W. P. Carey (WPC) 1 May 242024 Q1 Earnings call transcript

Hello, and welcome to W. P. Carey's First Quarter 2024 Earnings Conference Call. My name is Diego, and I will be your operator today. [Operator Instructions] Please note that today's event is being recorded. now Investor program Relations. will Sands, to I of Head Instructions] turn over today's Peter [Operator Mr. Sands, go please ahead.

Earnings Good morning, for Quarter morning joining us everyone, and thank our you XXXX for this Call. First

like to we the made forward-looking and this on statements. I facts Before are historic be remind statements not begin, call may that some everyone of would deemed

of Relations at will our materials. Investor Factors Carey's expectations P. related made X materially from SEC wpcarey.com, it An the that filings. W. could call cause will actual our results this can section where also of other and online and approximately in available for where investor replay provided of be our presentations copies differ in find website conference be year you to archived are

that, Officer, call our over And hand the to Jason with Chief I'll Fox. Executive

Today, and positioned pipeline, my activity the current everyone. Thank strength recent touch you, how on morning, as investment our I'll Peter, our our well outlook. upon and focus of good remarks and as we're

As by activities. balance cover and Toni first CFO, as our joined our Sanzone, results will as recent who asset quarter well our management sheet I'm usual,

Park, Brooks Head Asset take Gordon, on We President; of to have questions. the our call our Management John and

first Rickenbacker of completed early distribution foot International and Starting properties. in of Columbus, the X.X which million, a investments near This of completed investments with were approximately outside $XX acquisition April comprises Year-to-date, quarter Airport, Ohio. investment the of million activity. we've facility during closed industrial $XXX million totaling vast majority an $XXX just square million

opportunities year. investment Europe. has about come compared bid-ask last XX% of in in in that say in I'm Year-to-date, pleased to seen we've been to spreads significantly, region more the our volume creating Europe,

we've where could ability Our European where bonds. a that issue tighter moved than rates basis advantage given presence has gives of issue we closer our cost to it around us XXX seen historically, points bonds. advantage, Euro-denominated to Currently, at debt also U.S.

debt source high-yield key and sale our remaining ability other rent is lease investments largest very including an leasebacks advantage alternatives capital attractive expensive, comprise of our financing the escalations. directly sale the be structure, negotiate A leasebacks of With and year-to-date. of continue to to proportion

we're a the is net lease leases contractual result, with basis. positioned ABR XX.X% rent just which uniquely generated a same-store of As over with within built-in on X% sector growth, currently by

capital. strength average rates look of to the cap long terms, rent initial both to believe Given our yields over it's and growth lease at cost of relative we our important

initial in approximately had cap weighted life going Our leases. over yields the the growth of investments year-to-date X.X%, rate average cash around average reflecting of a providing accretion X%, and rent

and running For X% which average prove now, inflation yield, over targets, although with generally is conservative may the at ECB X% be in time line we're with assuming inflation Fed to some for expected to that continue.

While in to investments, we including the a Xs. $XXX across at totaling we rates, months. over yields that target will range about currently stages the of initial strong the million of mid-Xs the in rates of the life leases the over to a close we average pipeline, few million and for year, have averaging cap continue expect expect cap investing We advanced $XXX full next over

to several $XXX capital hundred in for gives time us of have we dollars that completion far visibility XXXX we so of longer have that Additionally, deals identified other in clear for or completed as close. with million imminent. commitments million XXXX. told, are in $XX million deals of either over All the investments and lines And investments viewed scheduled pipeline into

$X volume billion $X.X towards progress in So our we're billion good the to guidance. investment of making

when pre-funding equity. up generally we've The our cost lease outlook the those of interest Essentially, an executing for net advantage have uncertain become and a transactions. REITs a time increasingly distinct built on has unfavorable rates at us gives liquidity deal significant pipeline

quarter, the I that specifics. to liquidity, our Toni with new on the in the the our just dispositions. we and even But main During and into the is billion added want primarily first minimally first to after make we quarter over $X through State $X point get Andalusia funding cash, investments, will revolver. ended of drawn U-Haul billion we're

fund capital bias both our term over to near-term are available or maturities, that investments. strong remains to the into repay While short debt new investments deploy

term, capital our self-storage meaningful Over operating portfolio net us, be additional available including longer unique differentiators flexibility access in giving internal to the we additional as to a an to how REITs, time, as over sources other challenging period of the us continue Lineage, stake markets investment when the the markets. our lease well capital runway longer extended and equity remain and capital of in should

earnings where to our we near-term Lastly, positioning the the time stand, long-term we to including it's of in how as we impacts portfolio, for strategy exit completion near good a the versus are the office company our review higher to growth. assets

on along Given fundamentals of comparable the but exercise without AFFO prior any ahead the associated spun to we've option, or U-Haul the periods, off without and forward the us. assets headwinds instead with a to sets deteriorating purchase significant going purchase from office baseline XXXX with assets AFFO grow sold options new of office which be won't

tenant its is certain rent talked lesser matters. about embedded on additional X any plans. Wawona expected currently AFFO by guidance. Prima also downside lease summary, rejected was specifics to the we made on as been review The tenant Toni quarter. not impacted working extent, has turnaround track a cold To packing Hellweg expect facilities restructuring storage and in our the in the and But them that through here, good we with was completed current on last too. XXXX will do and We've the progress on terms and

successfully we the facilities. April, one of In sold

working we're two. the expect and We complete second next the smaller other a actively to on sale the few of over weeks, property

outcome. spoke of to property an a at compared In vacant rent tenant, both quarter, excellent addition, about credit the re-tenanting completed a to and we prior the lease last which we the higher warehouse large was stronger

disclosures, call, tenants some last over revenue entities. including showing they additional our in government tenant XX% of made our comes $XXX or that generate are where company we've million Since parent or annual from their ABR details

our As to approach investment large mission-critical a invest in reminder, is properties favoring companies.

a investment economic to sub-investment grade properties higher which companies, During are critical companies expanded the generally to liquidation. our the of continue and the credits. XX liquidity also tougher to restructuring more periods operating event have top our disclosure which cycle, compared of are and companies, the grade tenants, likely access have small strong a in large better in to in risk of very large supplemental including show largest We've tenant far generally

largest for is of which with and Within those we're long-tenured tenants, production a North around XX well-known blue-chip in annual billion critical America, contract monitoring in manufacturer closely customers. number provides food top capacity revenues $X Hearthside, the and

we investment all the majority While any event critical thesis portfolio. a to divisions, experienced credit properties some disruption of largest nature central expect it of the has which of rents, comprise restructuring, do on the highly even Hearthside's deterioration, not original given we of in the our this large was X which to our own,

tenant we a progress robust well towards exit making guidance, execute extremely office we've liquidity our recent with of strategy even investment which including end XXXX some stronger positioned portfolio. given to amassed. this our volume resolution expect good completion pipeline, the with an closing, issues, year the we're of to and In We're on,

reflected see that we The flow us digits will well full of of rent the our will deploying in confidence growth the dividend growth through over growth gives that of a combination along returns impact in positioned capital with year, which earnings drive as and capital, that we is year-over-year double in uptick our a our the believe And escalations, next we total will cost through to yield. of XXXX. low strength shareholder term significant in long be

call over And with I'll Toni. pass that, to the

rent on the and as Thank our under you, restructuring, everyone. AFFO the $X.XX of X-month a about the abatement had periods, lease AFFO. good impact our primarily per first for with impact share, strategy Jason, reflecting $X.XX the exit execution share quarter office of first quarter Hellweg totaled the from a as prior well per decline which morning,

to coupled on our guidance line range. the the our $XXX full during first to Sale anticipated We Office properties activity quarter, activity track including leaving our generate of million, the X remaining majority completed the under year XXXX in sold our of Given with office disposition program. remain totaling just year-to-date, strength sell under the we our investment midpoint X.X% proceeds of ABR XX pipeline, for AFFO of with with gross assets, large representing us Program

$XX million. proceeds and million, purchase of first disposition also our of sold quarter U-Haul additional During total assets X approximately totaling we for $XXX the in quarter, option dispositions the million to $XXX gross the portfolio under bringing its completed

quarter XX.X% rent Hellweg activity on the The to a a for of rent completion quarter. lease reduction, also which ABR million. included and in was abatement extended bringing commencing lease re-leasing by $XX.X April its First the term years, X we X, provided the resulted restructure, first

overall recapture ABR. basis XXX% lease of points XX term of X.X Excluding Hellweg, of on rent re-leasing activity resulted added years incremental in average and weighted

quarter, in We rent and sold. currently and we As our one additional on gross other in being proceeds which guidance through the three, portfolio assets rejected working Wawona the collected $X resolutions on is resolution a these disposed first million. our the and to work continues portfolio to in the properties lease through Prima one that We're vacant. on April, of no full Jason of we for for assets close XXXX as mentioned, assume rent the of of carry

quarter the square a end Occupancy just of primarily the at Chicago. X.X XX.X%, points outside reflecting property, XXX warehouse increased foot of million to the basis lease-up first

The a for achieved of attractive with of XXXX. cash rent, the U.S. rent in fixed asset, XX.X-year noted, XXX% great of Logistics beginning the million Jason a prior a on lease ABR the rent division with initial Samsung of quarter As outcome escalations. represents in-place this term $X.X first we signing with

Turning rent to same-store growth.

was contractual same-store was abatement first rent to Hellweg's year-over-year the Comprehensive For XX and of XXXX the quarter which as reflecting basis reported, largely expected negative average points the rent moderate growth year-over-year, around full for year. is X.X% growth same-store quarter, rent. X.X% first

Excluding X% first at would just same-store this year-over-year. grown comprehensive over abatement, have quarter

lower for the of the we and year year negotiations, range. low current current guidance impact. full relatively to On same-store related to to the inclusive at And run settlements quarters first expected total income $X.X in lease flat, the basis, for recoveries was full a million X the on our assuming comprehensive based of with higher quarter Hellweg lease-related are mid-$XX over year, a million. remaining Other be the expect

due $XX.X to first higher a run typically for as totaled G&A view not than timing since do which year runs certain the the of rate the rest we G&A million expense first of the quarter, items. payroll-related quarter

for income includes $XX.X million received income million dividend full realized we expect the quarter the to to year, Lineage currency between million, be G&A during $X.X January. on we million million. on of the which interest continue Non-operating So and $X $XXX was $XXX $X.X gains annual hedges in cash, million of and first

income quarters of we the X%, During quarter, cash averaging income the of new we amount the into over first interest interest year, at as although around cash a remaining to decline deploy expect investments. rate earned the

For nonoperating income $XX $XX total the full between million. we expect year, million to and

Moving balance now to sheet. our

of revolver, increased Office on quarter balance in with other XXXX presented our billion from dispositions. $X.X approximately the assets and proceeds, ended liquidity million proceeds totaling are the Program exchange as position the driven cash including of our and $XXX first We availability million billion, restricted which $XXX cash during within to liquidity by sheet. $X.X close quarter, U-Haul under Our Sale

liquidity maturity noting robust repaid the in early very bonds We a using USD continue cash hand. position, to we our at second on that million quarter, have XXX

bonds remains along schedule XXX coming manageable July, with debt mortgage some denominated Our debt EUR incremental maturity very with for due. in million XXXX maturing

exposure Given reducing remained the built up, to balance rate low, we've cash relatively floating our substantial revolver our debt.

XXXX. interest for to the range first average for to and rest is Our the weighted expected quarter in rate, low therefore, X.X% at of the remained average mid-X%

to fund the markets approach to how deal have on we capital our ample we flexibility of pipeline, XXXX. With a continue great in capital

of appropriate to ended U.S. We this assets new first proceeds. windows debt-to-EBITDA to X.Xx, some which have execute Europe bond see inclusive We liquidity debt-to-gross deals a of and current expect deploy net both strong of in investments of our exchange year, preference the quarter and opportunity into the with XX.X% and is to XXXX

capital of end debt-to-EBITDA into we net new of to the While over low mid- the Xx, we as deploy back year was into back to half our range target below the expect high investments. that of range trend it

quantifying Lastly, our reducing a our than usage on reporting more step progress towards to our the sustainability front, making say electricity we've in further I'm footprint. key in of program, enrolled pleased portfolio carbon half and

to incorporate X/X objectives lease publish sixth under and month. report, of contain and We to our ESG have planning that lease provisions this further ESG detail continue leases We currently which green in look we're progress portfolio later annual our sharing green regarding our in provisions. forward to our leases

quarter our of full track us and year. with positioned on deals. us, we've AFFO first execute well year-to-date, to given pipeline for up. And to keep on our strong closing, capital In has the investment and we're Deal available amassed expectations activity picked the additional liquidity activity a

close good completing made some our we've to strategy. office portfolio, the Within resolving and issues, tenant we're exit progress near-term

us rent growth. of strength position We factors, believe for growth our all built long-term those the into with portfolio, conjunction in the

back And operator for to with hand call the the questions. that, I'll

first JMP. [Operator with Instructions] Germain And Mitch Citizens from our question comes

to the on capital market gain trying some strategy. sense Just

some think, Europe you said and in U.S. year. I offerings planned Toni, notes this

part So the the July and think the does it you'll prefund the that looks like back year? in of about it notes way then try to refi the February. Is maybe to

Yes.

Europe. I of we've said, our in in we think sight. as we seen movement in some And those maturities positive line have rates

there's So some opportunities. interesting

I think sits over would of balance and to don't capital hit now but have the good likely those about look with latter where year. we still refinance the bonds we the to necessarily feel part the markets, sheet

about be Jason, against any terms terms it landscape in think the of, how I'm I'm And competing in of deals. might Great. then you in curious capital you do curious maybe, still sits just maybe you of in of Are of back part the today kind we pools? terms more parties versus where it scarce deal in the Or were last year? seeing is competitive emerge?

think Yes. bid thinned the private remains still Look, I out.

may level asset unreliable. still and buyers I as on CMBS, that rely such remain they're be think debt, constrained

a cash run certainly I buyers advantage. public big think generally that sellers all value us more, We think I don't much the much. all REITs that gives into

sit really especially it's we right is competitive. bid the good generally, So in liquidity But the we're that private now. a position more in now, right pretty that given I think position

is call and earlier about more So up about the talked that's interesting We as the Europe seeing on how opportunities well. we're environment there. loosening

So to up environment in be for interesting shaping an transaction us XXXX.

with And Evercore ISI. our next Jim from question Kammert comes

list? Hearthside? on technically bit your Jason, rent? comments more they're just And current clarify could presume little I you a on about on it Is your watch

yes. Yes,

we through because critical it yes, at They're think a mentioned context top estate operations. company's company, we to production levered So talk we why provide and the up is highly, customer large we their highly our Hearthside. point, restructuring about we them They they And of capacity go XX importantly, critical in brought Very which company. real the own could some base. to disclosure.

reason, that position. right current for good very our now. So we rent on about feel They are

it to to to be proactive. the did add transparent, expect in to talking of it disruption in rent We do the to pay even watch be expect But foreseeable future. for we our but about continue them we sheet We're balance don't any event rents. a restructure, list

very very it's That's helpful. mean, obviously I And premature.

worst the stay, case, in classify on properties assume if relative would did to rents where they Let's you those market? the not

Brooks, do tackle that? you to want

critical highly Yes. the replacement it I best a of a their for way I to to customers. the capacity. to mean, also perspective list only is capacity think from the but cost it's blue-chip company I about think long mean not

there's foot, costs would Rents of so this that So food are our reasonable. capacity than under without $X To be orders packaged that disruption a magnitude huge capacity, a higher business. in replace facilities.

of estate here end company this the I real takeaway think again, their is as for the the well customer. for as mission criticality But key

of there. layers two really So criticality

the want And we we situation. proactive to feel so be with as good about But Jason said, it.

I of you can basis example, remind Very what operating basis receive would sort I an one, refresh per some proactively entity private you how good. retail tenants? you you're do or level financial insight just se, us on property-type and percentage could tenants sort you of so financial information? much mentioning this your And private as our -- properties me, from that some for get but to apologize, in of realize your just

Yes. tenant. materially, financials We got from, every

So annual on track get them ABR. on by percent effectively then XXX%, closely. -- basis audits. ends, We we us, There a those then those very and After they particularly very, and a and XX% prepare them change and delay. a to quarterly is send the quarter

very approach good the I tenant And importantly, think before, our engagement a of have as So is piece we as key we there visibility. well. discussed

we at just their the dialogue constant also teams. and to companies want not it's management looking the a but numbers, with So have

with Our next Anthony Paolone question JPMorgan. from comes

a where Toni, And already out in revenue the talk side, can discussed Maybe, sense either on shake you about? you as it what you think you've give year? just will us or didn't growth this you've all included maybe to comprehensive credit that

Sure. about first Yes. in assuming And the built now, weighting we it. don't mentioned, of the abatement really those quarter. have basis running I Hellweg negative assets. front the points vacant rest we XX the we That for comprehensive as the mentioned we is Right think has year, sell into Prima of

baked that's it. So all into

expect, together, if addition at all this not we we've in positive the when rent that yet contingency. potentially contingency, at In kind basis flat, total, use rent have which don't point run around XX that, you used X year. we of about points we in We to quarters do look slightly

front-end so bulk more out the does, get situations it sense of 'XX a as credit Or full loaded year, it? for like lot a for And of any to -- like year Okay. we like sounds impact? that any the were to this what like looking

right. That's

disruptions have kind that into really year in rent don't of any to material at go past this of would early we year. expect line we any point. It's think this credit the sight I

impact I I comprehensive that. the points side. below think typically trended think we'll to to expect monitor We've don't contractual any major on But continue basis historically. there's XXX around

I that's would expect on goes think run generally given that's a basis. we any but down or -- the quarter, rate that up long-term it

I side, your really point. sounds talked it like watch Okay. else And at list you there's about on credit then, guess, this on the nothing --

a credit for if had And entire so string because to just XX it here like like trying of bit the portfolio was you seems just that or of just understand top matters. a

And so watching. other was you're if coincidental that I didn't if know or just stuff there's that

a more be there bit little maybe would So depth helpful.

-- Sure. we to that address XX Yes, just just And to basis majority did tenants The I from about context in the recognize collections. -- call we of that quarter we sorry, wanted have rent basis that what points maybe I of do in say I in would uncollected rent collect. AFFO. of we not the cash first about expect

or So really bad that we view a long-term more sort issue expense. really don't our timing credit perspective. debt of from as It's

that it's early conservative. in of foresee don't kind here. XX the So of again, kind still full and remain But outlined we the I really to want needing basis think year I've points

credit from is of as the a retailer, much perspective, relative emerged which around the credit has it's Yes. the somewhat. just well. off was One tenants balance X.X%. from JOANN, And clarify, sheet. And bankruptcy it's that other watch with list to few to Hearthside. then quarter, of A there list, a X% watch really, stronger quarter, Hearthside, our ABR. actually It's Jason Prior around prior are on up tenants came addition mentioned the specifically, delta

by off right credit the so ABR watch that's sort of But credit come they've list. range now. watch of of And our

Okay. in. just last sneak I one if could one And

There Xs. the Just put of for rest the about in an that about, in the the -- deal pipeline it talked Columbus year. you article was the mid-Xs think I

right if that And mid-Xs so higher-yielding there's at offset stuff that you're just was if looking get wondering to just enough to or that to that?

Yes, that's right.

rents, cap with some and mid-Xs, Our estate strong invest expansion. tighter we real target, rates of they across see stay even yields But deals below do especially on maybe target might maybe could a well bumps end where little a we they into in with even bit the those higher quality if range and that rent get with rate range. that some is Others, still higher below Xs. the the little deals we a of fall wide market above low and are,

DC, And that A, yes, into It's deal falls market below Haynes category. rents. brand modern Class newly-built

that increases, in needs that we also always I our factored with going or when of peers. comparing cap kind it Importantly, rent which to in X% with rates annual has of deals think some do be other

it's Xs But in expect yes, stronger it Rickenbacker Airport, range country. will the which asset, But high the that to the of International markets the would in we well-located cap even rest one be industrial of a be mid, is and still rates a year. of for

McGinniss with Our Scotiabank. next question comes from Greg

that rate on Xs, color high that look mid- just versus a standpoint? gave just how U.S. from Europe that does Jason, cap to you

and it's now good bit U.S., Yes. volatile all kind cuts the a push In It's going rates year rate the if back half is beginning the a if the question. Fed looking -- little the cap into rates mean, like of become of of the year, I see we more at that at to matter. that more stabilize to started interest

bit in So rate there be a cap the U.S. for room little expansion could of

now the in It's is Europe. been big seen I think right there. changes we've that dynamic difference the over very

I cost part spiked, point we now our call transaction better XXX XX basis Rates the reverse euros markets were over relative course. in of think months, spread. in now had we've last can I that to to And which borrow I the earlier averages borrow the relatively frozen what there. U.S., to For XX historical that the mentioned back where is would to about seen

that seen at we've aggressive U.S. what to or a Europe rates we get I little the is maybe we've more and been in cap relative yes, on So tighter looking what bit can that think and

volume there. property-type always the has that cap mean by rates, I probably instance, the tighter of deal. again, in the for at activity seen over might end Germany, our for to country, we're they been It's our we've do the XX-XX. And increases of cap rates. it's talking end in or Italy range. be probably is targeting and higher and countries like year-to-date that rent important the range factor more And been include range. is about we're But when reason, deal about pipeline on range the XX% Europe of

When we rates cap Xs capital around are and the that doing Xs cap average in right that relative yields into of the initial well -- the to averaging for over interesting X% the been have yield of rates life now. lease puts us, bumps with that's a pretty cost

Right.

guess, I be got now Okay. obviously, more right cash. dispositions lot liquid a for the for of Europe, to there's and more

given For expect that the issuing you'll be that we cost denominated still, debt there? your Europe should of debt acquisitions,

Yes. a I to if markets towards euros we we we'd have getting you today, But some the that diversification been do our we issue were get we It's different lot issuing observing that think to to time. capital But of benefits one in emphasize we different see look, bonds anything probably back in the for market quotes have of today to and executions deal as we've markets the and gone. in we of in having bond to can ability do in were how bonds bonds where each do issue have based need execution. flexibility. want can on mean, lean if flexibility, even and I we to issue and liquidity don't the

so evaluate we'll that. to And continue

had issues JOANN, last with some you and adjusted quarter you've plus tenant given risk? have tenant issues underwriting ongoing potentially announced, Hearthside then or or you're previously how Okay. evaluating acquisitions And the Casino

forward lease companies is or standpoint, with I our target rent focuses I Let me in it's comfortable whether how start, we on I let we're lease. the sweet spot Brooks and going terms, portfolio. short the provisions that just credit real We're think estate, answer grade. It dictate We other investment invest model increases, to process. business underwriting high-quality covenants the We in in we can mean within importantly, buying believe evaluating jump within net in these no. below think that's there from a can terms, with leases. on do

-- to mentioned And if and with buy is operations. tenant important in then And of very very Hearthside. JOANN's, played that's that restructuring, to respect very throughout done was a our bankruptcy we well, rent estate. without disruption. continue That's also we even portfolio the model. case our well critical like and performed to economic We've and numerous our decades JOANN's this exited real in very in And over cycles. the be importantly, business It's has there highly paid any through

I position, But same. very But to on underwriting that And still the the tenants, market yes, model. the always is no, So of focused approach our understanding think spend, talking their majority we're time meeting credit. with say, would the we business we I deals, management. yes, like our

for More question. final our a just And education. Okay.

to And Logistics looks tend the typically lease see When just disclosure, at the next be of place? of renewal place? process, a expiring at it's the does renewal looking like year. when take top terms that XX FM would we In end taking

to want take you do Brooks, that?

Yes, few and different approaches, them it pursue we all. really a takes

-- approach we either There not years. for the or negotiate. we to tenant we -- like already as be say, the it something really where they has our other what as, could So maybe lease where in situations we we us very extend call, are blend years X and wait situations position certain in that advance transaction, and later that. until anything we're -- from for many, takes and proactive We've signaled pursue, taken proactive many might where we with

footage. discussions We're You've expect referenced FM the think square I -- XXth it's that, we'll of majority in that on Logistics, renew or tenant. them active it's our XXth on

I on where thumb advance And is discussions. so disclosures. see around in kind we of take of those the that's the a most good where expiration we active a very in is proactive balance years lease leasing of quarterly But think rule X lot approach. in we're activity And of our

might FM? see something when So expect to we on

on with active an comment can't them that but transaction, now. there's situation I specific

Dennerlein comes question with Bank next from America. Our Joshua of

Josh. guidance your of color operating was behalf can as assets. wondering on is I This if far the [indiscernible] give assumed as on you

want Toni, that? to do you take

do self-storage think midpoint on to year. about of gave we we operating But portfolio. And, that range general, last to The I our total of to those the this from we and whole, Yes. continue Sure. hotel year our assets assumes flat few guidance of million includes in $XX We to $XX that's a guidance full operating expect same-store one NOI is expect which range, sell a basis. generally on the million hold. in

any remaining if Okay. And the this in still half is may that -- be there that is -- assets, kind your closing quarter? you mentioned had office of of first terms last of year within insight,

Yes.

really by good making progress expected to we've on the we're Again, progress very So closed proceeds. reiterate, XX% We're making there. good balance. around

Another of proceeds. in stages are or That under various contract represents it, transactions of another, of closing. call larger the XX% XX% way X by

very amount, outstanding the small beyond that. that's On

We're offers evaluating now.

line what we're So We we proceeds discussed we're with in last progress. pricing. making the good quarters think total of terms and in in several

So binding One transaction, -- tax a transactions contract. ruling two a we or one it awaiting think done. we'll it's get under

expect material but that's bit out to little a it's do So for we of control, on track guidance, that. we're not but our

Eric Markets. Capital from Our with next comes question Borden BMO

there there could of not talk -- you of conversely, may moved lower the Is then, you of tenant hoping are list industries? just a any portfolio. watch is there into your given strength -- health of strength tenant the your seeing criteria? And be tenants of but and that pool about is your in that overall just hit signs was I financials, insight have kind

Yes.

Investment-grade recent overall answer where mean, it's portfolio. been your ABR credit the quality question few about is years. think different first, in of consistent X/X in I So to ways, a very is I with

As and bit, that's little few X%, is so up really I around in tenants a mentioned, a picked we've watch list that that's concentrated discussed.

Broadly company speaking, credit the Certainly, migrate can and the over pretty any scale. constant, portfolio overall portfolio has for especially credit is of up -- time, at a down. distribution remained given

sub-investment acquired half grade like something example, we were our of For when investment-grade them. tenants

to expect expect watch they move are And would as we're we a off that complete so we can migration there on our both And happen looking in few list that directions. credit would at tenants refinancing transactions. that

But time, are that list on over list. for conservative decades. the is to been what important most others the there watch migrate think demonstrably there And will takeaway has I our watch that,

portion So small a actual watch default is experience that. the that list very out of of

a So ABR want by while indicative a no expect of of default. means monitor subset the that's percentage to tenants of we we where natural

experience. fact, In our than actually in much occurs that less

with So consistent. it's credit a closely. Certainly, quality very portfolio. But about comfortable situations. speaking, monitor specific we the we've talked very It's something of the broadly few we're

of the looking U-Haul office disposition helpful. actively on this or assets types front are what That's today? And of then you verticals transaction, for and outside to tenant year the recycle

Yes.

Office So Program as mentioned, our you the the and disposition U-Haul XXXX of plan the majority is Sale in for vast transaction.

million We smaller Marriotts that $XXX the to you mentioned was operating could have call $XXX last normal that what million a intend in which one, to course, bucket we sell. of range. Toni of the

working redevelopment As through a in opportunities reminder, process there. which there we're are the of others, X

residual few managing smaller buildings that a is the is theme total of in it's normal the part little say but disposition, XX% of I'd puzzle, a risk course the speaking, where appropriate. Broadly under our of bucket. a Vacancy

of So of exit, not office broad major thematic part a there outside thematic the from certainly the plan. story there is the trends disposition which

expense provide quarter. last it income you you tax for I Okay. model. million And the one on talked for was think XXXX? for me, update to guidance just million $XX Toni, then could an $XX about your last just

holding that's Yes, think I consistent. And right. that we're

seems and first quarter, just the I par the with would the think on year. we're of expect for for we about million really remainder what $XX that

our Nick question comes Joseph with And next Citi. from

think some tenant of setting as to that and recently. for do both coverage think reoccur make levels levels sure How you and you tenants, you Hellweg You issue? did going restructured resetting right? rents won't the forward are as an the about these it with about Just comfortable rent

In act. that's front as think And I do the good We It's they into plan, coverage. question. want in that it's as on grow to well same back on as this Hellweg, on it's a certainly. - a We making the economics good Yes. sales case, we question. suboptimal. put preserve not certainly efficiency. But, to we improving progress their discussed, they're cost-containment both at we will turnaround want the mean But a balancing company footing. better time, expect

it the support as recovery be we watching but as list. They'll a we're sustained closely. that of lenders. our They're So want landlords they've on well their their taking see got right watch remain But the look, actions, to process.

So be balance there's where we the economics a can. in for navigate what of between challenging not period of perceive from company as while really as a a number terms we would It's a time rent coverage a appropriate of that magic to we the a preserving of rule much of reset to perspective. thumb

term, outcomes how do think before? about escalators Then that lease in struggled with has range the you the given tenant of

extremely lease not think In existing right think did perspective, valuable we in we much that situation, us. an was term, for is From situations, outcome. this many all, very extending tenant the

growth business mentioned model. Jason tenet has a numerous our is As core times, rent of

very And We growth rent in important. so that retain these that's leases.

whether with as I'll longer thing activity is time. ABR is And that about other get could upgrades Brooks our can have, over the investment-grade that you like add from perhaps meaningful there. happen, tenants, Hellweg these half you of only especially there it's mentioned lease credit or upgrades someone M&A terms,

M&A transactions Some of an improving. business investment-grade has where the model Others is is that is rating. acquirer

the [ even we it There some upside behind something time. So Hellweg there's when credit point you than consolidation. term real add the where at weaker maybe like ] this like is is for extent potential in to to the would

next Barclays. question Brendan Our Instructions] comes from [Operator with Lynch

terms? to Samsung such large other compared escalator X% initial the lease around some correctly, considerations the like would detail escalators. you allow rate any heard has and Maybe the just you market I to you If could dictate that provide

the bumps I'm to sure X%. there. Just It's clarify, not X.X% where

right. some maybe Okay. details REITs assets? then primarily provide lease All could net more makes just And you office or buyers other or companies? occupiers That -- sense. the of office Were these the on

of the seen mix. was We've It's projected specific. tenant. say of mix. sale back the in It's Each QX seen all and/or private REIT building been is virtually it's to buyers. portfolio. very But has the what really I I bulk a public mean we capital buyers. primarily really been would the tenant haven't types in a Spanish the

Hemnani comes Street. Green with question Harsh from next Our

that the it bit little down to a the hasn't the mid-Xs about there thinking has seems used and of a cost for rest bit for been your cap volume to it's start Just be. year, been year. off slow going moved the acquisition, the and of rate seems in to it Coupled to have what equity stabilize quarter-over-quarter, with that

you an the some of a instead market you're these that a form maybe in through have or of capital evaluated Given that them back capital backdrop, uncertain dispositions returning the and share buyback dividend special deploying environment? getting of

the and we're on return still points considering the I of would rates, Xs. of Maybe comes we kind tackle to question. it half last point buybacks investments. made the it kind of the options mean do new between however, say to U.S., your some how look, capital. high the to allocation in Depending and then allocating the I distributions, first best now, But we right address and including opportunity where to cap go allocate mid-Xs. I Yes. capital, I'll first when we're rates Europe mean, year-to-date, capital you or you mid- deploy achieve of is or always can

the But will what right like, since significant some cash look but spreads, we're hard regardless sitting cap on think to we predict they generate especially rates interesting exactly -- now.

in factors we is markets we that's are either can X%. certainly right now deals. earning now, a into of lot issue or But sitting we where important, so on and right And how debt price the equity that cash,

maybe So the we're when about you X%. not generating significant us really That's a good accretion stretch. X by any for accretion, day think hurdle

but that totally especially today, we're we we spreads, it, going really the high unlevered increases times leases to generate rate, bumps mentioned call it just if X% several focused is When in on now, were trading even Xs. an important. rate. yield think we're in average embedded IRR not cap Xs built into because generates to where cap can somewhere But that the we issue new or interesting factor, capital on our We've you mid-

generates we within relative even now, and spread probably to range capital. equity And to historically, at a that XXX think that basis where of cost is is XXX we've the to trading point our been debt right which

well. where So we're do U.S., we'll the [indiscernible] cap investing I rate as expansion in think some are now. rates comfortable see if they that And the stay on

W. Carey. And questions. at P. showing time, I'm for you this further not any in Thank interest your

additional today's Relations concludes XXX-XXXX. call have you any call. That please If (XXX) questions, Investor on

now disconnect. You may