Store Capital (STOR) 26 Feb 212020 Q4 Earnings call transcript

Good afternoon, and welcome to the STORE Capital Fourth Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Lisa Mueller, Investor Relations. Please go ahead.

thank Capital's for results. fourth and to us operator, STORE discuss quarter you, you joining all today Thank XXXX financial afternoon, for earnings which our we quarterly This presentation, investor release includes call. today's and information supplemental issued These of website documents Results, Results. at section and our News are the under Relations in Quarterly available Investor ir.storecapital.com open up for your today's will prepared provide call On remarks and the call management then we will questions. two-question will limit while keeping the our to be In observing the to we a of maximize participation, portion order during an Q&A call hour, call. you Participants can queue the then re-enter have if follow-up questions.

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

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

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

quarter Capitals Officer; Mary you, XXXX everyone Fedewa, Thank STORE Operating Chief and welcome call. fourth President Chief our Cathy Financial of afternoon, With Lisa. And today our good earnings to Long, me Officer. are and

resulted a with on year strength to ago invested prior we small our were another a dollars pandemic. year embodies sought healthy gross many resiliency. our from STORE our safe. challenging concluded efficiency We're level deviated we of way have cash hope putting dollar collecting history, ratios that And to for it speak continue XXXX opportunity every dollars was observers our you you high to have little this But year to welcome memory. in our no from and and families invest. yield balance a way our portfolio broad most to the we STORE today always, a the pressures, As that of properties non-rated where the our of group to and your businesses and a centre economic absolute leads be the large to endure withstand rates deliver of while test to diverse who return. higher Throughout recession whether profit continuing sheet

should an will throughout performance rest. ultimately results Our pandemic accrual on put prove debate that even basis, the better. In to

all impacted reported we modifications of pandemic than deferred the the changes tenants. to fourth expect be did higher not net We notes that nearly and quarter funds reported fourth operations collect more AFFO. repayments, the rents will and deferral least for deferrals and adjusted least already and means has begun our rents was the This in our that that receive extended from rent repaid. This we deferred during STORE quarter via net during receivable

positive continue through this XXXX. to expect We trend

payout to dividend pandemic. prior collections rents will XXXX a included, our are converge ratio of expect In begin was to fact, our for where that we ratio payout point and dividend to deferred

growth ability dividend protection dividend in to this important us XXXX, been our than protection dividend. helping deliver And our raise internal leading sector then has maintain Our more during and important consistent time. this was over to

portfolio the by percentage a Berkeley pandemic, of [Ph] to the we locations we disclosing uncertainty business, concerted the the imposed along with effort for rent open that trends monthly With communicate collections. saw. made

year. something expected enabled for on our not that of year. for about during provide us do clarity and Our conditions market many done We to a the we the estimates increasing has on call health this the tenants AFFO have growth

later be will XXXX expect able track for have historically progress offer guidance put again and as to on done. guidance we following updates initiating year be and our to back to provide store today this quarterly on the We year,

AFFO on is Cathy attractive, growth in still will a that for expected to we little XXXX mired a call later pandemic. provide this we it's that remember and in While are important

For revenue in February the historically terms month and shortfall fact record. below XX%. remained collection cash been a of more or pre January rent high, in have a our pandemic collections Used X% would simultaneous

until which But simply trend be we Some we portions of vaccinated tenants XXXX, against to in collections with population a the should expect this first tailwind customers herd our XXXX STORE cash historic tenants benefit start enable position enter the more to It impacted our portfolio virus. in us to and perform the happening pandemic this of sufficient with unable will as industries more the converging to performance enabling to performance, towards are conclude normalcy. of since immunity the began. will year

and in be resilient port model a safe However, to storm. STORE through itself shown the this business a of all has

industries defined, I'd succeed said that over strategy We have a national that history always our capital leading call has if with across turn us And us prevail need like Mary. pandemic. asset enabled broad lot we that comments, we tenants succeed. lease to over to we those this net literally capitalization to in. our class paid That and unflinchingly backed solutions We dividends this providing uniquely an companies our by based with strong believe and cast to that regional over

And Thank you, afternoon, good Chris. everyone.

of I'll overview proved staying I a begin, a are to model. XXXX. that the an how challenges XXXX success business portfolio. and Before spend activity you like minutes One healthy positioned and families year safe. that on better and STORE unique Then acquisition and resiliency begin for tested customers no our other. our navigated was XXXX our of few be my your our hope with today I in comments I'll both and

and quarter new customers. fourth solutions customers broad demand existing very financing for lease both activity acquisition Our was reflecting strong, net from

of attractive of granular, X.X% continued lease investments escalators at returns size gross rate be our across Right leases cap term in rent weighted The $XX weighted an annual X.X%, to XX lease approximately over invested average years. at long years, million of with resulting just with with the maturing quarter to total Overall, transaction $XXX average For we of weighted be approximately term portfolio XX of new XX XX our X% X.X%. the average our is our transactions, a investments in of properties continued years. average five under next of only million. an

portfolio new customers, Industries. relationships build XX to continue on total across XXX our of XXX by We customer strategy diversified a us to adding bringing

in weighted of average cap at total property of high X.X%. year a billion rate of XXX properties of full of sales the million, acquisitions For million. XXXX, our $XXX invested we $XXX range the a end guidance exceeding $X.X Net totalled

the Over About properties. of costs. year, opportunistic sold the XX% were with sales we over gain course a net XX XX%

and to our the strategic in portfolio resulted remaining of were at. sales XX and costs. was how experiential gain part XX% we our attribute X% XX% in XX% our the are ongoing least for less interest. XX% properties factors, be resilient base together, and not that of was service cap the top interest. in were and comprised less, proved for Combined, opportunistic XX.X% with sales that of our rent XX retail, of sold manufacturing. that were rent a property base To of customers were Taking of accounted The at approximately accounted or diversity portfolio. originating our only to of steady sold our end, We rates XX% portfolio over that More many We our our our portfolio in in management extremely our remained than this XXXX. activities. XX% pleased Another strategic basis granularity points and which than customers X% mix of

only has than high the since vacant year properties nine XXXX, remained and spite in at remained occupancy economic occupancy XX.X% portfolio shutdown consistently of Our more our at And our inception. XXXX pandemic end. in global of with

increase October repayments began business through in to quarter collections our XXXX began the rent our fourth We continue of quarter steadily. in in and XXXX; continued in third As improve cash rent however, February. XX% scheduled force to openings and see too were the XX% for repayments rising early deferral nationwide, collections to

with their performing particular worth top Among our arrangement. mention. our quick holdings, in of are As are with tenants agreements repayment accordance today, a in two deferral

excited very XX strong through growing K our partnership The states. operates and Spring educations. performing brand. drawn national Education childhood and early are of with a XXX about units We provider schools Spring well was about company Group, than with company XX a pre-COVID a more across

exposure fourth are of result during on pandemic the increased a online post-COVID we Accordingly additional and spring poised by to managed properties well their adding eight quarter. As the they tailwind. platform, capitalize our in existing

XX STORE's proceeds of pandemic now base one entered and our customers furniture with customer, largest our bankruptcy. spring of smoothly. in represent is still Art interest. recovery they Historically, X.X% only top Van We the rent While

Virtually our related hit, of it overnight, bankruptcy onset them first dealing Who be immediately COVID face bankruptcy own had after customers their the themselves? the of structuring this keep business Love's Art of could that all we're ERP relief at we to leveraged historic a business Overall, our year bankruptcy to XXXX and situation. to we Most our was lows. it manage for agreements, tools active ongoing levels also things were whether Van's programs, to filed XXX properties us shortly the in new furniture. deferral professionally. our impacted was in how government for intelligence needs. are delayed We'll fully storm pressing on cloud-based informed doing presented and employees the to enabled year by we recently XXXX for these reaffirm recovery But and opportunities the help available However, personally other our work our platform of proved with When everyone and you portfolio. COVID resilient of all, and adversity. quickly by a about pandemic we closures updating activating remotely customer, rent difficult mandatory right. the implemented

our reducing family to impacted strong adjusted those centers, operations, continuously restrictions customers and cash and fitness position. impacted new expenses, entertainment tailored and While our Many restaurants of were and education streamlining team clubs, childhood with ended with balance financial theaters, early ride the automation. their centers. reality agreements, very out and most COVID lease COVID, technology that customers our who XXXX sheets required not our by wave of works introducing new severely primarily shutdown health customers good by in to the deferral of Overall, customers

in the a As a now than year world they a to ago. result, operate in are stronger they position COVID were post

served has Chris proved our and the team the business crisis, well and STORE of business its history test was years, the pandemic us under tested in the through both proved Built customers, resiliency models. mentioned, that time, major critical to the our our faced our model has As XX first over and past economic COVID. managing of to

is serve we market. is selective STORE STORE and an trillion we positioned in serve market. be This We enormous the allows that estimate for us highly investments make. about First, $X to the uniquely properties to market

margins disciplined to models, strong and underwriting which have factors management deliberately considers and team, lease process, year business sustainable customers we for view and long plans. the term, Second, business that With XX safety. our XX considerable look of solid

industries, the Third, we've obvious time relationships, our proved customers down known customers. of lease reflect of lease even contracts expand finally, COVID we level customers. geography. our this our to model sector, to customers And important benefits, a increased close our financial And our add critical other own value relationship business generate more is statements unit customer always health is strategy since the our comes from This portfolio is own able our that monitor fosters business which customer granular, their to and important, been own working attractive it diversification many ability especially provide important from our model, but informed management on long-term entire help our that our decisions. diverse our service. with by including and terms, relationship make direct of has which as advantage. portfolio yield during where direct We've disruption, and closed been became repeat has to one-third relationships, our consistently businesses them Create receive that

of optimism. XXXX round our Looking increasingly ahead, likely we another forward are looking and stimulus as and to becomes COVID vaccination ramps with up customers government

we Having pipeline, are dialogue active incredibly of our XXXX. the lessons of on especially a year. portfolio, confident customers half to I for second that are storm, am our see the COVID help for proud robust long-term organic model. on as to we strong of recovery, the The and and and opportunities STORE with are Based STORE the activities. We worked behalf our business the customers. activity health many stepped strength of of resilience strong in our expect about learned planning acquisition growth, up who for team our all whether We extremely in look who and customers our the the merger our our in explore will in of many accelerate way and whatever of of stakeholders along position important is future. hard increasing

Now the Cathy I'll to results. turn to over financial discuss call our

for on Thank you, financial I'll well sheet activity year full our XXXX followed capital and for Mary. the an guidance ahead. quarter the discuss markets how I'll XXXX. and for our update results our fourth position year balance by provide us Then

meaningful Sequentially, acquisitions, quarter. net activity, the million, of to activity million the acquisitions AFFO remarks. increased in onetime revenues acquisitions in the revenues approximately Our due revenue representing delayed to a XX% with small than pandemic of Van a were rent fee related underperforming straight only our bridge is of income, QX but quarter's volume All but few from $X.X taken December, rent QX, receivables her other the line revenue $X.X approximately flat in $X.X were from remaining higher in of from non-cash decrease from is month. on as and closing a these was to recovery that days million. Revenue our backend, million straight result quarter. closed revenue QX the full attributable from decreased line ago last about year fourth Reserves which amount volume, income this $X.X of approximately recognized increased heavily of Art QX the $XXX write-offs mentioned reduction acquisition the contribution in component impacted of the Mary The original lower weighted two of in that revenue the million were factors in of contracts acquisition QX. adjustment quarter a QX. which the large Offsetting QX other essentially in thirds were QX properties, hire for $X.XX a portion with the

down million granted from in fourth quarter, million the net of $X.X During deferrals $XX we the rent quarter. reserves, third of

deferrals COVID. be rent approximately the fourth represents repayments, $XX end of tenant $XX requested total over deferrals and the months. repaid to at highly the At reserves with next year stood the industries million deferral in end, $XX began rent scheduled a be COVID net of and million. impacted scheduled of Continued of Rent by less $XX repayments in in were same this by earnest same by the receivables that were quarter, million, million, to XX in XXXX majority collected remainder the COVID

the decreased November. of downs in property increased from Van from we which related proceeds delayed property resulted interest about the may a when Interest quarter expenses. to of million $X.X weighted million expense be able $XXX,XXX $X.X half the by Art notes for year in tenant primarily year not former quarter. locations with public Now expenses the was $XXX,XXX turning tax during the accruals increase expect our secured by due the our from of where G&A ago transaction, made X.X% from year-over-year over debt The properties to tenant to fourth X.X%. on average on to recovery quarter. in third costs pay to due. ago the represented our them Property issuance to costs just increased quarter, rate pay by reduction we The and senior offset increase this

travel compensation XX XX declined from G&A ago, volume, This acquisition year to points. of down reflecting average along a acquisition impact points of expenses lower percentage is equity portfolio a lower basis As non-cash excluding on decreased related basis the assets, expenses expenses. with

We somewhat rise as historical expect to levels acquisition in returned of G&A to activity. expenses we XXX,

offset QX lower per a basis, on of Full-year during per to $X.XX four provision, per AFFO year to our the allowed During from from quarter share our share. leverage we've in outstanding of little Sequentially revenues that well property a down count $XXX end. million, primarily us our AFFO share, half from tenants funded million described We businesses. by basic of by impairment share impacted allocation mandates, record ago, per I lower we share, XXX as $X.XX a levels $XXX AFFO for drove diluted a attributable business to shares earlier and to $XXX as properties. paid remaining December quarter, AFFO QX, closures share the change to the million $X.XX property to with XX. fourth in strategy our AFFO and $X.XX million increased for growth the government per dividend declined pandemic, increased revenue for $X.XX XXXX from costs. this and or year change to mandated to a the maintain of as fourth declared quarter On million costs AFFO prudent were to per over XX, quarter due in increases the social diluted by ago. was XXXX was short-term in was we in higher $XX related which change portfolio aggregate and primarily share diluted due decreased on related a year distancing shareholders January recognized capital was equity, to the on acquisitions quarter

closed expense quarter, little our load along vast asset AFFO in sheet, the of proceeds fourth quarter. with the and $XXX to of acquisition for the funded contributed half we strong acquisitions the million equity, for last with Now the with December, cash in in full these from commissions, the turning but majority Since activity balance acquisitions sales. to activity quarter acquisition

the full will We external felt of impact QX of in XXXX. expect growth be this

For QX. activity with the in of $X.X XX% we acquisition year, full billion about the closed acquisitions, nearly closing of

continues effective to be granular size way of ATM equity an our and acquisitions, the raise program through our Our program to pandemic. to raise continued ATM we given the capital, throughout

an renewed equity quarter, stock million our approximately about use we million of of $XXX issue of $XX.XX fourth raising We ATM to the During share, price the in program net X at of this shares common program proceeds amount $XXX per million. QX. in average

of average issued million. $XXX the an common course shares at raising of Over XXXX, million of XX net share, $XX.XX more approximately proceeds stock we of than per price

loans term our of the most of net penalty, a used of million a funded result, one in trended to of activity million interest market to a leverage by XXXX. of of $XXX investment X.X%. in on net of we XX, of and notes that average to XXXX prepay bank $XX.X debt rated a was senior As debt, We an December of equity low approximately weighted long-term funding of In master unsecured advantage net X.XX%, an and had with attractive debt interest X.X our $XXX average of acquisition November, large weighted $X.X rate XX% rate took we a issuing At maturity mature with proceeds has notes cost our due level basis. with scheduled a grade X.XX% billion without XXXX. were portfolio to years, historically portion million and

our under seven of unencumbered to Our at unencumbered unencumbered year portfolio interest at low And leverage times. gross just XX% estate end. NOI ratio exceptional expense our was real remains remains approximately of

prepayment These a debt no available during in interest XXXX. and window weighted at average will until XXXX. master XXXX continue to We become costs reduce funding significant X.XX%, debt and to prepayment three an without of penalty us series bear XX-month have maturities for giving have they a notes rate of opportunity notes

of $XXX available the million approximately team financing leverage, program, about under conservative address access options. seeing opportunities Year, strong into accordion facility, variety million which equity flexibility, with is substantial and attractive positioned Going also to direct financing $XXX million well $XXX feature. have to we in origination $XXX We're and our our ATM million our credit acquisition an and has full a access debt the New cash, to

remain our guidance. We $X.X of range to projected ability to billion achieve in share level and $X in we XXXX volume. our sales acquisition volume provided initial net attractive per confident guidance that XXXX $X.XX for November, the turning the In $X.XX anticipated to cap expect at volume AFFO in we this currently Now billion to of of net acquisition based range rates. on of

of a X.X% Our AFFO is debt rate in weighted leverage to average net cap to EBITDA. run X and a based rate a target of guidance acquisitions on X.X range on ratio times new

investment anticipate level mentioned normal earlier, to of the expense slightly of As compared as the trend combination that G&A growth. support we to to XXXX our return and up due personnel I activities we're acquisition will to next portfolio a in making

Still plus share excluding XXXX deferred Our AFFO per reassess costs $X.XX per $X.XX sales or as early as losses plus and year, approximately share $X.XX real we'll guidance per always, I'll related equity per and anticipated the on amortization. to call expected to amortization, the compensation reflect property income, And turn year $X.XX financing the net progresses. to for straight guidance $X.XX rent, to depreciation gains of Chris. share, estate, now items of back share in such line as and

Thank you, Cathy.

to operator. few comments. over additional make the the call I'd like to turning Before

you for first the your complete and the I revisions the time is results. in to undertaking, to liked ultimate an would which sharpen five presentation has sought presentation, a First, Periodic shorten draw work comments team. undergone investor to makeover large and We've your our important We hope attention a corporate a years. welcome the are credit presentation. and

eventful website. stores year the among to this my and to most letters letter annual of XXXX be and XX-K career. available be will my with be stockholders long is business no tomorrow released filing years tended our exception. have My will concurrent on Secondly, was

Cathy relationship Chief our call, planned fellow are announcing spans Financial we this STORE's was decades. instrumental Long. and today passage. retirement corporate announcing after the Cathy of Finally, will press working issue Shortly and release conception, Co-Founder in a Officer we our a

invested many has of embodies gracious, to successor. to unfailingly with call has she on model She example. our Cathy us, best or who her plans this to role stay on She's of analyse fellow transition until us a leads teammates. For can the and the proved STORE. you her us Cathy role reliable, by and

firm Reynolds say, engaged and finest across to adventures. and our to Meanwhile, tax have all Cathy Russell see in working over playing the key this that lease with transition. moves her seeing will and replacement, Cathy seek search questions. and with a to executive assure can platforms. team wish you to now operator, with is every we her successful role very her you I call she We for day, financial any a member on in comments, turn net have I accounting will miss we reporting group new that these she so the deservedly And We process the built three publicly traded Needless the her. best

Crossett Nate from Berenberg. is question first The with Instructions] [Operator

congratulations on good And evening, retirement guys. the Cathy. Hey,

you, Thank Nate.

deck. Are ramping was in levels Yes. the the again. looks volumes It's up end the good addressable so flow estimate in last guys year? your on see saw to hoping seeing the And 'XX. like also you of toward QX deal market comment just you I consistent that you far it you the to total acquisition could of

curious I'm customers of through guys much potential So, XX,XXX have worked target you so that how far?

this Mary. Nate, Hey, is

we're of seeing definitely the quarter, level as flow up So, ramped in and activity. I'll that take fourth saw, I deal Yes, still say you that.

market, a detailed pretty terms in And we the do the a year. of once we So, market that. update and on study do opportunity

cover, clearly it the is be as difficult database have XX,XXX large here of surface we're that market over the of scratching just We we're prospecting through a will there's companies ever so to it working that. even

So, lots there. of runway

wanted lot list Spring a currently I that's it the they also of don't other Obviously, that your to have Education. like you that ask I add XXXX. throughout about moved to looks properties own. Okay. to there And tenant up tolerance guess, are

of tolerance the exposure tenant your kind guess So, top terms upward here? I of what's in

area back three in balance about tends its but X% that true three be growths under X.X% nothing with it. to be but where back There going our that down top to are they'll but definitely else, are be just tenants. they'll sheet we've been to

XXth this they're they little and Mary, with an an Nate, early Group transaction, education all a like, integrated way And across we education work children. comprehensive that centred customer. a from to have bit do that childhood was Spring and is sort and play through of tuition. through care that' private grade. a contractual kind XX K really the through I'll that pure the space a space - a they're solution in talk really existing of space, private provided in about of a that We space we're through for span K platform excited Yes, the on Education XX transaction with K education is

in the really offer but through in an that existing in education COVID. sticky. also are offerings, have the of channels K childhood superior through platform they only education. Not XX, well already from them the they early And they're diverse very it's they diverse served online really So how

of from a attraction new - of lot a from enrolment that particular they they So platform. had lot did

well, And pre-COVID, we're COVID. do to did were pleased So up our top they well list. they they during during at have XX great, of the them top

The Sheila from next of McGrath Evercore. question is

markets how about rates, your the environment. Yes. thoughts investment the interest and changing think opportunity you companies if wondering a spooked now on moving, opportunities could the that rates little a operate previous you take just STORE bit Chris, rising environments, your rate and in in how I was about

Sheila. Sure, I'll do this from angles. two

escalator let's last year, average our look The AXX our weighted say was our at first at rate you look average was is, portfolio, if X-X. cap

total you gross So returns together, XX%. you if two of get add to around a those

XX-X time, If tenure public gross like was probably was at to XX-X. company, our our the or predecessor and something you around or the it compare XXXX-XXXX, was treasury that that, XXX yield

similar kind we're time, of of points that rate during we investors where returns that a it XXX know really, XX% And with ran So also to types company generated our return. out rate of gross on a that of during top company was. interest

to chase temptation we tried a inflation, the not assets. disciplined. rates low have been stayed where tried So that away asset to We've for to from would for that cause downward, we've just justify higher we've what bubble pretty can you have rates avoid you price

shouldn't company that long-term outset, working we the be X% treasury say like and they it XXX is volatility, chasing long-term has thing really of can to is in there, and if rates. you the to downward, risk thing push contrast, volatility of rates in most environment getting going is a about, you designed able with tenure interest you move borrowing it. because people where to been of good, deals one after make a up more this interest stays been rates, low mindful it's I so going the the are by the hurt So kind acquisition end happen. that may a note, during whole the reticent from bit we would terms then have cap little financing variable to our little bit financing survive, treasury, at tenure volatility make has for it's at in because should example, not type more of cap all. has change year, If that want, XXX, for rates we're down On careers rate that on can of the the And people rates, that we're range I be one rates. for an today's We're

on one as about. do We that. starts we hand, sad help of would the the that of And that trades maybe up think compressed a last people And little be just to it year, talking hopefully, to some were a recovery spreads wouldn't see go V-shape it so, the would economy spreads. our I to bit result ginormous were had

we So at out at money we borrowed put XXX, the money XXX.

And higher solid you're for as of [Ph] XXX rates that, we're that's talking okay. bit year So points, like this see if a on to room which that. comes go at wicked high, north of little return a plenty if is of There's equity. basis we'd result historically in

give portfolio resilience on In presentation Okay, during your And page that's you COVID. one question. other great. new XX, quick

could in yield top little top if peers. portfolio right door wondered more the a graph the Just versus you explain relative that bit

yes. Okay, so top right,

basically, So providers the unusually results of of one the here for we're being us for today year. last

kind of is yields of sort that back lot out and people have generated. that we've XX-Q and So XX-K a to generated, everybody we're of able into other pull cash filings generated and

into one you're so And like, with, doing. the be And the we've to noticed starting what's that you attention lot thing built and XX, of year with absolute XX, higher that much actual yield. at to of course, paid there's have that cash to rents most begin for And error yield attention of off lot percentage collected, about a paid are being being yield that so STORE XX. and there's the of is what's XX, less a return, the margin we people, a

turns yield. of So STORE our belief terms relative collected i.e. in a to had dollar higher STORE it's as it year out, we what we - invested, every that last

rents actually up, of had high to go percentage we kind nowhere have collected whereas to a interesting, percentage rent not up, had year, And going collected. is right. of percentage of because the highest that is second did that collected, piece rents we it this Although go

So course, this groups just further. year, of spread a up. will you'll that, going peer and to next tailwind, to go So our tend yields, is cash full you'll have in out of And then other have year gap a year even the XXXX, between

it. to So And I that's that we're show. charts think what that excited designed about

ahead. Please of go The next Janney. question is from Rob Stevenson

estate can us can remind assets them demand how your remaining think multi-tenant the about just is you selling what how Good this are? and versus tenant evening, guys. talk the on? of four the potentially or tradeoff the the markets And size of think in size? those like releasing And of between you Loves real quarter? Mary, for robust about moving boxes boxes in that them sold you you band I average

Yeah, from Love. absolutely, Rob, hear about I'll And nice you. to talk good question.

quarter in sites the fourth We of we correct. You're here. did, the four released

we stores, experienced of remain as our an on furniture so remain have So and who form, they're going furniture a ours. lease customer operator to they took

footprint they So, past, sales Love started footprint. ones core but Love paying core the released bankruptcy. do we bankruptcy, - as this the the footprint, And here a we they the in rent really were during in and in And core like outside still like Midwest, are they even the started to money art open, up, well open profitable also doing been perspective. they to made were they've when when band from they them stores. We were

would really that think would interest we'll But boxes, So say so bankruptcy part, But these will sectors in we think actually. could one continue. and them. actually to COVID. you is know, I some early, during sell think the And release interest some it fringe trend something might and the release they're - still. like these on hotter that. you the was look furniture good most in as But now I And know, you have of have most most for that or boxes we of of we we

Okay. Great.

were bankruptcy, of too. I one, even these when mean, quite well, from day making money. Art bit Definitely things property Van a

So about standpoint too. we good that from feel them

into Cathy, go one fourth Cath the the combined, From the expense Okay. acquisitions are - here. Loves, per the December? what buckets expenses drag And of as quarter one for those share? an What let one as then from standpoint, revenues lower weighting both earnings AFFO you without and between was on the attributing you two just well higher last

almost and then we couple $X.XXX the and And a another was accrue time for Well, did because to cash basis together that for Loves by well. move by by expense the We Loves itself, property itself. drag accounting, end the did the drag quarter people fourth a as you for other waiting, only was of expensed in-house couple commission's as for was that weeks. there And costs most consider are the a it weren't because zero few when closing for Really but was a wash. acquisitions hit, impact, almost fact even days. full that and hit revenue expense the a you pennies. back drag though some add taxes the acquisitions, the the that some was revenue also the

about depends have really you you in then much can modeled a it think you eight and modeled the math, mid $XXX when net it you hit would do cap on at would that quarter convention, how a how if million quarter. an have So that's were

offset out part, Okay. said the was the And paying That expense the how was by that much up door? the round you revenue? you

that's I about about that. guess basis points Yes, XX

Very Okay. helpful. you. what's Congratulations and good next luck with for

you. Thank

from The Caitlin is next Goldman ahead. go Burrows Please of question Sachs.

evening, on good yes, everyone. Hi, Cathy, your And retirement. congrats

Thanks, Caitlin.

of possibly of Yes, of you're what XXXX, the in increasing and assumes up course through on you, go of off could in wondering tenants cash if guidance, moving in terms the of and assuming terms and following accounting? question earlier, just was last rent from team collections I the guidance terms what one over

that. And in Mary can or chime want. I'll they start if Okay, Chris

you we think by about you for ended collections was of of if collections, where end a to rounding XX%, reported the we by the in So of the pie think year, year, and chart the but time the like pie, end the December, XX% about cash. XX% a year, actually it of

going cash is collections. the be XX% So, pie to of

of deferrals, the reserves. of pie net X% Another is

X%. might, to recognizing be So reserve revenue, think receivable, collectible, that's those that things what against the not accounts deferrals are a another would and put as be, we and we

on instead. sales of you And a rent quarter. record a base fourth flip fixed basis, to can't a then we've people rent, they're monthly Okay, then to percentage don't because we unresolved, quarter you pay And basis, X%, which remaining penned them who that's we the going but that deal have there's people but recognized with to they is other what is moved either when revenue, them it. instead, know In it's percentage are actually until cash sales, haven't And or X% the timing another of their third meaning cash words, in are. on unrecognized. we their

helps. just So, that

X% So, to into carrying that who impacted have if the then people bucket, you that a in normal remember, XX% overtime, are you industries. bucket. you highly of And And recovery will expect XXXX. are have these those

during a that for the entire basis The movie full time COVID, bucket, that if that in people service the little of would restaurants, that's be talked we industries look, things bit So, theatres, are some it's example, in like family clubs, and who entertainment? you at about there. health cash group the

somewhat do in the crab hot restaurants That's restaurants And process food. if meant pickup, on most continuing vaccination legs king to of the reopen sit-down some this able not that's that. takeout. of to like Alaskan just is so or you're not stuff like many are have something; things serving something them. Many, they were But to of reliant our and are easy

the of about. group fully. them to some were talking not So, reopen that's we're or And just able that reopen

come for more there social So, it's are - but open, waiting distancing help? Does they're They a little that before they really they're in of their expansive partly really locations. get bit in matter can to they're a this back. either

change given on I It spot. does. if had about assumes you Then, outlined. that it, Could XXminutes you they And then just I talk about follow-up, might interesting over pieces but guidance I'm those to more that put think just how the like the I of wondering XXXX? been have course

perspective a big seasonal, ramp-up more process is little from our most expecting bit along summer the by More the vaccination little further where the is some It's more ramp-up a June. of happening a towards are of of with a them. tenants for Plus, just that thing then.

expect summer. we this would that And rent towards the recouping so the of more would of be beginning

Okay, it. got

we is obviously, Chris. If a of We outperform we could taking. reserves we've Okay, we have collect we or more. been that ways this lot can could

could we be So over reserved…

could we we've have recovery; you written And think on.

have could recoveries. We increase

for where year. just got for So in prime Van the Art this last where a was recoveries we've of that, And example year of we drag relative terms the recoveries to a was dreadful been.

And lot a this do more origination. we of this then So team have could time our course could happen. of in

get with able are this on So through of get start through complete kind those other like is as exceed convinced pretty get the when all be - XXXX XXXX, more have in is And into going want of as us were know as help what's here to have we what to be that talk. an clarity to as we into all tailwind. look we estimate, don't we happening of is of that still sit pandemic, normal like get XXXX. we We're But we this, tune could we sort more But that's in we might be what middle in a to that the things year. you we and side.

the this the its So not 'XX just about story cause 'XX I think story story.

we them other they that one for is the you moment only basis, the you them. when And switch to people have would we over, accounts to receivable had had writing are out that not whatever property cash but accrued point thing when taxes moved off some also at

we be the they might them. pay their taxes, with that pay to but that Now likely now not them thought accrued property we didn't

on and recovery something also we where be accrue payment the tax, where taxes with that's up there then may property some like can state or So that. working a to pay plan tenant ends out something their

Got it.

much X.X maybe more which the fixed just coverage. page Okay. now, guys charge history that levels, of which at one seems at surprising. then times is And pre-pandemic level you showed unit pretty Thanks. XX, the numbers on And median

going Or So metric? I sales? with keep wondering been that Is there just have to something up it go on was could if that tenants else is able through you that.

Mary, give coverages as real know short I on most COVID. that. really can is this But Caitlin the answer tenants of you our were you not Hey, by a impacted

we and So industries, have Industries. there impacted are only six or highly seven XXX

have So prospered shaped sort during had a a actually really many tenants you V of recovery, them if will. lot of of quick are COVID our

really has it can from up the diversity the portfolio see benefited our that, looking you you're So of held in and we've metric and at.

is of Please BMO. next go The Lee ahead. Frank question from

Hi, Congrats, And good evening, Cathy. everyone.

additional on Any the today? up we your financing And in we given deals guidance. about equitized on will How be for acquisitions, over think Thanks. to expect levels where stand XXXX. late Just helpful. follow be AFFO a colour commentary leverage should should 'XX

pandemic. Frank. you, Yes, fund Thank during as we equity expect to we the don't with did

ahead of uncertainty. And quickly. ramping we up that sure due to it. time it during was get good out make because part to was a in up get being part prudent I the acquisitions ramping to was leverage were fairly low think it the of equity QX And and pandemic kept that of

for revolver. on So how we if with you ourselves look at nothing where outstanding we our ended year, the ended XXXX, we up positioned up

us. at to by the overall November, rates. So opportunities the as we of on And no debt our my mentioned, debt are And XXXX X% cash amount master funding with balance to more lower in there bonds it's where those sheet mode interest debt full will penalty. put deal unsecured in prepayment allowed us paying was during cost that that also we which We had some at and off rate. higher available I series in senior script, have almost and are three that X.X% be interest did

So opportunity there. there's some

active us XX% XX% being loan closer cost you'll debt even net a low, kind our little to market, basis. in on to more be see would debt being So leverage the of a if which trend with to or abnormally levels, we back normal

spreads capital and markets little long-term rates And see more So a definitely now debt. activity. the in for still attractive are you'll attractive; still are coming right interest

the start Frank, we of funded afford look happens, true up. going be expenses because it back as pick investments swing we're equity we same keep still it's revenues EBITDA, EBITDA the to with funded I And up, going throwing debt luck is back the roughly leverage us on our last to is any year, to And basically drop funded coming when mean, to in. and that as depends will leverage. XX% up our where able

sure which dry having means acquire gives becomes us dilution, more without that external So, your to powder more growth basically potent.

of service at your chart, have like sector it what the was pipeline, a fallen declined the about of some favour? investment of pie you very last type this? And looks if from talk bit helpful. Can industry look the other quarter. distribution, we behind groups that quite the thanks bucket Okay, drivers out Or then

we Yes, hey, this out the pie. it took we of other actually, and some is Mary, into service We out Frank. popped stuff

and So, another we auto that out. service was maintenance actually pop

centers, like it can and considers a around percentages around to things a has here that like some out; just But some of maintenance. repair services, in mix they pull the rental got or see there you So, some quite things that. over moved a and auto we imaging service few was of still sort X% be from other actually centers, things things

The Tsai next question Jefferies. go is ahead. Please from Linda of

as endeavour. the you in Hi, wishing well Cathy. and Congratulations next your best

you. Thank

quarters? of basis over ABR pool. you few XQ wondering said the is much XQ's do trended think that's I basis on XQ, tenants How just cash X% you that how past of cash accounting in from your collect and

So, how of we basis do cash collect? much the

Yes.

some But in I head. front you of don't the off have number my give information that can anecdotal me. top of right I

For them sales amount. a there on that basis percentage said example, monthly some cash a where of slipped remember, are I to instead are we've of regular

had For only in $X recognized million. type about recognized of that contingent QX, the $X for contingent, and million whole we year, we rent

has, from So, more million. couple up doing to X.XX doing, gone the than, a pace barely a XXX,XXX really quarter

it weren't really is up. these reopened end QX. of So, to the people picking lot of back a as working being But you deals, paying recall again until around out and where started

all our going So, start of big that. starting QX the rent and be to paybacks to deferrals and was always contingent

than So, will seeing you're QX. more and I even a what robust think little that be probably in QX QX

then And what it. in? did fall XX they Got tenants the industries new

metal little care, a really fourth percent medical, dealerships, some urgent of non-discretionary fabrication XX% X% the stuff. a so and COVID and or some and care, in was services, quarter, processing XX% education dental, In only care our Mary. we XX% some is about sort group, about pet were course, specialty these and service eye in mix retail, resistant, about this of some we rent Linda, did RV in manufacturing, food had type

mix was sort that of really So, the quarter. for fourth

The from St. question is Haendel next

Mizuho. Please Juste of go ahead.

Haendel. equity XXXX? [Ph], is we on in behalf $X.X Thank income it investment statement, of clarity on what method can for you from million and Can taking more non-real this to this income Leah estate something of of Jane your the is question. tied is Hi, my more you provide specifically, on expect

- situation. No, is of this sort Cathy. onetime a That was

During two-way COVID, there lot negotiation, street. was too, a of a it's

regular got something in small a estate a and company rent particular we not this And in some return. just it's people stake you're company, providing a it's situation, getting a relief, real equity You're also operating but company. in

So, stake be investment that and it you're seeing. will of is is worth. It's but that value value, equity estimated And method, we to it's for - of the you what see cash a paid that the won't help that for got per accounted and we what actually an is stake se. and it. And it's on the necessarily part normal the business that. nothing reaching not do us Does

focus And every to resulting noncash from was because it's the the cash method, unless will on the equity or distribution. be us they income and losses a give from deducted operation added a

furniture very Art Thank signed credit and you you. paying And and talk tenant of for furniture can new on the the of is Print? this how the that Van rent boxes, store new That's the former about operator four comment profile leases helpful. the Love the Love versus

a is that signed this tell is a very a with release specific have we experienced on what when here. we experienced you Mary; furniture This But is don't disclose lease furniture I a will operator very has up us. strong who long-term deal operator,

question from next go is ahead. The Wells of Please Todd Fargo. Stender

Cathy, And miss going Thanks. we're you. to

best. the So you all wish

Thank you.

Sure.

it's levels. a at your your rent initial low into guidance, Looking caution if What's something just that's forecast? assumes go just that abundance acquisition that we cap maybe XX I going rate, of seen or an wonder [Ph] that a for haven't while.

this were or at So, so. that Mary. XXXX level we is hey Todd, is actually Actually, XXX in

of well. that as there's as compression of more relates manufacturing demand demand bit tell sort lot we're nonessential lot there classes, of out in still you some for is asset a can some of a imbalance in a there's of where or seeing marketplace, I will So, but compression and to the there COVID a imagine, essential there's you the desirable it as supply

hoped where sort And is rates to we better back kind the do of always to you'll So range that's be. XXXX back cap think And of that's obviously, than the we'll guidance levels. again, we I in see see I even that going to where But that. seeing compression. we you're of think are think our

And at any give I did or I net dispositions it? disposition acquisitions of you all; Understood. range color know your Did miss a there?

the low little sold year Cathy. a were we of beginning were kind the and I to year. during It's do Last year abnormal last X% side. Normally X% on we actually balance below a of is of We the was that think, year. an X% portfolio

see that You'll that, so way. can high back trending that it maybe into about perhaps the even end think towards us fully range, of and you

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

Good afternoon.

of the to a is mix more the if again, rate cost trended some going kind of is is, on pandemic? maybe pretty over So of Is now the vacancy? that has portfolio else to you're mature disclosure forward? there of in you've question cap selling the in maybe the on is something the years. related gain some part Or some on much original just flat a from and particularly remained dispositions, be it or more in going But of disposition kind presentation, of XXXX. vacancy going the selling consequence the And down out total that there headwinds loss

Okay.

year, answer over Chris loss X% out John, basically assets worked an answer is which last So a aggregate the sold But will loss that and this we $XX from as Mary loss, the perspective. together. is to cost, this million economic

us, We we've over every over single gains the mean, way five the years. look made costs. If you last year. years, at disclose that six by I

first portfolio cost. of management the strategic just loss actually our is we of a to from the this lot due of time mix it's perspective. So And did opportunistic we've had a what a

assets. the we more them portfolio year, vacant on and a were lot last did of management side So some

obviously occupied assets. were they Some of them And underperforming but - assets. were

we're past, are performing be the we've of, of loss. normal done you that vast us So many assets and much last history thing have we which think that a opportunistic think did of frictional, going that I We year, is year. caused that it'd This majority in where money assets do we has I cool store to as good the sell strategic seen as blend had them. high years more sell assets a the make and the a not year very would is

investing a to than very the record track in. have of are We a cap that sell lower being rates we're able good cap rates

added, million company. something or history and for So look accretion, creates, together that growth added last you at net neighbourhood accretion, to net the sort of Overall, the which somewhere in revenue if internal works see. years, of to out you bucks the we've X is the been want four five

minor like X but it's every So million million, accretion year, X that's recurring.

of that paid at like look to we way adding the year. And It's of that we So, as kind growth attention a almost negative every default. company. to another single

not And been last see related to I have year, COVID it do So, say you'll the losses some us might that. would wasn't related because COVID. though weren't was just all it

to were was than sales opportunity have. less would lower say, you that for year, pretty really when in have because because the slowdown the mostly John, I last year. normally the of they opportunistic, at And of Yes, the the end happened us COVID, strategic big a strategic you're hit, where and reason marketplace, we there's have in so COVID first much

that thing the non-paying a and final on nine we're total of walking properties. And vacant is sitting today,

So, to is the do seasoning this portfolio. has lease portfolio or STORE's the age in not our average the with XX-years. of of term And fact, weighted still

keeping So, term super the at we've been lease good really long.

So, it age or company. to of nothing has the do lifecycle any with

in would kind it's proven as of initial more be maybe than we're portfolio entertainment understood. large that of maybe kind bit where pipeline, held the is then, place Okay, in have a pretty kind - disclosure, have at assets, getting is still pipeline a world, post to kind little of or indicated? view based I to those the your headlines resilient vaccinated of a look And of on

and pipeline I of that is these will assets it, pipeline lot and a that really Mary, the that that opportunities vaccinations proved recovery they And that, become will resilient, present we're it's good relationships tell I second year Yes, is like the they, keeping say out very are relationships on but having with of in even have, those. think families I the and go a this see half think things, especially all warm, and that with when these do to very, more timing would we'll you, I itself the is these customers, we it's will have opportunities the is that opportunity right. lot a on are a though, dynamic. these the the of and resilient

So, space. we're still this interested in

we the keep the so we'll included it we And would pipeline. in to like pipeline - keep

comes question from the Baird. And ahead. last Golladay Please from go Wes

everyone. evening, And good Cathy, Hi, congratulations.

you. Thank

follow-up I just to of one questions. want maybe those on last

a vacant potentially the selling mentioned your properties. way look and not and the in do tenant vacant to paying to leases? you the You and sell But strengthen paying ever assets substitute

bet. often. You tenants this with absolutely quite we work our Mary; is Yes,

know else they're work have multi-unit they working most want we of that a assets tenants we with paying, do but them in with you out our are and not tenants, substitute And that mostly master we work for help leases, to property sure. of out can - for, they all have in. if of closely closely As and pull in for and something our get mostly transactions, our multi there, that's them, we

not this. on totally and paying vacant And to be, disclose we transparent you for the

So us because to it forces all it. also two attention I one that. pay And people to of of to the a think do lot

of want from paying. have kind they're vacant paying so you any residual value not or don't just And where to perspective, properties

able a working to we're sales be process. effectuate And with so our to customers

Yes.

Chris, So, our mentioned step do do well. you one in customers as well, we

really that nice So we sure they - performing we're really want aligned portfolio. with to have a to hoping make

then I'll And maybe your for Great. call, Cathy, with guess. just last I end

that? Do You timing a amount have mentioned and going mode. for you on prepayment dollar

The timing year pre-payments the the varied. during is for

kind be early that we many as be that'll QX as in that some time have early way. be that'll that'll some so But QX. we So, can and can we late, it QX think we'll some wrap that of pick a of about

thinking you're like really. that's So midyear more

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

any you Mary, the follow-up I Thank available for questions. will today. attending all Cathy for and call be

next there will March conference, in Raymond James that X. upcoming on week property March the will note through those the schedule, much. after if also course. just and let are a And in global be events we be day. virtual conference which Citi's our investor getting Just know so you're week will great participating then be you March we on will of have XX. Thank Both But us of interested please X

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

may You disconnect. now