what really sets their customer segment apart.

The primary customer base is made up of middle-market companies that can show you their unit-level operating history. This isn't about massive national chains; it's about proven, smaller operators. To keep tabs on credit risk, Essential Properties Realty Trust, Inc. (EPRT) requires unit-level financial reporting for 99.0% of its leases as of September 30, 2025. Furthermore, 94% of new investments during the first nine months of 2025 were sale-leaseback transactions, meaning they are buying properties directly from these middle-market businesses and leasing them right back to the operators.

The industries they favor are those that provide essential services or experiences. As of September 30, 2025, operators in service-oriented and experience-based industries accounted for 92.1% of cash annualized base rent (ABR). This focus is a deliberate choice to select tenants less susceptible to broad economic swings.

The diversification across the tenant base is extreme, which is a key risk management feature. As of September 30, 2025, Essential Properties Realty Trust, Inc. (EPRT) had tenants operating 645 different concepts across 48 states. This broad reach means no single customer dominates the revenue picture. In fact, no single tenant accounted for more than 3.5% of annualized base rent as of September 30, 2025.

Here's a snapshot of how diversified the customer base looks based on the latest figures:

You can see the breadth of industries they serve, which helps smooth out any localized or sector-specific downturns. The portfolio includes tenants in businesses such as:

• Restaurants, including QSR (Quick Service Restaurant)
• Car washes
• Automotive services
• Medical services
• Convenience stores
• Health & fitness
• Early childhood education

The focus on these specific, necessity-based sectors helps ensure the middle-market companies you are backing have inherent demand resilience. If onboarding takes 14+ days, churn risk rises, but Essential Properties Realty Trust, Inc. (EPRT) manages this by focusing on long-term leases, with a weighted average remaining lease term of 14.4 years as of September 30, 2025.

Finance: draft 13-week cash view by Friday.

Essential Properties Realty Trust, Inc. (EPRT) - Canvas Business Model: Cost Structure

The Cost Structure for Essential Properties Realty Trust, Inc. (EPRT) is heavily influenced by financing costs associated with its real estate portfolio and the expenses required to manage and grow its asset base.

A significant component is the interest expense, which saw a substantial year-over-year increase. Specifically, interest expense rose 31.3% in the third quarter of 2025, moving from $21,627 in Q3 2024 to $28,348 in Q3 2025, or $28.3M in nominal terms for the quarter.

The costs related to expanding the portfolio include property acquisition costs. For the third quarter of 2025, Essential Properties Realty Trust, Inc. (EPRT) closed investments totaling $369.8 million across 87 properties, achieving a Weighted Average Cash Cap Rate of 8.0%. Year-to-date 2025, investments reached $1.0 billion in 212 properties. Due diligence fees are embedded within these acquisition costs.

General and administrative (G&A) expenses are tracked closely, with Essential Properties Realty Trust, Inc. (EPRT) providing specific guidance. The cash G&A expense guidance for the full year 2025 is set in the range of $28 million to $31 million. For the third quarter of 2025, cash G&A was approximately $6.7 million, representing just 4.6% of total revenue for that quarter. Total G&A for Q3 2025 was $10.2 million.

Costs associated with maintaining REIT compliance and general portfolio management are captured within the G&A structure, alongside other non-cash operating charges. You can see a breakdown of key cost metrics from Q3 2025 below:

The company also incurred a $1.4 million impairment charge in the third quarter of 2025. Depreciation and amortization expenses for the same period were $39.0 million. The 2026 cash G&A expense guidance is projected to be between $31 million and $35 million, suggesting continued investment in the team while maintaining efficiency gains relative to expected revenue growth.

The structure of these costs reflects the nature of a net lease REIT, where the largest variable costs outside of property-level operations are debt servicing and corporate overhead required for deal sourcing and asset management. You should watch the interest expense trend closely, especially given the $400.0 million public debt issuance in August 2025 with a 5.40% coupon.

• Cash G&A Guidance for 2025: $28 million to $31 million.
• Cash G&A Guidance for 2026: $31 million to $35 million.
• Q3 2025 Investments: $369.8 million.
• Total Debt Balances (Q3 2025): Unsecured term loans at $1.72 billion, senior unsecured notes at $786.3 million, and revolving credit facility at $120.0 million.

Essential Properties Realty Trust, Inc. (EPRT) - Canvas Business Model: Revenue Streams

The revenue streams for Essential Properties Realty Trust, Inc. (EPRT) are fundamentally anchored in the consistent cash flow generated by its real estate portfolio, which is heavily weighted towards long-term, predictable contractual payments.

The primary source is rental income from long-term, non-cancelable net leases. As of September 30, 2025, the portfolio consisted of 2,266 freestanding net lease properties, maintaining a weighted average remaining lease term of 14.4 years. The portfolio occupancy rate remained exceptionally high at 99.8% as of that date. For context on the scale of rental revenue, Total Revenues for the third quarter of 2025 reached $144.9 million. Rental Revenue for the first quarter of 2025 specifically rose by 23.6% year-over-year, reaching $121.8 million.

A key component supporting revenue stability is the embedded growth from contractual rent escalations. As of September 30, 2025, 97.7% of the leases included these escalations, carrying a weighted average rate of 1.8% per year. New investments made during the first half of 2025 featured a weighted average annual rent escalation of 2.2%.

Growth in the revenue base is directly driven by acquisition volume. For the full year 2025, Essential Properties Realty Trust, Inc. has a targeted investment volume in the range of $1.2 billion to $1.4 billion. This acquisition strategy is heavily focused on sale-leaseback transactions, which accounted for 94% of new investments during the first nine months of 2025. For instance, in the third quarter of 2025 alone, the company invested $369.8 million across 87 properties at a weighted average cash capitalization rate of 8.0%.

The expected financial outcome of this strategy is reflected in the guidance for profitability metrics. Essential Properties Realty Trust, Inc. guided its Adjusted Funds From Operations (AFFO) per share for 2025 to be within a range of $1.87 to $1.89 on a fully diluted basis. This guidance reflects strong operational performance, as the company reported an AFFO per share of $0.48 for the third quarter of 2025.

Here's a quick look at the key financial targets and portfolio metrics influencing these revenue streams as of late 2025:

The revenue generation model relies on the quality of the underlying assets and tenants, which is supported by the following operational characteristics:

• Portfolio Occupancy Rate: 99.8% as of September 30, 2025.
• Largest Tenant Contribution to ABR: Not more than 3.5% as of September 30, 2025.
• Master Lease Utilization: 66.0% of annualized base rent attributable to master leases as of September 30, 2025.
• Weighted Average Rent Coverage Ratio: 3.6x.