Store Capital (STOR) 2 Aug 182018 Q2 Earnings call transcript

Good day, and welcome to the STORE Capital’s Second Quarter 2018 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Moira Conlon, Investor Relations for STORE Capital. ahead. go Please

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

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

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

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

and Operating everyone, XXXX me morning, second Chief Thanks, welcome our With Moira. to and are Chief Officer. earnings Officer; Long, quarter Good call. our Capital’s today Cathy Fedewa, STORE Mary Financial

be to active continue We the acquisition on front.

for investments. over $XXX divested estate totaled activity million. real approximately investment And profitably million $XXX the in Our we just quarter

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

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

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

sheet remained Our well balance positioned.

funded debt equity the Moreover, $X.X at times EBITDA X.X the made unencumbered a with stood our for investments, us all rate new the XX% growth through quarter of our providing program. pool added in our to assets, for gradual includes options. slightly billion investments run approximately which substantially of during to of which Our the financing about on to our of ATM impact basis quarter, our issued improved flexibility

quarter, our each activity. as here investment statistics quarter Now I do some relevant to second are

was slightly our interest of and than can growth about of during which at is XX% escalations have rates why disclose us outperforming annual having made major gross and charge average investments at of the was predecessor rate Including solid majority the from lease companies investment of escalation overall of always at investor The with our rate lease term The last we be during level return outside, public favorable time been an better median XX components. at returns was primary STORE which to investments, with ratio approximately fixed to Score for tenant rate rate X. lease contractual Moody’s is a return average initial during of corporate quarter new the successful quarter approximately the BaX. for approximated the rating, profile investment quarter. you of rating investments assets the above were median property-level take where The return weighted coverage weighted-average unit new to get average at portfolio by credit favorable return, adding we from also BaaX. The X.X%. rating rate you our The long a median continues of driven was X.X%, or lease to Our X.X our quarter post-overhead cost purchased in of X.XX%, for new which by STORE XX.X%, lease on contract almost the providing years. XX%. at borrowings The line for RiskCalc

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

end quarter. which XX of with of this At top $X.X XX rents and transaction XX.X% average annualized separate end our interest, investment and at quarter, realized the under up Our from slightly customers revenues size granular was quarter transactions the of from was activity of was the the the million. XX.X% exceptionally completed first proportion of

no interest, to continue X.X% just our last of a represented and However, and having X.X% our X% top exceed with down annual customer diverse long-term target tenant quarter, rents our of annualized customers from the single be highly of largest XX revenues.

XX over we quarter, of cost of original gain we During a $XXX million, approximately the cost and which $XX.X acquisition sold original netted represented our properties, million.

management itself like to sales serve going who which call this I’m to direct And to our strategy. or net long a I economic will vacancies real to owes the produced from generate in And discuss to proceeds gains stated, which to profits Mary, of recycle offset and ability is lease the accretively as more Our activity this with assets customary sales return assets that origination underperformance, activities portfolio the sporadic part detail. business. have over

our per made XX%, transactions, our the based million quarter at single by In slightly the morning Good in XX had everyone. since our quarterly transactions Chris. acquisition over $XXX million. our second pace bringing investments cap separate through you, a a puts rate on X%, acquisition year-to-date over nearly This strong million second month. Thank a quarter, growth We $XXX were $XXX most at quarter of IPO. acquisitions to with of volume average

increase We level in activity handful are the of a quarter and to additional which is market. in this transactions, are volume, level excited achieve see our to by to larger which customary of further encouraged opportunity of transaction is this a

advantage to portfolio, taking opportunities properties. our continue manage sell We actively of to

we cost. were the cost. And cost During portfolio ongoing X% of had activities on profit were sold of generated nearly approximately cost, XX% reposition and for over a to XX gains, in reasons We an gain of property our X% at the $XX.X average opportunistic in over over net $XXX which bulk over from sales which million. the the quarter, our strategic the sold Based of resulted management deliver original were gains original the XX% and remaining properties gains acquisition property cost the million. acquisition sales XX% quarter cost.

XXXX. Now highlights of turning XX, as performance to our portfolio June

with world's diverse XX XXX remaining top system. Our investment of the XX% management portfolio manufacturer Dufresne history mix the December rent and in worldwide, Holdings, our as to XX% furniture in remains Ashley in customer and ownership over ranking with our design added licensee. store Ashley Spencer We in by our Furniture, Group Customer and is consistent furniture our tenant, majority strong at factor Ashley Spencer portfolio Hill Van team largest a Corporate in licensee experiential Ashley in Dufresne a and They of an Furniture the of our XXXX. in Dufresne one top representing within retail result HomeStore a remains ours, XX. just X.X% their XX%, with Group extremely top from Group have the by Art Spencer the to With the XX top another service largest were backed manufacturing. the of interest. number of the seasoned and joined existing Country brand is in is world. operating locations garnered largest excited

to tenant partnership, health Our management due six as continues out only be X,XXX more very of with portfolio vacant. than to strong remained our and active vacancies our low properties and strong portfolio delinquencies

this which growth the on focused the continues employment customers and Our middle country, creates revenue most in to play out. of market,

XXXX. in revenues XX% their by average grew customer Our on

allows this in Now our long-term turning our rate our capital. spreads strong Cap us of continue of remained and to generating pattern overall over pipeline. to market cost stable the

market Our achieved targeted market the companies and larger we market penetration while ahead. middle is we of And extremely runway plenty have is have is exceptional, deep.

remains pipeline robust manufacturing relevance. about for talk that, With I’ll on to having an retail Cathy select and the diverse financial emphasis turn long-term and Our to service, with high potential sectors results. call

quarter. financial start and for I second activity with Mary. Then by are structure. you, I'll our Thank year-over-year followed All otherwise comparisons capital discussing by the unless sheet, review Beginning guidance. will performance XXXX our balance our noted. markets our capital

and debt variety to the a reflects Our equity ability ways. flexibility financing our access both markets of in

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

our average equity aggregate we over real significant proceeds work quarter, price an fixed second weighted of X.X share. XX.X which XX, ATM we the note This weighted on to our important debt to of June environment the $XX.XX an put rate. us million, going average rate rates, years. quarter. raised focused through $XX.XX at an of stood investment interest of the shares of an under borrowings During it's Year-to-date, that aggregate We X.X% $X.X million average equity X a average of with maturity interest shares and we long-term In activity. estate our gives per share. long-term sold common per million billion At just just liquidity net at third sold about under $XXX all into of an at are our price

debt well maturities are laddered. intentionally Our

covered by our is assets. total annual such grow flow that after free the is X.X% cash wouldn't only maturities as goal be to of our cash of amount flow, our Our about debt dividends, free

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

XX accordion to debt The second on on quarter, attractive our equates of In around on we with At facility of sheet. credit basis. and at This XX% times $XX balance to a Our to to summary, end even remained the a well the addition and our cost we're expanded access leverage feature opportunities. conservative more low credit leverage fund in equity basis. net facility June the flexibility, debt of to capacity $XXX million a at cash options of financing borrowing net debt run-rate variety to liquidity. large of ratio X.X million had to of EBITDA the pipeline investment on our provides access positioned substantial nearly

Now by our activity strong to asset from second from cash flows activities during dispositions ATM funded Acquisition performance. was financial noted turning the from quarter earlier. the and proceeds I proceeds operations,

substantial $XXX XXXX. million compared assets estate billion in million secured As XX% our base pledged billion $X.X billion June estate interest ago. June of $X.X real to our and our by rent portfolio billion gross billion of properties. XX, XX, at $X.X increased $XXX was annualized debt at real X,XXX place collateral portfolios XX to approximately year financing real the This properties to at unencumbered, $X.X for representing our representing remaining are stood estate as $X.X at June generated portfolio, compares Of us X,XXX flexibility. as giving and The

will We portion $XXX drives In approximately revenues portfolio second year-end, million. the the quarter, our Portfolio growth expect increased of XX% revenue growth. unencumbered that remaining to by year-over-year XX%.

weighted acquisition of until Therefore, quarter that second volume was full Our the realized end third won't be towards quarter. quarter. the impact volume the of the

solutions. capital strong revenue demand broad-based estate our consistently reflects Our for the growth real

estate real For to the also to XX% this to Interest Nearly $XX expense growth estate was year of to a as credit average were impact quarter up to higher average to expenses $XXX,XXX million real of increased Since borrowings. costs XX% XX% ago. taxes, partially year $XX interest higher Property significant our Property to million slightly leases, our total million weighted such on property-level are compared decrease of That the the subject second vary second can the was our level our the on triple-net costs based year long-term and be $X.X depreciation as as and for compared our rate with in primarily increase of reflecting Interest portfolio. long-term costs debt responsibility underperforming by a expense due investments and on a our amortization and ago. the compared debt insurance of attributed outstanding a of we portion a to balances of fully can our almost quarter slightly timing maintenance on use the property tenants not are activity. facility. quarter offset was up ago, property acquisition annual fund the expenses. properties. vacancies quarter

four have about portfolio investment. averaged points eight past property of costs the our Over quarters, basis average

year compared growth $XX.X property staff of primarily investments. quarter the costs basis additions. our our this expenses $X.X ago, and the average million quarter of million a in were portfolio second lower of points the to year, G&A During X were about to due at second related

to quarter, as in percentage from portfolio size property offset growth basis Net to points estate the in net year For This decreased million a to a the revenues before and This $XX million interest generated investment additional sales $XX was rental on of to average income. slightly income gains real which on increase our XX G&A was decrease portfolio, year compared second ago. property increased points the ago. increase a basis by a XX assets sales. gain due of

gain quarter quarter per share gains, XX of the second as last and increased from the these share a XX% another and gain basic year. diluted included basic the or year. properties per second to $XX book for or We $XX the per share share book XX strong and and of $X.XX AFFO last in year and share quarter of a Including per million sale XXXX income million $X.XX AFFO ago. million net net quarter compared of million The basic of for $X.XX to of $XX from $XX.X $XX.X AFFO of or basic a million the compared $X.XX to per quarter $XX per growth. diluted diluted sale or increased from to properties net $X.XX diluted delivered million

last last the you June net beginning comparisons. and timing year. impact know, diluted back half investment AFFO As the Berkshire the reflected meaningfully in This and issuances, of dilutive to share accelerated expected effect we in Hathaway a income equity amounts, year-over-year per-share of per is the

dividend low our per an important of a maintaining Since in we've Our ratio same stockholder and XX%, payout return. is a by IPO share XXXX, time component dividend leverage. our dividend increased while our reducing

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

permit. annually at our policy raising know, you our results and As each board dividend least at board meeting considers as a evaluates

share currently into As dividend now AFFO growth. we per maintained the our ratio our we quarters could growth payout the would among at anticipate dividend quarterly in level is for dividend $X.XX lowest the sector, fourth our that and translate

announced turning volume XXXX XXXX Today $XXX. track approximately November. affirming first guidance. we guidance net we’re Year guidance last with our acquisition to of on to-date, Now our are

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

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

guidance outlook the back and assess I needed we’ll As the we the will turn to And to continue update year, move second our Chris. as through call of half now,

you, Cathy. Thank

just operator, the year. successful Before a of leases the investment STORE the over over own few the achievements in call design running portfolio some highly by net I'd past companies. comments turning net of to to lease in make to history our diversified providing know we certainly of the like has most diverse long most and our

are but of of expected portfolio hold we beauty strategy hold the the staying rents is properties paid. a be investment in investment-grade grade deliver which portfolio at profits long-proven of finance core exclusively universe, yet senior the proven many performance to note But after we our the just structured universe. to diversity is contracts. when alone, a Contract of leases tenants owned real-estate. real-estate diversified can seniority not deliver issuances. Taken is investment a the That’s a to our structured our long senior Contracts another cornerstone diversified of of profits finance cornerstone

paring with a yield level of investment-grade should So performance. diversity leading portfolio contract portfolio alone seniority sector high

time long-run you tenant asset acted XX% profitability. score quality, But Our discounts and in grade raised at replacement portfolio of our and full aggregate to STORE, of the includes quarter in achieving this quarter first X.X% of equity and started the year, average half management impressive adding and property like Since returns. well real-estate with we and STORE way suggested is last that cost contracts we STORE X.X% our our a then last results growth STORE. score. value get actually net per third investment dividend performance and been since an the an which A-rated exceed has and more investment highly based performance location The has growth or portfolio been investing the diversity, the portfolio AFFO organic realized We've of upon credit end our of is industry-leading credit. roughly which of the for share

our just the XX% second of our So at become dividends the AFFO. and end interim protective of payout ratio at more the quarter stands in

return As Cathy helped year. consistent from dividend XX% adjusted XXXX, growth on dividend while alluded, the IPO. for us rate our like funds General have. double-digit those a also reassess Since maintaining Chris Underwriting, Executive Vice year quarterly performance and Counsel; close to questions management over to have Burbach, with IPO and our this dividend Such of Board each you will to will for our we our with our our realize have Bennett, questions. XX% operations. Michael elevated has of of to help annual us shareholders in comments, for the any policy call by to since that I’d answering might operator next we And be note our Directors ratio turn President, And operating performance the payout of mind our

Collin comes of first [Operator Instructions] Our question Please James. Mings Raymond from go ahead.

couple your people timing? sense how maybe as is pipeline just maybe makes over do just me seeing bit flat a a but on call dynamics the about obviously from more the current $XXX capacity seen of million in of you And feel lines up team line the it Is little the some appears deal was relative growth growth question net on last there years? tremendous add here? at to market to it play pipeline that It those, First year. size. basis, Are that last along

Mary. it’s Collin,

here at see is but they to some time coming sales we will up, two on growing, It and have them and are for will good It’s to the take So them no, get mentioned along. shortly. start this that new year we you timing. pipeline people added board because

achieving market we front-end are great investing So too. now the and we penetration in right are

on good is everything sale the So side. deal

sell? in examples sense just of the of board what that in find appreciate better this second just you're is across you're best what my now, just the you gains there. then shrunk maybe then But maybe you opportunistic the process or of selling? on buckets some disposition I opportunistic a like strategic of you to between able you detail that And right bucket are the that the operating terms where -- us give up is the can post And to sounds front. looking question some deals bid of were to what some kind for trying the strategic

It On more its have generally front that the we the properties opportunistic -- granular Collin, is again. restaurants. Mary

things urgent classes the side, that on some strategic have as asset We cares, a it’s And of of plus really nature. well.

terms industry. in in systemic So anything nothing particular of in in all any

really a in areas, So quite it’s honestly. both mix

stores, stores area that The sold furniture two one example, mean furniture strategic you I we from for -- saw. or

On the optimistic side, yes.

sort it strategically our managed. keep and Well, of exposure

make we So quarter was mix, side, money a this it’s been lucky just on is the property - even management were unusually. and to then which it’s

money property out of I You don’t expect to management. don’t make know.

Correct.

question comes Capital of Our ahead. from go KeyBanc Craig Please next Markets. Mailman

wanted to guidance hit on Just here.

based You $X.XX on guys the kind the to year. half back in midpoint, are, need of of the

half penny from a you fact the a of points on the just is back towards that basis the that second ahead like of in. So quarter Add are the you your activity the XX guys noted And uptick lot quarter. guidance. investment came weighted where of

seeing kind given back year that guys your at midpoint you're curious lower the execution in end didn't maybe potential that had. I'm the just the leverage half the maybe a you've bump you confidence of bit, give little are headwinds You're of the the the what range. of to

Hi, is it's of A Cathy. it timing. lot

in was month acquisition the and actually mentioned, in activity lot the second of front, for a Mary the the on June. of as quarter the release granular. the actually So of of very And quarter in a month lot was June

properties. closing business, So a more to of timing flow favorable necessarily because be to when can't you you say is we're the you're going

it timing as of reason, keeping for but acquisition for just that of guidance of raising well. the activity only not So timing equity a was lot where the

less as share have XXXX they on what as rest is -- that do of a And numbers. impact type on big of go an the progress, impact the less year, impact and growth, the for happen through the you although will we acquisition

that we're 'XX. what to year, have XXXX able to for $XXX in to million extent exceed net that more the and hypothetically So will happens do the with

mentioned, know, as And AFFO year. bit no has if December you of it for the December, the close in Chris month. on you things sometimes And impact as back is half a quite almost

and the I’m Okay, continual refinement the talked just that's Score. is how of helpful. you the STORE curious Then that just guys curious about in have going. past process

If at you guys in, materially the the the made have of any way is substantial that viewing impacted any portfolio? all, changes you're credits in

say STORE Well, no at I this point, Score. changes to would the

it's you impact So bankruptcy very on been the Moody's on composite just the unit-level statistically consistent together retention lease or insolvency look of loose or for case in of number, since coverages a is robust STORE Day that X. at the of discount if contract of very And which a really proven hypothetical it's a expiration. a Score, a with number

would It's less could view less our for almost of STORE portion use proven, hypothesis. intentionally Moody's than a piece conservative. We've tried as And bit example, a Score that it so the level make property you for robust number we portion be. the as to of the

our we in insolvency. it overhead, event sort example, for coverages the people assuming after think what to calculating We're for conservative do affirming leases So overhead. of over of be probably we

artificial intelligence investing in have months been next number probably the I years mean, business to intelligence. of have we're last going data behind lot a and a We for in and this. software lot the of few

things to the those Score, relationships. almost performs note strong realize moving I more pretty vacant hypothesis in doing diversity, really see I point of been better our of now, as says our remarks were asset assets and proves mean, it's a better really amounts sector-leading that I management, driven really done around discounts at get we've a helps whole mathematical all portfolio the quite around and net keep every high the than prosperities of really performance. at you because to assets portfolio year that. levels can going up which sort by neat property the representation rates that it's total of at job internal more A-rated we've presentation. in STORE levels And having good low. growth XX a that and on and some in internal see to point, pretty as property portfolio and Isn’t the management. my modified which as of just for But basically us under portfolio of proven made you bit And appendix in external portfolio value, and Score lock is management We would move pretty to intentionally so end a in And time, and trying tell some this an active growth time is over to reflect really of active just front that buying in to way lock. selling return the you're that our properties you stuff a STORE type that so for well the

from go of Kim Our comes Bin open. is Kim, next ahead. Bin Please question Ki like SunTrust. you’re Ki

Alexie This in Ki is filling Bin. for

questions. Just quick two

quarter. looking looks dollar further On amount give like sold exposure? like three And the disposition you rates? this front, of those the cap it to the you are color on some Perhaps the terms could assets you in and reduce Applebee's

of [Indiscernible] side, properties early collecting yes, time we we did some RNH some we some some have Applebee's -- financial the the move front from of out quite been on now on that for getting of So issues of statements. in the moving the saw

been So right those along. we've moving

landlord actually of to their money and basic So those the guys this see make on on reduction the do we new to still But just and those those enough give are and lower with were rents can a able Applebee's assets. Applebee's. permanent rent

with theirs that rent and again some neat permanent marketplace. our interest gave aligned So exposure strategy on it them was lowered and the reduction our

properties the they size least in little their requiring $X average the rate XXX over than at So stock. range were basis which and less is points million cap

we So on execution a those. got nice

they range if are Cap are off and for rate tight rate - marketplace. holding the Applebee's, lot And in over looking shared the seven seeing numbers rates desired quarter. cap few in last the you we restaurant at are that And pretty course sale awful for found

wanting cause been assets. that's of for buy So those people to also kind a

And then another follow-up question.

half So losses and in Could of it be is the in the $X have $X.X then any quarter in the there you year? some more that of provisions about million expected color the you for on provide And like looks million. just to quarter first second you loan had that? another second of

Those two loans. different were

put looking see As times often our on we necessarily estate customer-centric makes trailing capital those the may and be providing would if very give real that you estate, proceeds real for solutions we the versus are we support them for to are that you. separate when are to we they know loan if don’t in a proceeds, money more and sense more customers, willing proceeds we

estate are by all needs properties tenant we If own. the might the loans it's more And things, real So they really estate real other secured can the when investing other estate funds, in values. real secured we show make equipment maybe by may estate, values loan real value. or sometimes

to we them we quarter In a frankly separate loan. This all loan first dozen do. of the thing we quarter very, a small. are they're less a did the the a small and is had very write-down business and the loans. the supporting grabbing loan we are Most equipment of very was that And part of loan the second for There That same collateral. wrote them. of than we a value. down during up collateral so So ended them

not the of that's part business. big a So

any put valued real at estate could times wouldn’t take on all Often and lease. you on write-down the things you

affect So it doesn’t overall your recovery rates. really

of calculation lease lock, So percent. or internal appendix, growth it's a for loan in we're giving performance recovery you a terms the whether in example, lock

Our comes Egan Please Stanley. Kevin Morgan next question of go from ahead.

out morning there. good Hi,

lease for that pretty me. Just at any significantly curious peer success I just from to range above you the looking at in just of had negotiating range? that higher terms I sticky maybe questions was additional are Or escalators been X% quick X% you recently? the these have average that than escalators was have group. you’ve

have range? leases Ask above that time. to more seem We question the one [indiscernible] what

to have you had I has higher given in higher that been that any it range little the So just inflation to than possibly recently, bit success maybe X% X% guess than pushing the in range, higher escalator X% there's or historically? a expectations X%

X% really Mary. annual it's market. Kevin,

seen that. anything higher much than haven't We too

So and and have of middle Xs got very the X.Xs of the some this. inflation. of of X% reflects so we've sort X.X of X.Xs, very, kind between guidance for term sort some in we long a mix a is

to that escalators lease are have want really lagging inflation. You

going to do leases to you exceed have much chance You the like for to that below you better a escalators expire, market at lease which your lease renewal. inflation leases give want rate they time have is be because not

get. that, it's about you be trying going said, as to is So as on to I high as market, mean X% push difficult. And Mary this

Okay, just any there sectors that perhaps downwards? thank been seeing And rates, that. or upwards of specific cap then for you've have been you terms in acquisition movements more

and class of of So favored the downward industrial a it's in of having away asset classes retail very-very year really have in other sort side and been industrial been terms and terms stable. from still affect on being the away movement consistent this pressure movement from

Okay, thanks a lot.

of John Please Ladenburg ahead. Thalmann. comes question next go from Massocca Our

Morning.

you Art tenant? Furniture of to And color on One the of rate strategic maybe kind leased on dispositions that would during give sold quarter. do sale? look So more you Van properties Can that to the cap some

south It'll that's property and assets that rates so And growth about we what below We're going X. of we because cap be been not buy Art the a the reasons. -- simply knows get of sales. we're doing customer the and diversity they’re at. to sold always are combination the Van And for sell exposure

some you what we’ve to is. and spread disclosed we're the money So making

that So going exact give not property. disclosure on to we’re you

Understood.

in bucket, to strategic was that correct? saying think going you're your I be

Yes.

disclosure saw that gave and charge kind of coverage. around little you a kind extra then And I of fixed forward

You year average. was that just a have have the simple looked was to like it last average? that weighted clarify, given? also what maybe Is metric that is And -- or if

the drag want a of up is We average. from average companies just that a with companies this, off. you tail if and to that’s gave average time. because just up is ask a some other weighted there I waste weighted disclosure it to weighted average. out it total by substantially X because the of right We disclosing were our keep look is is median to just weighted We tried they at opinion our and north weighted the hand mean, opinion -- there the gets us really other did going it on we

it on going have include to than So other you that that when coverages it ours, of are artificial so going - like don’t the is are weighted other have gives and of their sort don’t sense some assets it, say manufacturing them. hand, we I people better and coverage security. to skew people But may and

going and to see. get are we So

you speaking Would it the one have? median just trended kind same of fit way would as of kind as the think median roughly

might want more just weighted to And on because depends to Yes, do -- on say little right again is There what it volatility I drive would that you way. focus be could the just sale average a same the it. the really median. hand

is and at a three STORE look year scores. three-year scores If stack the also you there appendix, stack of TDF

STORE a all trended. if the better each years. the the been much three been you the perspective from chart, on by is the years pretty at for that years. look three of score, the of tenant has coverage flat top that driven that how or level has the look last see And BaaX stuff So our can percentage numbers on same the BaaX other, if three each fact so consecutive point the is are last And of which basically last top on portfolio meaning you you at unit for basically

think the not. an is And that of stuff trends So you credit idea where flat. are I just and gives what all that

That’s at should So now a it. you look on take XX. Page just

Allaway Street question ahead. with from next Our Please comes Spenser Advisors. go Green

look back driving to relative it quarter. And to up correct? first does that Just pipeline, that? viewed like so, significantly the quarter what Is if was investment this is going the are fairly deals

things quarter. necessarily just not and consistent each it’s timing how decisions. transactions It’s get Again, Yes. the of

quarter made we just this think probably I So some decisions on and stuff.

that point worth transactions you of just and that if of look quarter it’s I the to I’d $X quarter granular. our average which the But mean itself over made years, for earlier, at million that transaction net average. the is basically -- Mary change, terms was average last XX% was the number say in hyper

are And encouraged deal volume. by it’s means price the doing because of it smaller we’re but number. drive deal So north a evenly And big month it they we size. can $XXX million a usually

ways one in size up with that to speed other $XX But basically get will million. meaningful number So same our deals million have no had transactions is $XXX if deal assure you $XXX will transactions is the rest transactions, the it number can But the normally the the net side of throwing the size. through to be happen. which of more the of $XX terms of we be million, bucks, that of some but one million year, happens, through were volume look to that were bigger ways that no could to transactions likely we ourselves on no get

time that we big honestly done. basically may have It deals to deal. as small it we really do as of penetration, -- amount by encouraged the are a take of So amount the deal takes much

do a got in ask or say, have able to flow. is there million ago a a billion. this that's a focused able $X million like serious So would possible business to penetration to we're if in get market deal deal, as maybe terms be people And deal people were $XXX here to that deliver you what would extra to on of number be have that here there to I $X having your deal to it of million or of able showing no, year to million rate that billion $XXX full efficiently -- $X guess do you have is average or fill of a copy. would years you venture they $X team number to as

if 'XX, Spencer, precision I end would deal. you're part at expect in beginning larger this in the kind the be some or or pipeline of seeing up -- climb line the first the review the should think there in pass-on you of and -- of deals of 'XX so

So I normal. pretty it's think

you're in on Okay, last Can kind one you that's of a another helpful. select what just color retail sub-industries And little then bucket? targeting one. provide

Other retail bucket.

auto of So things hobby, maybe just let's retail like sometimes we and other things stores, some like go stores say exactly, of buy -- things Décor, would copy-to-copy things that, that home might be nature, Home on parts. maybe side be probably the décor,

décor. maybe don’t you get stuff retail that, it's where think Specialty like like something if you Internet. might I and go about home into go a boxes, firm mostly the on hobby over really

and teach teach in go actually all how and and classes, stall do to have You to stuff. they that how

question go Please Our Collin comes from next Raymond James. ahead. Mings of

Thanks.

tenants for any us from supply you follow-up uncertainties your Just curious quick the policy? on there weakness? ranch trade just broader me. some agriculture the just have you Are about talk farm seen given one of any the of about outlook and concerns was sector give exposure. on seeing if Can weakness I just any those the

any seen this I that. having At any farmers mean, The not it’s anybody. levels for has we're not in say anything if not point obviously about is any is good of there issues. Midwest adverse going and We've in whether words trade at to seeing numbers change point unit what of and soybean this early at heard from we've not on. the tenants our discussions hear

we wars, So XX% for if but else. expect by I affect can drop break also I would covers it if that to the at -- to your you mean could the trade even. news it affects - farmers good XX% sales way we unit these average is, the X, have everything mean

their economic on Applebee's have why would kids that go our we this have put do they have huge of it. other which at mean kind those sale the suggest for But Applebee out, stuff. about I have and that in the will They so it's stuff. things air mean eat declines be companies there you concerns. point, numbers we but of and would that But one rents anything you which walk meat, and concerned I deals. this same-store almost we I margin haven't have like is for are just really have and there to mean is the say area I the and that up things. huge, supply we just markets just broader relating source, not problem. formers So daycare we often

so trickle all you the the through economy mean if stuff coverages. I So have

Our go Please ahead. Bin of comes question next Kim SunTrust. from Ki

doubled years past company you've the terms almost in of the asset value. the in size So of

you company time? or philosophy kind that have what kind think how And parts pace? billion, to your of growing deals parts kind other So portfolio over couple of you've that And done do the next you source adapt? of of has changed business of grow any from of or gleaned has of or at the just for

million think around that the say internally four would doing think been with reliable. able years been activity a very for month month we've so steady our press by million do about think just out just to external been course clockwork a do that they But ability growth, be investment primarily and analyst clarify reasons driven growth on to growth had doing a the I a in when when off that close at mean it's like not to and really the pointed and $XXX I we've because external almost to discount that. tend more and to they encouraged been release about But I company. it it on very pace. that is we're a $XXX this

thinking really million doubling been the month business. about of But a $XXX has that. course of the we So done size

time the asset. billion year we $X off selling We gives adding which that billion our better you and side I which exceed the credit the well repeat change market through is relationship been as mean, said took $X.X penetration, that closing adding year, change at able our has and have huge. of we $X this sort to - for us you’re something well. being And in potential potentially And course additional side business worth now as assets is So the per public in of we we at managers company million a months with some billion assets $XXX for been gross are of as mind. point the in we've hire -- you the had are as and on to the

doing we've XX% X business. of Day from -- doing been been we've So roughly repeat

grow, you of what and you the helpful growth. that's more as to is fulfill very repeat get So business happens

for repeat if -- example, look to we XXXX are we we before us look some company business. So in XXXX public, you when at had the going not went if you - started to were XXXX, at in

So XXXX.

you So business repeat had that basically to XXXX from do just for we when 'XX, go we didn’t that business. much

in to business $X billion So that every business I will type earned. us as carried for doing has $XXX us which grow we've where investing Otherwise, the repeat new kind like that single as it we've of hold And number, far think to sort really million is kept of year. it diverse.

by risk. trying look very diversifying related for industries. We’re non-core We're to

side, the about time you assume are a lighten of strategic this. we property hold they that need to diversity stuff, underwrite you where from up long-term on We’re very two, thinking recessions have these cautious and the assets. to during maybe three the sale side perspective. you We we're When

underwriting. So you are not

year cycle business year after about next worried business in I the cycle? or years. mean worrying Somebody cycle the this today. says worry a where we’re we business that. I'm about We the are XX about

last said investments loans the better. to mean closed you retail residential cycle and would So of sure your -- time company, diverse we you be market. over And we year, our time. of can't and of X,XXX first a we’re a wasn’t particular at portfolio. earlier [ph], if you I all we have they to were I or course, we that very portfolio too good market, we CNBS are where that diversity. how cost are underwrite, in be the mortgage will thinking sustained that mortgage When FFC really our so here in. people that we’re that and if XX% mean presentation, the I underwriting rated public make year, BBB do mindful underscores just as one trying the are And, past business of suit cycle to were the X,XXX stores business had

contracts performance. which itself, if So our by which you better diversity goal, huge should even we're performance, recurring with that then grade you investment and risk-adjusted a seniority gets have you

growth credit highest wash. the up the the are page rates at some hundred an cap you're in percent of end through yet you that which that you a escalators A-rated returns is on performing revenue You the the end and of business, talks got X where that X.X% the on portfolio, in to appendix close like with up internal

that's the So goal.

portfolio kind about that your Or items tenant, guys you XX% your for sales broader just line when of about And the corporate you're growth your will revenue talking in only? for add tenants? mentioned

the on performance our the it their was rent So they level the weighted our. have with interest that And corporate average at a was based for at top-line. tenant XXXX and

quarter, last growth to it’s' level unit at look you closer If X%.

not it’s exciting. of So matter

growing it’s say new-built of been unit let’s at too. building several But of a lot the other X% quarters. are So last of stuff tenants like level also through growth kind for acquisitions been some They're our tenants.

- So thing by of as substantial We more because is and growth. They less that the giving them many means got way diverse they’re diverse it pretty treat profit. they’re more risky. great more points of together tenants are it a our

good So a that's thing.

mean? the 'XX can sales So X% way same-store tenant it for grew your in to past I the the just you call in over clarify a year

quarter. X% to closer It's last

average. top-line total grew to Same XX% corporate store sales, revenue On back level. but their

conference the over remarks. would any turn This concludes Volk to for back closing our question-and-answer to session, Chris like I

investor at about Conference, growth, out taking And asset going to encourage into account personal please rent bulk in appendix us understanding historic asset your Thanks our you're finally, held contained earlier know. enhancements interested in September the annually cash quarter to be recycled investor designed our sales is New one is account stand is seeing call presentation, to illustrates under which our for for second Lease all Wells share. at the Net there, today. favorite internal that for be expected to and growth XXth. look is should AFFO talked York improve the And Fargo walks scheduled thing of as materially call on attending And that internal which And let per in of if the next of are the our a our number cash or retained STORE. City, thanks dependability presentations are meanwhile, I from internal you us of the increases, includes take disclosure to flow performance. all listening. growth the the that which I My growth a

today or around questions We’re that have. tomorrow, you any

great a day. have So

for now is attending Thank presentation. conference The you concluded. today's

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