Store Capital (STOR) 4 Nov 212021 Q3 Earnings call transcript

Good day, and welcome to the STORE Capital's Third Quarter 2021 Earnings Conference Call and Webcast. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Ms. Megan McGrath, Investor Relations for STORE Capital. ma'am. ahead, go Please

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

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

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

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

Thank results. performance. on you, today. you quarter provide her portfolio call Megan. call I'll of Craig an third Good retiring morning, and management joining we is with for and will this, us an added our quarterly after to activities, update begin Cathy, thank portfolio review will what overview our and quarter XXth our financial the who the third everyone,

call our Following prepared the we open will to questions. remarks,

know, all you and years. worked have many Cathy As together I for closely

to a know strong role assume will who finance with and be she markets, background CFO you at the business at program Sherry the our promoting team. of we in feels also an like building era. department. counsel call I end conference and STORE thank for finance Cathy outstanding all to want behalf a bit excited and contributions a also Cathy an everyone beginning, the at and best for to this especially wise So ending many practices, STORE. ambassadors top X sustainable asset in to capital On career in And to November STORE, Rexroad, new BlackRock. of the And signal retirement. you X. introduce can advancing wish ESG well-deserved very to great am from I of Sherry forward Sherry her we was her her Many BlackRock's in her help will on successful look her and of of

activity. a lease significant of organically growth, very for prospects third had pickup back through as robust and October, opportunities. and press resumed our acquisition execution pipeline very both a volume Business As office new reopened and net demand customized We productive outstanding in quarter. I'm full in team's proud busy in you that and our release, we and saw our strong our resulted growth our of our solutions M&A saw in financing in customers in We is swing.

During the rate our a cap X.XX%, center profit weighted quarter, year-to-date estate bringing at in acquired than average X.X%. million rate of to real $XXX weighted more we average cap

our share AFFO strong growth revenue delivered $X.XX reflecting operations. and also We portfolio healthy of per

strong to our $XX and grew proposition activity, the has of billion quarter. continued of reflection our new customer lease a approach. a unique operating this attract end We relationship The results also is since space market to believe had our participants. healthy pipeline environment, direct prospecting last the net and We of value direct

surprised model interest of to that benefit and having in in cap importantly, compression continue not quarter. So I've operating confidence This many rate me we had to to several cap the decades, the today's been That continue some business operating to gives in lease for we across cycles positions said, are net the rate saw deliver economic returns attractive rates deliver and, business environments. STORE market that our environment. financing above

investment master debt most of healthy For quarter recent average issuance had X.X%, spread funding X%. over example, of a our third a resulting in weighted coupon

which on to headline topic. Now I'd inflation, the touch is like current macroeconomic

a environment. an to few even we is positioned inflationary AFFO in reasons, For believe STORE growth strong key well deliver

STORE as operating not First, REIT, property-related lease does incur triple-net a expenses.

rent built into Second, leases, we of provides nearly have inflation. our which average hedge against X% escalators annual a contractual natural

XXXX. laddered until significant flexible and is we financing fixed our Third, maturities rate have existing no financed options debt well portfolio with and

lease operating opportunities. have Finally, structure flexibility And approach acquisitions, to given a on based the pipeline environment. we new strong our the we have contracts new to of direct current

and and Board earnings turning Now be our mentioned last our our our increase our on I On dividend outlook. recent was would evaluating operational likely that based a to meaningful call, increase. that dividend performance positive strong

approved a with ratio in $X.XX share X.X% conservative the the per per at expected, public which Board to payout and XX% is increase in share, the dividend company. a history increase our September, highest annual quarter. share. quarterly our AFFO This significant brings Even per $X.XXX our of remains a represents dividend dividend of as As dividend increase, increase our for

may positive affirmed stable BBB their seen, you Craig, report over The resilience portfolio during Before rating. S&P our and our of as healthy recently underscored pandemic on from outlook operating to its have I and turn to the the raised especially the STORE financial average tested and This for stores rating the policies. portfolio. prudent global outlook, metrics of performance, a embedded significant that raising high heels factors occupancy, and our other growth. rent validation above their is cited credit S&P including stress also pandemic on call

As and we the have expertise. during our our attribute and of portfolio outstanding vital With operate size in industries the our performance that, portfolio the said I'll before, to of management to call we strength portfolio our diversity over Craig. the turn customers pandemic who

We the minutes customer a quarter new average and at opportunities years. acquisitions XX I'll $XXX About was Mary. to or lease recapitalizations few cover also X/X portfolio third our of of acquisitions volume weighted growth source we relationships originated rate million of average weighted the take is quarter. to repeat X.XX of years. you, a customers, several cap used a represents Thank of activities management for term from for new as future XX% used strong from was for existing for past of Therefore, capital. tailored about M&A has sheet customer and for and engagements. the our selected This been financing our new acquisitions an each the but both pent-up the identify each new over from was elevated in the half new transactions our customers of important solutions to quarter acquisition remainder were address our level collaborate than STORE More growth of who balance either to existing needs. volume their activity the capital team facilitate broader highlighting acquisitions quarter, demand only customers. cultivating economy, our In in together not and

manufacturing. to commitment portfolio, maintaining auto granular quarter food spanning of Our restaurants, industries, a and our childhood transactions education, including diverse wide this range a reflect and early service

sector, with our our broader This the in service quarter, the portfolio. consistent were majority of acquisitions

Now attractive XX% diverse portfolio hallmarks turning one a portfolio of and At deliver our returns quarter risk-adjusted in XX% our economic consistent all cycles. to retail. STORE in our manufacturing model sector, and service of in across portfolio. is end, and mix was service-oriented the overall position to XX% the business Maintaining

More XXX portfolio in base of consists and individually less than portfolio was and properties operating than that of our the interest. of comprised X,XXX XX% represent of across annual Our customers X% businesses XXX regional industries. rent national

for well. interest. our portfolio and financial top XX% Overall, to customers' performance strong, XX Taken account our rent only perform our together, of continued base remains customers

Our fixed last unit charge level slightly higher average coverage quarter. weighted than ratio was X.Xx,

XX.X%. sectors advantage opportunities and high remains at many or their rate focused near-term greater valuation are to in expand are of growing Reflecting confidence integrate. outlook, dislocations seeing of occupancy businesses. their taking on Our their created by are in vertically our customers opportunities They M&A

supply pressures, financial macroeconomic disruptions changes are constant monitor customers with relationships as environment, focused Most and strong review Our the strengthened health. communication we the with inflation. and in their as recently, such our labor customers them on through chain

through are We adapting are changes these telling successfully. are managing us encouraged they that they and

cash to be on our activity. operating important our management Moving to in opportunities, portfolio accretive flow of portfolio that are source can an management deployed they Dispositions play continue and role toward strategy. a

our rate cost over properties sale were opportunistically The over for our the million. to either now achieved activities. During dispositions management This as original to sold X%. property an of about had proceeds I'll original sold property remaining our of results. cost. cap call quarter, financial remaining ongoing of sold Cathy the properties gain one The or gross we we of XX% XX $XXX included equated a XX% strategically that XX discuss cost, of net a part turn to which

quarter, by otherwise for guidance. and Thank our unless financial are results Beginning I'll Then capital discussing review our our our for third year-over-year I'll a sheet. guidance and followed XXXX, balance statement. you, updated the of with provide Craig. our All markets comparisons income I'll begin activity by noted. introduce XXXX

$XXX higher third costs, termination million the increased Property totaled amortization $X.X in collected the estate the $X.X third $XX.X average we related the properties expense for million year to of of noncash from $X.X portfolio. sold. Interest reflecting reflecting million, fees charge ago Revenue in our real as million of quarter accelerated debt connection financing quarter increased the lease debt for deferred and $XXX,XXX by million XX% a ago revenues approximately with for quarter prepayment quarter the quarter, outstanding as Third of year to well July. costs primarily year-to-date. of growth XXXX in from includes

X from our during same the amounts period quarters first Excluding represented by year about portfolio XX basis average of of year tenants, assets the for the XX ago. points our basis a down reimbursed costs points property

that estate rise portfolio investment measure real some in as G&A grows. We our will expect expenses

as scale. decrease time economies expenses and generally a of of will efficiencies G&A the due However, to portfolio percentage somewhat over

stock-based were points. basis relatively last year, a percentage the the and portfolio as noncash average about flat compensation of expenses XX expenses at G&A Excluding severance assets recognized quarter-over-quarter

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

Third per portfolio on quarter share real to increased increase AFFO year AFFO per ago, growth. $X.XX $XXX AFFO a in from estate revenue The from diluted higher a share total $XXX primarily $X.XX million. million increased to XX% reflects basis our and from

sheet We rent capital our that Now were markets deferred the balance relief during turning and to our activity. quarter rent million receivables COVID $X of under the collected program. originally

ATM in $XX by of of the COVID as to our third remaining quarter and As million our collected this acquisitions proceeds to sale the from the September be proceeds expect program. continue of borrowings from and majority on revolving operations, our scheduled. estate just equity receivables, cash facility, of vast we XX, we of had dispositions end XXXX net real funded through from We credit with

quarter, of using this bears from of take debt Master with X.XX%, Funding weighted of X.X%, shares coupon without cost as advantage net a of July, equity debt proceeds an planned, $XX.XX XXX,XXX common we STORE prepayment. stock capital opportunity to issuance of issuance under This that master latest million. issued a so of we prepaid average had master were of June of at penalty share an per our coupon ATM STORE our our $XX In to approximately price of debt. able $XX in funding million program raising we the During proceeds average funding lower

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

us years. funding long-term and prepayment under have master for to available giving program, $X of At With debt X.X%, will XXXX fixed notes opportunity gross Approximately a debt series net X during about on Funding an range our this will another rate portfolio to month. portfolio about basis interest These with weighted operating EBITDA Master we net average of costs. our Another the a is a exceptional flexible the net of notes lower of than prepayment maturity our average X.Xx rate interest XX% to run with on a opportunity a our portfolio times. September and had target on XX% end without Leverage years. basis. rate strong cost our at X% of and estate ratio debt series of outstanding XX, additional the or penalty unencumbered sheet. was quarter be of around at closed the a windows further debt low bear weighted to prepay later interest balance to approximately unencumbered in future billion X rate real we of remains more income expense We at

program approximately of At access $XXX our nearly ample debt capacity available priced variety borrowing quarter growing a have to under and facility. of very we $XX our to our million ATM opportunities and attractive favorably end, had We million finance cash, options million spreads. pipeline of credit under equity revolving available in $XXX acquisition at

guidance. to turning Now

We compression XXXX be rate to $X.XX of share lease per sales net $X.X guidance $X, overall on increase closer XXXX from a of to net maintaining we property of for average AFFO. the acquisition We're billion. date rate to the real annual projected over volume acquisitions to the Based the to range guidance $X.XX at an expect acquisition $X new of on and our our weighted cap raising activity to seeing X.X% XXXX's to the estate XXXX our $X.XX sector, in at range X.X%. a AFFO year are midpoint cap billion we're

for approximately for initial anticipate be share $X.XX our estate of based to years. XXXX, We This a property our to $X.XX. XXXX of to AFFO X.X% projected for real billion plus current projected of currently guidance a results using That sales projections guidance volume, XXXX XXXX. real midpoint range annual turn represents to both per XXXX projected I'll AFFO Finally, over on net the within is $X.X $X.X of net for remainder increase estate the guidance billion. acquisitions

Before minute I've to and investors the past years the to a met since back call went public. many turning I STORE Mary, take want thank to over the X analysts

our Your observations for of to drive gave it value thoughtful me shareholders. perspective takes what and questions important

working STORE you to the build it work these With lead company into of to call will strong turn success. deep leadership While powerhouse experienced passing it's every is talents I Mary. hard talented with STORE that colleague. of that with side-by-side step I'm helping to knowing past baton your Rexroad, the I and an with and results-oriented many and both away leader I'm confident Sherry from retire confidently vision, friend I'll the that, I'm the the combined decades with can and today, want a and to the my colleagues, has right Sherry a of sincere chapter REIT I express force financial great next space. and been outstanding team Capital's It thanks her understanding you to wish to years And to finally, privilege proud to success. our call in Mary. back

Cathy. you, Thank

about in We business. momentum are the our excited

healthy pipeline. are and is growing, customers so our Our and

cap Our unique levels, supported by at our attractive business rates model. remain

allowing Our and are and cost of low excellent spreads AFFO us to returns. growth capital is deliver wide,

So it's a net in to time the lease be great business.

remains coming progress updating X-pronged team on we I our look in growth outlined on Our quarters. last focused quarter, to you the forward the strategy and executing

share underway annual anticipated February. well from conference, in network draw for provides for success are Inside many with customers plans customer event track us and forum the together that our come mention to much inspiration ideas opportunity want I Finally, our to an sixth stories. to This

year, them like one we're ways in event back valued turn thank trust we be are their call for your collaboration. our would excited with to conference and for I the and the over person. Our for that, is of customers And This stakeholders the to questions.

question first with [Operator the Please Instructions] ahead. And from McGrath go Evercore come Sheila will ISI.

Yes, good morning.

on would bit that what acquisition new of it I these of XX funnel mentioned adding more the personnel is tenants You tenants you wondering And result you consider? detail of if a relationships. little us types give widening perhaps customer the or could type are? new of was

I'll one. Yes, this is Tyler. Yes. take that

a education tends medical. early and range QX, food be of in processing So the service, manufacturing. all, typical product carwashes, medical childhood of And volume, was XX% service service, to specialty industries QX first wide manufacturing, products. across auto on like side service it side, specialty restaurants, and manufacturers industries, Manufacturing then and of the but XX% mix in was that about was for our it of about

So that's span the of the it, been year kind the since have prior. beginning we that of relationships cultivating we're continued pipeline and it building and the the result a that in of of is

any in Sheila this add salespeople didn't new quarter. We

Cathy. Okay. to Great. just Cathy question positive. you for And from an agencies a also. But Congratulations, then upgrade rating question, the a and mentioned Sherry

you would If costs? that or would plus, -- get to BBB+ upgraded were to should -- how impact financing

thank of all, first Well, Sheila. you,

So for our you financing grid. on revolver, if there is an pricing costs, investment-grade recall,

as lower the spreads market. a certainly keeps BBB+, our we your So come ABS And of unsecured the the those in are do senior spreads get and the side capital little would pop bit wide. up well both year plus on if that would senior allow pull ratings rate every as to market on down there unsecured cost revolver, you to in issuing the

our all rate been XX to And capital, compression So how years even our this that deck in been this maintains we've quarter about this talks Page though you chart lower may maintain put in over a have in have many able spreads. quarter, able to the the to we on seen cap being cost fact, spreads business.

we kind of think that's it. about So how

you. Thank great. That’s

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

this looking guidance larger future, start in year possibility mentioned congrats, Hi Sherry. acquisition even the but welcome Cathy, acquisition 'XX of volumes the next it and not the meaningfully 'XX at the guide Maybe deals or team year, maybe does the assume with you yes, earlier looks net deceleration. we'll and guidance Mary and higher like a doing

So there's you composition could different discuss just pre-COVID its also whether normal time maybe your versus if pipeline anything about wondering And today? a

Yes.

You Caitlin. bet,

of that and say XXXX last track actually, actually when really achieve that in to guidance included would the I volume this came gave throughout and So year year, for November, sort on we with out we we're XXXX acceleration for that. guidance

talking probably you're We have X-pronged -- the approach, talked a portfolios. about I lot specifically the about and

evaluating in really active been going continue we've any look hurry. be We're going there's XXXX Although you're couple now. portfolio to in and acquisitions. to any We're not to report correct, nothing right guidance portfolios, to a But of at selective, specifically the does include not things. we're

then, you funding you Got And master mentioned XQ. available prepay Cathy, in Okay. it. have that to

of So I it you and/or move could in do with if be debt replaced both? 'XX, what were to Would be master new unsecured, forward was some you other wondering funding just think prepaying that with? that

It could both. be

We to are committed both markets.

master And to issue XXX If the funding pricing talking we XX points that senior we on rates. in issue then over still there can on debt the be tight. AAA side. recall, years. So basis, attractive on the if we XX-year debt seeing could usually the were is unsecured quite a side, are you you market, And today, basis

sub-X still rates. So

it. Got you. Thank

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

Cathy, luck in morning. best good of congratulation, retirement and Sherry. thanks, Hi,

in came of right? 'XX? we fourth is to quarter a in the based compress quarter First then It terms in discussed sounds at in can a about what yield that what's further year cap like that bit question, moving little guidance? embedded yields the expect to you bit the in the speak you cap X.X%. the that you're investment little rate And forward on that the should investment rates yields full anticipating and just in expectation, And

start, this Mary. So I'll is Todd.

hard actually all, -- just weighted cap rates. our spreads seen pressure yes, mentioned widened. -- mentioned, our have First you're some to capital worked and of average correct. on really Cathy as some Cathy cost initial reduce pressure We've But of initial our we

you look would to we presentation. and would -- corporate Page the I you So encourage in XX to also at you, encourage

into more in XXXX. compress We may quarter maybe little cap the are expecting and a that bit fourth even rates early

Although The in lines we the what the are telling is low the be go interest all-time front -- I our this of out line bottom of rate right the the seeing that marketplace say is is sense would -- and cost a now. that general make us consensus -- our that perspective that cap or the to an and probably buyers. capital rates is front would we're telling from at lowest compression us for could more most less

we we'll see little bit think a So more. that

We could the guidance as to we'll getting Cathy the for XXX probably bottom You're that XXXX towards correct. range we that as But well. guided XXXX, guided. be -- as 'XX and be in

thinking in 'XX. was Great. then higher the -- the And Okay. which for about terms guidance, of 'XX, and revised

$X.XX term So about provide you're in at per at lease some the realized But you was there quarter before realized drivers a I decrease $X.XX reramping so that of third $X.XX the decrease to, guess, year-to-date AFFO, $X.XX, the the around from quarter. quarter can $X.XX detail midpoint, the just 'XX? in the fourth income implies I or fee in sequential quarter. so

Cathy. It's

quarter, sometimes fourth in seasonality you have expenses. So some

quarter. that bit up a So tick fourth in could little

in everybody year-end. So the that fourth as of to at volume, deals last at you year-end, be gosh, would close minute it. quarter wants remember, Also, part

revenue just fourth It in acquisition in people provide quarter will lot because generally XXXX, acquisitions, look real from a is at the is a whether of year-end motivated. that the tax revenue generally or M&A won't you of fourth transactions, so And boost motivated impact quarter very of of fourth lot we but estate quarter have into reap quarter. doing sort they're fourth when small

that having lift big what that's think see timing-wise. going I revenue to not of so And necessarily part you're is

Thank helpful. you. that’s Okay,

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

congratulations, Thank Cathy. you and

Just a quick question.

driving differences? Can ratio. ratio, the noticed you your question So an me fixed charge improvement understand just those that a help got on charge coverage coverage you fixed I two on the the stays same. what's average but quick median

the average in weighted the of speaking median? you Are

that's flat but right. quarter-over-quarter, coverage was median -- The your increased. to average fixed ratio you're Yes,

there? to happening trying understand Just what's

Yes.

media on calculation the So it's a median. the --

think The weighted is coverages the So that that function up. pretty quarter-to-quarter. you some pulling average of larger with much just when stayed our a same about investments just

So weighted average. it's a

But a of doing but higher, there Right. to getting the better I'm driving tenants median certain the I what was flat? is average being that's guess group that's that weighted

Right.

Okay.

or to really operations. regards up, the just in pulling tenants sheets. strong financial composition They the that their have good I be -- industries So might that it's They've in very are adjusted our health. mean, balance

and So they're introducing reducing expenses, automation. technology

overall, coverages So are improving across the board.

So we continuing there's industries, theaters medical restaurants. like lot specialty always a industries But across wide seeing a are dispersion improvement movie pet are of to in lag. care,

So those are of pulling dragging kind or coverages up. the

And guidance. just on Okay. question a

to whether above what guidance pretend XXXX your Your know commentary be cap has there pretty everyone -- -- fairly just just compression. don't on? similar And going XXXX you're volume items in is to acquisition I'm are rate Or and their the but being to numbers. line given consensus should curious net what other expense that some like models, about was are it save aware any that assuming interest money of? we that I you're

is that Yes, true. Sure.

benefits going starting midyear are of to were because do the year. of to cost this We capital that lowering reap able our we

and we've replaced funding didn't because sub-X%. interest lower, interest a done quite the And get that worth that right, interest many with are rates, bit at that than full X% master of the ago were rates. we rates And were we're years year's really so talking lower transactions greater a

then lift than half the their we of is just to. year. example, impact quite the half this well expected we're year, have the who And a year you'll and would about earlier the out bit. impact lift of have we Well, still full thought that quarter, from next get the their had we in year second as quite percentage pandemic lift coming seeing paying sales. sales had in a last of second But of we year were large, for increased getting that that So people, as faster the little a talked a of

you're able so more higher were We basis getting people cash And move off rents. to of accounting.

annualized about X% under base last whereas cash So the it now group. basis quarter, X.X% interest, and it's our are was that of rent

expecting trend cash to that's we So you're payout a new lifts that seeing of happening, and you with flow excess internal free to now growth. gives were that as a all able but as push as after for into ratio XXXX be all at those dividends. well flow go And that growing will is and all right reinvested being in cash properties we lower XX%, remember, that going along,

And by flows. as so you're not having much to cash stronger free equity having raise

So to that boost help? AFFO. Does that provides additional

you quick just helpful. in a And much one you how that's are Yes, Are guidance? here. -- XXXX equity assuming your

keeping target. same We're the leverage

you're cash reminder, Xx which continue reducing need. funded do is and much debt-to-EBITDA to as a financing that how you flow, you using that So that. And we equity going range. X.Xx to But to do, we're big do free debt at in remember, a part of what

Okay, thank you.

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

great Thanks and is which transparency. and providing Cathy, Sherry. guidance, just congrats, the Appreciate

us, Thanks. 'XX relative line to debt, that of does relative what and -- maybe on for sticking for maybe also to pre-COVID? you remind Just what you questioning. assuming assume bad Can XXXX are

We at pretty much are now. pre-COVID levels

cash and things you collections if we're levels. look pre-COVID would like So that, back at to

we're So of that at And being in probably that will looking some. like today revenue reporting that. who things or are we're maybe come probably re-let X.X% people down on not process

you that -- about it think could that so way. So

it. Got

X.X% sort of right So is ballpark?

yes. less, Or

bit, the pipeline grew. a Got then gears Or obviously switching little just And less. it. just

any there billion pipeline of that. out? call this more sectors? relationships quarter? there? color and that Is Thanks. Just for new because opportunities $XX color the hit can specific Or some any strictly that adding industry of tenant Just looking that on the of Is their, on we the some

Yes, this is Tyler.

business the kind an composition where returning the generally, there family it's due a entertainment we consistent result with all in been so There reopenings But pipeline the cultivating our and industry say team uptick in industries was industry thing. I'd to that yes, It's overall, Generally, terms particular. the in of M&A an out composition. of to So businesses, that's in consistent evolving acquisitions address. with opportunities. is pursuing relationships of an the is growth

just always continued there of mentioned, is out team but there it's timing, really necessarily anything really trying that, be by it's Mary is acquisition out for dynamic opportunities So and the not us our pursue. cultivating like back, to driven to and as relationships businesses our indicative beyond and teams pipeline just find fluctuations can those

me, it's a then may, And for if one. one Great. last I small and

in the Just the through quarter. equity came and income that

equity in that think of guys that a came should and the about quarter Maybe is, remind I us taken have you how in tenant. what that? just we through you think can

valued the an like believe we and reporting million is theirs, we the value I just of an It on $X.X We or accounting. have discounted So the that get didn't that things We're collateral equity It outstanding are like got. asset. distribution that that basically of losses. a affiliate small our parks it our from water and up books about that but industry mortgage. mortgage But amusement At now of ahead doing that about on to We hundred by income. thousand, Sure. last an our losses, amount was equity appears flows We we We be they really during as wasn't the that, to maintaining those year a was tenant is, was share of and what our it was and had put share mention way, that. that. in picked include couple year, it? we AFFO that's the we're able quarter, things additional only that we able were interest based cash of that equity actually some and they see cash for year, last do to But and the of income, end with talking investment add year, in you're small AFFO. it. last up subtract method did not well. picking on this in really budget so we of a of

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

morning. Good

going is assume sorry, it guidance. look the we run that of to volume It First from there congratulations, we my XXXX? activity kind investment could volume as passed congratulations, off, be at variation of to And of out that that Cathy. acquisition Or kind about XX% question Sherry. or first is Should historically? some on disposition

It's Cathy.

at would So baked anywhere year. portfolio looking beginning we balance X% X% of think any how the it then to is about of amount that assuming of guidance, in dispose we into from would and the the be

so really But or just going volume related not deal actual it's the inflation? to the to be Okay.

correct. correct. That's That's

release to us up pipeline, every Obviously, that as in a of then was you there's And maybe Can but up? the assets pipeline more it are that in movement activity of just just in bucket? any within timing what of just of any pipeline. there terms of to jump also, entertainment it color moved then kind remind the percentage helpful. the there quarter, why notable. Is type tenant be Just hitting? it's industry? as would And deal Is color

just it's on John, I'll that Mary. briefly. touch

and class particular And COVID of of that other result prices now the or really it's things is laser the asset activity. or really looking of out mentioned, have Tyler go type tag and coming this M&A park adventure Whirlyball along in grow as that line, of families one particular. in do can things be That's lot it or industries, some activities. to where it and these is like So a

some to right particular tenant potential cap competitive a sorry, but tack Or now? environment that one, is quick One yield that rate on, outside a to maybe there is in industry? Okay. get

today. cap happening what's with line with It's in rates

it's So we're anything that not say seeing. I would normal range of the outside

That’s Thank you it much. very me. for

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

Cathy Hi. also you, and Congratulations to Sherry. you, to then

by of the remaining mentioned $XX end coming as you How pretty majority have vast evenly terms of until and XX, end Is think we remaining receivables you be will XXXX. collected million rent In next the September of year? amount million collected the the it should about $X the online? of

they Yes, that I tenants we a time think owe so the because amount spread fairly that try on evenly most over period. the are of payment a to schedule

I fair. of in, you think kind yes, bake So probably that's if that

had last and they're quarter, environment X.X% quarter. it your when tenants you've from increases? in rent success an difficult escalators, also right inflationary Okay. or this to experiencing get now wage in And How then writing this is X.X% easy

Mary. is increases. actually get This been able the rent We've to

any or any difference in seen We change haven't that.

continue our our on to have think to direct and -- prices, And escalations So as and I could bit we'll and tenants. might rent approach escalations. for the to I relates get inflationary it will interesting on talk find which we with rent bear asking market as a you those what comment labor Craig for that you,

Sure. Yes.

with driving our and pick Automation and adapting reduced there's very From is for with I'm is more conversations to a actually investment perspective, I and demand key overwhelming our In strong, you're to is all think labor a based doing our tenants managing profitable on do menu space, restaurants, a remains less our they're across for businesses or restaurant that's sizes. obviously, and ordering industries. capital up So everyone and sentiment pressure less. it's the there, of able movement, sure go online the with very today. more

specialized labor managing from So adapting they're from labor. a and perspective,

their they're early. example, taking hearing for -- establishing to like tapping adapting or practices available special programs furniture or sources, retain current customers immediately to their looking for labor. secondary -- incentive everyone's a on us possible, alternate with our capacity. processes orders. manufacturing telling is trade from employment practices of Our efficient to they're are we're And perspective, chain we're if to the showroom switching schools. instead pipelines They're that supply more obviously shown creating retailers, is to procuring procurement procurement they're From relationships what And

customers. they are some inflationary that to pricing realizing up their inflationary question, our actually then customers they're your winning power the just to lead these more lot having a pass on more than profitable increases from time. they and case. actually of are So in them And of ending have to by able much And are less very businesses realized

that some hopefully, you on kind of thought that. So gives

from come will Hendi St. question next The

Mizuho. Please Juste go with ahead.

in Good next Sherry, Best you and of welcome. been luck adventures a morning. the to pleasure. it's Cathy,

is, I quarter they question dispositions. my you So guess, on and talk were compare about recovery rates how fourth historically? the they what on Can

Yes.

most, strategic some almost vacant. for perspective, includes cost, property we broke at from So that management and actually and the even

our reinvest X well And go can So XX% then above funds made opportunistic sale. we cost historical our now we recovery. those as you is actually that and on saw, and over

Got it.

that. Okay, for thank you

in or lots to? which the Thanks. about tied quarter, I I'm On of compression. the guess cap tenants now impairments types and property rate talk curious maybe why impairments they're

It's Cathy.

we're the to So those sell. properties the are were and impairments generally restaurant in sector, likely

properties, property they're relet time but to revenue property bearing property analysis have to say, the some to normally, we on taxes better spend the it property to in better not impaired you on slight then reinvest Or and do costs sell get away. and and want to like new loss you we at So are holding the the the if a off that? and are to things right a

so there just on And you some want when make restaurant analysis properties occasion, that you to sell. are

we took help? the Does so And those. that on impairment

I that more peers. on guess Appreciate for the larger you I and your the guess. comments it was the us cap all quarter QX your better credit, in around heard -- a there. compression Last one bit I story from the and is rate deals we've here was impression on

seeing sandbox? bit I'm versus are So curious, insulation there from competition enter peers. a some given I thought an guys your anyone of was I you your of doing more what are you guess

Mary. this is Yes,

You're correct.

compression little we're a and the bit seeing I in quite compression, larger we're think more bit deals, on probably manufacturing of space. seeing a

able still X.X%, and we're that. with we're near originate to pleased So

but both And side, you've on and side the on how normally your bread new tenant? about that's direct competition, the guess, butter to the direct margin where going also I

the it's obviously, driven been good we the new place a niche. entrants have there's find a do to interest Haendel, would a across lot low and space. by But I just say, have There's and of to yield. been into space. that it's rate environment,

have average continue That's and we much ourselves find $X of We deal and to there. there nice $XX in the place competition fully, million, as a grow we size to million don't correct. to see

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

for think Hey, Maybe that ever might good priced what first on unsecured? just then equity was this that I And funding us your the for master and that look target preferred offering remind 'XX. if like? morning. you've something you one just was just I versus you can you've ever did quarter. preferred sources out considered? Question peers mix if of was I funding wondering their curious And

it's Yes, Cathy.

and we date. do stack So that get to and evaluate capital we strive haven't we done flexible any any always preferred most efficient to But equity opportunity the can.

to we're that master When doing both not at that rule unsecured it's versus deal, a committed out. So we're senior looking markets. we would funding

unsecured stack that advantage the the a of do penalty tranches have with without year, in are we have interest during we chances ability are that has more master If coming would robust a to that because some senior price. very in funding been helps. with fill rates, the master market and at refinance you will funding So which each debt rates. likely market, that lower the of higher prepayments particular, has debt going at new to attractive rest X with of just And then up the take be when

you. of I concentrations. on, us can And remind you maybe just X Yes. just tenant tolerance Thank on That's then helpful. had your

balance new those versus just concentrations this you I Maybe tenant with how Spring LVM like or those think quarter. tenants top you or Cadence? have do a opportunities

Nate, Yes. it's Mary.

at you're top already LVMH we acquired we So they of our had right, X US popped up and a store, customers have actually at tenant there. which new here the top that to them

it So maybe they'll to by on. we grow portfolio, manage some so -- that -- by and as disciplined X% the stuff battle selling bit we're or going or we'll but can -- we -- might at we'll little -- grow stay of end a into And maybe around ABR. we

So itself out work it to right around tends X%.

The ahead. next question Evercore Please McGrath come go with will ISI. from Sheila

this, Cathy, through for COVID deferred on me. last how us year? remind one million, can already I of but said paybacks one you or guess apologize if FFO the flow will AFFO I like that next you $XX

AFFO. through It does Yes. flow not

all. didn't revenue. at didn't we So were what it collectible, revenue report we cash, or revenue was it were we did a we we and reporting If was in the reporting whether think was receivable a

the it reporting was were AFFO. revenue, we if in So

to not So AFFO. a that is boost

you. Thank Okay.

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

and and We in to all week. any interest great thank in you, Please you look have STORE. free reach today have and and you you support continued feel to to day. call Thank NAREIT forward us participating your questions, of at next if for a some out our for seeing additional

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

disconnect. now may You