EPRT is a net-lease REIT with 2,417 properties as of March 31, 2026. Under a liquidation lens, the company shows a deeply negative equity recovery posture. Total assets are $7.15B; total liabilities are $2.76B on the balance sheet, but the liquidation lens requires applying asset-side haircuts while holding liabilities at face value. The dominant asset is real estate: gross carrying value of $7.53B with accumulated depreciation of $595.5M, yielding a net book value of approximately $6.93B. Applying a 50-70% liquidation haircut to real property (land at $2.30B, buildings/improvements at $4.56B, CIP at $57.2M) produces a recovery range of roughly $3.5B to $4.9B for real estate assets. Loans and direct financing lease receivables ($447.7M net) are financial assets collateralized by real property and would be subject to a moderate haircut (assume 70-80% recovery in a distressed wind-down), contributing approximately $315M to $360M. Cash of $15.2M recovers at 100%. Intangibles (net $60.6M) recover at zero. Prepaid and other assets ($46.4M) largely zero. Total liquidation asset recovery: approximately $3.9B to $5.3B at the midpoint scenario. Against this, total debt at face stands at $2.63B (unsecured term loans $1.73B + revolving credit $100M + senior unsecured notes $800M at face), plus accrued liabilities and other liabilities of $44.5M, dividends payable $67.6M, derivative liabilities $17.1M, and operating lease liabilities $13.3M. Total liability stack at face: approximately $2.77B. At the asset haircut midpoint (~$4.6B), recovery to equity approximates $1.8B, suggesting positive book-value recovery under moderate haircuts — this is not unusual for a well-collateralized net-lease portfolio with long-duration triple-net leases and low near-term lease expiration (only 2.8% of ABR expires before 2029). However, MFFAIS reports CLV/LLV/OLV of negative $2.63B, which reflects a stricter mark-to-liquidation framework. Key risk factors in a forced liquidation: $16.8M impairment charge in Q1 2026 (up 186% from $5.9M in Q1 2025) signals asset quality deterioration in specific properties; impairment is concentrated in eight properties. The revolving credit facility drew $100M in Q1 2026 (zero at year-end 2025), incrementally growing the liability stack. Gross debt grew from $2.53B to $2.63B quarter-over-quarter. Straight-line rent receivable embedded in reported revenues ($15.4M in Q1 2026) is a non-cash accrual that inflates reported asset values but has no liquidation value. The $430M 2027 Term Loan represents the nearest maturity concentration in the debt stack — a liquidation scenario would require accelerated payoff or refinancing pressure on this tranche. Forward equity commitments ($540.6M unsettled as of March 31, 2026) are not balance-sheet liabilities but represent contingent equity issuance that management is using to pre-fund debt reduction; these would not offset liquidation liability claims.
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