Store Capital (STOR) 1 Aug 192019 Q2 Earnings call transcript

Thank you, Lisa. Good morning, everyone, and welcome to STORE Capital's second quarter 2019 earnings call. With me today are Mary Fedewa, our Chief Operating Officer; and Cathy Long, our Chief Financial Officer.

On the investment front, we continued to be very active during the second quarter with investment activity of over $360 million while adhering to the granularity and diversity that we are known for.

Mary will run through the numbers in more detail with you. existing with we success focus address the of happy large penetrating on are needs that market while our we our in ongoing the meeting But customers. maintaining our

of quarter continuation the our Our second saw investment the retained for dividend our of for payout quarter. first the strong meaningful growth second performance AFFO share first flow. that ratio in cash per is of fell With the that quarter increasing funded we corporate year portion to a XX% demonstrated half activity up the XX.X%, through

historic We on to paired that AFFO per reinvestment with contractual expected nearly our annual our rent same X% growth share of of focus store growth. tenant majority the drive maintaining

growth which funded new funded As Cathy will the illustrate, for through program. we have external is share for through that combined been issuances three with internal years past aftermarket successfully efficient accretively growth

to profile. XXXX our billion, operating [ph], about a have our issuances maintain note public unencumbered consistently often retained flows. first equity funded were investments all leverage $X.X At conservative stood of quarter newly substantially growth combination a investments. enabled of issued Such and the second of at equity, pool issuance, vein conclusion this of us In the of quarter unsecured X% our assets our cash or

know profiles we note our Given amongst such that performance consistency, the asset STORE in our holders having unsecured leverage REIT has options with enviable financing flexibility lowest unencumbered of.

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

above what quarter. the was X.X% rates quarter is just slightly average last lease weighted Our over under during the was which

leverage cost XX% investments range. just investor operating return you the X.X% rate a the levered of XX% net area approximate return our corporate in contractual XX%, get the under made quarter with the of escalation in of and Adding average will after lease gross returns of with the for XX%

investment having companies driven investment contractual favorable return of our expected yields, predecessor the lease essential of the take been our which returns. enable returns property through outperforming compute to of we have is cost and are assets cost disclose four and borrowings by rates which investor in and annual you to percentage STORE why mostly investment public Our escalators, variables level time spread the long-term that operating

contract average weighted during XX investments The approximately to ratios was calculating quarter years. was The median at Moody's and important fixed overhead charge BAX. purchased score lease investment quarter the terms The rating unit assets post median BAAX. for the contract tenant primary new the charge coverage or at more fixed risk made favorable new X.X:X. long median Incorporate level level store far new investment ratio the profile for during coverage was or continues

three portfolio. This net financial Our replacement leases. all, Ninety funding our last our is and of access ability inaugural to unit to commenced seniority evaluate level to year. fact AAA as our contract as including rated quality within issuances that October of estate the to XX% financial of critical from well properties in master we average deliver made of capital reporting percent our was us leased real cost. were quarter XX% XX approximately during of that made us investment statements assets the multi-unit required to second acquired to are during the master In we giving the new quarter unit investments level at new subject notes

the I Mary. call over that, with turn will to And

size rate weighted million. of $XX morning average and acquisitions a cap at over quarter everyone. average good of real a you, included just strong $XXX Thank and Chris, investments in second an This separate X.X%. in million XX had with transactions estate We transaction

leased XX the customers extremely and portfolio XXX adding to of with new created net relationship, quarter granular We our than ending also successfully customer more assets.

tenant XX.X% and due score of remained subject locations Our only leased occupancy portfolio Delinquencies based methodology. vacant an low nearly our are quarters quality and active investment of and approximately strong remained of in to the on XXXX our end contracts our the store grade seven net three rate vacancies weighted not of were to healthy continued our a and At partnerships property portfolio lease. second quarter, management. with

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

an sales properties, management And opportunistic cost. cost original net During to $XX cost. resulting from on that over And were an XXX% the property remaining achieve We of our XX were in sales Of sales which a property net were acquisition ongoing Nine approximately able generated recovery we and XX sold properties those the we activities. $X gains strategic X% original X over quarter, of were million. gain over sales. had resulted in million. still XX% cost the

Now the retail and turning portfolio online with properties XX% in substantial with manufacturing. of performance quarter a driven and highlights; to portfolio service at the presence, mix end XX% remaining sector, of our experiential in our consistent remained service the second XX% the in

portfolio than Our revenues. highly no single our diversified customer remained more annual of representing with X%

just annualized Art single rents Our interest. our customer represented X.X% Van of and largest

top last revenue Our end of and quarter, quarter. ten customers realized At the rents XX% was from interest. annualized ten the from were of the under top unchanged

prospects third of the are rest we As we excited the XXXX. the head for into quarter, about

robust acquisition and pipeline to diverse. be Our continues

industries we compelling We are a level excited opportunities diversification. our portfolio investment variety of are the will reinforce across for that creating of about strategy

demand Our customers. value delivering on unique creating engine focused to sales real our intensely and remains

to I will Cathy the discuss results. to now, our And financial call turn

Mary. by Then, increased with XX% Beginning million. our sheet. on million. year increased The by I begin balance our quarter markets to the base review XXth generated capital XX% quarter the you, will income our June and activity will XXXX our at in over followed $XXX.X update to from by guidance. I financial discussing of ago performance our statement, for the Thank second $XXX second almost an revenues annualized place rented portfolio quarter

from to depreciation be amortization and million million to to quarter Interest property average related million real acquisitions. long-term Total fund steady expense last primarily debt estate due $XXX year. remained portfolio. our weighted that used can of increased interest half X.X%. $XX expenses higher for from attributed larger $XX.X our Approximately to the increase to increased rate $XX.X debt on The relatively at to expense long-term million additional second

on $X.X such ground rental by a accounting increased a of to of requires costs behalf year-over-year, million gross our property us lease impended million the lease which basis $X.X tenants Property new items as standard, related which and revenue costs. property on recent taxes to adoption present the and payments both make our the as

assets of this up, gross excluding the accounting basis, costs four average totaled for quarter. annualized portfolio an property about lease basis On points

second our from up about a to million reasons. ago, council for to the health-related quarter were severance departure G&A of $X year in million, $XX related due the general expenses million costs $XX included and

costs, ago. severance points expenses basis to a XX these Excluding XX decreased basis G&A from year at assets points portfolio average

lease XX property impact portfolio amount of an gross our costs, together; points basis the annualized costs, and excluding non-cash Taking G&A equity basis the to and of compensation accounting assets. net of ups average on just costs, excluding severance our

was of $XX.X $XXX.X an increased quarter On share $X.XX per year to ago. We per growth. delivered from XX% AFFO XX% strong ago. of share and basis AFFO increase a a $X.XX a million year diluted AFFO from share AFFO million per diluted share per another

payout in Since quarterly low leverage. and same XX% our reducing and we've dividend For of $X.XX per a dividends was cash share per maintaining at by increased IPO we our ratio share a while time payout the ratio dividend at second quarter, low XX%. our XXXX, dividend the declared

our policy our each evaluates you at at know, results. it raising considers dividend based our on board annually As meeting and board least

anticipate lease now, lowest that would while our four and We at share a we've dividend per consider board given complete dividend sector. $X.XX dividend level a ratio quarter the we've grown maintained our quarters in our among payout our increase as remains our we the third for that net AFFO quarterly

balance turning sales, funded credit our capital we Now, borrowings program. ATM the during a cash temporary proceeds on markets from equity of and volume from flow a proceeds operations strong acquisition our property facility quarter activity with from combination revolving to and sheet,

and particularly way raise lot sense a transactions. effective makes And it be our business to to the granular of continues given program our the equity. ATM of of flow Our a size

quarter, ATM of $XX.XX program, of per shares net price an share, equity second raising million the During average X cents proceeds under at sold our stock of common over million. we $XXX

$X of long-term that maturities substantially intentionally For about the sold and under the common at an million year, It's fixed of rate well to borrowings net are cents shares debt program, equity ladder. important first-half of price per share our $XX.XX we note $XXX million. all this our stock of average are raising proceeds

currently Our debt million. median maturity is annual $XXX

coming maturities property we meaningful which is basically due plus to year. flow, maturities cash one the cover dividends, any cash debt from of less free have from amount debt Our operations, sales tends in no near-term And proceeds our

at giving At net times was EBITDA unencumbered on or gross our was low-end real-estate at substantial flexibility. June X.X debt to ratio basis XX% range XX% the debt portfolio us portfolio run to a quarter cost around on rate end, leverage net Approximately basis. of a our our of target financing at XX,

to quarter third our the pipeline. a sheet, acquisition conservative leverage entered and ample profile We a fund liquidity with strong balance

million over million which just an $XXX equity launched, credit ATM last facility, $XXX available include million And capacity our over sources that feature. funding under accordion flexible has our program $XXX of $XXX Our November. $XXX we million million on also

This on approximately projected to for of our share strong as acquisition of to $X.XX range to we're level guidance the turning well $X.XX up guidance as XXXX. to end a robust announced volume lower Now AFFO based November. considering $X.XX, in net is raising from of and our for first XXXX, $X.X first-half, we billion acquisition last pipeline per positive outlook, $X.XX, our the of our

our monitor our As long-term portfolio we investments. of Mary diversity manage mentioned, health maintain to the actively and

the activity higher the throughout of year. expect on the Based to year be we opportunities, sell So property of the sales current the may second-half properties we year. first-half than believe market in

equates $X.XX approximately depreciation amortization, on the real per to weighted per share debt items to to to of and of $X.XX based ratio activities. equity our X amount midpoint $X.XX AFFO X.X in plus XXXX share is leverage rate weighted financing per the line guidance $X.XX backend in per average any such new and X.XX%, property losses on sensitive compensation, costs. expected plus of deferred dispositions, per anticipated or quarter. AFFO time a straight rate sales, timing to guidance each markets gains period be acquisitions is Our tends of to run The AFFO acquisitions, property rent, to net excluding activity target amortization $X.XX related cap capital to both share for net income share and EBITDA. share of and of estate a and as on Acquisition of

and outlook our through second-half guidance move the update we'll year we continue assess the As as of needed. to

I'll turn now, Chris. back And to the call

And joined Few operator our thank ago, close their where I'd a Chris before Credit an join have Burbach index us REIT of us Executive Cathy. Suisse, was to words since with for him associated turning our predecessor And to have here the few call thoughtful our I role in weeks which to led sector net Vice Andrew like and of lease held team. of and Rosivach efforts. by he questions. you, evaluations all the earlier Andy about team to formally leadership have are executive XXXX. assuming company from he and lease covered departed team, a for research research who He's at Goldman Sachs Underwriting, this fund. year REIT net deluged President the followed this back traded known exchange over

has concentrate the who Co-Founder with Council, earlier cancer General was his us quarter, we diagnosed we to on and XXth, knew we many June On year. this more miss Capital call felt loss I which in left departure the his away, been know battle of fellow of on During and our than you STORE Bennett, to him Michael and all. can us second say. the passed that May, devastating Michael Michael,

for call turn operator any with those like comments, to to the the over And questions. I'd

you. thank Yes,

Jeremy Metz We the begin will from BMO. Instructions] question session. question-and-answer with the first And [Operator now comes

guys. Hey,

anything the mean, you the of Cathy, here in here the the that really very your the Just down the the Mary, out to Is for the lingering of I you talked seen, range? low But you potential pace guidance in kind there dispositions you've second-half. about even that there. end or first-half, acquisitions opportunities feel going midpoint and just good back there about to bring could of guide out else performance just some mentioned given higher

timing, of lot A is it Jeremy.

more to QX would know later. it drag than on trend a little You are lumpy, bit so the that AFFO sales maybe be if little sales earlier a would can in then there

things acquisitions. it's that's of capital So -- that's activities, basically markets timing sales, like it, really

All right. little the bit; quite which think since balance is now, gone you've you I it's originated, $XXX highest then here I of loans grew been in it's million public. And a a over terms think the

do how this artificial of you on So sort any the around you managing of business? part put there it, any think about thoughts cap is Chris, that? that

is purposes. a you'll for treated a accounting financing. Jeremy, really when accounting, Cathy. is new And see purchase that. lease, it's In it leaseback as it lot a accounting purposes gets sale the of fueled we real option if Hey, lease This where -- growth do contains a a life and as just it but our accounted we customer a it's tomorrow by Q for gets transaction financing with a for it file

big the really change. that's so And

accounting? love you Don't

Absolutely.

a share -- we've to right, is this I what shows loan. as and mean, up so… leaseback come it

look investments that at, Q, so be have we'll our out detail to where in on you'll easier it'll a if information some we'll our section Right, of see.

All Thank right. you.

the you. question Thank And comes with Goldman Caitlin Sachs. Burrows from next

being of this morning a on, moving that that but is this $X.X I in guidance somewhat think But lower specific versus below XXXX I good get acquisitions VP conservatism lot, extent flow to expectation and question team. were team acquisition unknown guess in recognizing and year net Congrats XXXX? of the the is what billion, Hi, new a for member. a on business that. volumes Executive more you

Every of that. And prior it year's guidance average business, of our see large look the the is estimates transparency Caitlin, acquisitions, year flow when that business whatnot, year. way a roughly on And that a far this don't have going can't that this acquisition shot. ahead. to part and of a of $XX to at net and closing the have we tend a buy really We're we're time And just from sight always that you'll mean -- number. the respond you the had the have I don't and we -- transaction when in guidance do to I'll were end year day-and-a-half. don't is the than we're just million deal of so we Chris. lower we just if flow in is of a we've see we you beginning measuring true the every like size some you're to out or us end accurately portfolio towards trying it,

side happening also sales that on of most we're peers. our what's meantime the is we're In very active more well. And the than as on active side the sale

dealing exactly. always but the not even the pace. you're with target also only acquisitions really pace, so can't the pace sales And sales dealing just you're And we dialing with

it lumpy. So that treasury be We're to has with not tendency here, a so bills dealing around. moves

we're But target. and going I mean triangulate it. basis net year up can the sure origination and that. Mary whether we we're a don't So first-half beat team out our the if the of we'd to like to we best to have go we a want and it's it's that team; to we room to there, overpromise. Clearly, have of sales you is the to function business on so on make doing the do

able you're anything basis? as become you and change makes and kind it process a all? maybe If it, of you're such acquisition the what's a up bigger not are keep at just company, about there at if And sense. that Got you to to granular forced is so, do how grow then works being changing, way

have we we point to don't at this Well, things. time change how really do in

on beefing some in to see to been to I us take fundamental the up credit that. of investing be and all of you'll and what able going of we we've that more write-ups IT we're a Over enough scoring manpower and guidance we're at software at look have on year we -- that it to infrastructure. sort beefing credit it time that abeyance bigger think up. holding test the although apply successfully get if to we and that have we This do. consistent we make been as to adhere lot did spending it which Last credit runs can company. we policy that enough Potentially more some intelligence this can and it the may and us up investing started And time we've change same business and what the have do techniques in we in do our time or speed year, things. do we we we improve way So since

in go efficiency let's that. year time next billion after So $X a in that's and of whatever, to where sights able if acquisitions working that. point were or say, on of something doing but It's not improve to activity, the that acquisition a be for to, we're our worth we we're the year year

Thanks.

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

Good is question, certain One Do Perkins about down into issues a happen in stores. any to closing recent there Restaurant any was to Alexi of new some exposure morning. operator or this restaurants franchisee quick associate, specific Perkins you possibility Ki some have This Bin's [ph]. to multiple general? running exposure with

actually yes, We this do. is Hey, we Mary. --

you operator. on So little highlight I'll give that a

of nearly expect all very rent, they that. open. what investment on is to know amount are And stores support got today the the of is credit rational. or today current on all we So We've maybe top we remain

color the that number around percentage of some of they the give perhaps total or you revenue can stores Okay, contribute?

that, small or is losses it. it don't really from any have to XX basis like it so is and expect we Yes, points

had. That Okay. very Got is it. I you all Thank much.

and research comes and a that even address than would bit. risk at go talking of up I about for the with tenants a to and score of to is guys risk frequency number but what by Keith a made the mornings back to then EDF scores thought we better I that make off page quarter does it Moody's really migration the the a our in going that. you that, produced I'm little better Every for point would of of the scores coverages give than we way portfolio because downward also fall come go, expected you to probably things actually Before a end you adjusted source overstates suggest, number? you,

XX. is It

first we presentation, we our of stack up XX is over years. give you this It three it

were what the trends, one I over can to want that's trends makes if you think at period quarter You longer the that. are time never a And because you see look stuff are than of at before. we of the versus year to let's delta scores that look you'll Page sort on calc there last a XX see tenant year risk where and between is today say

it's is all aggregate tenants. It's costs not is suggested and growing. of very low. that most and the almost in most degradation because from tenants number that risk that a degradation been there's the there cases just look But It's and a the result huge they're you is So some if some for. default it by in probability at way some of not handful many

just It's what they has look phase going with do but that leveraged more so, basis this financial a they they And on otherwise. a of up than fine. to just growth that statement company that is a you rate look run end happens Moody's for is would a during

overall perspective before quality you that credit our not we from that or portfolio So has last say investment at year confident are all year deviated from the quality perspective, to that. would fairly I a

Thanks explanation. understood. that a lot for Okay,

you. Thank

Capital next the Mailman you. Thank comes KeyBanc Craig And with Markets. from question

like kind of just anything and curious mean just business the net there's look contract be everyone. of the said best the half activity about to you a assets. on where where of to up sale a million, timing come know going were the of more $X.XX gross like a kind in? for if estimate guys I I to Hey, year, that in billion. you we $X.XX the could did expect the it billion in under half in of do investment your first those second Question, $XXX sales so marketing lot think $XXX to robust number is sale, should million flow as process I held Give you we are side.

the second best in things the already sales one Hi it's were there My of the July. Craig. held would of beginning were there them midpoint that half when the in them be will be of the properties of two has sale, guess the Cathy, for and majority of at happen would one it of sold

anticipate heavier September of be the may for sales month would the a end sell the that example quarter other in activity that end for The and heavy heaviest we than any are quarters for times QX was may one other sales that we be in month month the QX, of the June same of the lot August and of would probably quarter. before

makes if of yes, you several hundred model kind sense, the sales and of middle the dollars. half, second So, million in probably be can it activity

And I are you know in sales then additional people. investing just added technology, guys picture, bigger some you've

maybe investment able post you scale activity with basis the staff these ramp kind them? of gross robot of but today, framework You've do you investment to been over where in want you and of you that investment kind activity whatever to past reasonable underwriters could guys couple some of versus think a have on of years the kind call

you're think two as one that years to prolific. takes acquisitions them it I hiring to become really Well, people,

to of So the the year in I are over kick-in people productivity acquisition think. next going terms or two

in some sales cost variable of be terms there'll that acquiring people. Beyond

and out costs If of to out reimbursable also phone to and want you basically inflates want also what running property out any we back not expenses and you be. look stuff this which shareholder employee want equity property tenant comp you back would to tend overall non-cash cost so right, sort you get at G&A number at to back just our look of business compensation to but

is cost so down to points points our to from my doing that year guess. XX was the or closer basis last Last You're company which basis XX run today year. is

as at really scale saving they're we but some assets the perspective a of shareholder this on is cost at where So booking is to we've really at of grow that payout are small. a cheese where rates driving is are things things cheese from there's concentrating And these cap our points lot six the energies. escalators, a really I platform, investor not low been having nice most are return economies ratio. definitely these lease having basis and rates nice dividend mean essential there's and

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

Hey We've the thanks. have… heard negative some guys chatter any and I comments International on NPC Pizza about exposure there Perkins. appreciate I'm that Hut there and through is Wendy's if wondering you

stores It's nothing. couple of and it's

relatively will Hut Pizza be small Yes. well. as

to a mean true Just this I put in overall. perspective is overall,

the so X ratio is for to median is X X overhead doesn't restaurant to for after a coverage Our X X to is risk really much around a example because X state X X for the early fully but childhood property. chain what education at and than better to

about so us, the of is at and around hand sales lot get at focus have? before last tolerable to how industry tends many or down XX%. a analysts when trends in do on to disturbed number tenants really and go XX% don't lose this looking fall-off the you So industry could or we Huts the pay to they but theater I spent mean that not or and XX% get so negative restaurant worried by very XX% we other quarter or then it. plus we negative time and Today they want got casual what on our we sales a movie some to X% to same-store Pizza look of necessarily be X% much we how have dining by sector like

It basis is points. XX

basis XX points. It is

And coverage. there is two times

and times XX basis two brand is it's coverage of points interest. It

Okay, that's comment from weighting mix exposure lessen anywhere? and to moved is between manufacturing. I to mean just know services, the here. trying maybe I'm how you gain or curious then can retail helpful on the

we handpicked consistent It has -- which then online been our and consistent. retail you were important little probably And than since industry XXXX, Nate see we been they Most And of probably XX%. bit is in us. primary know heavy. We've favorite a as heavy really services retailers will we've are started our have then manufacturing just in nice really component and service presence focus. stuff and we -- were to less on that consistent

there quarter new tenants XX Were this or?

Pardon me.

tenants this quarter The within? new areas were XX

that, yes service, classes retail. Across asset of plethora actually, a

that helpful, Okay thanks. is

welcome. you. You're Thank

next from And Haendel question is you. Thank St. the

Juste with Mizhuho.

morning. Hey, good

you Just rent a of portfolio from to good exposure noticed is seeing expect how consistent you exposure what had sector auto the business ones your that could that it's embedded about bumps grow entertainment, XX about curious me, I segment it maybe yields maintenance or a morning, more are couple you But at or ratios exposure sub-sector. to maybe and head on coverage could we with some of quarter list bit number drive repair outlined. focus talk and just in seems you there that quick and perhaps excites from perhaps you that that what your now talking guess that and the I particularly color that in bps on six industry last your goals so up the family the on

in in me that but well. a add it so space, Yes, be let washes we and car maintenance start service some actually and can color, dollar we handful shops tends as Chris repair some did of to added do

and membership are to acquisitive those very about and have space industries right they car that We much lot kind like increase the talked the there. now. of primary the an industry So wash a the we've space it's programs that added

repair like activity space. up So like rolling our and car and and we seeing people well. we spots and are the then we're maintenance as that existing but Good washes we so service pick performance on that and good so there there services

are you specifically willing Can rent any you prefer provide the yields or bumps taken. color something coverage not that or be you, Okay. on is to would embedded

kind to of it would to X bumps right portfolio, the around X-X in that rent coverage, same of annual. is and here they're X the kind the the going I be going be and so say to to be line with

Turkey Got that third thus was And and quick today CLC the quarter. bps as you follow-up or in XX the just that far is on of same XQ sold any figure a it. and have

It's same.

you. Thank Okay.

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

Good morning.

of So, went the to million seems driven it's where acquisition over just bit kind customers are or, little of it matter strategic is that a $XXX of is, the I acquisition a deal like course pipeline and and with quarter-over-quarter kind flow would of or it grown the say is. focus of tenants it a are your becoming activity up these bigger for the exposure in with, by over if distribution kind year, larger reasons tenants is

would in, either a I being to going recession large companies it's big mean, all companies every targeting about for $XXX in is which Great in at to and our little that and offers jobs and that dominated not, the matter if advantages all most come after if go be were at there's not what which now thought want sectors important thinking true, particular businesses. think company are for look that a are we it's across happen single have same we're the to the every but the a there after way any a processes that always like in like view really because market just it's non-rated and so concerns might companies companies by world a substantial obviously flow by then the the we're this middle I sort will that people target companies big customers not but on if that not Recession companies are speaking, the shops, and say spaces They're part. the view not the you larger these it's the of companies our we'll in as you're dependent is I sector last, you no we're for over take intentionally add is the broadly there well little going bank million us strategically companies issues look market are they is larger

buckets. mix on is Okay. between disposition And I of three kind of the then some different kind side, expected there mean,

half the to you. of particular is back to of opportunistic dispositions it XXXX. the in out look we be, Is there As a available like amount going

consistency think consistent. past management I we've or done X% opportunistic on roughly, other that's take an you that XX% the what we've strategic give think then XX I really in and John fairly see property done and the

thank Okay, very much. you

you. Thank

Thank question from Allaway next you. Advisors. Street And comes Green with Spenser the

Spenser. Hey,

guys it you space. continues to for exposure again that competition lot to Let's of that quarter chasing remains would was down mentioned robust say a be tick this safe fairly and restaurant in yet that your there deals considering money

for space. Our size… their competition the [indiscernible] just People is restaurants robust love in actually restaurant

people that know. Brands

and a So, driven tend risk covers objective be we and rates because trying you and anything and really are accretive their find here to opportunities not the returns their to are having by the risk-adjusted risk could sometimes be that's our buy cap goal not by where about restaurants to driven doing size, but goal who best is are just and buy on to buy be are AFFO focusing just with people to really and not our we blackout. to properties, are be our attractive

restaurants harder of us kind found the to get for have So, been to have. and trends, we'd we that like

been into of broadly in And into? guys you would that competition Okay. type of terms change more you say other perhaps been competing competition, the and has running like been any crowded -- industries bidding most you've there in of running capital tense then like have the the speaking, what

continues would people big still are and it manufacturing to think capital high be, enjoying hot Yes, change retail say this is is right industry a class a not to. but out service favor, level and now lot I is of certainly Mary, a and still I out really of a there is at

the that's of it seeing seen kind we've same mix all year. we're So

portfolio transactions And do especially a large if a of to we're wanting the seeing or they're lot people of trends teed up, are. portfolio kind a

yield be out Yes. I from just demand that at think we comes work needs And the all. for or money to yield there demand for the even to and put some insatiable

would for All right, your bode well granular that pipeline. more

and plan to $XX place place million Right. it's nice a niche We be. good of this million $X million in $X

in pretty play we've system time long a that put just got have sales deep the it niche For to together. to the takes - a

you. me. from that's Okay, Thank all

Caitlin with have follow-up next Thank we you. And Burrows a Sachs. from Goldman the

again. Hi,

think given with what more topics, just customers to you potential you again your the Just a business do the quick recent in on the one did up those following business do that quarter partners with

last repeat our business So quarter high. was

half So half -- it it because was and say

Yes.

quarter it For the or something was was, but about XX% - year-to-date like that.

So it a little kind bit. of ebbs and flows

tend and very businesses. real leases partnerships customers target would growing more providing adding do and Caitlin, that's to XX to value long-term So chance with XX-year to their I say high, we the them

with to have So us. they tend plan a

quarter of you the terms If at presentation of in bigger growth the of companies due on most than a which revenue revenue of of modest neighborhood company -- the customer is XX% is and all the part, in that growth number the piece growth is sort that market that. as their to if middle redone we not of have sales quarterly of beginning expansion same-store average acquisition most look annually, we've this our the

be it of will of the and growth customers of have. kind that most due is typical So, to we it

Okay, thanks.

you. follow-up a Nate Berenberg. we have also Thank with from Crossett And

in I Yes, mean about payout you about comments appreciate ask maybe I the the context appreciated. payout the us ratio, dividend. dividend certain you target. wanted with And look you how think you can just remarks, to a but be would the is help your in to prepared remind there ratio any I

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