Realty Income (O) 5 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to the Realty Income Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Kelsy Muller, Vice President, Investor Relations. Please go ahead.

Thank you all for joining us today for Realty Income's Third Quarter Operating Results Conference Call. be Pong, President Treasurer. Chief will Officer; Chief results Jonathan and Financial our Sumit and Roy, Executive Discussing Officer and

this any federal will considered we differ significantly actual conference that matters may During be discussed the may in future make results forward-looking statements. laws. securities statements under from The forward-looking company's statements call,

will in the differences disclose cause may such in We Form greater XX-Q. that detail the factors company's

to the give X-question a limit the call observing participate. in of order the be will We everyone Q&A during to opportunity portion

If reenter you like you would to ask the questions, additional may queue.

over I our will now turn the Sumit call to Roy. CEO,

Thank continued Realty momentum, everyone. of Income's our and execution results the benefits highlight and you, Kelsy. disciplined investment our third Welcome, global quarter platform. operating

investors the simple, partner predictable stable a is estate cash consisting estate created We've drive to world's companies. and top-tier real to diversified defensive real and flow. of portfolio a value Our to leading clients proposition

we've positive of year a economic As variety returns XX a environments. a public each becoming since delivered ago, navigating company result, years successfully total operational

a move more Importantly, by backdrop attractive helped see the rate landscape. started cut improving in transaction external we through U.S., a an we've as recent to

pleased approximately Given as strong to XXXX we guidance pipeline our for to robust a are this, activity year-to-date volume quarter. $X.X investment by underpinned well billion, increase investment as the fourth

Despite $X.XX we strategic $X.XX. ahead. AFFO guidance factors, for share in to our of recent the by per Concurrently, a the are vision our low to range the opportunity confident we of end raising volatility remain year and exogenous some driven

which and and we the touch At making on core in including call. growth for as the same fund, a data Our later towards I'll of centers significant across gaming. investment opportunities such offers retail progress of capital industrial and verticals verticals, private this our newer establishment are time, multiple strategy

Of X.X% $XXX We of compared at third million details last year. the invested both to the X.X% balance yield. We've cash invested growth share We this, initial was of CPI opportunities blended X.X% cash volume yield at to million representing in a $X.XX, improvements seen per Europe yield initial Europe. or the X%. a assuming delivered X.X% at of quarter. straight-line X.X% into meaningful growth a cash the AFFO U.S. high-quality Turning of U.S. $XXX initial with invested a a of a million $XXX in and in yield

years for we Our X activity markets prior we contribute a our represented share completed XX% relative total, international breadth of $XX year-to-date, the greater the achieved million, our highlighting platform. to investment volume, growth. discrete with In of XX of transactions, investment nearly avenues which multiple continue cultivating volume exemplifying over benefits including healthy to by transactions

momentum investment to the increase billion. transaction guidance we seeing market are this volume noted, I supports in As year's to the $X.X

activity, organic quarter's the prior In in million credit excludes negotiated second which largely as the investments or quarter, our quarters $XXX than third double as spending more well acquisition volume. development totaled

fully funded year, momentum quarter is of approximately $X.X return deploying risk-adjusted as expect investments, in we capital vigilantly fourth requirements. into We billion are with that of on outlook high-quality meet the an the focused further through opportunities balance our which implied

flow of million on cash on of of that quarter to payments These the cost year are $XXX points, free by available points. nominal spreads and excess fund of our a utilizing spread volume. measures based our in third dividend free supported dilution short-term flow from investments. our investment an basis XXX leverage-neutral external capital was the fund XXX average X to historical investment after spread basis deployed above Capital This spread adjusted yielded cash basis capital

same on decisions of dollar capital, equity cost which burdens with investment ultimate our the our reminder, of long-term every of average a are As based weighted equity. cost

capital XX external our by points of of quarter. approximately increased points improved average yield during decline This weighted the XX our in cash the investment basis basis compares initial approximately activity third the to in Underpinning quarter.

with Turning through to portfolio cycles high-quality continue that various portfolio clients operations. than properties of returns. to economic XX,XXX resilient have created a proven We've and diversified deliver more stable

In addition, insights XX point tools enhance and prior finished with quarter. occupancy, availability, management proprietary future ability research our of our asset data analytic the teams quarter the vast from decrease XX.X% predictive basis anticipate We our to and a trends.

approximately totaling new the diligent rate cash in Our rent, annualized leases thanks of rent was XXX% we on efforts our recapture renewed the $XX XXX and to million team.

the XX This Separately, brings an $XXX In $XX additional of for to we of to our sold third million. lean million, net source capital. continuing total properties. related we which total of year-to-date million dispositions properties $XXX as are vacant quarter, was into to proceeds

For proceeds the asset of $XXX to in million year, million now $XXX expect sales. we

third With our discuss turn that, I'd over to more financial like detail. Jonathan it quarter to in to results

Thank you, Sumit.

increasing pleased over AFFO another reflecting Consistent the disciplined continued year, our our are our investment [ management. ] guidance we in sheet with investment while balance strategy, We to for strong quarter momentum. remain level in

AX to advantages, sheet the opportunity to fueling balance significant access ratings to earnings grow represent underscored by and multiple capital competitive A- deep strong through credit Our globally channels. continue

of was of a as Our well including X.Xx outstanding our unsettled or X.Xx, pro million forward target $XXX net as leverage, equity adjusted debt by today. healthy to measured ratio forma annualized within EBITDA

line charge coverage fixed the in of X.Xx X.Xx ratio remains to with X.X range. Our

GBP offerings dual available and yield the XX.X and consistently of our of our annual capital catalyst average bond third bond the philosophy. and to quarter, weighted needs on million million effective a behind delivered to X.XX% derisking bond last quarters. consisted semiannual These during the future which offerings products maturity focus was U.S. of raised intentionality of and average $XXX the have X diversification A tranche dollar at tenor a years XXX of of us funding offering over offering an that yield X a a maturity X.X%. sterling diversity our a XX-year debt weighted illustrate We

and our to offering since billion. outstanding was offering bond our fifth XX-year Our sterling was offering denominated public $X XX-year our bringing years, approximately non-U.S. over X our public first in unsecured issuance XXXX, foreign debt

grateful have are loyal community received continue credit the to we we expand for the fixed our as support income presence globally. from We

we At quarter only liquidity, portfolio net end public well almost full unsettled rate cash our in on year. financing of have all forward paramount our in priced retaining $X.X trading debt X.X% revolving illustrating us liquidity we the afforded opportunities. diversification scale, billion the to to into capital of capacity our high-quality was held have our equity, of to of the nature, flexibility consistently facility, with quarter available success capital the including addition large-scale, of at Access to the end, and billion credit heading variable our outstanding end of size, and company the markets, grow in investment is $X.XX the

that position With plan, and growth. we future as for said, strive our we demonstrate financing strategy to proactive forward-looking evolve a mindset

Over opportunities sources and recently have capital evaluated capital earnest begun few believe, the markets in our of beyond infrastructure and expand a last that years, leverage to capital allocation of we private have globally. the we equity build over additional our strengths breadth will the public time,

provide to like Sumit? I to color. to Sumit additional hand would back it

Thank you, Jonathan.

access equity private capital step entering natural in our We last our multiple private markets. enlarge strategic benefits through evolution business. diversify capital the we mentioned year, see As to is and to a of

real public far we by the available based $X.X the estate exceeds that, more a Estate equity investment the is amount of deep from access markets assets from who National of REITs. capital to public investors provide otherwise available approximately from private capital pool real traditionally Investment securities. estate size of real invest commercial of accessed. trillion Association of sources us the which private the platform First, the on owned of a institutional U.S. to larger is U.S. ability or estate lack may through market $XX.X the to XX% research trillion, have private mandate controls expected Trusts. Creation private XXx market of The than with is than Thus, capital Real in

alternative the access proven value opportunity we operating to scalable equity source the in the of in and will accelerate the investment less to volatility have shareholders. monetization with ability Second, our supporting generally to continue of give us turn, to built, pricing platform delivering

transaction-oriented fee a management powerful management receiving as recurring fees. a a earned in it's third-party fund rather by the high-growth capital performance-based observed investment is funds community. managing incremental majority of of anticipated through revenue, Base multiple than income we from represents life earnings vast offer. The or would earned the premium generated potentially open-end to capital-light Third, element perpetual and which source the strategy nature recurring be fees of and

platform. collective of advance talent Fourth, us differentiated this model our the business of capability leveraging investment initiative allow while will experience and the team to top-tier with and limited incremental our

founding impressive operating we decision-making. estate underwriting, of dating our model history level that XXXX. in holdings, value history, our Leveraging property quantum to of long back develop maximizing a have to an harnessed of support analytics We proprietary to predictive our data and real the have

and of co-investing we compelling With expertise our provide platform with scale, we team, become size increasingly investors. accurate. these insights Together the robust data-driven and additional a will believe for

as behalf endowments, investors, available capital and that evergreen acquire and believe we percentage to private fund and intent pension our us market an private open-end Finally, for sovereign of public funds, will funds, currently will foundations companies. acquire we opportunities that is on the wealth large manage Overall, enable vehicle. create manage insurance a large capital source, institutional such of operate to

fund duration clear, narrower have equity be from closed-end will a opportunity a distinct typical this that or To a private may style structure fixed set. be

as REIT, high and or target will retail structured not fund worth designated institutional market not will this to to non-traded be investors. we a net investors. Importantly, be do It to intend

describes expected that same today. and is to the Realty Income sheet prudent leverage business fund balance philosophy follow Our

a Realty operation approach aligned. in We or Rather, do transparency reinforces by return credit incentives to fund Income's These Income fund. between bolster are intends financial investment co-investor sheet ratings of investors balance private strength would additional will incentive our an impact and ensuring on while flexibility. generated objectives. adverse management shared the to our commitment receiving This anticipate and meaningful public also enhance potentially on be and it not fees earnings while Realty the our

for In will our private existing investors. the fund benefiting to our take capital allocating opportunities returns to We realty be the a income believe summary, our both approach maximize thoughtful additive platform private to shareholders and and shareholders, this public intend business. we complementary between and investment to

and sharing initiative addressable market this our market reduce on cycles to grow information our more as We enhance forward expect public look across equity to on expand to fund. and reliance advantageous. investments ability our progress the our launching We we earnings strategically for dividend, when

expectations, performance portfolio, stability across the leading In by has our globe. supported and front momentum propelled year-to-date clients of investment exceeded our of the by closing, our on consisting the

we growth cultivated for forward, verticals for capital have deployment. Looking about optimistic I'm the multiple

growth these pairing of our alternative Importantly, sources accelerate will the further of maturation platform. capital verticals with

would I questions. up now like open Operator? it for to

Fargo. Kielczewski [Operator first from [ Wells Instructions]. Today's John ] question comes with

-- Maybe excuse good a acquisition bit and could cap XQ to or then just the the guide There up for if jump you acquisition XQ. put we acquisition compression. was guide about the of rate numbers talk me,

that cap potential capital? your going the of large if deal, average then acquisition volumes. then Just you part talked on of weighted of curious long-term given deal. to is that be about acquisition in speak step-up have market. a I'm to would curious maybe for can being maybe And where And terms for rates transaction the on a if that you X-Eleven cost big the what's X we've so, in accretive

There's a John. you've lot of questions asked,

what me the did rate, basis a is at It ] quarter one in of is in So function capital. the at XX cost million a points the cap, did a The it let but [ we absolutely second also $XXX that we take cap third time. of you're quarter, was of which right. a X% inside just it X.X%

the cost what our notice, quarter points. where during the vis-a-vis And you improved about was that improvement -- at we If we third the of were year. beginning of basis capital XX

do to cost we of lower done XX compression, the our of able we of it quarter has transactions fact more did points, capital cash to despite yield the had XX the So improved that were with basis the first in half. by the was capital third that in that experience versus the we cost basis accretive points what

rate cost capital, you look based the in to on just think So lead I cap to based conclusion. isolation, at wrong on anything of may just or

what out So spread that X request would you is figure to in being those are take cultivate these pieces I through able to investments. that true the conjunction we

happened a side, quarter. volatility where that us all the what's you It The we the weeks it very second forward closing has cost quarter, funded $X.X basically more over for the of the X.X but investing we of planning healthy approximately essentially lot quarter. is third were we week, for was of question the on most that all billion and a that allowed is fourth experiencing that pipeline had the are pipeline been in build -- the say largely have of our true there's anticipating that fourth billion last around what a function are to on we we of capital in the $X.X have and

we have at we numbers. with markets are public achieving So on regards in this what our to zero point fourth help reliance the planning finance to quarter

approximate cost transaction enough have of particular of And long sure they are market. just that et how we with find investments. in deals are one-off the when are lease X-Eleven, you potential that taken we to looking versus I volatility at sure is The is opportunities capital think to were in to are day. discount be accomplish and our would always one-off if a able something about that specifics we safety quarter. on portfolio term, But cost the transactions third what important hurdle you sure portfolio make by, at we making and Anytime we the rate. is it that any XX at what in margin critical we term, every one-off we difference the portfolio a that the heard account look able making place and we in when quarter, market. pursue into transactions market there you're mentioned margin to traded, X traded to they that making that take same inherently large you where around up to a large deal is in year-to-date were of cap assure the we cetera, have I'm can comments being buying there that in XXXX long-term the we've a make because going is rates again, healthy X we go in certain pursuing not to we a what X the into around a there fourth And superseded capital -- at do. large

And played that has out.

$XXX of rent replacement in that at are That risk-adjusted you the what we rent bought, look our very million. are is If the costs. below compared why is The market feel our and below that value actual that long-term X% confident create that investors. market is is XX% pursuing rent that inherent the million investments we to on basis, a transactions for we will that $XXX ones

Greg today question of next comes Scotiabank. Our from McGinniss

in going the to be not lack equity of expect raising, raising you environment this an kind on improving cost capital investments volume spreads. business on factor sourcing based this has although mentioned fund Sumit, been acquisition you limiting into at equity lower? like saying market full and capital of benefiting private foray of Do seems investments the up the inherently it widened year acquisition year is

how fund investment where differ potential to And the avoid and should investment placed? when conflicts any philosophies of between core business determining be interest an well

first XXX in a line at hesitate our are Greg. what points, That's looking is pursue first versus inside biggest can to IRR. this the transaction generate on particular markets very long-term good is markets year. we to a a the focus in When has transaction difference and we is the not private spread because historical we with basis on that which question, of The been focus spreads, I between year public point that can it that

long-term return private but to focus, with the higher rate. -- business, where of AFFO spread higher that public transactions that translates acutely the expectations the have similar even are despite might that we us cash that et investments allow short-term inherent and this yield. that profile we even standalone that you we capital initial capital as much initial most, a allow know, being That a not as horizon sandbox then at entity, the growth. like we similar, much a our cap as able does, But they on cetera, focus capture, given public advantage but growth expand which make on better rate alongside entity as does a horizon, has share is access to have lower initial potentially to are to pursue return will feel private of lower potentially have to having into that per us that able valued we take total opportunities, off growth, And than a that not

complementary So Were truly you we to Go to as going think ahead. ask else? of something our business. this

was examples equity you or guys this just structure have us give to you as tenants to some pass allow might because will of to hoping this had up capital current I to Yes. investments you maybe able on pursue? what of type new that types be of versus

ZIP a as Industrial the with leases. growth, go cost -- We've is, XX-year our capital code. We Sure. of today. where example. opportunities perfect looked X.X on at X% cannot is there in based

You asset you're we're term, line profile, but do non-spread the have -- perfect of There what transaction we that's for are because the return math other day much X, but the is and in that can't what a very the a long particular with types. maybe that pursue not example. looking to going dilution,

drive public a our to able earnings may fall to example growth in is the we that currently And years is business area the capital. another in be being can that not given cost of of asset we a entity of which going centers bucket, help perfect particular squarely Data come. type believe this that for pursue to

Brad Markets. comes question RBC from of Heffern next Capital Our

Yes.

lower set. vehicles? you be opportunity the would rate it the target like curious, between any profiles would be a fund So I'm there just in for X cap investment expect that the sounds really the do overlap

Of large continue going course, equity to a holder be to very we are the fund. in

So to be interests aligned. are going our perfectly

So be term both function stand-alone entities long to this lot there also the which looking are will term, the is be potentially for we to not that entity. of opportunities But public for in be at, going actually works going work does a raising. of short capital but a the

the things even going We long-term account into not entity. never have profile that public into we be to buying taking return the are would farm as a touched

truly capital raising pursuit and fund this and successful, the enhance our deploy is to together is transactions, So That to like the we assuming structure. to box capital. is participate through would how

Okay. given do sense, a you And where target then sort have for just complication? in size any of the added makes it mind

it's hope life, be complication. simple. large are I co-investors is all capital pocket What pockets be vehicle. Well, to statements. fully our intents different going for this this vehicle. with And financial a very have perpetual to that consolidated it but added very of capital, in it's and finite And a purposes, unlike causes we perpetual be going of will

visibility. So have perfect you will

that unfortunately, to being given we so and, The to way this vehicle. bring. and might scale, the this little monetize show that scale have that that this cost such massive that too, the not say that is does advantage, And far we And market. one to we time in a we about this by platform therefore, is is our have is are fact incur of, our have at size up that talked That, very go the a platform I a very which going platform for can the current ways incremental stand of value proud as to to us public fact we markets. a points and get valued

from And Smedes our next comes question with Citigroup. Rose today

more there? what just maybe quarter the smaller the to ask about in Is guess there? bit client, the outcome more little going in name same $XX you related little about a you the what's I color can't the million that kind could of charges wanted little some convenience bit first on And client. I store just you be to the where year? client to talk a the related charge took but a around maybe of half

of fair in where welcome. the rent been of had I'd north a XX% say We've First of we situations absolutely that's expect recouped historically all, about impacted. credit issues we've portfolio, talked we've

foremost, million allocation to with drove relates fact the original it and the As of do the has accounting the noncash it's that to price. it the charge, purchase $XX that really first upon

you've got meant got then is land, intangible, you've cash got and the to the future You've in which inherent account flows lease. building for the

reserve difference of noncash. is already that why a in impairment, leasebacks you rolls these from nomenclature for accounted really the it's sale And And as our all because financing that's XXXX classified for And originally a that's and lost into were expensively receivables. is the just we've that's which so see, excluded from the into AFFO rent guidance. built entire but of

asset. of located just while It tremendous rent are these And add client Texas. to mean primarily that we're assets, one And that over. management control the done, these given are have of really is already not who's want we in these we more. I power let our get this a which bit to to work are we a assets. me in has And asset the interest I'll pay about because decided amount just share talking just team -- operating essentially it control to we doing credit, everything a that in assets

very is gain And this to able significant control. confident so rent is being once actual replace we in the very case. rent, feel quickly we The not that which about cash

operator. quarters. the this through of you conversations over on to last what So some that's the convenience I while few of we dominated want has are credit, store But topic walk the

new a They've Chief Red emerged Officer. They've a CFO. just bankruptcy a Lobster has from and hired Marketing CEO. hired got

We rejected name. storyline X the assets XX% had assets, XXX prebankruptcy. through on on that were a We bankruptcy. close rate particular me had Let that. recapture

Rite Aid.

from Rite locations XX is XX% now recapture ongoing had today. is and an concern. on which emerged have We rate We Aid, bankruptcy an

has emerged assets an XX recapture rate have bankruptcy. and Regal, and where from it today we XX%

dominated end have is lines quarters conversations, all conversations. those that this story of and of the multiple result the are those So of

what been XX Let's Year-to-date, renewal. our rate be X,XXX. used about XXX%. renewals is Walgreens. for of XX by over Walgreens. lease closings, store which concerned we've In up a to of history Everybody talk maturity. Walgreens, X,XXX XX now All were come with to had a Walgreens reduced has recapture They about had we've renewed had

that throw XX had in in with renewal. We've over CVS history leases renew mix. Let's at CVS our XXX%

talk Dollar Let's had We've renewals over Dollar Dollar our Family history General Dollar, rate. Tree a similar XXX% Family about XXX is renewal Tree. with lease at Dollar in story.

So I to just make asked on And that's that portfolio. out that that what we very see data to be emphasis in want Smedes. and Go the for we is the what headlines our case. the the ground I don't is proves necessarily happening translate the to ahead, selective are

Sorry, you off. I cut

No. them, I fund just for see back the the nature understood. business. right? to appreciate to to -- the I on have is mean you the going about as we moment. these a course, ask of wanted headlines, No. detail mean that's we I ask But the of I

but think You I previously, -- I it think heard was the I don't asked answer.

how Just of size and of over it how maybe sense the what fund, of talking billions? $X guess, think would start? And do fund time? grow do have the in it about of be? are several we Or maybe would might you initially you kind Or of the billion see you to scope I kind the a

are is to to we too accrue -- is are obviously Smedes me to our doing of we public this We could Yes. become. how tell. opine early too the to what believe doing. our believe going it's early We in big believe shareholders, what pieces. on benefits but It's potentially in it We

And Jay our with [ next Kornreich SMBC. question today comes ] from

in the was that expect kind as that outpace see new I Europe on opportunity exploring into acquisition and you are in opportunities today, continue And can if U.S. into currently things seeing comment the you looking you to to of wondering you're do you territories Europe.

Europe, of view able we've given that's the been what all Europe to wherever has for as why reason quarters, of that verticals that done found the be And the case year-to-date be in the Yes, first an Europe we great XX% but we growth question. legitimate in a That's quarters. to is we've continue. it opportunities these question, X Jay, best a reside. advantage advantage created we is what precisely to momentum done will where in take the I believe the of

Europe. We are in seeing very good opportunities

And I mean, by we yes, go beyond current geography, are our something Europe countries also is that constantly ability our in to geography, looking.

opportunity, with are for countries be the had the client we with don't right so right asked there and that And well. would as into about consider future several going right in opportunity. Jay we happen the to that the

quarter, will see we seeing more reverting $X.X the the was loop to but referenced billion It's fourth quarter so the had you momentum of in And versus momentum has that's Europe, it In expected U.S. continued. fourth I I the of here it's been want beginning to the in international. that the back that there at momentum continued, has that. historical close terms that the U.S. The the a on in momentum norms year. in That are

from comes Haendel And our next question today St.

Juste from Mizuho.

also some growth long appears your more when you be free existing of Sumit, potentially your to annual need point long-term a the go rent core back reinvestment one There of list the cash think of for your to raises that about kind you mid-single-digit without generate and already, but I'm could AFFO benefit bumps equity benefits target that growth, flow. the long-term sizable I of mentioned allowing you at thinking a be wanted fund to to time. there

that color fair? first, look look and to then And guess, if some portfolio is your could like? it mix maybe fund with you'd So I that on within what existing assets

idea That's and into of Haendel. the return here mean, expectations to I that the for good we while parties right. a universe And concerned. adhere this investable we you're sure expand the very for business the fund question, get you. to making Thank is all ourselves

a XX to fact we're don't mathematical public not today, believe growing I years that entity. we the growing, at continue to that the on public but of finance business we especially the markets markets going are that fund growing our level are Look, in at an just rely growth, issue now, it's into it's to from rate the a if we capacity public are, issues. same run up markets have expectations as the the public

us then And this dearth it is our into the get That which have desire the XX are of of so momentum will to the capital of it last to to allow making not opportunities equity goal sure source trying what we that is has create is that of a the will over platform a that is XX business. that business us and help do. been this public fund years, entity. a continue complementary driving monetize shown we as

our and of seating by call similar that how in, looks a the of it business capital feel get subsequently, function. attract which, entity. the like. to at outside the appropriate to new what will fund, alongside of and look that very they public us that is for way either initial But all income sheet time, That's portfolio business. And balance the going And will this disclosed, it, will way, it participate Realty start to transactions be be the is or on will

an year? if rate then cap into if if didn't And about you and to quarter, I rates pipeline in quite but uptick I the to if for incremental. catch be comparable the volume that. that's next lower? into not appreciate And the or expect that's fourth one answered run the think thinking sure No, fourth appropriate the about I'm quarter, it, just more, you

and will to is things what to that on not going spreads. we the be will cap And to That I'll quarter. Yes. already Haendel we spread with amount north can et fair going of take that I for other a to But -- make will need you move healthy be Haendel, rates, I'm is a our around tell because cetera, prefunded of historical confidence. can will continue our you are fourth bit. piece you the quite leave continue be the opine have

quarter. fund on fourth public on reliance no that are the this that $X.X is there So the we in doing planning to billion Hopefully, helps. help markets

Street Green And today from our next question Allaway Spencer comes with Advisors.

commented general, about you, for talk just and fund. Can private the the just how And but economies early investment process maybe if analytics. foresee opportunities any and to in headcount of deals data be that underwriting changes also time stages curious just I our around know launch? on in team more of just spent on or in data will you scale then the Sumit. you One you of the for But terms to

a a to to a -- of say heart we that this as the mitigate are question, cost for scale business. stop it goes company Spencer, we're That's use would going scale great today what an I be really to start-up to our because insurmountable when

care staffed international XXX have taking both business. in have investment Amsterdam, U.S. our the U.K. and well in the the We already fully of arm, as We in in people a here as business.

side. number don't on any personnel we incremental the X. need So see investment That's or scale any benefit,

Scale benefit #X.

on balance or We whether it large are a the public agnostic going be will that team a will continue And in as the to these in the well fairly by job our to a the U.S. which, here are fund, as is side, these in international London, sheet. the interest #X. has on That's markets whether to assets assets. they way, in thus, manage held entity both public as in asset benefit superb management done have

the dispositions, any we that, elements of already here. team Any have

team massive given work a are do have is for very source We leverage of we majority of us pride obviously to a that in-house. large legal the going a we that that

benefits, on lease will help them scale with We negotiations, #X. transaction That continue lean to negotiations, cetera. to et

platform with that outside have. private muted. do -- setup around business accounting place leveraged will required as fund That's tackle that, going a to and that on we will of have the But my from and be the We fairly cost proud to is already have be the a cost block so type something and needing that incremental as existing arm by are very up will an base an very investment manager all help comment finance, this not be the reporting standing with the is way, well of function where work again in will are of we people specific the around we dealing in incremental be will the investor side. be which, new we IR of,

if the can relates now been just to about you there's in talk is And it Or last Very the any helpful. the changing? competitive transaction then how landscape market? Europe one, as and right changes U.S.

run it's are Yes, course, we are There is in of the of who we here And against. Spencer, much very of is public. we've doubt become fluid space but a it's transactions of lease U.S. compete into given no of the a We -- we that companies don't the that terms field becoming to competition have crowded pursue, the in arms are starting that terms in pursuing. in that in private most bigger had them it transactions net types few players more

of competition we intense let's we it but that international of market, the the a as most still years ago, to the capital are we or X in not as continues advantages one running international what did, more where today in call competition here be comes than -- into but experienced year U.S. that have, biggest we it's quite we market. the In And from private it,

of that's the in the flavor markets. against U.S. the So in compete we and who international

And our Capital KeyBanc from comes today Markets. Rana with next Upal question

of Sumit, the points XX you and week with wanted I XX basis reacted basis likely talked cuts. then about the buyers rate about cut and since but transaction points to XX-year cut Fed have to driving basis really sellers a higher on in this that momentum the last get on kind rate market, sense points an another XX and with really the

I get So want good to that. on sense

Yes.

curve the point the is to what And the it's around I think, this curve exogenous going the happen will factor at determine that's volatility today. down. much settles Upal, where largest across of so

exposed end the as of not the are We short to curve.

-- to are the same We are as not the we it's extent of but to curve. the end long

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fair wins, we'll usual. creating early to to to clarity tell where is too as going more this have and curve that be the what once hopeful of of terms is volatility, It a So able settle. of of who are in all going amount regardless to on we look execute business we is like,

Great. That then me. for was And last helpful. X

you some but capacity been on could you sense else I there. back the your now capital bunch on economic be you've creating a And I why the there mentioned sense in your this environment. was Going have is to in that today's friction to know makes wanted may with anything But dealing private and get that end? already know future, listed issue an fund. of benefits I why

Really, the side. nothing credit on Upal, is either are there that we seeing

list side, good. very I feel went on that with a think pretty I to share through we detailed you credit the

came the points watch quarter. to down by credit basis list actually previous And XX from Our X.X%.

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and timing going we do thoughtfully a it's take long do a for very to most desire. that years. for it to one do this to and around and our right, they've peers our this is business. to We mature time become long Really, businesses, XX-plus time, which the want in want of probably look to is who the this obviously one collective very been fund at And has open-ended of a mean I that's business successful Prologis. slowly

back years it business a that today, ago. say And very become is has and into XX we successful can it some step -- smart went people super

years what could of anticipation start up in become this, perhaps et just so today, we limits to happen of put run that XX from to capital the and have could more accessing against sources acute. when capital out And desire cetera, the now, that our we

additional would in this, be years ahead done which and building There starting really cetera. it. limiting And this asked, be history why and point public a multiple it we matter at the would et road. bear to question capital could have no fruit that but it is a to And -- really business this need get today to cycle starts there when -- That's it's now is don't we so for build of that's we about build have fun and are have to what the should start it a down we to where doesn't business this for to point today. shareholders doing our factor

comes today question And from our Tsai next Linda with Jefferies.

outlook debt what's where Just 'XX? And a on ones. your trended? bad update few give year-to-date an quick XXXX us for you has Can

Yes.

XX First rental around revenue. debt our about So million this That's the that release, of operator of earnings in Linda, if this at incurred one expense. $X basis you year, you referenced earlier. X out points take look months When we've we C-store bad

basis historically points You're really we've there XX year looking XX basis at as how basis in of We've of when right talked points. pandemic, percentage on credit given exclude loss points revenue. about been around a the sub-XX a you

portfolio. So unusual healthy of onetime is and a indicative XX constructive very to at pretty of be we this think outside events,

we was a There's at meaningful. -- for good cases, that list, no And not percent Sumit exposure we're assets. on into monitoring I We tenants been really earlier, as quite there very that coverage feel are the some X.X%. the there. X-plus we we've alluded though that in And really these have monitoring loss lot There's flow think out on some to as credit time. on cash watch visibility those the

get so we'll February guidance. that of when come in release baking XXXX we're And into the our all for assumptions we

do recapture what And the think write-down then of the AFFO is And the what's impact potential terms quarter, earnings? you rate? then on in in C-store the

of operator, all it's in. C-store or in call month it I that And of is So this built million terms $X X a so. really,

of as that in interest trend quite we is where And a built we to of in recovery. we'll like our into bit earlier, assets. of But could referenced All terms feel there be see do these guidance. out we

credit So that of recapture I offer have rent to that's able at response to event. being from XX% been any and the impacted bank or by we our or think precedents you XX%, look default get historical up is

next our comes today question Stanley. Morgan And from Kamdem with Ronald

the Just fund. to X quick ones back

think there public interesting fund where I in policy mind, Or in that into that anywhere. it. is terms you is there that of investor my your any investments be question the the different do couldn't dividend other is the that's And geography, a like fund go that fund in about the equity overlap? some investor stock? fund, terms just, completely base going would the guess other the in some contemplate would in is is talked of I the differences of

to invest universe a real compelling. haven't through mandate investable Is in investments. estate in to the what's to much have Ron, really you that invest of ambit that possible have the these direct some of so bigger funds about Yes. comments potential any invest in fund they done public look a we profile, work and it to on structure is this private securities investors have how is but made I investor

tell I'm a is case. have security structure that But estate have will into may fund those on be the what even they directly of to through side. investors they that sure you what real multiples the invest

have would invest invest you in invest work but the platform, are but believe, I ability investors in public securities like majority, with give precise we who be can't vast to I our the us answer So that, to the a in. utilize and don't more that going to product than

on. that is goal that to that is already going a massive we balance doing to fund. a not There's Keep in anything be won't be co-investor one touched And business mind going I've do outside will sheet. be the that, we strategy of on in is the this the fund that new

going perfectly are be interests And so that aligned it pursue. is our we what to in of terms

pipeline sort Obviously, data seeing Great. the of And points of then sort that X how are second lot there's of just been on evolving? demand vertical sort initiatives. my is center in a you ramping? the Just of about guys data an quick update

Yes.

trying to So terms with been talk I demand, this in to the terms craft pipeline compelling us are that they've showing space. but We to that see multiple in it in operators. be we've the what what referenced value speaking pipelines, won't of that regarding of very created they're operators about Ronald, these we lucky we're seeing in a you've space. is proposition And

could allocators. on particular very cycle are at where of end XX, going clients we be can we capital capital if to years, type And feel optimistic that's go business. this about is what realty We business and the forward. for S&P have a And needs a in demand a for XX XX to the of our core we capital the that like the exposed S&P day, can income meet we solution once And execute helps allocate situation. some

all this is play going And how too early out. tell but to so are in we excited, terms of to it's

next today James. our Raymond at And R.J. from question Milligan comes

structured therefore, properties might not So helpful. internal that I I or to that funds, fund And the just the a be of and the couple on wanted been growth examples have to expect have net ask you more more more necessarily transactions appropriate might given those of development do clear, be to questions investments, loans. wanted some invest just there, better leases triple has in

it's trying the to net. is triple mix pure idea of if get what an So I'm be to just going or

do. share executing sheet done I'll businesses income in start we with that be you should have similar not of is what rental idea to NOI of That's right? to margin. balance we've R.J., terms NOI a to investments is go XX% flow-through, not these through to on very think what flowing what The you on and

flow-through flow-through going the XX-year we and are versus And hyperscale so about still when to be not where data should to -- is we that not what but leases be single-tenant there triple mimicking really buying asset we net the may going are That's colocation i.e., be high, a doing. going generated. centers, triple sites out the precisely what talk net, be different is very incredibly

quick answers. Realty's. equity then the I X But have number be may expect or missed And do you one, Okay. follow-ups, than to cost higher of the and lower

profile not hurdle R.J. as one So meet big a the entity, return entity, return X I generating is and hurdle both by of very be rate, XXX% the But And did year the we, the gave mandate that on rate. similar dual that hurdles spread that's I day public focus long accretion. that businesses. examples why long-term cost of as today on their term difference, similar, for these of public equity the defined very but long-term That's should long-term is the our cannot

we recurring we'll have stream, that that fee of met have but able how through essentially is passing meet be in to to we to are monetization for to fund can play. that. a today. point. which we that, markets have. those how the long-term will that's order understand the what that this of have in and management the be think, our that public public much We is lower are there benefit co-investment enhance that's I the for through this That's to do how and will But hurdle, platform the structure very we potentially work. asset Both assets the us high-quality That's grateful pursue game transactions And shareholders. starting our -- are are valued, we on up the very assets

And one be fund? follow-up is, Income contributing Realty will last the Okay. properties to

investors. will conversations That's how it a new pursue. be thinking that have potential will But seat it with thereafter, we portfolio we're There today. to about us will be investments that allow

initial everything portfolio, So of else that new will that be be transactions we'll pursuing. seed outside that

McGinniss from And question next our of comes Scotiabank. Greg

want follow last on question. that to up just I Sumit,

you contributed contribution platform? would to where may I itself? the you instead have Or would wouldn't be underwritten pursue developments, platform -- think you So the that's investment instead question the mentioned within you developments which then envision Prologis, right? could those comes And increasing that But into maybe be otherwise from.

there able yield cash very times the a to. full unable good certain And we we to pursue we the development, cash we structure. because are just the to adhere a positive that's not factor scenario, to Greg, impact, that are that's question do when to accounting we it given a that that where have, investing are elements development be lease fund prohibitive we going on we generate certainly in accounting the have have recognize are that through dollars doing

answer the of And exceed fund Yes. so again, hurdles meet those? to overall to and is return we could we that yes. would would the we needs do In address. need it the more -- But

stuff, a entity, limitations et in that this are source we of financing we as report cetera. of either public us how of way only have but which in can things to done some terms do, the have there So because alternative allow lot limited a we of that could a inherent of

us. will that this the pursue transactions and the be to that to the would source think do I types available of give I flexibility us made about this alternative sandbox of of So thus, having we able expanding comment capital by the

had And you've investors or already this kind do conversations that first you mind in have of on front?

mind. in none We have of that

we we any We have us haven't like. have and who and that, I with are what advisers the are this shared about -- investor have but would think I've our had that, of working the profile around look conversations is talked what today. details We this, with certainly

there final specific in increase midpoint Okay. expense to point Is And the just follow-up to guidance? the to for anything Jonathan. in slight the leakage

to some deferred combination few ahead of a were just brought things. year. of and up First We're trying we there's to expenses Greg, forward, get cases. all, a been last carried some forward some from spend It's Yes. of catch that trying in

for increase So say few a perspective. of basis year, a that year-over-year we from costs there with say a also some also comprise do a that that this an are bit of I on a heavier incurring assets I bit there would quarter. margin this little vacant carry is load would are

also, more in $X experienced well just that And comparing to X.X% I mind rate a leakage January you're did a on portfolio. think then billion keep did in the when basis. we portfolio slightly And we with bring last just that year, leakage the have run Spirit as in

driving what's those from So of going factors to slight X.XX%. a as would increase X.X%and I now really midpoint attribute it to the

from Wes And Golladay with our Baird. next comes question

have I now? When nonretail to on Are you just back leasing up? development want right holding pipeline. do to you expect the a question that the on lease

Look, Yes, of very that's the a great question, it's overall development. Wes. portion small a

code. And even think I clarity quantum ZIP have identified plus/minus development, on spend get coming XX% until we we the for we of it's this the like through. really in that particular though that type don't leases

And so confident. very feel we

we the to clients without leased We get of in are mind, near investment being leases. in partnering capital are potential take on in step over one make with And having best that [ the developers big term. these up confident feel very of line some those and the going ] we sight to able won't of keep and in Panattoni

to that, a since follow-up going on nature. little more a yield? Are just it's Maybe spec quick bit more get in incremental you

the -- we've wasn't. one in had where And fact, Yes, leased situations buildings, and X in was absolutely. other one

going what actually and up and We -- think have by than lease superseded our to rates what often we have rates lease ends those rates not, are expected happening. lease far, expectations more -- the so been be

build continues also ability of transactions. of to underwrite this but types to amount So confidence not team's fair in our partners, our a these only

Thank you. session. for to concludes remarks. conference this any And like the back closing Roy over question-and-answer to I'd Sumit our turn

you a weeks. Thank for and seeing joining speaking the We soon all you guys. to us you, Thank at today. conference in look coming forward

Thank conference for presentation. concludes thank call. you. you today's attending all This today's We

day. You lines, may disconnect a have your wonderful and now