Store Capital (STOR) 3 May 182018 Q1 Earnings call transcript

Hello and welcome to STORE Capital’s First Quarter 2018 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Moira Conlon, Investor Relations. Please go ahead, ma’am.

thank Capital’s for results. first and to us Pete STORE discuss quarter you, you joining all today Thank XXXX financial morning for earnings which our we quarterly This presentation, investor release includes call. today’s and information supplemental issued These of website documents Results, Results. at section & our News are the under Relations in Quarterly available Investor ir.storecapital.com Long, of Fedewa, Chief Operating am with Volk, Chris Mary I Officer. President and and STORE; Cathy Chief here today Chief Financial Executive Officer Officer; will will provide the prepared On then today’s we questions. open up and call, your for management call remarks In call call. order during will a keeping to the maximize participation limit to be while our two-question the we X hour, of Q&A portion observing can Participants follow-up queue have they questions. reenter then the if

include I Before federal would laws. the like we call securities comments begin, will statements forward-looking you under remind that to on today’s

identified or AFFO by phrases. words comparable such XXXX such as our words or XXXX statements. for be, statements not facts are as per and anticipate expect, and also intend, historical our statements forward-looking about Forward-looking and acquisitions are AFFO believe, share other guidance Statements are that will expected

to including Volk. in contained and materially of I Our over that conditions of cause our turn Chris, reports are factors that, from statements XX-K please ahead. to forward-looking SEC our Chris XX-Q. statements. to results Form call the With by forward-looking financial operations Discussion filings, the materially may could go and results our those from actual these contemplated on differ vary would like such now

Mary our Officer. Chief Officer Thank STORE today earnings welcome With Capital’s our to you, first Operating everyone are XXXX and Long, call. Chief and Cathy Moira quarter me and Financial morning good Fedewa,

the be acquisition active on We continue to front.

$XXX quarter for totaled just the activity investment million. over Our

divested estate approximately million We investments. have real in profitably $XX.X

same and XX% our and assets divest in investments net Our STORE’s core shareholders. of of the XX.X% lease healthy contracts occupancy in At ways based our are grade accretive consistently about rated property to methodology. in to upon our with of an time, portfolio rate investment that sales reflect invest ability remained our and the quality

about activity will sales and more portfolio hear from You our help investment Mary. property and

for quarter adjusted funds serving well-positioned company cash growth shareholders well-protected our Our with dividend from for approximated tenant the XX% a and based a payout our surplus provide long-term rent that’s of dividend reinvestment ratio anticipated to upon our and increases internal flows. operations the of

BaaX BBB quarter, XX-year rated million During closed $XXX grade It on of by inaugural unsecured financing investment The offering enter the the been we our senior and issuance X.X% markets. public term S&P public always to Fitch and strategy debt, by of Moody���s of were rated respectively. notes. debt first notes our a part has

providing us term program Our quarter with $X.X for approximate in X.X on our ATM a equity run-rate issued ability Moreover, about publicly gross stood basis new expands billion continue our options. this borrowing investment with funded substantially the debt to gradual quarter. financing issue to unencumbered flexibility Incorporating debt flexibility. of or XX% our times investments which and assets, of investments newly corporate and to added our during our our at through all pool of our issued the debt capacity grade to EBITDA

was quarter assets favorable The medium STORE BaX. fixed at to profile post-overhead during Score ratio our be Moody’s credit tenant for investment our first as new long term investments contract relevance lease rating The each X. coverage for X.X BaaX. weighted new the rating are was median do RiskCalc statistics activity. purchased grade to charge was unit or years. Now, here XX I at some The level median primary approximately The quarter to investment for average investments new quarter continues

giving made during unit-level assets cost, us were acquired during that acquired replacement the Our XX% And approximately to statements, lease investments financial unit-level subject new deliver our the properties XX% we financial master at are required to of statement XX.X% portfolio. multi-unit made the new the us quarter investment within XXX reporting the from quarter of was all net average leases. of of

investment activity with having customers highly of customers represented X% of XX.X% of XX an a to our and from transactions X.X% Our largest top end with interest, from diverse granular exceed quarter, $XX size continued At XX XXXX. the be time of end slightly and under target separate our of revenues annual transaction the of XX.X% be realized just and Further, single interest up long-term at of the rents our annualized continued of average our customer highly was no at top completed to rents million. annualized proportion revenues. the XX the

gains is will real quarter have of would sales sporadic $X.X long customary I asset served our sold gain address, about profits ability XX original I which a like activities management generate lease as to our vacancies the part stated, the our be properties, During first thing million But to which dive the for origination lease normally acquisition direct net our a or Mary would all cost offset cost from economics. economic Last of to million. an owes approximately $XX.X netted original assets number and I deeper strategy. into this of of this we this business. talk portfolio produced you. and represents itself underperformance And which over we will

about initial lease rate X.XX% by escalations last Our we lease to adding contractual near a us weighted lease is approximated we annual quarter. were X.X% with X.X%. return for investments made was of almost gross get the which during of you the rate quarter where escalation rate which lease average providing The average

the impact X.XX% makes basis levered that at XX.X%. a our you annual before approximately averaging be X.X% about debt which equity of impacted spread XX% increases the our rate what As offering for stockholders, taking approximately which inaugural quarter X.X% roughly lease XX% leveraged leverage on return rent accretion annually. mean public current the starting of economics these is impressive gains our our arrive growth. XX% tenure you of and to above performance cost a XXX and interest rate sales cost, our property asset great this gross rates X.X% and yield cash the was by about operating points by Adding cost, return also get of and investment of will them increases and the dividing by Net annual over at cost of external leverage

leverage returns is the why major investor However, rates we of over to take had disclose in time outside, I outperforming two STORE been of favorable to call have with return majority total property we components. predecessor which turn And always the our our level Mary. having return the from delivered growth from by will driven that companies that the

XXXX morning size is X.X% seven for the first good of Good We to $XXX off Chris. granular with cap of new transactions with XX you, under start in and about invested a acquisitions million added at quarter. customers Thank $XX of over million. everyone. separate rate transaction a a

manage actively and sell portfolio opportunities our to take to of advantage properties. continued We

that properties which and gain our the by are X.X% million, During profit We were the the acquisition over delivered XX% of quarter sold cost properties gains an properties gains strategic over these sold slightly losses cost. our of sales. cost. portfolio opportunistic of for seven we offset costs These sales as impressive to Three management net original recovered property million. were a sold remaining part reasons $XX.X sold on activities. were $X.X the XX approximately original properties an XX% averaged the bulk generating of the ongoing about the were XX at which reposition cost from over gains had of of XX%

Camping back and partnership, X in result Now our XXXX. experiential Art XX% top World recreational is rent X a March the properties largest with a ranking in top we Gander new top portfolio Mountain moved for XX XX retail of the Veterinary Camping customers. longstanding heavy only the extremely now National a Veterinary and X.X% World as vehicles. with to National as our XX% is provider and World provides one diverse interest. retailer, XX% about classified leases Veterinary Gander the our of National for with X,XXX of and representing our the XX, a was among service new by Zips turning by second Associates U.S. These manufacturing. very performance largest Camping low X is XXX XX over properties of the as are veterinary accounted into as as Associates service new management out locations. Holdings, XX these Customer are Outdoors. in carwash an only signed Customers highlights, business Zips about our Camping U.S., in This result incremental parks the being to portfolio opened our with locations and design of Furniture of World hospitals also national for component but service Associates. STORE business remained Delinquencies XX to was portfolio, due our Van within tenants of top XXXX, operators remains tenant vacancies the vacant. strong of active and operates and largest our in only the sector

has consistently health remained portfolio strong. stable Our and

our borrowings. rates market, platform, spreads origination over of remained our continue to cost of turning Now, cap and which us our long-term pattern to pipeline our overall stable, the strong enables

customer-facing industries. XX% pipeline remains diverse representing and pipeline Our with robust of our

how our Directors low Regarding are solutions our presented with creating customers for Day, our and Senior studies highest level operational helping of investors cost capital of origination our platform, Investor at growth by case our efficient access showing recent the our X flexibility. Managing alpha

coming we Cathy I have the customer benefit call business for to turn our talk financial relationships, about to With of XX% continue strong years. customers from to worked from will results. with We our with about that, many

capital will markets performance our discussing and start Mary. quarter. for sheet by you, by the Thank financial first followed our balance I activity

unless for $XXX STORE. was that year-over-year the will first $XXX million noted. and are facility the million. Please review quarter XXXX to unsecured guidance from credit From of I very million $XXX accordion active capital In all our for perspective, February, million time $XXX revolving from Now, otherwise markets our a XXXX. comparisons expanded feature note we the to

this rate raises settlement million issuance, our coupon of September this under the with anticipation to March together, March, In ATM in a in adds the public X.X%. our launched when into issuance was new We February, February program received entered XXXX. and an debt us first extension $XXX borrowing lock issued options. In lengthens we we of debt grade facility closed offering a notes giving XXXX capacity the program to we the at million treasury two January. established agreement $XXX terminated rate we XX-year debt X.X%. a $X.X in investment of and Taken on maturity $X.X effective of of billion, the million in In maximum had X-month

our under average shares program million X.X of per $XX.XX aggregate at of an share. sold an ATM we quarter, first the During price

We put proceeds which nearly of through estate investment million, have net our raised activity. $XXX real we to work

and Our way ATM effective size to of a given us program of our been for equity has granular business lot transactions. sense the makes a the and our raise flow of very

a debt $X.X borrowings an well-laddered. environment rates, of average rate markets maturities just stood debt average activities under our of long-term weighted note our and of are important interest of a maturity As capital of raising that rate at X.X intentionally long-term all interest with it’s a weighted result are to March XX, our these and In at fixed billion X.X% years.

is million until the we maturity have debt annual XXXX. median debt no maturities under $XXX year meaningful and Our just

This to a of EBITA the $XX basis. had to sheet. leverage to the million cash XX% over Our at debt end cost on credit a on XX At of ratio the million net debt to basis. on our balance $XXX borrowing addition in run-rate March on our we quarter, X.Xx capacity net equates facility was around

the conservative to flexibility, As substantial a I we are a our leverage access attractive the indicated well provides liquidity. large earlier, facility accordion positioned debt to expanded In to and credit options investment even more opportunities. variety of of with of feature summary, fund access and equity financing pipeline

million quarter markets I our from proceeds asset capital noted strong was acquisition activities the flow first dispositions during cash funded and approximately from to from our activity operations, $XX proceeds by earlier. of Now cash performance, the financial turning

representing year-over-year March generated X,XXX at $X.X of our rent portfolio XXXX XXXX. XX a at and As billion, to revenues Acquisition place properties. annualized to million $XXX by real This growth our $XXX March XX% as increased base representing in March interest compared activity XX, million million. XX, XX% compares $X.X billion estate revenue to properties The stood year drives and ago. at $XXX to increased portfolio

the that therefore impact first quarter volume second will of realized Our of was weighted the full not quarter be volume towards until end the of acquisition quarter the XXXX.

growth costs in $X.X to The million our a due and quarter of rate year ago. the on $XX Our demand compared expenses year expenses can increased revenue that Property a insurance the of to based on related Total increase weighted a solutions. is were year million property reflects ago, growth $XX taxes, all average $XXX,XXX consistently real the compared million as borrowings. X% to relatively primarily compared our G&A staff Interest vacant were other capital broad strong properties attributed increase to long-term for additions. estate be this Substantially, by ago higher the higher the year reflecting ago. $XX.X flat quarter. primarily decreases to million average interest depreciation the as the for during portfolio. on to will to our $XX.X outstanding offset compared facility and balances of amortization a expense growth were our related million was costs and to portfolio credit

of the quarter XX or during per $X.X million property expenses quarter percentage first quarter an aggregate an charge written diluted increased during of end and income diluted related average from included $XX XXXX to of the of property million versus to quarter. for diluted net impairment first XX or and $X.X compared growth. from with million million also basic AFFO vacant million and quarter In off $X.XX the reflecting loan charge after of or per the from portfolio to that first first increased basis of $XX a million sales for as income share to that the decreased share G&A XXXX Net $X.XX share XXXX ago. XX% gain Net year. $X.XX net scale quarter portfolio for related in an Net a XXXX. includes the last includes $X.XX diluted sales basic $X.X that quarter. of XXXX efficiencies property million come the $XX share basic gain to basis was a to impairment year that points a shortly aggregate of quarter quarter basic comparison assets $XX For $X.X an of of was million sold and or per the per from for income the points the

increased same dividend IPO while maintaining Our time component leverage. our dividend an per we XXXX, important our the by And at dividend our is in of share reducing and overall return. ratio stockholder XX%, our have payout low since a

representing For the share. of quarter, first cash of approximately quarterly per we declared dividend XX% AFFO a $X.XX per common share our

throughout guidance, that to to to in announced period million guidance sensitive the are our $X.XX. of quarter. to of XXXX are towards weighted and acquisitions midpoint spread is cap each AFFO debt a the range be often average the on capital end remainder amount and turning net Now $XXX dispositions share $X.XX affirming Based AFFO timing we net our XXXX based weighted per range per for The the year acquisitions to as though they XXXX, on volume any as the run-rate expect acquisition and well to X.Xx in of EBITDA. we acquisitions X.XX% Xx is of November. first be of share of the in rate new targeted last of of timing we of during In AFFO expect leverage activities. guidance projected to markets on period the

to costs. to Chris. anticipated deferred rents, losses per $X.XX call line expected net sales on approximately as income plus amortization financing Our of to turn such share XXXX I $X.XX to excluding and the $X.XX per guidance And AFFO now, share related share of equates compensation equity property back $X.XX $X.XX will items share plus per depreciation or and estate for per to real gains straight

available questions, rating, you, for probability base insolvency the multiplying And of make tenant Thank comments. do over we STORE the of for to I which added the Scores, by forms quarter, get from usual overlooks important. we are for is but Cathy. and as performance. to companies. that can of we of estimate Every bankruptcy the more are rejection are very it want you form our precise call Moody’s this before just turning with to lease contributors a you to important number of I measurement, Over option a me RiskCalc contract insolvent stock, by derive an this very in and Capital which for probability, our time, few which tell one, disclosed operator

are capital the unsecured effectively that to For X XX we top going are notches. credit adjust subordinate us, stocks by be for to ratings instance, elevated would approximately tenants

deposits amidst prices guarantees, bend to come qualitative either rent risk portfolio and or effective investment personal relative corporate, ability the this from more, can Although management. values, through to assistance curve all our low

So, percentage assets declined of STORE XX% having disclosing rightly XX% quarter. the lot because XXXX, moves. We about roughly since grade the ourselves, we which average that to from the a we middle data, figured might about has we investment thought of of Scores Score used transparent base of ask an STORE you uniquely hold this gave

So to that industry sector No of that rotation. simply out you nothing preempt will and the and see. systemic tell A there stands lot there ask, driven. is is we this or balance I growth sheet is

to almost more. behind or moves while Then if X% from in to X% X% small notch has moved average investment probability a technical XX% STORE contracts XX%, the fallen grade are estimated has ratings has our of most moves, cause percentage So, in experienced individual you to about other the the Score portfolio improvement, of look while direction. or move

the are has moved actually contracts our been on holding Very the list, fallen move unit we continue since cornerstone you slightly XX number median level for finance. that which At XXXX. stable portfolio, of exceptional this The than have STORE of center have corporate of to watch the the fewer of little to out pertains year. vacant. are of have know, last this quarter coverages two we performance is have properties And that level X principles very are few as Given performance. unit of

decade’s history cash trust. of entities is investment is to STORE’s portfolio substantial of real grade. first best your a majority pools non-rated our diversity, long outstanding is and loans have leases successful permits simply of in become investment which The what Diversity flows the to running public estate

cash diversified actually securities is cornerstone second non-rated highly is businesses lease we flows of highly Contract assets. on and of claims by combine we disciplines fact these had a tenants The rated represents profit portfolio to STORE, in net having issue senior to that seniority thought contract permits the claims. seniority. what investments by exclusively cash At the contracts owing senior backed that to our invest flow center

to credit While the average will notes, might this rates operator, basis I shareholders, years have the questions. of X from base expect quarter company. a from excluding is not, risk property gross for call basis are growth an the our execution you level points therein see for lies from turn that’s levered external point over our that what equity you investments through XX is contract And benefits made return XXX on principle corporate each our and this with now you returns end investment gross XXXX our the realized higher, complex impressive historic static of equates shareholders achieving with our rating, the XX% rated the higher, the diversity of is grade enabled but first along. of as in alchemy a double-digit our that STORE can seniority, and that’s rates A materially to our for return around loss levered for which than And reported. Scores better unlike like reported higher public level Only A which materially we returns performance that

Instructions] Mailman [Operator first thank Craig Yes, the question you. KeyBanc Capital with comes And from Markets.

Cathy, you facility or Laura was This Hey, to maturities upcoming and you, want an for is quarter, you still credit function if said this I as preferreds? markets active this guess are with Dickson Craig. program considering I everyone. know proactive here of is question you just capital the and ATM had being also for

in so public of that doing about the of and the looked and and this bonds the we right. quarter Hey, first Okay. good year had always quarter timing morning talked offering the plan was part so this

yes allowing year, good. the long-term the into so As bit as And were it. it optionality expanding towards and really as to out were debt longer revolver. we the that prior was more was towards end refreshing ATM do looking far of the to us program the a going for liquidity we coming having And just by when revolvers revolver, pushing maturity having little renewal, believe that our a always would we larger is have we really

looks like then like retail has XQ restaurants that you best X% XX% just Mary other so in pipeline increased, Okay, like was in indicative it sense. where And from been I have wondering the and makes noticed entertainment of I the currently? if and from then deemphasized that’s opportunities to seeing are

Yes, essentially pretty pipeline the and probably well. fluid Laura, out things is there, it’s pretty moving

plenty I moved at. but say some transaction it’s a still was category, we sort of probably actually that we big looking still of looked family entertainment, would at us a probably So, away are there that from movement of

Okay, great. Thank you.

question you. Stanley. with from Egan the Thank And Kevin next comes Morgan

acquisition done of and it on you more a this a more month disposition we looking everyone, or at raised quarter, rely of wondering quick what morning was less just kind $XXX question acquisitions equity? million with some funding, just $XXX good in million dispositions I terms equity million are essentially mature of assume you thinking I and funding have per just so and $XXX have like acquisitions match dispositions, looks near that you probably done to just about can Hi, about had you

The quarter would is and that it that be really I what think so don’t would happen. pretty know annualizing, activity taking first is Cathy. I this lumpy, would Hi, disposition Yes. necessarily the

of activity predictable, then reverse as or that. not more may might tends because a continue at do disposition do some different of be where kinds dispositions opportunistic as like the to inquiries be active we it little will timing that And we couple and things There look may we So Mary be to management. mentioned. and want a are portfolio

So and to lumpiness. going create that’s

that will assuming believe than about that decent will last we year, million, have somewhat. of this we property $XXX year think I a be amount sales higher So get I that

yes the for year So will for sure. be that a of funding source

assumption we think say of if million okay, and million is I month sales $XXX a your $XXX worth it’s… like

Okay. peers just you in so on a at? seen just terms there, have I have And your any anything they stayed lot of then cap said look of just acquisitions, rates know you movement pretty you are when seeing flat, maybe but

little very they Same, and the haven’t seen rates Yes. a pressure marketplace come not but very it stable in but maybe we because auction really seeing upward just rising, stable. out are are through, interest

Okay. you is looking do not have in or fairly are or rate just of are pretty you dilution you that you or back properties dispose cap at at in any something that are properties And on dispositions, that right was there like have that mind really are low minimal you then that mind can looking feel now?

is that all all Well, look we have And perspective, think accretive, doing sometimes I than it’s that really I side off activity so well and the than fell into accretive. activity the success of that. XXX, lower This even on And activities cap exceptionally accretive. a have transactions acquisition opportunistic be sales sales it’s that rate we important so been the mean if that, you at is from first less our it’s Chris.

And because over we to significant the chances time directly. dealing what So will stuff and BB are tenants, tenants it’s same. downward upward then happen are if just migration originate able of credit thing, and your about – you BB are with with partly

with or only some moves have you one us make out sort BB in sell off downward if have you money So, when figure represents to – but assets and of direction sometimes it tenants, dealing of huge are And opportunity serious have and them. upward, to either we on a then moves for grade the credit territory, migration way go. your chances just whereas high investment you a

So been going take advantage to we will and of that have do able forward. we that

Okay, sounds lot. good. a Thanks

next Stevenson with question Thank you. And Rob the from comes Janney.

Chris, bit or afternoon, it theaters, see are you these just in little the and this guys. centers is early days is childhood Good quarter, we you to should trimmed movie opportunistic feeling how that that a do something expect time about around? you

say this around, time been right opportunistic. it’s would I

of We have kind theaters in has that X% or less always been neighborhood.

to going strength. it’s theaters. you do. go Early great industry time So, we see customers have. I we us we like a that mean and not childhood long the a and has It’s that size we into think something big we fundamental and not just would education like lot And

of will see you So more us do that.

then what stores what Okay. And is Holdings, Zips type of are those?

Yes, Holdings, you talk about Zips Holdings? Zips

as have the rollup company, of but can’t the a strong player. Zips stuff, in so doing they lot really they apart, a second the good economy, It’s largest that. in which talk much really footprint a whole size private locations. good them appreciate, They program company we carwash They can have in good scale is so nice Yes, the a good industry XXX fragmented the large so about pretty express membership financials, they U.S. washes, have a you and about so – size, are have actually a have a big sets

So a competitor Carwash? of Mr.

fair. that’s there Yes, Yes, carwash, is exactly. that’s yes,

Are they regional they or are national?

national. are They

Okay.

don’t I have regional from since XXX perspectives. have they Mr. units, so larger a of say meaningfully I strength is are national, Yes. but number mean, they would of areas they Carwash

Yes, couple I Carwash. Mr. think with XXX of

thanks. Okay,

Michael comes Street Green Knott Thank from Advisors. question you. the And with next

number of can for in uptick guess pipeline pipeline parabolic of maybe speak the the one I to continued the, slide, as recent total and the just is on then I velocity this Hey, also Mary it you ascent would deals the reviewed? describe

Yes.

and try will explain I So, this.

imagine line can billion. up the billion. of we lot example then have pipeline is the see go so billion looked might that at So, you of $X.X The pipeline go pipeline. up dynamic $X.X the the as our decisioned you for total things pipeline and It’s $XX.X you velocity, on trend – may going and have quarter, in first

billion $XX total. about over the it a actually Bottom on. decisioning So, are little sort in that deals we of line talks stayed

transactions passing are that are them or we that we those are are funding, we or we either on closing them. passing on so So, are

So, fluid. quarter a and on had decision in that’s but first we more pipeline that, see from happening that chart. essentially so it’s what’s just will really through One or anything trend doesn’t the like make you to a of pretty move that the quarter perspective

when then Okay. reminder And be that about commentary very you for the closing rated over sort STORE percentage, see analogy in is there the down to your grade you credit just Chris and of migration give and your percentage, STORE reminder of downtick that tends time grade Score you useful investment corollary downticks have an maybe the in your a the there? is STORE do curious grade investment tenant, investment Scores recent then on with slight that also part the Score there

migration per we rating probably than say, over totally investing company, you No, that so rate, BBB a our downgrade you have XX-XX you se, like non-rated In shot which a something for see. not first credit rating contracts. if years I XX evidence credit corporate are better corporate are is companies strong are let’s being comment is we so the case, ratings in, correct at unsecured of all, and mean, there – that.

doing The to have just understand way basically this. going XX mean are minus company of I have whopping bit being that’s rating, say would we you a a capabilities the by full points is magnitude and the I So, different. type to and so basis to rated a full difference you the spread. a of the twofold the entire company little rated migration be probability, AAA appreciate BBB

to talking cause about move moves small You and can that or things up incredibly risk down. are just

so looked to has across it that is what portfolio, at with the have like of we most growth. we seen And have do things

example you of had run you for for your don’t So growing, let’s us. you to are income sheet a more levered, balance but looks show a have lot yet debt, rate

people is we where really some of of with not so have unsecured, There that happening. leverage are do there the have buyouts So about worried that higher some leverage are you actual it. some what’s done

of all to all be of this, back overall. thought but what’s I to going the are important you for we sort that so peeling it’s reasons for tell And happening us

Thanks. that for That was Thanks proactive Yes. helpful. commentary.

Thank you. comes Ladenburg with Thalmann. And from the Massocca John next

Good morning everyone.

Good John. morning

progress maybe two little us you CMBS to stores potentially even the or selling with update maybe give and either the lender? those vacant the returning Gander leasing debt can on a up under So

and the CMBS Yes. the have that to This Cathy, as then mentioned And are bed as put turning all last that quarter recovery re-let recovery effective mentioned returned online as outdoors. talked was the of that lender, back were that we And Gander two the as of – wise financed. as on. properties And two move to those is lender properties there to Mary had Mary eight now. that wise far that time were we that they well was about we most to and the the

are they four they paying came throughout and months. five So all or first rent on the

a servicing two we lot sold and one then on and are we sites. activity of in are getting special for those XXX% And two we have working on we that

So properties are out have paying Ganders. them not X empty the of two are we of that

are empty, Ganders. Yes. the Of X two

– then okay the and at to Okay, just rest just the two the left essentially point? so two resolve so, this

Yes.

been the CMBS already to at lender handed point? this has back

would on recovery that the have the what been basically loan mean, close anyway. was to I

it. just made to I CMBS for sense So, lender the service

Understood. between just of components manufacturing And coverages are the and speaking? generally your just service maybe then what your retail you can portfolio breakout

little coverage a Well, bit would higher portfolio. that the median I around that than would the say two the retail probably that. is for say I is

coverage at look maybe The line do the portfolio manufacturing service touched it’s to to kind company going lower. that is this why considerably be and it in about which basically of I be XX our broad to -- talk the say speaking that. cover to like probably median we average opposed is because sector I higher had be weighted sometimes going to you if the XXX manufacturing if something as you will have component is So would coverage to the of coverages,

rent on something insignificant so always well that is isn’t you coverages well. sleep night have really to high they that onto, high having so your might you have at other when way means as because the coverages, issues by it decide to focus you move just and So elsewhere,

portfolio the line kind to would because in you service median of expect basically of number? the be then with And bulk

Yes.

much. guys very it Thank me. you That’s for

[Operator from you. question And comes Instructions] Thank with Raymond the next Collin Mings James.

morning. good Hey,

Collin. morning Good

a going the question provide there, over next has manufacturing there, the six maybe there can going again little call where for do months, to back pretty kind year the that but up just looks an the me, or growth the side a the you of see of pipeline, over the so? flat pipeline bit, last just deal couple opportunities exposure of years on First just you clearly update picked deal

transactions Manufacturing, it either. around maybe than manufacturing the market little always been or in moved a hotter this of marketplace Collin, has that of have you actually kind has is lot for is, as wouldn’t in it expect is Mary. side where it asset gotten right class much XX% lower know There a away to much sure. Hey retail, of a higher we of bit move manufacturing on so now the people lot the I thought from Yes. auction about

and we no but at financials. going looking as master will leases is do we they they it’s P&L long service has So still will are as what the as it we – are to matter do and report a everything it do –

will at opportunities. We look the

really I our sort there. So, XX% has would guideline say, been of

competition bit question But actively I more on the is are the little market deals it. given there Got think of dynamics? other you part which a seeing guess, touched that was it, I you for

fair. that’s think I Yes,

to side of on that out a call I manufacturing we more think activity make people most of them, lot a people not I industrial, all the would so industrial it there. and call little have seen kind a retail from it running some bit. probably product, And yes again, attributed we ours

but of loss Okay. just in questions the ones, recognized quarter? expand And then you been have loan answered, the lot my two more just can housekeeping on

we was amount most back that was assets was That but on the made quarter. off this written that took of conservative, was of still of assets loan may couple just by We and was some during Cathy. secured it, the we – it that to a off. a ago is remaining written be collect years Sure, and the

color And some bit Holdings, your fair portfolio? little a bit but more little you in business repeat diversity that about around could then just be and Zip a how provide just maybe just touched terms think Okay, enough. there you do there talk on more, of of the

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