Store Capital (STOR) 6 May 202020 Q1 Earnings call transcript

Good afternoon, and welcome to the STORE Capital First Quarter 2020 Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note the event is being recorded.

I'd now like to turn the conference over to Ms. Lisa Mueller with Investor Relations. ahead. go Please

investor and the to operator Results, Results. all joining website documents under and for afternoon, for ir.storecapital.com supplemental Thank call. at Relations today's STORE thank Results. section Capital's Quarterly today These quarterly release earnings discuss issued available Financial and which First us includes we information in you, are our you presentation, Investor Quarter News This our XXXX of

we will questions. maximize X-question On we the prepared the our provide will today's of if then questions. to open observing limit have up and order call management portion reenter Q&A participation queue you the your for a call, the will be hour, call Participants remarks, call. then keeping follow-up during to In an while can

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

different cause from to including results that Discussion factors estimates, are from of differ and forecasts their and Forward-looking goals, and materially could projections could on our Form by our reports forward-looking our pandemic tenants expressed Covid-XX are from the the XX-Q. outcomes the in including and materially assumptions impacts contained uncertainties, results its statements that and nature these on statements or actual related us risks statement. to those involve cause filings subject forward-looking to arising in our those SEC and XX-K

I President please that would to go the STORE's Chris, and with And Officer. Volk, like over Executive turn call now Chief Christopher ahead.

Fedewa, With Financial Long, first good me and Officer. Officer and Chief quarter call. Cathy earnings STORE our And to Operating everyone Capital's you. thank afternoon Chief Lisa, today are Mary our XXXX welcome

to and We and first. to you healthy and First welcome today opportunity your safe. things are families you the hope that speak

very Meanwhile, our other opportunities together who address through look await have of worked of upon journey experienced up impact employees, us. to customers. to event come team pandemic a coronavirus we the forward unprecedented to we'll that side have collectively at fortunate and the made the to all, we're tested XX this has talented us the STORE the and While

also the remotely to to our needs Technology over when information from in address allowed for gather of collective time in work quickly two months. is our strategic has technology and home necessary us our the the systems instrumental This a team ability of been past the to customers. investment

percentage direct our said, relationships with interruption of Our address extremely $XXX strategy activity efforts, achievements our the first had our discuss moments continued STORE investment of the Score and also business of stability origination million ability Methodology. At with our in the let tenant national our me lease quarter. an for and time, that based contracts we rated rate acquisition the long-term net healthy With this. of investment grade which to curtailment during portfolio with Even fosters same improves over like quarter. XX.X% remained quality occupancy of the upon

below this the of of At our our financing total on or sector to in our of to flexibility cost, pandemic. our stood a balance end our which basis ample majority XX% and Leverage slightly at with stood about this billion on us at investments. lower XX% $X.X rate X.Xx EBITDA end, of providing low run quarter options sheet navigate pool was debt is of assets funded over range target a our unencumbered of

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

approximately lower the quarter during rate than XXXX. lease in was average weighted X.X%, late Our slightly

corporate gross providing than rate by lease be to leverage with However, net the area you XX% adding a contractual returns escalations normal which the us in with average return quarter the XX%. This XX% at about investor of investment higher annual will and initial X.X%, XX%, our range. levered of XX%, rate our cost get lease in also the operating return with quarters the escalation during and after is to lease recent approximate made for was about

investor by favorable, driven of returns predecessor have STORE and return. public from been from companies Our rate property mostly level

take investment are contractual to assets. percentage spread compute cost investment the cost four we enable rates you investment variables and the of long return. to lease annual While escalators, time our as disclose a to of operating borrowings term that essential of yield, expected our These

The assets primary average coverage be new quarter charged during was investment for to median new The fixed weighted BaaX. the BX. tenant median or total to cost rating ratio lease was charge our purchased level approximately coverage continue quarterly X. incorporate years. The term XX far our contract fixed at you investment the long at if But Moody's and the X.X unit for level was of RiskCalc credit median favorable new rating STORE investment overhead profile contract

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

ability real this our quality rent essential ability tenant's This really to quickly contracts is our to during our to and has critical ability crisis. evaluate to assess pay estate pandemic to seniority been

over to turn call With Mary. I'll that the

an Thank acquisition with average a transactions cap real at you, investment size good $XXX $XX.X Chris. afternoon, in acquisition of of of investment the everyone. rate million. million quick XX activity. our included X.X%. We weighted separate estate quarter And at first about average start This recap in I'll

only in is of a XXst our X,XXX to not first locations XX healthy more than agreement property subject and end mentioned, were XXXX. vacant remains at and year portfolio quarter unchanged March our lease from the Chris As which

original compared sold of properties majority sold our a the our cost activities properties We under in quarter. The part to in management XX%. of ongoing these nine resulted as were of first just property and recovery

of end service the manufacturing. were in steady, in the XX% sector; quarter at properties experiential remaining our mix businesses and XX% retail service portfolio driven Our were of and XX% remain first in the

unchanged last quarter. were Top XX from customers Our

diversity of continue to annualized result our XX for customers of and quarter. XX% we Top improve are However, as accounted interest and our a rents for well revenue below the the

and single Our and Fleet represented annualized largest portfolio customer diverse just our granular Farm, remains X.X% of rent.

Our second March. customer bankruptcy The declared in temporary process some Van, experienced early largest Covid-XX. Art delays to has due bankruptcy

good progress the continue However, towards we to make resolution.

turning to our the to pandemic. Now response

step could of clients more we say since to the the action for entire at like our they to I'd STORE efforts be proud of made team not have into our collectively onset Covid-XX. abrupt and First,

say focus on to customer solutions relationship significant financing value that resulted our delivering real beyond our and has customer us business. You before heard estate close in repeat

dialogue with customers several have you many past From As over the might government in been help imagined, might topics. them. weeks that our program active collections rent on we've stimulus to

Covid-XX our access as programs. to help resource understand We website various also a the relief government watch customers the and

part economy driver As economic you a know, the job of wealth middle in key especially creation the and markets of have in the always and vibrant been U.S.

continue government Program lot companies. of from CARES companies help are So to a through them it market options to positioned to And Protection larger them our such the the which Many for companies. process. makes well Paycheck programs sense launch and programs. the benefit stimulus Street the in educate middle smaller May focused through these team And on helping Lending Act tenants for about main is expected Program as will our is of that

we Now turning couple just update April on weeks progress ago. since rents, to of good collection rent have a made last our

agreements agreement interest, XX% longer for of higher represents now rent our deferred, April term negotiated escalation cash for and over we the terms. for these that included April Including interest. our But lease have collections reached cash example we rent. short Our rents rent of of that our lease XX% base were payments

our, concentrated and closure And for more include six we restaurants clubs, centers, our rest industries childhood more family that theatres, than like only in mandated These were the represented entertainment XX% for centers diverse have across differ than country. early portfolio. agreed XXX rates high April, industries fitness education in the of to

payments private is well in strong performing businesses looking and due the discernable size Going a or have portfolio disrupted addition April no event. unit company’s credit rent rent that corporate was been or it to into level with there difference as are in And coverages. than our temporarily pandemic in whether tenants backed that was release they closed by for clear were was What experiencing to equity. Covid-XX rather relates

that value, need optimistic these businesses up. on. will therefore depend are economy and We Again, people the nicely are as these opens that tenants essential rebound

also believe opening Covid-XX country of on in is sooner that the given regions We an evaluating factor certain are the important of STORE impact that others. geographic than diversity

stores of each have and news nearly least far announcements XX% interests. base makeup at states Based together on rents recent restriction they so and XX

who reopen are these states. we our their businesses many So, too to of talking customers preparing in now select are

temporary as over but While overall that in They time. not approach reopening our a will will their businesses happen destruction that over recover. virus will more open tenants be realize and a night phased and view the of Corona believe

I’d after strategy. existing our estate; in of like In our to going to we reiterate it acquisition We profitable meantime, pipeline cultivate the we closing a real will to Covid-XX. profitable into these to ensure continue believe And team And in center continues be opportunities. relationship locations profit invest and new that have was strong Covid-XX.

employees on each our discuss results. the delivering I’ll outcomes focused the And and what our our will financial that day Our our shareholders. turn we do. Cathy team continue is best and to is customers, call every now And to to for

results by in our the update you, to our to balance flexibility by our Thank begin financial steps Mary. and the quarter, I’ll increase discussing the pandemic. first taken we’ve for financial sheet on response followed and

$XXX place from the quarter the increase interests of year-ago. portfolio $XXX quarter March generated And with increased XX% based million, at year-ago to interim by an and XX% from our in revenues rents statement, annualized XXst Beginning first with a million.

to million Total $XXX quarter were million, XXXX. first in expenses quarter first the for of as compared $XXX the

recognize are do awards; based no longer we expected quarter of non-cash $X.X stock first be expense they the to related During compensation earned. certain unit performance equity restricted to to million

depreciation increase expense increased costs. was our the to in adjustment, related real larger expenses due higher portfolio well this expense Excluding interest estate as amortization to total property and as primarily and

million properties Interest we year-over-year in $X.X be in increased which activity. by of XXXX due issued non-performing to debt $XX.X million quarter amount Van additional expense to first $X.X related bankruptcy increased the not related to fund Nearly expenses. to property due able Property accruals leased for primarily cost that Art to these to to the long-term to by tenants primarily investment pay million QX. tax this half may

quarter a year a million of As ago. the G&A the response. expenses equity the amount cash to first expense, was included from for And $X.X non expenses minor $XX result down of our compensation of de-recognition related million, Covid-XX a

expenses G&A our average points a XX compensation, during equity cash basis year a non of as percentage quarter impact decreased to points the from Excluding the ago. portfolio assets of basis XX

During we provision portfolio the estate real quarter, for our likely to impairment related sell. we are $X.X recognized a primarily to properties million

AFFO million increased diluted a share share, a year $XXX ago. On basis, year over share from AFFO from $XXX was per $X.XX diluted X.X% a per per increase XX% a million $X.XX to ago.

XXst, price rate $XXX our of $XXX under average maturity early acquisition and to raising operation that an our of debt. interest share, average program. Now year-over-year had January, combination borrowings and million. of X turning common the with approximately funded issued seven we revolving per In approximately a from shares weighted of $X.X equity our to quarter million of equity billion The balance long-term stock ATM about sales years. first facility weighted slightly of And ATM decrease proceeds our from on net X.X%. rose We million along average $XX.XX with property debt at March of sheet. to credit proceeds At we cash our program flow

our first In available. and notes one $XXX of extended maturity quarter, term bank year we into two note that the extension option has XXXX of more one the million

the have debt no significant for We of this remainder maturities year.

we covenants compliance We going to remain continue to and all in forward. debt of compliance expect be with in

and sheet half to steps in quarter the in position liquidity augment our to took the latter response first We the pandemic. balance of

March, As previously facility we the drew the down a as end on announced measure of $XXX million to precautionary amount our liquidity. increase at credit remaining our

million $XXX the under additional of feature facility. We available an accordian capacity our have of

debt the We open markets that not from requested bank our to remains and us. term yet have to access

cash combined. $XX million $XXX At after of and quarter perspective, construction full of over amount commitment. the of payment the in we our had dividend year cash year it's annual cash approximately ongoing April, the for in over put operating that plus first interest expense end X.Xx XXXX funding of million cost, in To

We the conservative profile than position our navigate believe will leverage well pandemic. and cash normal balance service higher this to

rest of for to our outlook turning XXXX. Now the

As made withdrew our term XXXX to decisions maintaining portion levels pandemic. acquisition deferring guidance and and in the respond our previously than upon activity, mid based near liquidity to rent normal interest include a we announced, curtailing April, This we income. higher of

have state for guidance clarity more around the reopen. businesses and and We to will where we reinstate timeline pat

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

so you Cathy. Thank much,

the buy call we turning We've It to make like included at than cost be started your equity that slides to value As stays over since more the evaluation. regulatory the actual should to operator end addresses company few is April slide pertaining in a when questions, the could usual STORE Covid-XX. before share I'd Including current We comments. for compelling deploy. to this in believe a XX% at quarterly investor presentation the of roughly in that our handful and investors discount a we XXXX. impact of of this our the of

That as discounted today. even speak more I

By this purchase material has Xrd, our that the after shares to end the around share for in prices expired to by drop XX% much evident, believe recovering parts. and and $XX. of our close April. two a April have valuation at Before before gone XX% compelling extent window I Board share pandemic purchased well comes in several still STORE's leadership of our was of reason

We of which not that First believe a and evident leads second tenants their interest loss half permanent this do price the our to equated about base to contracted part paying reasoning rents. also will part which share XX% is that slides. happen income rent a implies the of me current from our is supplemental

Covid-XX lease from deferred. three-quarters the by As rents Mary And about these for alone sectors sectors of of the STORE all emanated granted the virtually related six deferrals of mentioned accounted economy. closed

closed pertain from quality, clubs, facilities, the Our actually theaters, life. of the a comprised non larger that like successfully Closures lease within tenants, rated are and companies and tenant nation defer central lesson is and view, portfolio STORE past market health retailers middle furnishings about emerge this sectors size. restaurants, largely a hardness did sectors and to take to our education and or these movie to This way believe our we entertainment this. more closed We In replete family with home because balance these of facilities. a ability pandemic clear pandemic. for represented credit revenues fully leads not requests sheet future

the model and a The results this net from albeit the an Surveying of or of its beyond sensitivities ratings. occupancy from relative. grade rents evaluation integrated public sizes collections of to arena, a tenant landscape this investing benchmarks I collected in becomes tenants leased percentage light refined moment cannot and black this with given investment more of that platforms. to such four credit as swan investment temporary business and in rated non led event April begins lease retailers believe limited this of XXXX STORE's on across wider said this and over separate rest of at even rent that percentage rate. approach we broad Viewed in the mandated commerce. past our that In payments three cessation is notion successful With decades rents or clear Everything all pioneered statics STORE sector.

for will also cash we grade this succeeds. our by rated to strong of very economy. to both not peer given event us by from that essential near I STORE's sectors lease to position. ability as a of attainable chose general tenant, US the yield lay tenants the investment if our stated which much We impacted group. And STORE lease our in Covid-XX was to top on included We've this the net that always the our impacted succeed of the of rebound of tenant In rates spread entire simply our from to less to posit tied case is but April work number lease sectors our pandemic. diversity pandemic would non emerge deferrals of it between portfolio, and investment the fortunately a

they really this We fully market essential expect estate for be this larger continue our we tenants how STORE this our we and needs are as from emerge market that and perform to companies proud and us. formation capital Companies nominated real of will among to like devotion and help will middle country pandemic.

wrote frequent become going a forward. Since a a I time I'll few update close has with communication earnings last two communication in investment investor we upheaval, national letter plans March essential. In have call, our webcast the about business conducted of for community. our comments

the tenants So prior expect financial comment our look our making to our ourselves business that reopening. states updated will be for your and release calls task day, very meeting second broader Because to we the May plan annual we is calendar hard not The monthly with XX. and that begin of on occur shareholder the will status meeting. to you very On which various on of quarter call answer a at these an forward next market scheduled three updates as rent provide for results. the available update of of to we We webcasts to these providing May hold to the first on questions. general future collections providing

questions. I'd the like over to now And to the operator turn call for any

[Operator Instructions]

today go with question come will Please ahead. first Crossett from Nathan Berenberg. The

Hey. Good guys. everybody Hope well. afternoon, is doing

I of in question, impact, the rent So on April. appreciate slide XX% was just the paid Covid-XX a the

think the mechanics paybacks we deferrals? XX% the You Are they agreements long to agreement how And cetera? about et kind the mentioned are future you should period do How or XX% these for only an of include rent April on. came of or of then that months?

Nat, Yes. this Mary.

and provide sale for locations. cleared certain actually on STORE's Delaware XX you update brief like the to don't the just Van. Q&A Delaware way Van I'd Art just the of releasing The approval including existing Art the start sure, okay. inventory Wolf Art Court has if assets mind approved a of Van yes, - we all Levin Before The Bankruptcy and this of

STORE entered existing Our an master customer four XX into of locations owned all STORE ours. leases for with

a And vacant. location former no STORE Van owned be Art so therefore will

portfolio the these estimated base recovery with in our approximately potential with written is of rent of in actually upside rest XX% Our line at leases.

everyone. quick for a just want on that So give to I update

to So -- go to back your question

No repeat -- me helpful. Do I or say to my that's was you question to want going

No.

got I've think I it.

So collections the and just asked about actually one you that April for XX% rent at month. are

So our on two average. average months deferral agreement was for

And so paid it from the within I back and within say to that next months. would that of the we XX perspective majority expect be

So question answers kind that of your hopefully there.

Okay and Fed these out? or programs, kind of PPP access include and how do some those like of of many where kind XX% if then of spend you to taking PPP

You bet.

in So April PPP actually XX% of without paid great was received cash question, help. the

just May of started in we So and you Xst end towards to here. come the as April know of

Okay.

So they way and like of can that what in the access saying some will your or form? shape is PPP percentage tenants

of estimating -- tenants doesn't the the We're Paycheck we're program. a and Main talking will include that protection be do about program half over little our the maybe just that about So PPP obviously to able Street

four tenants down that it help XXX that's but rent we that about how of you the sort other them the half and any rent is rent. in you're we of think further on help half PPP XXX could XX% of that is enough If how looking helpful - rent, it and eligible enough on money help have and about is of help say XXX it the then the interest on if to but get really which actually is won't half the actually which them rents the works will have half out because tenants of about of to break PPP out about many which stated net are surveying XX% the is tenants of much about at and if money

fact, would So possibly the we it's will to impact. --and in no they a had that possible that certainly from And June so. it may benefit April hope like in

with next Capital KeyBanc The Please ahead. go from question Mailman Markets. comes Craig

Mary does rate be and the may Art Thanks on recovery in just XX% a everyone. on dollar Van that basis? kick drag what's when the

Yes.

new possession for know Xth take you by XX% operator the will just that these a and the solution guys. is So total May

So quickly got already possession. in they'll They've still management take place.

and drag, had -- the coming it as could includes in start all depends. May rate obviously net total XX% so so July early the The but we costs all the but as in thing just the Covid-XX

what the just starts just drop? I would rent of kind on dollar versus But when a be previous the new rent it like

original Van our are leases XX% with -- start. the of rent our to

at Okay. kind that of any if And the of of getting kind just kind was you of of and any benefits. we're loans. re-cut maybe through these then on And some the versus all term, extending back deferrals just can leases you're other abatement agreements go go deferral whether

remarks, got there were So as STORE. for I we that here essentially mentioned no prepared agreements in forgiveness or were so made the no was all an abatement, economic -- there at benefit

it could from have So could -- been on interest deferral. the have been that anything

mentioned to was of contracts higher terms, lease there I stronger pure As escalations, no but rent. forgiveness longer

anyone Is on going non-accrual?

No.

ahead. Rob next go will come Janney. Please question Stevenson The with from

Are to deferring stuff? where to Hi. you Good or you to, Ad be this at buying rents? buying looking not if point? tenants so, still acquisitions I cut guys. is afternoon, this paying selectively point the guys zero you're mean, going are anything At

Hey, is This Okay. Rob. Mary.

asking is who course not or credit on the update under update rent the by construction place we where impacted few our not it Covid. of made so but -- small that have -- the honoring we know on was really and environment acquisitions, you we're pay made and agreements So small contracts we sale funding anybody Covid purchase in a an very and in we've not commitments had place, an and would be could without sense outstanding and who

great you one in require as that guys current deferral time you you then would the other that and point may wind require or pay April a to a people there any to like pay even up same April. people to paying percentage discussions And be -- guys the be likely likely versus know of in to as guess of significant being not they Okay. I did or so wind did have that like order were the up are rent is May don't the didn't people

rent is Rob, you're may and of the sort well this Chris. intertwining, and That

you may new rent. shouldn't here but of May So that's what have doing have and was going correctly intertwining be you the May rent investments notion to on impact

if the the think listened you're general March. I least a consensus month the at a general talking about that consensus I've in had potentially May, just April is of because the more community is month difficult operations to people that half May of with

and they had April they So May people course -- into steam were fully down. some had of closed some going

So equalizer. that offsetting The businesses, an from in upside there's April which be pressure for only to people from be got part X% perspective May. of increased us on our PPP in payments our might that we an could the

that So how we'll and works see

Reopening--

reopening is too. Nobody Yes.

Reopening were --

Right.

gradual and tabs some So reopening that. we'll keep of

call range May that the that elaborate conference recoveries so our are actually will for mean you're we right. other handful mean there give had the and or to as not. from that down to we've interesting open those I do if states the closer you -- be tend open can not have Mary just we XX% shut rent payments when the in out states looking what and was this, but an on XXth update you I on if So of who's who's kind of state-by-state

were that are open suggest states if there's states would that the absolute that look so at to And we today. open an upside,

Okay.

that just decent stay people home collected So revenue those I for close states were never that amount there of mean still didn't the a on automatically. really was

handful declared stay those we states government states and about collections, Chris place as materially Yes. mentioned That's The better saw plus have not did rent correct. our in collections XX percent. a in From order. that substantial

question with go is next Malhotra Morgan ahead. from The Vikram Please Stanley.

taking questions. the for Thanks

mechanics are just you sort I to -- the of the then between difference what this So interest of and how clarify on interest. deferral that? want clarify Can

way you're doing Vikram, you're that it payments modifications than So, form modifications, in some escalated it variety into a have there you're note. In the notes cases, are cases interest the some rates works of solutions. of in lease a is lease better and building that actually doing

be it's And just will the a collected things. of deferred if should of and the of look the substantial those rent And you by cash expected of end amount the deferrals so combination XXXX. be flows majority at that

these say notes these providing they're interest And funds tenants. are loans? like, so when on those you giving to you're And you

we're them execute providing we're -- make for not check can't We're if or is, we a that rent. anybody not anything. the rent pay check, just note writing what a writing of they us And actually doing not anybody a amount we're

It's not a business loan?

loans. business no There's

you that’s of compliance of a the get take and the trigger. the coverage you sort to percent and XX You XX, just XXish covenants, two XX the where numbers. certain wondering sort do level sort seen today? the I'm of you've at covenants, Okay of mentioned that's terms that in deferrals Cathy things to to deferral how specifically funding those bridge could if close then on that just you with related the master kind DSR level of

walk and be planning how through would on would Okay it if of some it helpful I the the master work? math

Yes, sure.

beginning the and year analysis pull to to So easier the as numbers I'll like management discussion section. the the at the with able to it's beginning go be because of out XX-K. And back of the year start of

those that about are of in Our for from whole interest comes revenue million master assets annualized $XXX based XX% dollars And the in the was portfolio. funding. rent

So million going that's be a XXX would into about year, master funding.

of comes or covering XX on sense principle So, a STORE time XXX million million the about and XXX if interest to you, we outside makes in to a debt Capital, time frame that far, so covers back you're so waterfall that's at And the have. that that when the normal normal bottom XX.

of take in coming you XXXX only revenue million. and you what if of million I the XX% say If got that's $XXX that,

getting talking compare about gets so a debt of below XXX but million that sweep you're service gets at at you covering XX would And X.XXX coverage you're which that million X.X you bottom what that's that's XXX that When if to waterfall cash service trapped. of a you're point debt year. the that through of million what which revenue. flow XXX And is about the of or a trigger is the

month. $X about a that's So million

that most And be worst-case of was nothing. to for the by April I the the It's master scenario this could And trusts is would and XXX the way. else coverage. was everything well you, say north it

And a just are want close we're we them So, close close big not to why to amount. from not, were to got it's close not to money a we're reasons lot to of sweeps I cash not If point not a of we're lot but ways, to ever there a -- them. out you. there we're this them

And to pretty make that's cost is And discuss right company it right to that every leverage XX% is strike I in XX% and much our but in clear, want happy where the corporately it zone B strike extremely which of the zone. was. triple

relying of right only on plus before fact, year on we're again the In is that income around the the was their not Realty trust did relying or as this well. solely last difference minus. they year offering, equity XX% at master unsecured end money, And we're

only two it has has of debt, trust master third thirds assets, The that. our less our than one of

up to come happening space, there's ends unencumbered XX%, And close one what that the the so it’s the net is it. in that, lowest no could are leverage

mentioned you've downside of in funding us. and question to it so sort Vikram that was poses risk the the master And is, some real scenario, a

investors total better be non-recourse on balance only. debt have just sheet would if downside and job were than does we much debt unsecured scenario, the that this master protecting a in of our we a trusts it Given

any other REIT from and better position protection of from would of note shareholders leverage unencumbered a is because note be a unsecured diversity So, much than capital a both and holders, you’re XX%. holders because our

versus Okay vehicle I'm you, the to how of in that is are makes deferrals the different portfolio deferrals in understanding funding to how not have it, clarify, just XX it's not funding unencumbered are unless sense, really print aspect like reasons just I the are get I'm close but the the close the vehicle not versus you for I'm the when XX? XX%, what and maybe not had being like want leverage - how to it master like master

servicer down sweeps we're not And the a you that CMBS you fact because is comes it where we're like the waterfalls we come cash have servicer, us, the are the servicer. Fundamentally servicer. have to all this and the to

So, our if to things that it are that essentially allow we then do choose are subjected to waive us sweeps. in can fees obviously not that the power we to there to mean be waterfall. do for there I example, so cash changes

debt looking at end realty the both at the on And completely. national versus you're us which are income if virtually day retail reliant of unsecured of

create but prepare, day the way the for such we basically cash some manage of don't a end the investors They can flows look have cash at which at out, the we goes chunk same, I mean that a that in comes protection of servicer, difference vehicle, non-recourse is we that there's it a assets flow the only trigger the because are sweeps. the we're in, cash any in

you Okay, fair so take enough, offline, I'll thank probably much. it

And from our St. will come question Haendel next

Juste with ahead. go Mizuho. Please

for my Hey, you up question. good there are you afternoon well, taking guys all thank hope I

and portfolio you, impacting all, versus can at theory you've portfolio but of your how middle you Chris so personal to certainly and allocation I curious favorite understand that market quickly and seen marketplace all what So, performance. other the in in Covid yields this make just could more I your portfolio, just performance peers exposures grade. terms happening is tenants just It's

your be So And to your more deals just I willing then how get attractive you bit more strategy? might a Are sprinkle here? you'll great thought impacting do to observations, theatres, on curious that gym. what bit a think movie thoughts do some recovery that for you rents like? you're to look restaurants, about can how also And the Thanks. road your those on in feeling exposures you it

Sure, so where here. want thinking about we

pay what seeing companies that is And positions are to those rent States when Covid-XX. for I Nobel up able rent hasn't somewhat that theory over Portfolio immune and companies, think And that it, Fama are the won wasn't United Modern today, in are Covid-XX. Modern that theory are something that Prize affected Portfolio for we're best those century. with he companies can is about a the thinking a that are came pay to Eugene Covid-XX companies

at you're the they retailers, knowledge the which of April. pay of would Amazon has to by everybody company, the one those and stores, rated at be rent the looking grocery else in owned had look any done at month is be sort anybody didn't to it world And So, even for and well. a like could pretty and single LVMH done company richest dollar to much badly. then if drugstores, best people that's of a from my And stores you A very

of companies And business really Covid a cessation so that where the any the pandemic the designed cessation caused of have to has Covid, rating aren't of business.

thing we'll So, from trillion federal on to this have and government. is see then and what has a outlook but forward going first plus wait more. maybe three happens cost on my society caused most is cost our and government things. Its huge our illness And a likely the the this couple federal

been million enormous XX it's And just unemployed an a everybody. so cost just

US such with the government every best this is again. level happen sure guess very doesn't is and do other to going so cost a their government And make my to that

It so capital and a something just year businesses of so think really those be Covid we to cost businesses the pretty year lower And about, it's slim. worry go than because of be businesses. the ubiquitous or it's being next and can't pretty you going proof chase needs I likelihood need have around that to slim have after to other Covid

we're And market those And go after going the in to going we're larger to middle in and as we're of United to market companies whether that and for going into companies the businesses only be fulfill very a efficient plurality non-rated whatever; broad States. capital. which a after case companies going we're so constitute of to best, movie we real do we anyway. for in important or what them need theaters theaters And do go the estate X%

anyway. we're the heavier. pretty Fitness theater bit a little light were in sector centers movie So,

potentially industries you'll impacted. impacted some a sector there be don't be permanently of industries. be will seen are early with you've us I hospitality this. Covid-XX example be the evaluating was implications what certain I education long-term to by big air, the hotel, transit, permanently see think that that Clearly, is societal impacts There'll believe for us, which for child could Covid-XX. going that on

but think fitness jury clubs the is I impacted that hugely long-term that out. aren't

think content going a new mean do think release, come watch to and the want stronger be they in than a so people to go really to back blockbuster will people probably related. I I they're and you this I And to theaters have if to can the go and think theater just tied that. they're ability content because bring out could content.

one somehow nothing, tenants market things tenants middle big one unrated are often of it's we about riskier tenants for that that the were these or of our remarks of is, we was said tied not about, deferred to rents rents industries six I middle that you So, think lost tied or back. And tenants. comments our sectors. that a coming in XX% than prepared It's comments get to just unrated April or tenants, get of are market things that lot

double it a doesn't or you're B matter a company. Covid with market or basically larger takes no or your triple middle B whether company prisoners,

the going sensitive it's impact this. going keep you to of the in a long we on it, for on this. long you're enough to going if really with be enough the Covid really go going by people, you're really, it overall And hurt be are people rest because to let XX by If if million economy business just hurt

what Nobel of So, we we you and going who through sectors strategy net percentage non-rated laureate, gets look make get amongst REITs what companies having another we're than take we huge getting the higher bets do we do one you do Harry portfolio’s by which going the STORE to And this. stick of amounts to collected we is make And as bets of and we we're efficient best. and when at Markowitz, And all the is anybody closely. STORE which about we're probably way diversification to do a that lease theory else. from rents talked if which is steps why diversify to today, our always evaluate is measure to going these things

had because And we on that hard a lot diversity we people such apart from did of working fact had that the this. we

sound I it so shift middle market to appreciate strategy that, commitment but your certainly doesn't like near-term remains. imminent that a there's in certainly

assets up April there bump little that that in % quick collection of trust X.X versus a within the is couple you what maybe outside the here, contractual month about trust? driving the and to single during bit did Just talk follow-ups pumps the more guys you. for those you was industry? then tenant annual a what's talk Can from lease the jump any share Thank rent about here the the

that Yes off or And risk measure of cannot that that, better are a less addendum measuring I'm say we wouldn't be that happy answer you will without and to just, grade to make when to is last better we be time. tenants? there. investment question implicit would your that that risky these risk, my And you that wanted somehow go in discussion I I was after about you one like comment talk is small which questions would

can't time. discuss actually You risk without discussing

over time, B of XX-year period company a really be of XX% statistics most like But triple with market is B so the for we're figure once just triple we're company. can't B a lunch having today time going to do company. a triple why like if so unrated that's out trying the to people, it’s in treat you people. And really long-term a in happening it candidly to what's credit migration today, calls Now then a like, month that's for like they're conference the

that have I company of of a for years. decade, not do that for we're thinking risk accordingly. returns what we're comparative we happened XX know the this decent quarter, tomorrow, running we're about this got now. in were the we we're acquisitions. the and And company span would cut to in be risk, to transactions on adjusted roll we say risk from measured years this risk So, off running of was of And a thinking quarter worth honestly about terms

a a those of look cap of down had small of rates bumps term. handful rates half had elevated we them, It sort bunks we curtailed lower curtailed went was due we which when makes went higher sample like were really bumps really up. and the them where We transactions most you and to in and short

into I to discuss. in details, remarks but a that's lot like of what go did we tend so my prepared not So,

The next question will Bank. Deutsche come Please ahead. from Shivani Sood go with

activity team the pulled. investment taking you thanks Hi, your sort touched remarks near-term when on it and curtails the of mentioned was question. the that investment opening Cathy for in XXXX Chris you guidance just activity

just we get sort operating environment toe a curious arbitrage see in see to or of market the sort an dipping with if the the were do your need comfortable opportunity team something And be back your to market of again? could what to would So in team opportunistically had? there

talk I'll start about and forward. going plans for Cathy Mary can then what are It's

activities, investment the So, March to we yes a mentioned. expected U.S., had of we when very And was quarter less very, Chris have most curtailed. decided had hit early bare to Covid as curtail so

spread of And we've year. rest Now the doing. over will earlier, that the are XXX commitments we be kind about Mary out had million got about talked of that those of a construction

So, the construction things talking I'm what about. about when that's I mentioned

deals And she example I on for to and keep and the that that on. on Mary. could prepared And remarks in maybe think were you talk going mention new that working our relationship managers the did then Mary's deals we to continue relationships

end that pipeline activity is, lot say our robust. Shivani still would but pipeline I front with Covid-XX they've a our is Yes, been helping very the

many in businesses our lot many, have tiers We of long-term a relationships repeat.

really again. on something of do to of have are anxious edge We seats that growing a lot their and customers the

for on So, we can warm we get we're we're very sure, as do keeping back out that still. so warm. there, will the think soon front front the And as end I end

states that And half reopen for mentioned represents then to the I starting the space are company's you about rent. color. that think thanks of had Mary XX Great Mary that annualized

still quickly it So, appreciate returning? can and may not on but very how it's early or you guys demand there commentary about that share may that I be any

anybody's right Yes, in a as but reopen. it's quickly question reopen great one fashion a what it's mentioned, just, these Chris now tough also guess it's how will has they'll to as

whether reopen be are optimistic get lot to cautiously need they'll some a on. lot put to reopen going I in that of masks temperatures industry, place theaters mean that think movie or industry precautions They’re between of be phased putting so in right but and spacing seats approaches. taking in doing it's doesn't a there now, our really or by customers there's are able and

show itself. So, consumer behavior to do. the then And things some there are has to yet

kind of that's we'll if So, the or piece last the to there of not. see puzzle, they jump start so out consumers what

going. So think I get there to just definitely excitement is it's that but really early Shivani

want If education is to look but you XX% more to basis Scene on enough running the person than or excite just going could so some need people you be room education a capacity state-by-state child they not restaurant open. business mathematically so of at early business on rules a a the XX% childhood to or that. to you restaurant if the tell you're business facility in early

I And we're gradually. that so this going see think to happen

Times New were that the did suggest this. from second of York the Somebody ending in we

could but innings, and have patient it will. I to whether we third or that this what while, a a And we I know take prepared through right? don't work it's be be think us second with to

Jeremy The comes next please question ahead. go from Metz with BMO,

to of nearly here, the a funding, another you to having lot cash have some property it's be to for coverage restaurants, unencumbered guess to I more they're wave being like XX% sweep. pretty the low XX% any being Thanks, north the go fees composition in supports what's the collections you outlines, industries pool restaurants. pool just The that's given it, than that the retail. well mentioned of just us I back guess help want avoid to the able XX this of I potential master

Is you're far is swap I guess your something do? you're disposal it just that else that here ability So able keep considering? color and properties just so to is help there? is Any your to that something it that to XX, wondering above what

or of we swap properties So, out into Jeremy don't master funding.

funding. as the subordinate to another the the by to can is we So, income. master and one And are pool way don't. interest B but get way obviously one far we fees. way as way And have to don't swap concerned, between note unencumbered we We triple coverage coverages the the

actually basically coverage you you the our right? talk And XXX the So, fees for want after so about that paying people the us notes. subordinate stuff B seem to is interest all if right, triple on that you can

and rent the if you you form do that in is note. thing a deferral of other it a The take

Then note doing rent So, paid. been will it's make and the to we like we��re a a funding a that fashion. look deferral in master tenant if

just get so cash And there's a there's referral. to no,

see And that as you'll so happen well.

funding disposal us funding are And to the would number do these actually investor portfolio be all portfolio. if master So, there our that manage want able things. you're match you an in things that to to

this So, to want do, you don't to it. is something want you us not us support

going as think if to I it's to easy sweeps is cash as a happen to if said, master about funding we - Going Cathy be we to abandon decide to sort were sweep is don't a it's -- of we essentially, cash you these if get temporary about and that be only say And you about to are assuming going into assets, assets. really might sweet situation tenants were maybe we to rebound. but these these really then care care clear

a XXX would recovery your that, and way it, we're unthinkable. that's having to a it's XX% have risk. something normal and a that really XX% it’s aren't going good to be between unthinkable your XXX to of again And to the of able mean have happening those tenants candidly like XX% is about but difference simultaneously defaulting risk to it's tenant a active really right? having because not It's tenants circumstances me it's get something be risk, been our XX% which that or to You're going that's under Covid of XX%-XX% the to I default your environment tenants by point feel pretty also the in like sector

don't education I not exist. sector And going that think the early is child to

So hope you. that helps

of latest on, noted for in just what's light light you here the of the some and dividend and around across you've going pressures can your us of thinking in rent just these Okay industries. the of then some give the collections is, second us some

wondering what Just is there? how and the latest Thanks.

Yes, for to in answer you. we I expect that be to able June think

May going I they going board to as And and directors think in and closely should do. you’re June do they're - you on our June evaluate as transparency dividend to of you're is what and more look as looking collections. have the that some world April and can predictability forward or than And think you as is important you as seen and of have as you, just you've collections, important heading. the where

position good are the boards of And a day in and changes think course, to every going I you as make know. be Then clear to stuff policy. very cogent

So, and so one next things day forth. on closed, are open are things so the

next what's monthly going to call. that's happen we're give the course web to you going access So, earnings and before calls of

So, expect that you'll in that means update, now one you have should an June.

another update in we'll be it, And July. dividend talk June so well. when policy able have do in about we as the one to And then we'll

come Stender please will with question Todd Wells next The from Fargo, ahead. go

it’s may a early thanks. and standpoint. May, deteriorates, gave Hi guess April the Obviously, very from indications May for collection us be in you I rent

July guidance? points what can collections, indicators maybe us that you keep Is guys to early but it kind is to you reopen? we're out about eye for you it's it we do on in would guidance? too having an heading visibility indication every or start guys How providing that reinstate could and state of look an that June on give data Looking

I it’s a question Todd think issue. good think it's macro I a

And rent consumers said happening the six as or then super showing and I childhood are things unemployment mean that mean a if the and of if today that sector be staying think tend -- be when signs space in for you specific then opening to or early not it's think rents XX% knowing I specific if I from store sectors about. six are I no they space and the state's or out more call analyst the got what open. worried risk what’s those to it's tenant deferred these cautious an all being of education as this to deferred perspective, much and risk they're and sectors the on you before high important. a to restaurant industry or looking there tied are I then right

point you month, a three it rent comes far number to becomes of a so rent default. maybe two when tenant have deferrals the many not to month; we're months, one months in Then it what of to at ballpark how rent get month the paying month for before

we actually Well rent a send notice. happen unless default doesn't default

before our April but up to And So before not I had there started Xst and pretty with was clear us time we pay. of left around came around, having always out who so Xst much that idea mid-March tenants the came mean we in tenant a field people are some April very had idea our good come started pretty going April we happened. by a dialogues calling

in tenant we've more same relationship the and the part not than working what our originated work have of then And assistance if types us already tenants expected you so going And the a a well I exact we have problem them. part with tenants them of to we're mean work with you're partly because to solution when with upon of those our dialogues with agreed and tenant is directly. dialogues. going so need the we good have I you're

Thalmann. with And our ahead. question Massocca go from Please come will today Ladenburg John last

afternoon. Good

partial kinds pre or had of know payment what where of rent of of modification So included was Covid April. in kind leases number you gave of I that would you of and XX% in April? rent roughly imagine other deferral kind percentage know but that support maybe I some contractual kind modification the kind your from came some provided cash paid you

out I to So for you. get reached feel wanted many to general how just a tenants

the of is income. percentage rent as XX% So cash and

month And short so for rent the collections XX% were basically of of we April.

for us. both disclose really is really getting mutually relationship I working mean how there's I get and agreeable that's actually back-and-forth just and for negotiation to all you're us disclosure. called not painful that don't And up because things acceptable of for right did and all what obviously tenants a many is we the asked on expect us this mutually frankly While was. for

of monetary April? was turn or any out kind of number be But payment didn't it impact really didn't kind modifications the significant cash that of where there to in

All that outside with do was agreements. the to of leases that least were to deferral the There made that. modifications was had nothing of done

you quarter? some any there Van specific Art the kind in was were kind the costs or drove a there mentioned one impacted XQ, what was a was tenants maybe of and what in of was quick then elevated was operating broad that of of other it Okay the other a things just first -- half group

is to stuff. of was This Cathy. were was Yes. big that point enough a minor one handful Art Van rest out just only The separately. the

over Ladies question-and-answer to session. our like Volk any to gentlemen, this I'd Chris the closing and concludes remarks. back turn call

great do then to been to Well, follow thank have you Q&A a up we talking you doing all with we talking a until when pleasure May forward and call it's again this XXth and you. day. a on look And

now presentation. today's conference The you has And thank you. attending for concluded. Thank

now may You disconnect.