NETSTREIT Corp. Announces Launch of Public Offering of Common Stock

Rhea-AI Summary

NETSTREIT Corp. (NTST) has announced a public offering of 8,000,000 shares of its common stock with an option for underwriters to purchase an additional 1,200,000 shares. The company will enter into forward sale agreements with affiliates of Wells Fargo Securities and BofA Securities. The offering is made pursuant to the company’s shelf registration statement, and the net proceeds will be used for general corporate purposes, including repayment of outstanding amounts and funding of acquisitions and development activities.

Insights

Financial Analyst

NETSTREIT Corp.'s public offering of 8,000,000 shares, with an additional option for underwriters to purchase up to 1,200,000 shares, represents a strategic financial maneuver designed to bolster the company's capital structure. The forward sale agreements with affiliates of Wells Fargo Securities and BofA Securities provide a hedge against market volatility by locking in a sale price while deferring the actual equity issuance. This allows the company to plan for capital needs without immediate dilution of shareholder value.

The decision to not immediately receive proceeds and instead opt for future settlement aligns with the company's intent to manage its cash flow efficiently. Upon settlement, the proceeds are earmarked for general corporate purposes, including potential debt repayment and investment in property acquisitions and development, which could enhance the company's asset base and revenue potential in the long term. However, the impact on the stock price will depend on market perception of the offering's terms and the company's growth prospects.

Market Research Analyst

The real estate investment trust (REIT) sector, where NETSTREIT operates, is highly sensitive to interest rate fluctuations and economic cycles. The company's proactive approach in securing capital through forward sale agreements indicates a strategic move to strengthen its position against such market forces. By tying the sale price to the public offering price, less certain adjustments, NETSTREIT is attempting to mitigate the risk of share price depreciation during the settlement period.

Investors should note that while this offering provides NETSTREIT with a financial cushion, it also introduces the potential for share dilution once the forward sale agreements are settled. The timing and the utilization of the proceeds will be critical in assessing the offering's success in contributing to the company's growth trajectory and overall market competitiveness within the REIT sector.

Legal Expert

The legal framework of this public offering is supported by NETSTREIT Corp.'s shelf registration statement, which expedites the process of capital raising by allowing the company to offer and sell securities without the need for a separate SEC review for each issuance. It is imperative for investors to understand that this offering is subject to market conditions and regulatory compliance, as indicated by the necessary filings with the U.S. Securities and Exchange Commission and adherence to state and jurisdictional securities laws.

Furthermore, the company's clear statement that this press release does not constitute an offer to sell or a solicitation of an offer to buy ensures transparency and compliance with the SEC's regulations on communication regarding public offerings. The legal intricacies of the forward sale agreements and the conditions under which the company can elect cash or net share settlement are pivotal in safeguarding stakeholder interests and maintaining market integrity.

DALLAS--(BUSINESS WIRE)-- NETSTREIT Corp. (the “Company”) announced today that it has commenced a public offering of 8,000,000 shares of its common stock in connection with the forward sale agreements described below, which is subject to market and other conditions. In connection with the offering, the Company also intends to grant the underwriters a 30-day option to purchase up to an additional 1,200,000 shares of common stock.

Wells Fargo Securities and BofA Securities are acting as joint book-running managers for the offering.

The Company expects to enter into forward sale agreements with affiliates of Wells Fargo Securities and BofA Securities (the "forward purchasers") with respect to 8,000,000 shares of its common stock (or an aggregate of 9,200,000 shares if the underwriters exercise their option to purchase additional shares in full). In connection with the forward sale agreements, the forward purchasers or their affiliates are expected to borrow and sell to the underwriters an aggregate of 8,000,000 shares of the common stock that will be delivered in this offering (or an aggregate of 9,200,000 shares if the underwriters exercise their option to purchase additional shares in full). Subject to its right to elect cash or net share settlement, which right is subject to certain conditions, the Company intends to deliver, upon physical settlement of such forward sale agreements on one or more dates specified by the Company within approximately 12 months from the date of the prospectus supplement relating to the offering, an aggregate of 8,000,000 shares of its common stock (or an aggregate of 9,200,000 shares if the underwriters exercise their option to purchase additional shares in full) to the forward purchasers in exchange for cash proceeds per share equal to the applicable forward sale price, which will be the public offering price, less underwriting discounts and commissions, and will be subject to certain adjustments as provided in the forward sale agreements.

The Company initially will not receive any proceeds from the sale of shares of its common stock by the forward purchasers. The Company expects to contribute the net proceeds, if any, it receives upon the future settlement of the forward sale agreements to its operating partnership in exchange for Class A limited partnership units in the operating partnership and the operating partnership intends to use the net proceeds for general corporate purposes, which may include the repayment of amounts outstanding from time to time under the Company’s revolving credit facility, and funding of acquisitions of properties and development activities in the Company’s pipeline. Selling common stock through the forward sale agreements enables the Company to set the price of such shares upon pricing the offering (subject to certain adjustments) while delaying the issuance of such shares and the receipt of the net proceeds by the Company until the expected funding requirements described above have occurred.

The offering is being made pursuant to the Company’s shelf registration statement, which was automatically effective upon filing with the U.S. Securities and Exchange Commission on September 1, 2021. Copies of the preliminary prospectus supplement and accompanying prospectus relating to the offering may be obtained from the SEC's website at www.sec.gov or by contacting: Wells Fargo Securities, LLC, Attention: Equity Syndicate Department, 500 West 33rd Street, New York, New York, 10001, at (800) 326-5897 or email a request to cmclientsupport@wellsfargo.com and BofA Securities, Attention: Prospectus Department, NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina 28255-0001 or by email at dg.prospectus_requests@bofa.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About NETSTREIT Corp.

NETSTREIT Corp. is an internally managed real estate investment trust (REIT) based in Dallas, Texas that specializes in acquiring single-tenant net lease retail properties nationwide. The growing portfolio consists of high-quality properties leased to e-commerce resistant tenants with healthy balance sheets. Led by a management team of seasoned commercial real estate executives, NETSTREIT’s strategy is to create the highest quality net lease retail portfolio in the country with the goal of generating consistent cash flows and dividends for its investors.

Forward-Looking and Cautionary Statements

This press release contains “forward-looking statements.” Forward-looking statements include statements regarding the proposed public offering and other statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements, including statements regarding the size, timing, and expected use of proceeds of the offering, are based on the Company’s current expectations and assumptions regarding capital markets conditions, the Company’s business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include financial market and regulatory conditions, general real estate market conditions, the Company’s competitive environment and other factors set forth under “Risk Factors” in the Company’s preliminary prospectus supplement and accompanying prospectus and in the Company’s annual and quarterly reports and other documents filed with the U.S. Securities and Exchange Commission from time to time. Any forward-looking statement made in this press release speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

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Investor Relations

ir@netstreit.com

972-597-4825

Source: NETSTREIT Corp.

FAQ

What is NETSTREIT Corp.'s latest announcement?

NETSTREIT Corp. (NTST) has announced a public offering of 8,000,000 shares of its common stock with an option for underwriters to purchase an additional 1,200,000 shares.

Who are the underwriters for NETSTREIT Corp.'s offering?

Wells Fargo Securities and BofA Securities are acting as joint book-running managers for the offering.

How will NETSTREIT Corp. use the net proceeds from the offering?

The net proceeds will be used for general corporate purposes, including repayment of outstanding amounts and funding of acquisitions and development activities.

Where can I obtain the preliminary prospectus supplement for NETSTREIT Corp.'s offering?

Copies of the preliminary prospectus supplement and accompanying prospectus relating to the offering may be obtained from the SEC's website at www.sec.gov or by contacting Wells Fargo Securities, LLC and BofA Securities.

What are the conditions for the offering to be made?

The offering is made pursuant to the company’s shelf registration statement, and the net proceeds will be used for general corporate purposes, including repayment of outstanding amounts and funding of acquisitions and development activities.