Store Capital (STOR) 2 May 192019 Q1 Earnings call transcript

Thank you, operator, and thank you all for joining us today to discuss STORE Capital's first quarter 2019 financial results. This morning, we issued our earnings release, and quarterly investor presentation, which include supplemental information for today's call. These documents are available in the Investor Relations section of our website at ir.storecapital.com under News and Results, Quarterly Results. I am here today with Chris Volk, President and Chief Executive Officer of STORE; Mary Fedewa, Chief Operating Officer; and Cathy Long, Chief Financial Officer. On today's call, management will provide prepared remarks and then we will open the call up to your questions. participation, be the during observing portion the maximize hour, to the to of will we a call. order while call keeping an Q&A In two-question limit follow-up the if reenter to free feel you Please have questions. queue

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

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

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

needs we’re existing with the address, but on for. run penetrating the morning, Officer. a of you will on that STORE investment Cathy quarter our you we Mary with With front through Financial investment earnings call. success nearly Officer; granularity XXXX began Mary known in customers. Capital’s our today quarter Chief Long, the to while everyone, are and XXXX are me to numbers and Fedewa, of activity $XXX Chief more we our first focus markets very adhering detail our Good active with We welcome diversity Operating and our meeting while large the maintaining with of happy the ongoing million

our We portion same-store annual first our flow. dividend quarter the rent through below that growth of share. meaningful nearly with our on activity expected funds adjusted XX% maintaining the retained tenant AFFO for X% focus to from historic retained flow investment is growth operations, of cash a pair funded cash drive per the of being of ratio majority With contractual payout

As through successfully growth which at-the-market new internal this through Cathy two been program. have our external accretively issuances, funded is for efficient will illustrate, growth the years, we funded that past combined share with

we During issuance a investment $XXX term quarter, closed notes. on the public senior grade unsecured second offering of X.XXX% our million XX-year debt, rated of

most at to in years, the our of our or financing past As assets first XX% us secured its our very asset pool unencumbered profile. conduit unsecured sources expect other noteholders unencumbered with funding low notes. At massive our efficient with a stood our have pair and leverage quarter, with conclusion rated providing to with investments, access flexibility we of about nearly borrowings, debt AAA of to notably, we options of $X.X the efficient offerings our term gross billion highly

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

return of weighted of rate investments average X.X%, just contractual you quarter the during quarter adding for XX%. average lease escalations lease under and a of get exceeded the made X.X%, Our the rates during gross

about cost total levered XX% into a at XX%. returning This return Now of of average you than and spread of translates corporate cash XX%. borrowings, X.X%, borrowing arrive investment after approximating around of gross costs our operating incorporate better costs over a

median you of investment and four cost investment escalations, costs expected to level variables companies outperforming disclose lease mostly investment return, a been time of favorable Our spreads borrowings, unit the charge be long-term our our during to by term of percentage The as at weighted The take essential median the STORE was the to ratio quarter primary or which XX is BaaX. returns the average operating RiskCalc new X. the BaaX. fixed from enable investment new was profile tenant assets, which to public rating of for X.X median deals, long assets rates why level property STORE driven Moody's investor having purchased for our annual favorable new were continues to contractual The Score contracts at to we lease and quarter years, returns. coverage investments post-overhead predecessor compute contract for approximately rating was

properties portfolio. will the estate notes contract to within to master including unit-level investment seniority capital, AAA from quality as investments evaluate cost, in rated issuance replacement to new multi-unit financial Funding made to access as XX% quarter last lease ability I turn our Our during our of well inaugural the subject average all, approximately real unit-level XX% the new critical net giving us of This Master acquired were during that, assets our XX statements, Mary. are of is reporting of our to financial that to deliver was to the us made leases. XX% call In of year. quarter fact over With we at October required and the

average cost, Thank estate you, invested in a $X Chris, first million. strong separate everyone. cap rate average included weighted nearly acquisitions size In we under X.XX%. to at off just the active Dispositions rated XX our of while remained in start. million This is resulted $XXX our of loss very a was with property morning, good part over Score only activities strong at gain and transaction vacancies investments on quarter, quarters. the were property transactions quality, properties XXXX in of $XX aggregate continued remained four an diverse and opportunistic contracts first slightly were built with and At and Delinquencies low management. our lease million. enabled our every of sold. a management an first real a of in and three day The time, for to our cash past partnership during same us locations and portfolio granular how portfolio tenant our during due of solutions a end X is and close with approximately quarters investment quarter, light the methodology. occupancy for such STORE of sold an three strong investment few portfolio. X,XXX only At sales to the remaining less has highly than the we were an based This healthy XX.X% the and demand investment vacant. XX% net grade rate the being was half our have quarter of One

cost of sales For we our our during net remainder to expect past year, sales the our results. to over gains projected realize similar the

our Now, performance. turning to portfolio

substantial of the manufacturing. remaining design. properties in with and XX% by portfolio well-diversified Overall, mix portfolio remains presence, XX% end of the Our highly first the the experiential online service our and remained in in sector, service-driven with retail a XX% at steady quarter granular and

from revenue year. quarter-end, annualized Our top unchanged XX of from XX% last of our from quarter and was and customers XX customers were end interest, last down rents at realized the slightly

largest and the X.X% XXXX. revenues. the annualized our are our rents our represented second quarter, having excited exceeds which of X% target single Art Van, about us Heading of of places Our of rest interest, our below for into we annual customer, no tenant prospects

success investments are our results Our year reflected pipeline our strong markets. in holding cap continued our penetrating are to staff target we steady. last made as large strong yielding remains expand in The and rates

solutions diverse need results. of deliver. market real of discuss identify I'll that to are industries to continues attractive, plenty to a call team turn origination the And long-term, uniquely direct our across companies we estate in qualified middle the Cathy of set financial and Our are to now, that geographies

our markets Thank of followed quarter you, capital by Mary. update will an our guidance. XXXX I'll activity for financial on sheet. by I balance performance discussing begin Then, the our first review and

debt million ago interest to grow annualized year to and and continue XX% XXst March portfolio we half year $XX.X base roughly due additional from and million. that The to million expense Total increased in acquisitions. quarter discussed, increase amortization our quarter our debt to estate to our a portfolio real for to relatively at The Mary increased expenses from for primarily million which weighted due average $XX.X up portfolio. and year-over-year. year depreciation increased were first first real our million, XX% is Chris $XX has points $XXX.X to about from basis a generated fund long-term rate quarter ago. Interest X long-term reflected by property on growth rent to $XX.X interest related expenses first higher $XX.X last G&A As our million expense to used that estate increasing revenues, of million larger increased the the from also remained with $XXX place million. steady, in $XXX quarter

average in costs. nearly of quarter AFFO to rental to of costs AFFO the reflecting share company. basis, from assets, decreased year-over-year, present $X.XX and and of primarily lease year $XX.X such $X.XX tenants XX half, from a of per the XX per diluted a in property a of AFFO ago. increased X% as and and both percentage basis strong due AFFO $XXX.X make XXXX. portfolio amounted new million standards to about diluted impounded quarter. These We $X.X On was per scale and As million a an standards ago, by primarily another our us million lease year new points the to accounting a basis Property require quarter. basic million share This gross increased ago. adoption the delivered share, on taxes from our as growing revenue for increase year advantages per ground expenses basis G&A $X.X payments our share the XX% property growth to by a points the items basic

dividend our declared XX%. we payout while $X.XX of to continuing dividend Finally, low a quarterly just per share ratio of under maintain cash

and $XX.X strong our to At LIBOR our bank of and on net $XXX proceeds the reduced credit million pending held In included at-the-market disposition from in million X.XX% debt of spread finally, loan our operations, debt sale XX-year at CMBS balance sheet. term March over borrowings at we in a activity we X.X%. from and notes property million equity in and flow a And by balance issued due to March, capital volume the facility. year our and renewed turning we proceeds our that’s basis on XX for used We senior real combination we cash end in points. with estate Also in $X.X XXXX the million Now, sheet. defused the February, our long-term down pay program. markets $XXX funded issued acquisition

shares maturities substantially of $XXX program per common over ATM our long-term million note borrowings $XX.XX X are that rate net million. equity approximately an of laddered. well sold we stock share, quarter, intentionally fixed debt to It’s at of raising our and our important under average all the price just During proceeds are

times X.X debt quarter-end, or At end our couple years. debt us liquidity little March $XXX leverage EBITDA coming basis. over pipeline. to our run due plenty our basis financing we of real estate was with target range on maturity unencumbered balance portfolio of annual a and to the at the rate next median our debt XXst, million, is ratio gross have net strong profile low of non-extendable very leverage acquisition quarter currently entered Our debt conservative of at to substantial around a on flexibility. sheet, giving second We XX% net cost Approximately fund a at and XX% was the

$XXX Our our equity November the sources feature. our on $XXX amount available flexible million funding launched and last we has program facility, a accordion include credit full capacity million which ATM that also of under $XXX million $XXX million

outlook, for $X.XX. of strong guidance the positive to quarter we billion approximately we're as November. on of XXXX pipeline Based guidance volume XXXX, projected acquisition of $X.X expect acquisition our to per in range to as last our robust be turning net the activity AFFO for first announced Considering share our affirming $X.XX our well in and level Now, XXXX.

a is guidance AFFO of amount run on weighted average Our dispositions, times rate per sensitive acquisitions, markets activities. on property debt in timing capital and leverage each EBITDA. X.X share tends to acquisitions be ratio both of a the to period any in and X Acquisition back-end weighted and cap activity quarter. AFFO to X.XX% based of is new to net target rate

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

accounting standards to Before changes the resulting the our like to balance Chris, note I’d over to from a lease quarter. I turn sheet, few new call this

sheet. in recorded approximately use our we The on our balance portfolio million right $XX item First, right use shown as a our ground for assets operating of related assets portfolio. line of leases are of separate to

right included shown a operating our Scottsdale, we recorded on other recorded of $XX.X assets million balance third, we to lease balance sheet. a related separate corporate our use a within asset is Second, as sheet. totaling in And on of million, $X is approximately which liability office our liability which corresponding

impact We’ll related provide our to changes statements, the back cash Chris. our And they guidance or turn additional lease business. of don’t to these flows filing. call our financial now, and the While our new closures the impact economics will XX-Q accounting upcoming I details in

Thanks so Cathy. much,

one for of upon management stockholders propose customary a of to which spirit, offers season and stockholders. to this based the of Takeover our entrenchment governance From is entitled do, a be outstanding approval with STORE’s amongst has control. Unsolicited being including our by usual turning STORE and to of for shares auditor, and has option bylaws, In proposal our to intended the day offer fourth REITs As company, the cast. or our four is nominees the stockholders the before public officers’ of is consultants. Maryland proxy as to proposals out Three designed me year, eligible close to for amendments the over questions. opt few compensation the limit on be best-in-class an review pursued proxy to executive Board vote actively proposals, by long-term new to few upon our comments be measure majority are the the compensation I’ll call next approval items The a the added to Act. voted group this MUTA, of of including We're operator these of approved reappointment would in

contains the corporate is my website the importantly corporate leaders investment stockholders, Corporate Our by in proxy Directors promoted Responsibility which corporate the SEC. business responsibility was our page we discussions to constructively by first in made available a obligations at letter new responsibility, and management also which regarding time even year filed recent teams our of and expanded leading tab disclosure Board and with this been regarding that annual of Corporate the echoed annual XX-K of many has firms.

to ourselves ESG discussions attention a in corporate taken count proactive or Environmental, and have a a such more leaders. We we these approach view take prospective, broad to XXXX amongst look From to the that started way another stakeholders. capital our Social to estate about meet of and real Governance this the thinking of to middle-market company our estate issues many needs real responsibility is of all companies. We actually intensive

customers. came stakeholders the investment by So, inspire Capital. our that growing stockholders are our followed many that the customers to partners Then formation our capital are positively country alongside the the the of think around business we employees STORE communities impact prudent businesses the our and that of and our

led founded to this true by Our has that if public do measurement been relevant of win always This stakeholders. success been of well and and is companies today. two all has highly were successful by team prior all for our win. We the we leadership

The the that have drive Seeking of external eight as net key my like of well which lease leaders addresses external indicators growth. and find you growth. business Alpha as internal enable as the our and estimates six variables to I Those we recently companies variables dynamics interesting. model additional mathematically internal might performance the eight computation business of article post, offered Capital STORE Finally, and first

foremost of against these are points. peers year, beginning two In quantitative such year-end to STORE’s stock the comparability, that, and return AFFO you with multiple will quantitative opinion, fundamentals Given while performance XXXX, reason for business differed ourselves have. the the price to beginning data. the of started various outperforming I this any we upon at benchmark end share like XXXX our based And the call for Operator? my the consistent from little operator to to the over XXXX of may questions at

the [Operator instructions] And from Janney. with comes Rob first question Stevenson

have of hit is goods? that impact having any on gotten financials so, few and on your made if And you businesses? with all the furniture them Chinese other maybe I’m significant thinking on given what get guys that tenants, tariffs Chris, of coverage? a

we’ve that are looking of with what it impacted started we so stuff of for Rob, away from all. is interns customers up that can summer as of for them our the our the lot exactly in, out a just last tenants not China. all since summer, lot a of lot to actually been import started just are all there kicking the as the you And we were. the it’s whether And doing Thailand. lot directly. answer other Vietnam get we interns tariff goods, because surveying summer, or hired actually calling that. I And think I They’re at and goods stuck companies a mean, impacts a it’s of places so finding

the parts you’re are what kinds what all furniture and in other assembling where of you from furniture places kind buying you’re of you If in happens And manufacturing, that’s U.S. is places manufacturing you're then really parts. which the buy business, cited, in there

or raising conservatism in to there there then, And is thinking just you you out want the of guys less did it I days? $XXX of there for leasebacks $X.X on the Is that roughly guidance and acquisitions, these acquisition the early billion; acquisitions about be first market sale deal what's maintained terms the April, product and the you sort for in how quarter. with million of Okay. guys everything, we you mean, guys should pace May year. out

Marry. will going But first didn’t you in quarter. that much well. really this Acquisitions Rob, are notice, sell Hey. we is

you lumpy, are sales bit So, a little as know.

net number. a is X.X right So, now,

track And gross is pipeline would I the I much say So, good. basis. pretty that Yes. think a on from we're

hard it’s time. at to much this predictive in in the point we're And flow be so very business,

start terrific as encouraged pace it’s too timing impact and But, the a early Mary guidance and to it try start measure it’s pace what to exactly early and year or acquisitions future on to the quarters of had just sales, we the terms by the we're of too changing of in have So, it. to said. can

you. Metz BMO. question Thank next with Jeremy And the comes from

Hey, guys.

stretch at of other or international just enough model, that U.S. here you the expanding you it success outside the of are yourself interest Is what to do see if consider more that no need than something your to is into Given the in markets? just all?

Jeremy, for we that I make. market to think big that so do we to this need say do is companies for the here, very is overseas. I a mean, would decision personal enough we what it don’t

think, assets also, denominated I and it America. to the investors of reduces that how in allows complexity operate are based dollar buy we

All your education? I Can right. looking some change just do attractive given properties And XXX then, there. about I at didn’t out think over you color about there, you what’s relationship have growing it list, Cadence And with to add on schools just you XX XX but early expect the know Education. to give then, added top more much us more

something that is we grow here? could So, see

early that educated is a educate way in business. the over wanting today early getting sure can’t especially over so internet, education. of and It’s hot internet. topic kids a buy politics an have fragmented terms insanely can’t access to you a make your Well, having kids of education It’s very in to you child service people the very easily

chains It’s at never the players those of we’ve of lots name country around around acquire they a are keep -- is names there operators, because Cadence heard country. regional brand regional the aggregator. and So, smaller brand probably

run well. it’s lot names. of a a different very of composite And So, they it actually

just space. So, believers we’re big in

Bin from the with you. comes SunTrust. question next Thank And Ki Kim

fixed the down? category some other Can number pulling tenants of up their coverage you and of are about of are just charge ratio that types the that tenants maybe talk moving that

is Ki fixed better. Bin, the ratio, talking Mary. When charge about this coverage you’re much it’s

they’ll of of I are integrating leverage so mentioned, as realize A customers are expense and coming doing had mean them. volume and lot -- the acquisitive, our forth And growing. are they’re made well, increased them and So, that they’ve really-really so they’ve and some acquisitions Chris on have we some just several forward. they

units strong that are So, we a capital on and on have coverage. in really favorable that places our stacks units we’re of lot driving really

And more into It mix? how XX% you at seem mean does internet traditionally being I look like but are is and year-over-year. the -- that Wayfair's furniture very numbers always up their about does resistant, thought furniture sales figure

maybe can resistant term it it question long brings So, be? of kind that into how

there’s easily, put furnishing. say just Yes. is let’s home that put A of -- you This is business. this call been lot lot Wayfair’s it’s a is together is mean, Chris. way. would it itself fragmented And furniture I assemblable. But, I’ll sales of of a well, it smaller lot a can it that a I stuff --

what box of like You bed firms in the which have degree. to world, the people is not type obviously some stuff the for and mattress

than the provide with hard On you provide with you hand, And well and financing design. stores, sofa. and a with you very it’s provide they when as furniture ship to deal just be more you other with they they consulting furnishing,

America there in high service retailer successful in a So, it. I is personal to mean, component view doesn't that have my no

the to. where that's going So, are industries

internet, that. buying if So, stuff service a from over don't lot of expect you're the

you're If you in do service from that. expect stuff then facility, a buying

delivery. retailers And And of so, the of successful level they're providing high immediacy providing furniture service. all are

sofa to of a hard get anything delivery it's like one-day a that. or So, like

been ever with distribution So, think the -- get it’s off way, have there places you has there. furniture that business, it’s is. by mean, then a all of to I hanging I taken. and online If fruit all complete facilities. fruit wants commodity, move the in the books, from retailing, low-hanging these with mean, which -- you the all lowest you Amazon deal start when I

heavily very invaded. been low-hanging the So, fruit has

at furniture a getting high-hanging think And Now, fruit. a is fruit. I you're high-hanging

pick preference to and is ship what some very delivery, questions. is just that and out their to want But, to very, do, a same difficult You just a terms deliver, of furniture they fabric. personal there in they It's can want share, people no get lot out try of time furniture.

reasons, continue find be those to furniture will like will Wayfair retailers all furniture successful guys successful and their and retailers for niche. So,

look coverage ratios So, sales healthy? just clarify, to -- the you and of are if pretty look you kind at trends

the so. if I are but But, I sales I are across it's side, been and you you would the probably as down, at that And say, have the pretty by take And it's you if dabbled manufacturing you there, up. you some overall by manufacturing furniture we the some mean, people advantage but retailing, is have of that on that have if look would say look storefronts, flat, to the not sales some furniture our I we’ve down. Yes, ability have the then same-store look way the coverages. you number, online too way. are delivering at flat, retail to of well. mean, also

on distribution. more cover side the of you to fronts that of business, get So,

And you. Raymond James. Thank with question Mings comes next the Collin from

you. everybody. Good Thank morning,

less Just opportunity distribution of looking is would that once graphic, an maybe pipeline seem it the than down was. suggest, sector at restaurants to set again, a ticked this trend continuing

both ago call. sits You on through quarters discussed and us your thoughts your it flow the of update exposure as restaurant can portfolio a deal to the opportunities you the restaurant relates on maybe But, far the currently as door? as coming where exposure couple just

the like a space We lot.

necessarily space folks the from from to in I well. lot players have a deal say but -- lot public less And restaurant that been of have as would seeing also And so but not been the really flow general. other of a we competition heightened seeing and we

deal. caps, of these restaurants in there start you going barbeque some you when restaurant lot is seeing so, the know a chasing And of money that off mid-X

and risk returns. that of barbeques the So, be are been we trying or selling think We have cap that investments. types we're these just restaurants other investments don’t’ real we potentially returns while interesting like and are low great much. as And we generate buyers to value adjusted making of plenty estate think buying rates at

decision. So, we that's why made that

quarter, what moving furniture exposure color real back in and just exist and opportunities quick, any can increased to DSG to the Ashley provide pipeline Okay. drilling of the on with you incremental down, them? And then, peak

So, Dufresne the largest Ashley Group in Spencer distributor is the country.

franchisee, have So, they they don’t licensee. have

the So, licensee. have acquisition. they through in been part are And they large growing

their resulted increase to And And quarter very so the way is Dufresne was by the Ashley owned that from acquisition. in Spencer heavily Dufresne by Corporate. Spencer

in parcel a way, and of entire integrated part And the a system. so, it’s vertically

the you. comes And Crossett next from Berenberg. question Nate Thank with

cost a you on of touch know have players. cap debt. slide you And to the presentation growth your have in wanted showed spread the your highest and I rates net the over that I lease spread of

So, of is, the they've larger what seen we've lower rate a my at to historically. cap willing done acquire question lower and versus some players

sense able kind is want level you I just do long from And And, just to so, spread spread X% get roughly you, won't a that of a think be over there the of below? go you that achieve you'll to to medium term?

companies spread in companies getting with We’ve spread. public less with than previous today. run Okay. The run lifetimes far answer is successful public less we’ve that we're

the to Spread spread return. room said, business. nice the spread our That but is being is not we’re there generate in and just numerator matters. so, in of so And bring rates nice,

-- mean, a X-cap absolute absolutely return shareholders from whether dollar So, a you’re I the a perspective. matter numerator does X-cap investing or you the whatever,

the both what of mindful spread we're is. and So, numerator the

prior to question, As are investors. we the said value I earlier

it, So, high like actually to on to would assets and yields marketplace we at that’s able are be rates money generate time. We’d be that excess looking return. to we to auction make in what day assets to the we that the sell buy following any at of do. where the are wanted able if of given important It’s be

now, we it’s to -- So, a buy margin that think And really have can we for margin what for cap want can’t you you get. of like I we do, you terms rates ton error. of with at flat can’t get, buy error, leases in

the That we hammered gets incremental been XX, work have XX, in and of. from So, share is could of compound been very lease staying it than we're about. spread make which to you that highest yield the just pages a -- investment we're you're exhibit rates still It MBA in per have yields resilient reason AFFO that -- that space, very more we we're point buy essentially if stuff your net a terms is [ph] creating also XX, proud is and platform, probably also at talking return. if of which why says AFFO we’ve which making in actually our an is we the on else up to space, the still growth the most big anybody

if but it, if the value more So, of compound not that. hitting on capital. mindful share our -- or it’s we of we're been goes have we say, and a lot we’ve to basis growth multiple were our of we’ve higher, stuff, our multiples. hitting creating definition you in been wouldn’t goes they of just multiples AFFO that cost if shareholder growth per to to defined win for are equity higher do is our in also take super cap And rate And XX-year, nice higher going and advantage multiple go over not multiples,

not, to knitting, middle doing. made a grade run haven’t that’s what go our decision and tenants what market, investment stick and We we’ve are gone after or after to we

there year. that then, staff you That's call investments last were mentioned earlier on And Okay. helpful. the

just to continues continue Maybe you get that you color Just year? to grow Are as how further curious little this expecting investments to bigger. as a there.

this certain this. parts to mean there sprucing year, certain we that Yes. front. staffing on going lot out a But, spent company last grow the say, would of I join of on are are time Mary just areas. can I

were look company numbers, going you all our take lot don’t on so our management the so if said, also That reimbursable property of side. and we cost them you stuff. do One if were middle that. it. out property a spending and a back normally asset you our at in being of We’ve beefing running But, the portfolio cost something terms in time way to do of management to this and the cost, the all did is basically up lot, been I’m to the

reimbursing in So that talked leases Cathy Long terms what’s to about and [indiscernible]. kind ground you tenant of

to cash do at at shareholder end AFFO cash as last FYXX costs be would you divided net compensation as -- anyway cost to And the basis even cash which were average there to to end and cash quarter, costs, and we’re be the would is. quarter That XX the which So, around as you this efficient basis were the this but back those at to for not add an is -- out our XX into of lease is non-cash collective didn’t look company if run add biggest. were to you G&A this. and were take net to costs and and I back it of points maybe this assets do you our points, property

this to in net have incredibly way running them. so we efficient So, are And company efficient efficient, almost any us us occupancy and be of the with certain little very we’ve all invested And that in of we which has have been properties administrative employees we that. we’ve all. over has properties exceptionally lot aspects have to today outsourced And high allowed allowed double basically platform, an more obligations employees more of to servicing for basically be no because at X,XXX IT outsourced we has efficient. XX we’ve rate, have requiring our a lease technology, which

anybody So, from the to numbers, you frantically, and we’re it to so out. want do perspective, bit out a all have little would just find sort an to have of point to insanely that operating back that you if efficient just to were these math you do pull I relative you

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

afternoon. Good

So, bit for or potential but provide Can quarter-over-quarter. on some roughly term assets those any remaining properties? is little color you jumped operating what on and those not lease caused that lease kind to maybe the resolutions property a subject of

Sure. is this John, Mary.

in would I in reopen we’re that in remodel one leases, that actually closed those the they say case working particular yes, they’re change. are during master of that make master in So, so individual And they’re tenant that and majority individual with XX% properties going are they’re then just are leases. looking properties through master little in simply and to And those site. of a over reimage site to lease some a majority to --

we But, our you those substantial a of it’s of as activities, master portion have flexibility. operational So, leases. in know, a of leases kind combination

leases. think in XX% master I it’s

helpful. that’s so, And

is entire that. any tenants, and of concentration property individual master lease It tenant; covered it’s the so. no with So, in is one an tenants diverse by the we’re on working list

Okay. Understood. And then...

this John, it disclosing and but down. of be rent. know keep empty mean, keep disclose don’t I we to paying just and empty mean, -- is just abreast I Chris. us are because it's that think we I that is intentionally this disclose important the number may people paying been forces common even I how it rent. many not of are very think number to we’ve that it, properties to properties

tenants stores, to number close So, basically servicing stores, stores ways sublease and that with to group the out. either works swap minimize our find

doing do are or with properties one like. a our properties out so XX don’t to swap like right they of We transaction XX XX tenants they properties, now

is all of the business part this and parcel that So, in. we’re

healthy. really leases master our Keeps

manufacturing say is has What kind with of kind that you of types able source in And continued making of Any space? compression historical kind of of industrial, that amounts to rate assets kind last over acquisitions attractive, have capital XX then, are averages? how to returns of those roughly your exposure cap inline your and grown especially steadily chasing months. given

probably stabilize have is XX% think been to we'll a and get we going basic obsolescence. no would and doing And They to around a not that are probably we'll they businesses. are time. tackling long manufacturing, where blocking direct fair guess -- for business between mean, that be very my while. a I I for functional And Well, of the sexy. we be XX% helps. We'll and They always are. we that they've businesses do around that tend are we amount say

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we Thank the the for to session. Volk end this Chris the time have any you. over like question-and-answer At reached to conference closing return I’d of And comments.

you and earnings Cathy New City thank attending Week all Well, for first call. York June. I and will be Mary, in XXXX quarter REIT in the attending

usual So, meeting know for you any to during day you. if like as the let us then, thought arrange everyone. around a we’re a until or And questions day. then. Thank Have great

attending Thank now Thank The concluded. has today’s presentation. conference you for you.

You disconnect may now lines. your