Store Capital (STOR) 5 Aug 212021 Q2 Earnings call transcript

Good day, and welcome to the STORE Capital's Second Quarter 2021 Earnings Webcast and 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 Ms. Lisa Mueller, Investor Relations for STORE Capital. Ms. yours, is floor the ma'am. Mueller,

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

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

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

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

for begin an and financial and everyone, will the this second provide as our Thank Cathy you, strategy. I'll quarter you quarter Good what call added morning, with thank on growth our to update we us management will joining portfolio today. Craig discuss portfolio Lisa. an activities, quarter overview review as of performance our second well our results. the and

We available will to your be all answer questions. then

you for strategy, acquisitions million X.X% of saw on press a selective rate estate. results in $XXX quarter. our cap center acquisition the average As Through of our we we in profit delivered release, our operational strong attained second weighted real

revenues share, also level AFFO our We of strong portfolio. per growth delivered of in from the $X.XX reflecting investment

collections our see unprecedented the to collections the with XX%, that our reflecting is pandemic diverse both of belief July at strength cash from the portfolio continue increasing, and largely impact financial now We cash us. behind

pent-up acquisition as due to interest picking continue their the financing and see for demand. becoming and is increasing we demand to customized front, up in confident rates, monetary businesses On are outlook activity momentum low more continued stimulus M&A our solutions

highly We good and of for making STORE. a to us pipeline that have for acquisitions billion, investment good good shareholders, our be selective robust allows customers, which for $XX.X are in

diversified is rent base with tenant account shape interest. of Our remains and in and portfolio to for X% highly great only our continuing largest

a annual against our We have nice which inflation. of contractual built-in rent rent provides hedge escalations X.X%, growth from

rate with term an no we closed occupancy XX lease remains long of the quarter lease has virtually years near-term five average remained consistent weighted years. which the XX.X%, expirations. Our over We and past at have

result real increased value-add we customers in market returns. result are we net rate influx continue prices. continuing to attractive bring is of attractive yield capital. our believe coupled to to rates risk-adjusted can in opportunities rates some all and estate know, sector above our cap STORE, lease the This new will causing be you are also with an acquisition As interest serving historic the to At sustained attract low compression, in strategy deliberate the cap in and which

see approach we we real real always, I remain during broad I as As estate into review extensive observations process of my quarter's the collaboration also we of including of call, of leadership and primary in where open On underwriting Today, the we level some our provided CEO role, to our to committed growth. some is right are with I on ensure to objectives new I customers, our next want scaling success to of to our I experienced paying additional that disciplined to plans. one STORE be providing an that our the we growth last price. capital team. avenues the provide estate would stepped to mentioned color is what heading. STORE believe mentioned

front customer Over been than business, focused developing a base relationships. engine $XX proven technology valuable and we end past platform leading-edge proprietary an professionals than experienced real of years, business supports that XXX model, relationships, have our our highly our Today, have portfolio, aspect the team and XXX installed estate more a the XX an business. every of acquisition a of of more on building customer diversified we billion

have pronged since continuing our important by it, platform while leveraging inflection returns now our the accelerate risk-adjusted point. mapped volume delivered we we've we today through place fully inception. As achieve To to business growth an generate STORE We to strong increased has see in our a have we the that, reached approach. can three scale out

trillion The on over estate to X estimated real focus to $X is continue market properties. comprised center addressable million about be will of organic profit for growth. we First,

at size purchased strategy, the assets right disciplined center portfolio with focused the continuing real build our a pipeline, to more exceeds take real portfolio. our of profit which while right remain to very strong a have than the right estate We will proven a on owning approach current with price rates. Leveraging the we cap estate diverse

their checks central profitability relationship secret be their in business, our to level. This is to always customers and and high-touch know It the businesses down customer issues the risk and play and partnership. direct Every to property will at opportunities hard of our a Our their team We identifying in role It's our strategy. us replicate. mitigates grow mutually customers years our our the customers businesses. and and to sauce, quarter, approach. a with our the making in state vital our strengthening origination evaluate allows model to helping

return origination such portfolio as have our our now transactions, will consider to consider If are through opportunities we more our them. from expertise scale business hurdles fit we the presented, Second, larger outside and and meet traditional shareholder channels. that platform transactions model

We the strategic resources to have lead drive the experience and of initiatives. and growth types these

in continuing to proprietary analytics. our leveraging technology platform includes data Third, and our our strategy invest

the XX years, have For been past this we platform. building technology proprietary

us our We valuable substantial view information that every gives and have from a of XXX-degree business amount of aspect supports portfolio customers our to management. of a collected origination

able for to drive success. now that risk-adjusted more growth analytics to strong are and data our want STORE say returns. to and volume I've and prospects I utilize We been excited about never

dividend, return. an Now which total to important our of our been part always has turning

relatively consider complete Board In Cathy's Board third meeting the least know, I you as over will our anticipate before And operational our I a quarter. provide the to want for meaningful call quick update finally, can dividend successor. Craig, on to we increase and turn that evaluates strong our dividend outlook, annually. a payout light performance as at and considers of low ratio, policy Board you it positive raising as our dividend As each our our at well search

quarter earnings. We are on be We track. least through knew Cathy would always here second at

pleased over through of turn to thorough We Craig. and with the in highly qualified are call the manner. candidates and a are slate process the diligent that, I'll With moving

Mary. minutes management a the acquisitions and to take second you, quarter. I'll few Thank our activities in cover portfolio

We As set Mary across leading $XXX tenants. the XX customers originated diverse and ended XXX we and industries. quarter acquisitions in with added new a national regional million mentioned, of

than quarter finance help of our customized financing customer was address More a of volume wide Our half solutions second to needs. acquisitions. customers variety

early capitalize For example, education M&A operator opportunities. childhood helped we on an

remainder growth, as for fund carwash their was balance unlocking to estate XX% the recapitalize sheets. about real with to customers addition, operator organic and was In a expansion plans, such equity help

confidence deal of we expect which activity Two we third picking showing quarter, seeing into is months the back sales up. Our translate the flow customers and at half more the transactions renewed closed process their our the outlook are to front are into in more of end in year.

base At interest More who than that portfolio service remained In across X% individually very second of had of XX% plans XX% with base market XX% intentionally of collectively, and accounted By safeguard helps experiential their XX our we X,XXX a strong end, XX% and comprised the with represent only reengaged the was Our manufacturing. quarter of repeat XX% portfolio portfolio design, following our more in our and built very have customers optimizing and the cycles pandemic. for properties growth top industries. risk-adjusted was consistent, portfolio businesses, than XXX rent as returns. companies in rent business than retail interest. against quarter, diverse less industries, mix

customers We expect relationships large as repeat acquire with and role installed greater our business will we base. expand play continue to an new increasingly

quarter. our in of only ratio portfolio are coverage Our Out quarter, properties, with line up pre-pandemic level the Xx exceedingly which end XX continues remains X,XXX X-wall our perform second at as unit last the X.Xx well to charge vacant, was fixed of levels. from

activity. Moving on management portfolio our to

rent excluding managing turn cap During sales. our results. we Cathy our X.X% STORE's The the Actively achieved discuss net than higher sold over call When on on the properties, demonstrates $XX to for quarter, to million we over assets. was rate internal historical properties liquidity of in proceeds. now I'll noncore our portfolio XX accretive and average. for properties those noncore a recovery financial creates the growth

May. overview otherwise quarter unless quarter our updated you, an declined Craig. noted. comparisons increased growth amortization Property Then income of second Interest revenues our quarter pandemic. to ago by interest million. our year at our expense for primarily $X.X in sheet. discuss expense estate results I'll prepayment credit The also our from we had costs the current reflecting the quarter, Beginning when capital the $X.X from the provide the the are for XXXX, million, decreased includes portfolio. year-over-year quarter $XXX activity related quarter statement, XX% ago of quarter Thank ago on balance to real level in the our while I'll with the by accelerated onset facility year from of second and slightly followed guidance the $XXX,XXX financial second debt higher million for of markets borrowings year approximately to noncash a of

million property from year the from $XX gross portfolio points average our our points tenants, Excluding down compensation due ago. represented costs an $XX reimbursed a increased costs G&A expense. primarily assets, expenses to quarter, of basis XX in increase basis ago million by performance-related in to year about XX stock-based

basis noncash this relatively expense, at XX gross overall Excluding year-over-year assets. were G&A points portfolio average of flat costs about

quarter, sold recognized on the by the likely to $X.X on was During a we million properties $X.X amount gain This we're second an recognized provision million aggregate largely impairment offset sell. quarter. properties during

on as $XXX The million from basis to year lower per AFFO share growth our XX% portfolio expense. primarily revenue increased a quarter increased AFFO AFFO estate ago, as share and $XXX $X.XX real million. well $X.XX in a to Second from increase total reflects per interest the from diluted increased

received collections mentioned, in who to deferrals, COVID of end As them our the increased of quarter. with July essentially over as XX% of cash the With pre-COVID respect full line repaid have to deferrals, levels. tenants, XX%, in Mary

$X.XX majority expect to quarterly and in be for In maintained share million we the per ratio of payout receivables the XXXX. cash of quarter. of declared the remaining end June, net collected a COVID vast a of $XX the conservative by dividend dividend We XX%

from capital the our from turning We revolving program facility. second and our borrowings sale of balance cash acquisitions ATM operations, Now equity with to activity credit our through our sheet. and on markets quarter proceeds funded

record In AAA-rated took priced $XX.XX completed interest advantage of a program attractively This we equity $XXX an STORE quarter, second XX-year $XX raising we approximately debt. blended million common of million X.X%. market per of million X.X Master net price average low ATM our our of June, issuance under includes in raise at of the of of $XXX Funding X-and favorable notes million. During at notes. conditions rate to under debt the proceeds share stock issued quarter the We Program shares of

prepay in planned, X%. without portion As of used rate a to notes we Master two of proceeds of million Funding the a of that XXXX scheduled had weighted were $XXX to penalty and interest average classes mature

decreases substantially were investors so notes the and the Funding transaction, back debt new about debt XXXX, another this strong also giving of excited execution These We our are without us that prepayment through this our so will notes opportunity Master X.X%, year. to global existing many cost of pandemic. portfolio of November to penalty. in thrilled another our our interest available of many speaks a an be transaction. which bear series and We In participated this welcome of capital investors for rate costs Master Funding to lower of resiliency

laddered, maturities debt Our significant and XXXX. maturities intentionally are have well we until no

to billion With $X opportunity during future the our we XXXX expanding the maximum $X.X to the we by feature prepayment In Accordion credit windows and billion. Program, facility, under flexible years. increasing Master the from Funding in prepay borrowing series our also additional million to June, have capacity $XXX recast

note. bank had June rate interest years. to average and extended finally, in of maturity outstanding a our At XXXX remaining $X.X X.X% a two, billion with repaid April, $XXX long-term term weighted date facility approximately six-month we million We maturity interest of we weighted rate extension seven points the rate the XX, also about reduced of options. fixed basis XX And debt June by the and with of average

strong remains cost of was portfolio gross to at net remains our low very estate and ratio a NOI a Approximately Xx. closed expense exceptional portfolio with the of We portfolio leverage XX% to than XX% more sheet. quarter on on Our the debt interest unencumbered at the real unencumbered, balance a basis.

our spreads. and priced options the finance equity million to debt to $XXX access had attractive quarter opportunities of pipeline million more We available and favorably $XXX than full have acquisition our under very growing of variety availability end, ATM credit of facility. cash, At a in we at our program ample million $XXX

turning to guidance. Now

net AFFO acquisition of run the to to on in net billion ratio raising projected and of is $X.XX, our to cap per of are billion volume EBITDA. range from The $X.X share to of the guidance average guidance AFFO a weighted revenues a $X.XX approximately We midpoint leverage rate based a our on Xx X.X% at rate range XXXX of $X $X.XX. to $X.XX stronger to target of debt range X.X

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

through half we'll assess provide move of we and outlook I'll the Mary. updated appropriate. to second year, to as back this our continue now turn guidance As the And

Thank differentiated out people lot position lease STORE you, the choices Cathy. that in of know truly there. space. we closing, REIT a have has a net In

in pure-play a center real are estate. We profit

and granular large portfolio. a have We diverse

We know every have we for a we own, P&L site so their profitability.

disciplined set lease through are our risk mitigate to structures. We up

We with business. have that a new strong customer cultivate deep base relationships

attractive I would to And highly attractive creating to questions. rates, with spreads. access for the call like over turn at your capital have We long-term that,

begin the [Operator Please question Evercore session. And first question-and-answer ahead. from ISI. now will with come Sheila a will McGrath Instructions] go We

more Mary, growth, prongs you mentioned three of portfolio transactions. in your considering

Just cap typically wondering, rates? that lower as move if could at lower rates are means portfolios acquisition cap

Yes.

So Sheila, of I'll ways. in that a answer couple

I'll I'll talk the here. all, cap then about some rate approach, of and a compression address bit First little

at years. we've here, we're think We've mentioned, really and I an as COVID. around been over So XX we inflection through point come

sized we've portfolio scale, a a have diverse built tested team and We platform. and well management highly We're portfolio. in

to can really feel we a pursue result, portfolio in as larger opportunities customers transactions. acquire like these now So we

been model you As our always centric. very customer business has know,

real disciplined customers, customers remaining profit relationships center these we it's that important and approach long-term and are to building on our these with very focused in on So estate, acquiring us focus that.

going as look they at themselves. we're to opportunities present So

are seeing compression In terms cap in the of cap marketplace. rate we compression, rate some

search capital rates, cap for is mid-Xs. So our lot And our and into focused And issue as the said, influx about today, return we our low that rate well. really the nearly return, interest spread the in on a And here. XXX of was resulting -- a we're of basis total debt there's total could second of a know, been but in piece you that of And from capital cost points. as also yield. being but big quarter, Sheila, space

create so basis nearly X would a that And spread.

at So we're to good and make things our accretive way. in a really acquisitions, we're and based take a place come now very, look ready, very size to scale on that

question second And Great. my Okay. is.

the You analytics also a growth. data platform means as mentioned of

the Are or wondering detail Just us more planning data a give the you if little that? platform? could selling on on you

I data, And objective, capabilities. as to targeting the for make better through the No, the efficiently include selling to continuing not decisions analytic Yes. well yes, advanced is that's decisions as prospect The Sheila, of more portfolio. But monitor sure. will. these deployment

will with go question ahead. Burrows Goldman next The come from Caitlin Sachs. Please

prongs, just portfolios. following those that large supplement and 'XX, shows has in so origination XQ of 'XX. in Yes, about from I of the up portfolio but STORE's XX% terms mean, guess, one as of the terms 'XX direct middle I three of been

wondering, as as process scale to that from just Or business, will about is expect ratio there you So change? change? you that the the you go here something do

suspect customers the in not process Yes. stay our line. suspect to and Catlin, to that that, have we're No, process know you that. I what, acquiring will we're change. will do same I going Again,

to approach. here. for same have real going disciplined that center the profit we look same have to Our We're going We're estate. foundation

a be. large big but the of so maybe is we And sure, that to like I you're what prong be is share market our you'll of see bit, continue do, that change organic to big, three growth. for So think a part see little a going

same those thing, that it of get size the just keep on larger? might happen transactions the is but kind of then to doing you'll So

Yes.

that's think I way think Caitlin. about good a it, to

XXXX And even the Okay. mentioned also levels how are coverage XXXX. STORE's then in above you now remarks, prepared and

some could tenants that So you Is strong you or of if underlying just commentary. something tenant now have of just give wondering that the a businesses, the function mix else?

question. is Yes. This I'll take Craig. that

a really it's our function of So how is. diverse portfolio

recall, industries you And a all those tenants If of within impacted. we had those industries, highly only they've that are reopened. handful really

strong continue And businesses. experienced actually Our really in their actually have to collections these tenants improve. rebounds

regards on they've are our first in they've and same-store dining They've gym for in and the example, improving because about clubs businesses. membership XX% placed that memberships. actually of they've greater on operators just, half to first investments -- has X% been emphasis in half when between focusing And single-digit comparing to year sales business, actually XXXX. in streamlined of our XXXX, have casual that improve health to-go in menus. our profitability operator's gyms, actually our a seen efficiencies. margins growth investing and actually they our the this pandemic to are simplified In increases focus They actually So restaurant, you're their have and overhead health experiencing counts, actually people are higher technology the saying reporting well-being,

kind and helped And XXX as translates into diverse think over that's benefiting by coverage coverages and had our being industries this of COVID we well resilient some so higher tenants COVID I increase. industries, well and all as we highly as on our impacted being

The come St. question from next will Haendel

Juste with ahead. Mizuho. go Please

mean? you're give considering with a talk that look here be? large us about meaningful comment you Can you correctly next could What in curious, that telegraphing a And might dividend? of you third I you hear that this I quarter will appreciate the resizing maybe But did increase the the sense implemented increase be the dividend? dividend saying how as parameters with bit. bit on at you're a could meaningful perhaps the what

heard Mary. Yes. Yes, script the Haendel, this is correct. you

determine seeing Board COVID, you will you our at the be as under So will nicely. by But we that the the as is we day. know. Board by encouraged And will that. currently, determine it slightly during rebounding end the increase. increased we're X% And that the last dividend think cent that Board know, of But with that, also, a year a AFFO

about to to perhaps thinking is growth Sure, sure. in guess, And tax to Is -- it relative we need basis there it's historically, a, there or been maybe consider it that a anything just overall. how you're degree? Or anything I expectations? AFFO else

XX% When get in. we That's It's target, a Cathy. I'll our at around ratio. this XX%. ratio, payout jump AFFO about to certain payout we were about quarter,

AFFO we there, once idea get the then that growth dividend growth. being translates So to

as the yes, sort component on like So consider they other that. the things business of AFFO there's overall, an to outlook well as on that economy, outlook and things

enough. seven there? there well? no to new the range back yields term. sounds a bit You X.X%. And you about in going any here customers. then expect like a that transactions the it within current XX Can Fair are industries you're to near that guys there buying? Are new mean talk here you cap Okay. rates mentioned assumed guidance what in stay Does portfolio that high as -- that And

cover Tyler. this that is question. Haendel, I'll

manufacturing So about our each portfolio and of in focused much very with line towards for mix a and for industries examples. are XX% and They're couple QX, been companies own not and XX% composition, it's growth, have on just overall our rebounded geared volume that their retail. service under was and

lumber, specialty side, medical. a of industries education, typical the wholesalers, like On lot washes, the car service

tends manufacturing, was of for in actually about retail this of food And range to auto in be industries. dealership a space. As then In quarter, half comprised manufacturing. primarily is of in the it wide

Kamdem ahead. Please Ronald Stanley. The Morgan with from next will question come go

Just two quick ones.

one, I you think mentioned transition, it's just So track. on I CFO think the on

appreciate it's any situation, color on just other expect curious any you other on there's to that that could Just XQ in provide XQ can or there? can track. a comment more color Is rounds -- but or what fluid any we you're if I something in? being wondering Just

We're a can work relationship and and, lucky that's looking really, Actually, Mary. a are her have on We're smooth at to track. in -- qualified we're candidates. point, you this we're transition. Cathy about her through really Ron, with to tell long-standing here we what team at some Cathy it's highly really

we're the make Cathy be to to and we're taking time and so our And transition. going right find the smooth person Company, is that going for here to

-- but track on do we're that. So to

Got it. Helpful.

switching well little portfolio, you at and the back it's Can just recovered. gears a us Just take clearly, you remind a bit. when look done

basis you still cash what and Has maybe you're can cash all? in guidance? is us assuming percent the on tenants, changed basis? what Just remind like for that terms what look of at And collections

Yes. This is Cathy.

of cash as at and rent basis and tenants, For annualized about X% year, recall, of our you the gone beginning that's down base the interest was cash basis, X%. to

about that. So just off to of agreed the will cash tenants of basis. cash do And things basis we they that on pay to that and we've moved X/X like hopefully, were as as continue continue

So, pickup this was some basis revenue of players quarter paying the indeed cash in more.

of extent in for share? you're And collections just guidance or it. then where to Got the assuming terms

Yes.

collections, that assumes we for July. around right stay my For guidance that we the collection percentage reported

then we'll revenue. So gets better, collections. that that guidance up XX% pick assumes more we're if And at

or or there we like we there upside we well. decide, some as up could potential reserves something there's that, reverse So something additional if can pick

Street The next Allaway question Advisors. Green Please Spenser ahead. come will go with from

can breakout for you your it how guys currently appetite just about latest raising guys for program? the a And to additional funding this As and capital little under funding your the bit talk term? relates massive near acquisitions about over issuance, you thinking are then

again. Cathy is This

So debt investment-grade two have options. we

unsecured plus senior to financing, and back coupon. traditional unsecured the If some a at for A option. spreads more X.X% example, low notes always balance today, coming going were market But with to you're fairly paper the financing. So issue, XX-year looking for and being them the we're one we AAA under with really Master Treasury the senior that paper in, Funding that issuing is we of where

as debt same attractive act we always is don't and keeping as group transaction us markets, The the just the because have. to secured have That the debt broadest way market two Funding economic most market Master between can gives idea flexibility, the investors different recently did. those unsecured in the we the of of So environments. those that two options

due, there would to transactions, having So that are Master like that Master idea due opportunity fact debt flexibility. Not love expensive. prepayment an replace they're we the Funding that the November of give program. we this with the are so us for tranches two-to come The Funding part large, would mentioned windows. that's prepay We come that November. But prepayment it pre-payable less in and will some three-year in be windows come

can spots in economic be reduce of So able continue different environments we pick capital. our our to to to cost

note Master program, You much we'll out balance are us unsecured assets encumbered Master be of X/X use X/X of get today, won't the see to way debt. the will then going by assets is -- basically the too unencumbered, the where our of the senior that Funding the on Funding be side. And and

helps? think is over time, be that the So balance we it that where to you're seeing today if pretty much very will close

one And color. then just great more. that's Yes,

divestments? can of you of what strategic in on to should term? focusing terms And dispositions, near percent versus in then expect be remind we your industries which terms opportunistic you're just strategic us In the the

can jump I in.

And that, Spenser. going is that's portfolio So X% it we longer that modeling of and the during lot investment financial that at either on really go there year. be it at portfolio portfolio, that us have the looking But to opportunistic through looking decided would disposed weakening, been is see quarterly see of divest be come tenants. It's X% to of to of statements exposure property. what of always just X% a certain mix, to the from would quality our the industries, a along, things we lot reducing we certain is that whatever. those the as a look augment that our the rebalancing of the we to is part we real A certain strategic. to -- If getting are Or somehow locations, we're some beginning we to portfolio, core the based year. ahead no of X% something of what of tenant along. -- some

been any not sort sort across in Does real it's portfolio just active what been that It's of board. type board. the industry it's There's honestly, of that location just And of anything. or really trend, So on not help? even across or based management. the

great. Yes,

will Thomas Todd question with Markets. come ahead. next The from Please KeyBanc Capital go

an there in The model. reserved on guess, reversals the the I previously would that first quick follow-up, on a quarter the impacted rate? just amounts the of quarter? Anything question, run have that any Were Cathy, impact

amount. reversal There small It less pickup on $X.XXX reserves. was of a was than of

up about just that other right in think sense platform that you helpful. give about industries ramp to comments investments, $X.X as an think should the of on be comments, of sounds mentioned us into might Just investments we right. about And think position expanding industries. $X pace the 'XX. from other see being your what And Can following as volumes, the made we expanding investment commentary then the Mary, you're to just there STORE we talk then, like increase expected some I in that you you into? read? billion to That's billion the contemplating? Okay. Is examples All a acquisition and about a of

Todd, I'm happy to talk about that.

where I right on year continue in mode. I feel we opposed business as COVID, have larger for the as on say managing at right specific we're to might but some in of for they're like the things started in now, and going the where really for gross nothing of to look And to about And And a portfolio, And track. that pure-play so just profit halfway what be anything that that. businesses ready. going So right talked their and we're going now like of during center that looking assets, in we're industries, I are there's space. and hopper through how environment would terms we're we're stay, terms that's think And today, at growth that. to basis, -- in look of we're we're to we a ready for the look growth sort to towards in now,

give years or different some us When where an that of or guess, advantage the I might be opportunities over -- been you segments areas there has the of -- you considering? of are be of sense a of mean opportunity take industries how increasing last the you certain might couple you're I thinking for about larger to can you there some as manufacturing exposure. just exploit

Yes.

I stay going continue Manufacturing, has we're We're a again, that X/X by as last less that had earlier, mentioned are, stay correct, COVID to up, second XX% industries creeped those some impacted to and Tyler about of we to pretty granular. we continue probably year, driven volume did service. we're bit of -- and Todd, of you're quarter to service. little was and think of going COVID less our that but the velocity

they're in M&A They've those vital They industries. are So in -- businesses to activity. able shift towards have performed well COVID. now

pipeline demand have and on for they their executing And and -- so pent-up of stuff. opportunities

to as we're here that So -- say, sit have today, we going we today. would a I to but mix look similar

go The next question will Please come with from BMO. Lee Frank ahead.

range, the AFFO end the follow-up you top up $X.X had we just of a the the quarter. in growth this $X.XX, look guidance. the at -- no I Just on revised posted from second follow-up If implies a the

we to baked some drag that this think are into could a in about be due the guidance? items earnings is Just year? there of half wondering, partly any should to conservatism the the that back Or

Frank, yes.

So there this $X.XXX cents, less reserves. that a of a reversal little about than was was X.XXX quarter,

of reversal guidance. in that's that not on the there Not think going that if about reserve way. count of be one-time, it So you would couldn't after, quarter we're that to or quarter be but something next sort necessarily

the And gosh, that If December, is business, activity acquisition especially we've over in the their the years that have XQ you they falling biggest. you are they when cutoff at nice recall, a the in close have M&A activity right so to all end the that always this transaction of year, oftentimes, oftentimes is for reporting like doing tenants transactions, been things. and

be So volume year, that that just going year, AFFO have this capture activity, that's per share next lot not this coming will you're great doesn't it but don't for really days. the but you because much not oftentimes, a in in, many That to kind it very of of revenue mean year. not

guidance -- of there out -- COVID, back to some in quite for we So in because there's it activity. but to just of the assumes little the you're acquisition back-end of conservatism a bit the rearview not the some hoped there's weighting have in And mirror.

appropriate. So conservative, just I think, being is

reasons on have distribution read COVID-impacted for to the the higher, like more presentation. capturing it's customer revenue And into quarter. then Great. last the modestly a other this? million chart $XXX It like to you anything just your Is versus Okay. in or or with quarters? question financials, mainly looks customers Any lower due this

Good Craig. is question. This

It's You're XX-month we of, a exactly function updated within there's quarters financials COVID-impacted those statements. right. as that received just

lot tenants this So these see rebounded again, in any of QX of a issues we and beginning don't actually And QX have there. year.

really pleased performance we're the how So portfolio. of with the

Linda from will Please go The ahead. with next Jefferies. question Tsai come

billion, $XX.X On $XX.X versus how down the that LOI you to in break of under do contract? terms increasing from pipeline under billion

is all Mary. here. the way we we internally So, Linda, through break all externally. the credit, new way But don't goes it this the down have actually closing. -- opportunities, it pipeline We in from

you're new recapitalizing So when most they that are have an estate at. of have or or event, need time These to they our right -- you an they're do sheet. looking make trying at sale-leaseback acquisition planning a to they they and have when they're their the opportunities balance perform cultivating tenants,

tenants that's the we're constant matters. time, contact So why with our in all timing

closing. approval with goes it and into start we signed then credit so LOI And new an that a opportunity into goes then really LOI an send into and

color pipeline. helpful. So on will provide overall, there's be the can a hopefully, that many little pipeline, stages in Tyler that But and

Sure.

example, is yes, same. ups few urgent as There's down went really time mostly up, X% an of industries the So the But versus was health. remained so this downs. all, and Pipeline a first is really one, But care composition of last up dynamic. like so pipeline specialty is the generally, it up behavioral here. quarter, of largely one medical kind

was is customers, on relationships just team like warm our always acquisitions keeping mentioning. calling Mary Our

and for plan can to that. you be never exactly when So there an it opportunity, when -- -- happens happen

-- want our just are and we our we're that growth To So hold. customers relationships direct so there capital establishing plans origination maintaining out ready. to taking team's when and always provide their going

collections, in XQ? And collections health on what to were And and did clubs then theaters question how like -- for XQ? rent what for it a Cathy movie compare

to regards gym's, in So theaters. movie

of Our today. pandemic the collections about XX% have nearly increased beginning from XX% to since the

half rolled is month see we year, in be in second for as However, of in tailwinds of And product operators. this out. out rolled with consumer the -- second some Product this so. actually out the as success scheduled XX% the they've actually the half the that rolled the confidence that's current last over seen with end the year. early our deferrals to or And vaccine

program Shuttered material. collections due tailwinds on our just our additional sheets our not to The also theaters, in in liquidity. But We Grant are bridged half. to get them rent these to again, operators better of Their balance movie see interest. X.X% the Venue about some exposure shape. annual the theater It's is has second

So collections. we in our see some tailwinds definitely theater movie

And health then clubs?

first counts are In clubs, half there. deferrals improving are membership July. it's experiencing with tenant mid-XX% of with of again as regard group the to tailwinds around they ending in the and Again, as XXXX health as there right

with Truist. The Kim go Ki question will Bin ahead. Please next come from

back questions thought guys just opening in So to you're origination non on channels. I a have you well would pretty remarks regarding looking prior nontraditional what some at putdown the to some -- process go you that your today. seeking imagine I to want out laid

into process venues, broad like say because can includes or definition. done concerts a you traditionally things service, a you it other pretty just center clubs. if curious go bit is I real if you're wondering golf was looking when Just haven't capital deeper estate, that, little at you entertainment that that

thinking see that that. in Just how trying to wide about you're

Mary. it's Bin, Ki

XX come obviously, we've So XXX today, is it a industries. into mean, wide years, over range. I

is lot attached the really though, asset. is box, So to it has there's profit have a we us, important a that what's that that -- to single-tenant P&L a center a

a real to -- can so owning larger focus about where look business begin to it's they can portfolios and at if we're their estate, grow. So their their better estate and going within It's even off help acquiring real we we customers. be by we own if that, on customer

we how and the we're to there to middle and -- as on So in to the to focus space that's value customers businesses. market going add in their helping continue world prosper larger out

Golf when talk So -- the properties are venues profit our profit or are courses -- -- centers I golf entertainment clubs mean, you generally. generally. centers

our important, though, things say are we that a going disciplined is -- important when of we lease in range broad and it just at is and our we underwriting What's look that that that us. of these at assets, stay So we we're will it -- to it. in structures that very to look

fit risk-adjusted been a what our has look We'll be take at risk-adjusted So it to delivering that's our -- return lease going underwriting, open. our since again, to structure. we're But we've We're good to fit return that. that going -- inception.

a these come All and things space, will things. it is at But look correct. broad of into those we you're when play

-- any provide you yes. Can color additional

it that good out mean mentioned was the know there's jump The quarter-to-quarter. quarter. modeling if quarter, $X.XXX just was Or you just the second you back big that? $XX the as I just that's a if I and about question, to this posted start pretty a of starting point I revenues first wondering anything the going was prior XXX period up of from is year? we the else rents. rest in embedded million

Yes.

So this Cathy. is

you quarter, $X.XX acquisition $X.XX volume. at just About the jump And AFFO is a So that if from just that $X.XXX of and of is pickup. then on $X.XXX of is the it quarter expense to this of kind about reduction look in last side, there's expenses. revenue

weighted. QX, acquisitions recall, back-end in If a lot of you the were

those the lot see you So QX. acquisitions revenue and in full from a of impact in hit QX didn't

$X.XX is other portfolio reversal so $X.XXX was $X.XXX of And is than well there's right doing little a off the there. less now. really about COVID because just the and So, then falling reserves problems

So out. help? Does those that of are -- it how comes that's kind

does. it Yes,

three Just does sustainable number to $X.XXX Does lower items -- falling mean? just cost reserves? off, Or that XQ. going what question sorry, trying to understand, the here, that I'm is like that to COVID-related mean but

is the Yes, customers $X.XXX onetime, assume $X.XXX was more than Does the less help? is rest and that that just was $X.XXX, of paying sustainable. less we than onetime,

The next from Please will Ladenburg Massocca question Thalmann. with come John ahead. go

Ki on bit question. little a Bin's up following Maybe

that, Just level and some received number? always XQ not abstract something XQ anything like maybe of 'XX there's -- a and XQ of is or coming even in that? of revenue or know know from maybe the you kind certain that loss kind re-leasing kind I is credit assets But there of assuming anything probably are you tenant And possibly downtime where on guidance. rent in some

talked I about. $X.XXX the Other No. than just

was those impact Okay. just mean, there I specifically, from or been in of resolved all them Loves the I kind have XQ? real least boxes, mean, no mean, at I

Yes. Craig Loves. talk to can

Yes.

of long-term all, Loves, or on in And have But XX, have we X. furniture original our above of the historical still there bankruptcy. are on but rent with recoveries leases resolved resolutions So the those are experienced the pending our And are resolutions recovery. operators. in majority

some de XQ Okay. collecting you're from them from it minimis. be But correct? I going then, think in impact versus of what like the XQ fairly and in see XQ to rent Any would XQ,

Yes.

So this is Cathy.

at would same fruition of So come all in year. half the that yes, Not assume there But second several because included in are the to come here. on. time the yes, they'll these all resolutions resolutions all will we

be So upswing there should going forward. in some

Okay. one But a I think was my couple question probably there. in

leave floor. So the I'll

Baird. with Please Golladay Wes from ahead. come will question next go The

include pipeline, potentially I you the talking you as of the $XX.X deals we look about does billion for any one the at just end of that quarter, this have portfolio at doing? that When well. the have you're

mentioned, this take to come advantage things I it but might I -- might some -- poised As in be less, the right that. as now, we're yes, for nothing hopper specific up, and to we of there's be time think

Berenberg. will Please ahead. with Nate go question Crossett next come from The

willing agencies market? could space you funding and they're ultimately, the Maybe having seen peers a the credit the days? give Does Funding unsecured the the you Master adverse effect this these viewing in any are How credit eliminate of source. have rating Cathy. to question the in We've the rating program for get some it on

to if a trying Funding negatives having Master any understand just I'm So program. to there's

Yes.

Okay.

good a So that's question.

is get CMBS lot. felt on in mean historically, think than that of secured it, them in way. put don't it secured debt, we we that that how So it I concerned of fulsome about XX% think of debt the debt. is agencies they are type sort to they difficult take in debt. press -- a lot, flexible lot world scenario, that inflexible, They and a a And always answer rating their of debt when as does does Other traditional having oftentimes is let's about traditional When really it a why. to level it secured longer resolve, a

way in debt CMBS Just conduit. that Funding totally secured program is different is own is in because the of it Master the world our The set up.

a have you had not if portfolio debt. relying we're way So CMBS selling is into the a is on type it conduit. same entirely flexible This own flexible, you unsecured our would that it And conduit.

out then it got than and and got subsidiaries And hard Funding worse the better that helped pandemic turns that actually it has vehicle. Funding Master beneficial came what those X/X that scenario, I a in that the pandemic, the rating the in assets is debt. to what something Company go by happens something happens that you agencies pandemic, understand them of to And baptism company for draconian And the with X/X to if just it's and So the had would take really fits the And of that actually part be only imagine, bill, left fine. through you through what which think fire. think worse of that can portfolio wanted to I think see than portfolio jettison Master to this the the and but I if was them.

it it So I we're space. fact, starting trepidation a that something sense think REIT see in there's transaction. Funding And public outside less Master like makes around to the

seeing we're of it. efficient It's an it's So big and a vehicle. market, more

that think I it. more get comfortable Does with the agencies help? rating So will

a you size portfolio I in lot of know one. average kind and about if I the to what it, been I of just one deals. also, was missed quick Yes. of the deals? just by then give questions don't No, size terms guys what that's quarter? And us portfolio there's as mean you helpful, in deal Can know maybe a range but

is in $XX or Mary. $X This million quarter just size The there. consistent around was average deal million the

consistent. So that's been very

want and portfolio of we industries stay rent again, interest. We the disciplined our like are and granular foundation and transactions, to that terms here, top In approach base built to XX we very diverse. which is our

we granular we do about portfolio talk still acquiring many while So talk portfolio transactions, when these and we transactions. about customers

so to we'll of portfolio and -- within new as those. new our to going we from And new buy guidelines here. tenants, So diverse lot we're how granular and it relates going at think I size of granular when look customers, to then -- be a a that's that, of stick And customers. comprised

This session. to Please remarks. like go I turn Chief Fedewa, over to question-and-answer concludes the back Mary would Executive our Officer, conference ahead. any closing for

you at Thank Please Access you. week the feel REIT of York New and in a Stock Exchange all great call can today if to additional any have free answer your we and upcoming and reach out September. Investor look Thank support for some seeing interest next day. in conferences for time to Day forward participating We questions, at in our and STORE. other you continued

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

disconnect. may You now