EPRT Drops 0.82% to 2025 Low Amid Capital Strains, Rising Debt Costs

Shares of Essential Properties Realty Trust (EPRT) fell 0.82% on October 22, 2025, marking its lowest closing level since October 2025, with an intraday decline of 1.14% amid broader market pressures.

The REIT’s recent performance reflects a mix of underlying strength and structural challenges. For the first nine months of 2025, EPRT reported a 22% year-over-year increase in adjusted funds from operations (AFFO) per share, reaching $1.40, outpacing the 3.5% quarterly dividend hike. This improved AFFO payout ratio of 63.9%—down from 67.1% in the prior year—highlights its ability to sustain dividends through long-term net-lease contracts with embedded rent growth. Analysts and income-focused investors view this as a key strength, particularly as rising interest rates pressure other REITs.

However, EPRT’s aggressive growth strategy has intensified capital demands. Property-related investment outflows totaled $917.5 million in T9M 2025, far exceeding operating cash flow of $275.9 million. To bridge the gap, the company raised $391 million in 5.4% senior notes and $299 million in equity, increasing cash interest expenses by 33% to $72.4 million. While liquidity remains robust—$880 million in undrawn capacity under its credit facility—rising debt costs and potential dilution risks have raised concerns about long-term capital efficiency.

Recent governance changes, including the appointment of Kristin L. Smallwood to the board, aim to reinforce strategic oversight. Institutional investor activity has been mixed, with some entities increasing stakes while others reduced holdings. Despite these developments, sector-wide momentum—driven by analyst optimism and defensive positioning in net-lease REITs—has kept EPRT in focus. However, the stock’s overbought technical indicators and capital-intensive model suggest caution for investors assessing its near-term trajectory.