National Retail Properties (NNN) 11 Feb 202019 Q4 Earnings call transcript

Ladies and gentlemen, hello and thank you all for joining the National Retail Properties’ Fourth Quarter 2019 Operating Results Conference Call. [Operator Instructions]

And with that I‘m pleased to turn the floor over to Chief Executive Officer, Mr. Jay Whitehurst. Welcome, Jay.

Jim. you, Thank welcome XXXX and National Properties Retail Good Release to Call. Quarter Earnings Fourth morning the

Joining this turn Habicht. results After to me Officer, to in some Financial on Kevin opening call more is detail. remarks, our I'll discuss the over Chief call financial our Kevin

XXXX year milestones of for Retail Properties. was a significant National

and XX of York and the our and growing most corporate owners a companies meaningful importantly XXth business, of for pride XXth two our few on Exchange Our only which dividend year dividend listed of Very XXth there's a have and more Stock heart impressive year in the investment nothing consecutive REITs company year the years. consecutive return in each on annual increases. year. the increasing culture we matched cash Maintaining to New record track other our the is public this dividend their returning safe take at than of

of of dividend ratio future. increases coverage of dividend XX% into string remain the year-end, well to the as With the continue positioned we

for as continued and total outcomes by XX.X% produce return impressive X.X% FFO our core steady execution was share Our over per to XXXX our shareholder increased XXXX.

five, our many many major National True indices over business heard we XX, the past multi-year and and averages XX, total three, exceeded XX periods REIT Properties respectively. a times you've shareholder on before, delivered to long-term focus As Retail XX with philosophy, run results. that returns year two, that the

occupancy XX% exceeds of diversified Retail remains X,XXX Tenant average our quarterly properties of XX%. portfolio our and which an of with to annual over long-term broadly Turning results, our healthy Single rate

of by XXX% XX% XXXX. rate renewal without dollars. were expiring in material lease expiring rent, at of approximately incentives Our or investment improvement tenants leases current tenant high Approximately of the our the lease continued renewed

of X.X%. initial investing fourth rate in Tenant Single front, at On properties an active the an concluded cash $XXX Retail acquisition quarter, million we cap new XX

year Retail X.X%. the XX XXX initial million of XXXX, Single Tenant lease rate For million with average And years. of duration price almost $XXX.X acquisition And average an in property. at per cap properties $X.X about an we an invested cash of

our continue and which believe per income contributors stream. to we occupancy meaningful are and low-cost high property, on low-rent our underwriting steady We emphasis rate

Over which to relationship the XXXX XX% almost invested We of our in prior XX with tenants were including we portfolio dollars business relationship no in dozen properties did in in tenants our year. XXXX with leased three relationship of invested tenants.

XX for We also had selling properties an million. over dispositions, $XX active of fourth quarter

of properties, year we XXXX, XX into capital the sold $XXX recycled raising new For million to investments. be

yield advantage strategic rate recycling Our which new is for of was below Accretive our disposition cap Properties. capital X.X%, in National on significantly remains Retail XXXX investments. a

between other differences National As a we Properties XXXX, I REITs are to many there look few strategic other to Retail that like and would ahead highlight.

differences bear they but We've repeating. mentioned these previously,

First, results are share per matter. what really

often given growth and never in our the of more in less consistent devoted management at growth us year. National more long-term perpetuate in are to to share REIT sheet, Properties. allows our on management will To and with results conservative to highly us our execution and results, risk quarter headline approach estate. Retail sake team is of share real value be record FFO core share volume consistent per growth, shareholder balance You not acquisitions matters the with to while maintaining focus growth quality track acquisitions for a with concerned growth or in us base. a creating less positions asset per meet This per headlines the of what multi-year concerned any than team selective

Second, segment section of real and retail estate. – vibrant healthy, retail the Properties’ National Retail portfolio embodies

services, customer e-commerce-resistant customer large regional operate consumer typically necessities. tenants Our experiences national focused and on and that businesses

trade Moreover, acquiring economy By good underwriting little reasonable e-commerce margin up our with the create apparel and real lines we have getting major negative on tenants in these rents. business. businesses. any are turmoil is We of expanding our retail very headlines, tenant estate respective at in tenant’s struggling any primary in offense an or focus better that other are on that our the locations enduring make safety adding and of our individual that their playing to factors, concepts concentrating and general are stores, withstands exposure mix or

our the the XXXX depths our XX% rate in occupancy never XX.X% seven XX%. has of years occupancy hovered and XXXX around During last for the rate to below and recession dipped

make most probably we're aspects and a of is philosophy and running Third, a our talented all that And In not all important, marathon, business in people difference. our associates. sprint. the reflected dedicated exceptional our

team key long-tenure The a of our benefit. is strategic

This XX% XX the associates years Our our and company by of have the with our at associates and is humbled to institutional XX% with business every of years more. talent have and associates. for senior More or executives for than the stark commitment than a average over many REITs commitment least XX competitive comes I'm years when model. with our advantage other five company. to memory day been us and been it of contrast and our a awed

board few want our and tenure refreshed the broader bringing last to gender than before. I Board years Along background have high-powered new continued note of also the of experience, Directors, talented evolution ever our with diversity we in Directors, of this line,

provide Board as to Our effective well decade. to oversight positioned look Directors and valuable we ahead of new the is

consistency. investors Let me comment briefly key which on one consider, last differentiator should

consecutive properties, Consistent to people on consistent. and before, raising said growth Single on per generating multi-year is XX Retail word share conservative National consistent consistently consistency basis. philosophy maintains powder, describe we've the a and mid-single-digits dividend years, culture, for sheet dry Tenant focused of flexibility investment the Properties consistently and Retail balance As best that

and take consistent advantage of turmoil has market and Properties execution Our business arise. focus may inevitable National to opportunities Retail plan, that positioned weather

more to me call and Let annual Kevin for our quarterly on numbers. now turn the color over

laws SEC looking forward-looking I'll actual as are in Thanks, to morning's cause under to release statements after statements And these cautionary that statements make future in and statement Jay. to forward-looking to reflect may significantly in results these changes press filings time-to-time and we differ be could that from not were the with results release. statements federal will with discussed a forward that expectations we actual the revisions differ from greater this made. may the usual, company's and be in matters considered the certain materially Factors from risks company's the securities statements may and detail start disclosed

core which per share this from guidance. of results press quarter year year $X.XX X.X% the than prior of were fourth consistent FFO and our report. Full Quarterly FFO With core results $X.XX release and morning's is higher share, is XXXX headlines per projections results for that, XXXX. with

sheet. grow results liquid strong a balance per share to maintaining and while continue We

Jay fourth As strong down and was and we're the XXst. which X.X% XXXX. expenses for a payout from XX AFFO XX% ratio say XX for for the minutes dividend was annual points XX.X%, mentioned, year was revenues basis of our G&A every XXXX. year in and the X.X% quarter at modest year December required we at XX XXXX; increased for our to consecutive dividend Occupancy

rent future $XXX.X of XXXX was in results, million. purposes leases all base of XX, the annual place modeling For for December as

acquisitions XXXX as QX as annual to to to So projecting is add acquisitions use the this rate timing then and run way or for purposes January and rent X, estimate model for amount your of or needing the for rent dispositions. try This of subtract of alleviates assumed one XXXX to XXXX. dispositions

capital the and markets debt obviously equity You environment that all for been are favorable. have aware both

continued equity take to ATM. offering equity as our in $XXX of the We and common well via as September and in million that advantage DRIP raised XXXX of our

sold we of in properties Additionally, XXXX. million $XXX

after proceeds dividend $XXX retained XXXX, this million $XXX plus million operating flow, equity equity-like $XXX $XXX total of So payments, $XXX common activity. the capital of million exceeds notably of cash XXXX raised that's of disposition of new acquisition totaled in plus all which million million

practice, in in of and allow to out into pointed position, over We acquisition we we a past past couple remain manner maintain leverage good behave which active to effort will relatively our expect time. very us XXXX. with leverage As consistent in an neutral decades and of liquidity the

we per started share, $X.XX our to XXXX $X.XX maintained per and of FFO $X.XX growth we for to where in implies of consistent we XXXX. – $X.XX growth morning guidance X% to core guidance which X% that’s also share our guidance share This with and results per AFFO in

of X can of and million; guidance on in XXXX Release $XXX property G&A reimbursement to of property $XX revenues; and million for to be $XX the of range; Page $XXX of $XXX $X of $XX which mid-X million million expenses net million. the no of million to include: found occupancy; cap Assumptions acquisitions expense million $X million, X.X% in dispositions is to change Press

capital guidance plans. market give do We not on

some we be regard, While and try it's them. in went doubt, made to opportunistic We capital clearly to in and more in follow get we never getting available feel have well-priced particularly assumptions that when sooner. bound

call the should I years, try separated remain meaning we past leverage and multiyear capital maintaining quarter, behavior with and but As expect mind, in consistent I the to with conservative of profile believe the sheet. view our mentioned last a raising keep company capital you managing on XX somewhat to our deploying a the balance

very consistent property type, sheet for balance years. tenant strategy been investment Our of many terms have type, strategy in

at $XXX.X line. XXXX balance a stock. our six happen $XXX does October with million the this coupon only $XXX with preferred. common of proceeds we outstanding to on million Notably, only was often for equity redeemed not ended XXXX, million $XX weighted bank In accretive $XX were preferred Looking which outstanding million our our redeem balance basis, an XXXX averages preferred sheet, the average able million years. on equity past for and with we X.X% X.X% We

strong. very remain metrics Leverage

XXXX weighted is Our next now X.X and October maturity is average maturity years. debt debt our

potential remains gross debt sheet assets economic and end future acquisitions and position weather Net market balance metrics. leverage the good end was Quarter in turmoil. capital fund year XX.X%. to booked to Our and

not of December debt-to-EBITDA particularly based are fixed only coverage XXst; mortgages interest know, X,XXX relevant charge coverage our you X.X $XX times five times As leverage encumbered totaling properties we're more net times X.X market particularly and at was was metrics, cap by million. sound for X.X relevant, XXXX was

be about to and we but – in through continue XXXX. I looks also operating the thinking say XXXX another So we us, results, a we that year those move middle in are for XXXX year trust trust to and but growth down should XXXX how solid of XXXX as was results

will With it open up questions. for Jim, any we that

from [Operator Instructions] We'll the hear McElroy Christy line at of first Citi.

a it comments you guys. more plans, consistent maintaining markets assumption regard average you morning. leverage embedded capital Kevin, good XXXX conservative on You a guidance leverage XXXX? give be level. level and on Thanks Is to – assumptions? but with don't would appreciate your during in maintain you you fair leverage what Hey, what just understand philosophically that your in that would

that's fair. equity. in XXXX capital I'll point think equitized a I a we in point think I Yes, the view will equity-like while raised I will generally this and preferred both say lot say out I too, we that of we over bit. as at And I XXXX, XXXX redeemed

my view a as not and so understand some that mind somewhat, in investors mind, view it's I we I But all in bucket. so equity. equity eliminating of And and action, think I reduced know it preferred I equity but my – the deleveraging – and

by raised preferred equity tempered to So to assume were – the of you answer for year. of was some question, should from yes, XXXX But fact your deemed the be was that going we're tempered leverage-neutral equity. the some we

Yes. Christy, this Jay. is

to or to that, to maintaining on as volume use that of we some add were we're the some opportunity, But to great very prepared of the all a to time. committed conditions dry arise you the to due know, need – in powder dry Just significant event powder to use we're it. market

I'm of pipeline And Okay. you in just I and that what about might in acquisition Thanks have for you currently deal that. might think what pipeline context, guess, your then sort and the you as year-to-date, if also, could And thinking wondering in rate your have that we guidance? about should seeing? completed be regard trends you're to or comment on how contract have under timing cap maybe you

last down maybe flat the little the rates, start years two part trending generally I've Cap Well, said cap are Sure. last probably, first. a bit. to rates with I'll

it stay a do generally little Cap And our going out by relationship majority they direct but be been for great our us And little of so again. the up X.X% consistent initial any acquisitions close continue comment to rates Pipeline that years. this bit let But may we are through the yield – just down We've and ballpark me are last a comfort X.X%, down it good be we been. gives pretty the tenants. with business means; looks may trend flow. couple not think drifting of to reiterate may bit. deal year, those relationship tenants, where vast they've That off-market there. in about

our I'd back-end I say, think, bit guidance little is Kevin, loaded. a

which fairly us. is Yes, typical for

of you of probably will, that think XX, half in XXXX, if as of XX, year. I second half, this ballpark it kind again first

Yes. We fourth some the we into part slipped had that at a quarter very beginning the end things year. closed last have active of of year, where of the this might

year. you for the an sets nicely So active upcoming fourth up quarter

That’s Appreciate Okay. helpful. guys. Thanks, it.

Thank you.

Brian with of RBC Next, the Capital. we'll first hear Hawthorne from line

that for them expectations that by guys were so units by good are have XXXX? relationships then key Can key available that kind talk because these are to the brought for the to And relationships you buying, that while owned of these kind all – market older growth your now? or unit been you they the the a these properties Hi, morning. are they are are owned new key units about relationship,

good Brian, Yes. morning.

real the buildings sale of tenants some or activities; relationship for the existing do for leaseback runs and is it's some In the both new estate construction of tenant's In relationship doing some books. target of the be on another tenants they're that of new of acquisition. described. gamut them. our are of structure acquiring funding company business our company you with instances, that built-landed capital building the using doing that the instances, part types to instances, Our that it's – we M&A In their sometimes transactions

relationship maybe, them. around years, the to a our in else kind with what is I have of tenants. same be us for and – last relationship with sale different XX% we We in year, been we business few This of we'll just these them it have kinds been and that tenants, offer on But when ballpark. our that there's dollars different somewhere invested that. So to with for expect of all there out depends ways do it's do programs

with the there. give remain that's our But don't the on we So guidance acquisition relationship on first yours, guidance with we specifically very volume tenants. comfortable level and – follow to up our with overall the of out question,

you. Thank Great.

you. Thank

Rob Janney. we’ll Next, hear Stevenson at from of the over line

with to your good to versus Is data release impact be it's years likely Is leasing versus the other? supplemental, totals vacancy in flat guys. expecting same at rolling something morning the be or XXXX about of tenant XXXX. the in Hi, releasing in that in abnormal you're tenant should anything that looking here? one mean, I forward way to close that the at there we would what that and the abnormal back Jay, XXXX mix and XXXX? XXXX happened anything that the mix of new in versus renewals prior

really consistent was same of Rob, The abnormal It good I felt to the due, middle fairway renewed the question. about the and all. rent. it came down No, leases there's prior at a of tenants, with would that me. And say XXX% very same nothing XX% at with tenant renewals that's the Yes. of the

our And little so bit average. long-term better actually than a that's

renewals long-term prior at of Our XXX% XX% rent. is around about average

bandwidth. but of rents, history. also at that side, generally on properties was about then side good the re-leasing And the the just prior on XX to bit little probably the a of re-leased was that that So consistent high XX% with we

don't properties along – don't that properties all of – of those generally, of re-leasing get prior our that is rent. XX% is we've our is around few told – get renewed, is We those re-leasing renewed, few that, what re-leasing folks our

make and as I think rent putting a we XXXX. about lease than stress is bit that's as So is as we're we great look rather incentive re-leasing kind opposed possible capital. re-leasing I trend. of as and spread. do that a higher might the would investment in did and properties little keep the better dollars want put re-leasing focused We better, any again, take stats that to low the to but in re-leasing, as on money of as dollars TI But don't rather re-lease on properties crow that our wouldn't very a a in the particular

how had And some Okay. about Number feeling Parts Auto then are you has these guys days X guys. trade the parts line Advance business? of auto you Obviously, issues. for

and within guys whatever. parts you few business issues the next your other had How and rolling do off have on guys or auto years? mix about forward the think the of that for Some

the up for some tenants of – make tenants. that category we are We're the that Yes. us strong – national that

feel tenants properties, there's So very low a are that good estate there. up of smaller about companies at makes lot we reasonable retail And the the overall locations that those our real very rents.

we And time, like. good find that That another feel – in user locations those real user have over time. another necessary, estate, security their think if we real so, yes, over estate will, we

then, Okay. where price And XXX Kevin, days? are about preferred you And you think stock you'd feeling these do today treasury? how at

Yes. preferred touch lean today, about up it. lower. million But way Again, the as for in in moment, debt, say not – do about My to don't maybe X.X%, a I good and those. not would preferred. perpetual piece close a a today, one preferred and it's XX-year absolute than $XXX rate, or I'd rates X% us. we existing gut of that X.X% we preferred like to get equity that at feels probably price have category the the relative rates XX-year The category. But won't then debt is, outstanding, capital alternatives debt leaning preferred tranche is we as between we're well and more comparing stacking think And thinking those this the direction.

the And give is I so as that. it to be on plan that's around we year. feel try something attractive. don't guidance the to go. think don't opportunistic that's it at moment, But I said, like the doesn't trigger to but we pull route this We

Appreciate it. guys. Thanks Okay.

Allaway with Spenser Please Green questions. ahead Advisors. go Street with your

open. is line Your

their Thank do or you. tenants? lines, expect curious And mind strategic, your tenant some much in watch disposition maybe along color particular your providing how the to be of guidance you just reducing just exposure guys same on to Would segments you list? of terms just

of Yes. I quarter should Ruby we the got there, ago. Roadhouse of currently a total, an each and was the quarter say, there, & art annual Pier total I the but of tenants Petco. is watch we composition changed and as total not ago. of bankruptcy, it, are in those, bit all form, It a list. have on talked Nobles mean, rent. there; I'll on define is which We've those speak base those our Logan's PetSmart, exposures from to hasn't last in since materially of watch on the Tuesday are X% under We where that Barnes than or X, But of less changed sum the are two total is size it list, a X% two

there. don't noise real So any we expect

good the the owned second to be a the going of by good at or real Spenser, the and majority our watch vast parcels of reasonable to process say, is this we tenant's estate credit "This A estate are ones real the real underlying properties the be we add also also look Separately, our watch replace lot tenant." – the with tenant's that rent about harder tenants the credit estate and are we're these And what's we credit, rents are leased I'd worried on we we we noncore about tenants thinking locations have in tenants that to with well of some where back. the our typically on a credit where our to list. watch or happy analyzed disposition that with enough do culling but sell list. if them feel that's what might get like the the credit are list location, can for

Thank Okay. you.

ahead. Todd go Fargo. Stender at Wells Please

Your open. line is

I Maybe the by of any missed – rent have you you may can thanks. what some you coverage the maybe quarter. Hi, I share? characterize sold hear didn't tenant, can term, lease this. or in characteristics

for particular on the Yes. maybe were subset one-third it's because the dispositions much wouldn't – the one leased I quarter of Any the vacant quarter, I for such broadly, think thing. small Todd, and whole properties think, properties. a put emphasis I two-thirds too

vacant at Over our properties I was the the dispositions, kind X.X% properties XX% was course year, the cap think, of XX% of around rare. of were dollar the and volume leased

in properties, properties longer but realized we Job what is one And, fashion vacancies. have, re-lease one, decision time successfully period for to we to before probably not here go I carrying them. a and job adjusted we're feels we vacant and us over time good as it let's risk like relates should that these to to than we a so was, a said ahead of – that that those were going re-lease what properties sell

like vacant under year. of was in it properties a little nine – – nine we duration The a was to the that months sold XXXX average bit

So us and properties going-forward onto trying period as costs, of likely other to lease more vacant trying to you find sell see the we're for tenants. that while to bear after hold opposed time continuing to carrying them a to to those deciding kind are

CapEx that no to has to correct? And them. Is go into sell those

sold They're Correct. is. as

cap drag cap a year-to-date know that down the or at the I for full rate XXXX the Does in year Okay. rate? X%’s.

drag? in was think that low your QX rate I X%, is cap

we cap that just that the rate Yes, is on the properties leased. quote are

going into, cap not aren't So – the it's rate. not going into it's the vacants

Got it.

Are bigger tenant these That's and a but of of factoring you're Okay. ability been increases underwriting point? XX in I least in triple rent the at observant maybe know threat switching at and increases more elevated And property increases, net, be coverage leases have are a outsides this increase? there are into of your then they your or pay the to the just of threat should tax the Texas helpful. there's repeal Prop certainly California. of gears,

think caused with their have tenants about our And not say at they're talk looking in else the your but it's hasn't to States us that go underwriting. Yes. to where I that about If – about it as underwriting. that, for occupancy up. may anything our buy yet, think taxes we in something you do cost will We

Yes. Great. Thank you.

you for Thank your Todd. question,

to apologize, I I if ahead. do I could your please name, – go of and sir, Ladenburg Next, if mispronounce John last Massocca go we'll Ladenburg,

Your line open. is

actually was morning It's good. It very worse Good way that. everyone. butchered been than

Thank you.

just going their So a on, two that small right bankruptcy. currently rent tenants through the mentioned were follow-up question, now? you Are on they current

Well, – no. bankruptcy No, not fresh right relatively now. of But, both is the process the process for them.

them to expect has of February The recent here. one get So shortly. actually in we it, approved day just rent just court

of So are both – those an our on it's really going to all. at thoughts move but around that numbers not amount

kind and a there early think we should expect same store into number of the XXXX? expect maybe reported XXXX that for we have same of what as including that the same that look typical kind of know year, some forward that as got is year Is then And I what issues that was rents store-rent, on of in should kind vacancy XXXX kind is about of in we credit or year maybe the of out a tenant X.X% kind number or may some were that something, down. on pulled early you kind store vacancy go number of Okay. I you for basis the there that

and think X.X% to – call or get always to level it by pain going tenant X% some get alluded quarter's in little my last assume to I consumed But low-side, but problem. I this on on call there's of a and about the I'd general, increase. the of is rent X.X% sort be going that I we

I mind, things my kinds for those you And yes, or but XXXX, impacted know, but through and be what of in think numbers, we should the to by drive Shopko rolling not that over you. it might issues X.X% low a of kind down a than it just have that be touch big X.X% so gets time. And closer difference, that's

plus last back would Yes. I we but on this probably over suspect John, say anecdotal, few if I X.X% look I the right it's is minus X.X%. Kevin's years, that, think or

like potentially are avenue then to space your bit be And is forward? that some little to that a that it is if M&A looked just you going that the in big or for of sources Is to understood. Okay, quarter-over-quarter. kind by exposure so, existing maybe of And more stores acquisition a looking capital tenants existing convenience guys going for their maybe activity fund being with of driven the jumped business?

estate. signage. problems our do the with that's like we convenience real store real good and access We convenience And good and parcels We few those very along corners very a business. been with business well high a – lot. store signalized estate, think like or often store are roads, visibility they've convenience and And located really good traffic very we've got

you to that those deals to do ones continue a the expect sense. make and at lot look should us So of

We be activity convenience we business some that our you source John, will to just with as buy mid-sized world be a like in that. in to there us operators. smaller some may transactions add for the remain store strong will And relationship M&A with fourth of did of some doing transactions store out of business a be, – quarter well convenience there described very stores portfolio tenants. portfolio as in small But interested source the the convenience

it much. That's for it. me. Thank you Got very

at Collin Thank James. your today, We'll hear you Instructions] Mings [Operator from next John. question Raymond for

guys. Good morning Thanks.

Collin. morning, Good

morning, Collin. Good

into at decision it other just than it making your assets? to properties as capital just sooner a adjusting bit sell you and as relates all, vacant me, for to you the one relates vacancy investing First are on thinking have Historically, TIs you've as carrying mean it I just assets, basis? investing capital reluctant you seemed maybe a talk, noted, avoid capital as look much active on into you but to make maybe just selective to you've could more sense on to be invest does pretty historically,

go Right. it conclusion We and as ahead often economic sense we to full just about do a a the property that it question. to it's good time, Collin, that makes come think But all analysis. a is. the do sell we that's more

do management a a all definitely and CapEx of presenting to into folks job on menu that property lease items Our want very When redeveloping what we or of the we asset good or want, decide whether we alternatives. property leasing look is the that at. putting we it. And it sell

Yes.

really it's present a us net value exercise. just For

seen frequently tenant. TI the are so returns projects, in the those tenant where And many dismal real have estate those dollars commercial are improvement what to because we've economic added used next – but times to little on dollars

you just to that have And realistic. about be in so thoughtful

So of putting a demand needs not and capital decision to just we're that on will whether in. to so sell. we kind It the incremental itself in lease there. free get or we that return in carry rent impact up shows the throwing money It's we're and

I wanted what, how just Okay. feeder wanting just just me. other And of just front? less one question little juncture. appetite you're maybe this A to then But the the on thinking portfolio, feeder a your about get than exposure and thoughts get down investments potential for latest update at hair, just to year-over-year. X% an on the on

but relationship having from good location is will that where a it well is with due on us. portfolios got. primarily see we've theaters like They per looked with and the property we've relationships to a per AMC time-to-time, good of so We tenants per with we – the Cinemark, the price occasional number portfolio property. We've that be may portfolios you well to strong the as were pricey do at good as passed cost and Yes. comfortable portfolios in some feel other us and and operator. situations got our the asset felt We've other

Okay. both. you Thank

And Stanley, please Vikram hear do signal audience Morgan from listening next ahead. another our gentlemen, Malhotra we from today. have at We'll go

Your line is open.

Vikram?

Hello. Can hear Can hear me? you you me? Hello?

you. can We hear

it Is better? Okay.

So thanks me for squeezing in.

have SD then say And Sorry, if late you of I that could specific I in But can dialed-in exposure you any I Sonic do to those? missed filed? offline. the just two tenants mentioned are franchises specifically, this, follow Holdings which and I you sectors any or caught, bankruptcies

own yes, that is in Sonic is about domain, very one Sonic Yes. the that's small, operator. specifics, why one process That that small to get leases the of them and appears a It is in it's public will or the private but master through are those But we and we a other those talk generally time bankruptcy, through involved the Sonic going two is is and but tell. stores the pushing now. a number of going in don't franchise

add we the our was by That by in again, not that bankruptcy don't these that factors to driven of at And things kind driven process, the locations. tenant. rather will comment other about but performance of was I

to continued perform stores well. Our

reminder, of of a bankrupt X% sum our less Just total two are tenants annual those the than base rent.

think I into mentioned of you've some And usually Okay. guidance, that year. do every you you built

there. got we of shows I pain whether there's or occupancy of talked like up rent – rent. all probably we've in it said, in assume up assume it always just We same store lower just Yes. we a We X% again, in shows pain always level number in And about. the

we're bankruptcy out either a mean saying of pain and from you I the these but not times going I'm come just tell, two. any – many gets in will you tenant fine. time have to notable

And so out. these play we'll see how

going in question, And the of thinking sort sort Okay. of the last about funding, how just leverage of forward and issuances you're versus equity hitting ATM overall. sort then terms deals just of just wondering

down how and sort just payout for now several thinking you're wondering You've including drift that the of years mix equity specifically. the about let

to Yes. mix change notably Again, at probably not looking all. the

But so if a and we like where we today priced. given it that assumption And moment and the equity mentioned, leverage that's feels best is, there neutral behave I and going to Jay the what manner. we're have in debt make case from go base is As the to at do to think cushion chose.

Got it.

you. Thank Okay.

for you today. to question. And thank audience Vikram, each members your thank you who question our signaled for our of

questions and no I'd standing it have leadership closing Mr. We for to or back turn to to the team additional like Whitehurst. any yourself by remarks.

to forward Thanks this you joining and look of many for all you this the spring. seeing Jim. at And day. thank us Good morning upcoming conferences we