FrontView REIT

FrontView is an internally managed net-lease REIT incorporated in Delaware, specializing in acquiring, owning, and managing outparcel properties that are net-leased to a diverse range of tenants. The name "FrontView" was chosen to represent the company's distinctive "real estate first" investment approach, which focuses on outparcel properties in prominent locations with direct frontage on high-traffic roads, offering high visibility to consumers. As of June 30, 2024, FrontView owns a well-diversified portfolio of 278 outparcel properties with direct frontage across 31 U.S. states.

The company's tenants include service-oriented businesses such as restaurants, cellular stores, financial institutions, automotive stores and dealers, medical and dental providers, pharmacies, convenience and gas stations, car washes, home improvement stores, grocery stores, professional services, and general retail tenants. FrontView was founded in 2016 by Stephen Preston, who previously served as a principal at NADG, an acquirer and developer of commercial, residential, and net-lease real estate across the United States and Canada, with approximately $5.0 billion in assets under management.

FrontView focuses on investing primarily in well-located net-leased outparcel properties that offer high visibility to consumers. The company believes its tenants highly value these prominent locations on high-traffic roads, which enhance their business operations. Tenants retain operational control of these strategically important locations through long-term net leases.

As of June 30, 2024, FrontView's portfolio comprised approximately 2.1 million rentable square feet of operational space, with high diversification across tenants, industries, and geographies. The company's outparcel properties were located in 96 MSAs in 31 U.S. states, with no single state accounting for more than 12.1% of its annualized base rent (ABR). The portfolio had a 98.9% occupancy rate, with leases to 292 tenants representing 137 different brands, none of which accounted for more than 3.4% of ABR. Approximately 40.0% of FrontView's tenants had an investment-grade credit rating, and 96.6% of leases (based on ABR) included contractual rent escalations, with a weighted average minimum increase of 1.7%. The weighted average remaining lease term was approximately seven years, excluding renewal options, with 96.6% of leases (based on ABR) containing renewal options.

For the six months ending June 30, 2024, FrontView generated $29.9 million in total rental revenues, incurred a net loss of $4.6 million, and achieved funds from operations (FFO) of $7.6 million. Since its inception in 2016, the company’s portfolio has expanded to 278 properties.

As part of its growth strategy and in preparation for entering the public markets, FrontView has decided to internalize its management team, which had been externally managed by third parties. This internalization will take effect upon completion of the company’s offering, after which all senior management team members will become full-time employees of FrontView. The company plans to continue executing its growth strategy, leveraging long-established relationships to source new acquisition opportunities. Following the completion of the offering, FrontView expects that its balance sheet, along with cash on hand, expected borrowing capacity under a New Revolving Credit Facility and New Delayed Draw Term Loan, and its overall leverage profile, will support further portfolio expansion.