National Retail Properties (NNN) 4 May 202020 Q1 Earnings call transcript

Good day, ladies and gentlemen. And welcome to the National Retail Properties’ First Quarter 2020 Operating Results Conference Call [Operator Instructions]. At this time, it is my pleasure to turn the floor over to your host Mr. Jay Whitehurst, President and CEO. Sir, the floor is yours.

Jess. Thanks welcome Retail and XXXX First the Call. Earnings to morning, Properties National Quarter Good

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

by say dislocation affected and across offer We’d want healthy. COVID-XX let the the keep me out our all the are of putting by who the harms order to to responders professionals our country. first that First coronovirus, the profound go and and hearts safe to in families rest the economic medical us in thanks related also themselves everyday to

With very XX year reflected occupancy, of with the quarter and high first consistent well XX in transaction year raised that Retail earnings today’s activity and Properties timed another continued sobering issuance a release quarter million. $XXX perspective mind, debt steady for National

occurred of global are moment, the to the that our prior for the the be there the XXXX play is we’ve results. uncertainty project steady of at all much guidance current to in to enduring market uncertainty instability spread out. financial updated States execution United March. how able that that duration exploded will about We unprecedented Based All economic of But withdrawn hop guidance and provide in for now, almost across XXXX on largely to and coronavirus depth later the companies turmoil year. the the simply too related

have positioned weather Properties attributes me some the that our quarterly the of long-term to let our strategy Retail performance, highlight discussing current disruption. Before National of

drawn the zero excellent with in remains on million our of million quarter sheet first line balance $XXX hand $XXX and credit. balance shape. We cash our ended a on First,

in And XXXX. pause Our marshal cash our our order taken until a debt maturity is uncertain in this moment. acquisitions not in we've to next

large Second, tenants. of our portfolio well-capitalized consists primarily

the generally positioned leaders major their are in the each are over to and are a of operators largest business, trade. These smaller on regional their X,XXX large as better operate average, lines than units in such moment. that tenants at occurring respective typically disruption and withstand Our companies national

Third, estate integral once to is passed. expense disruption this tenant's real our business our parcels remain well-located

As at National company. real Retail Properties said, we've heart of often its is estate

were properties we're will started, Our properties same that continue located high occupied before to demand in be highly this all all and this well after confident passes. those

And lastly, we've before. been here

downturns XXXX, seasoned team expertise of the company most the management might number Our was recession in all through of a during other great in entire major company with past. handle and with the issues arise. We're that have been to the in-house a estate us real

our to quarter results. first now XXXX Turning

tenant properties long-term consistent which portfolio our occupancy. do working of get rent in business our many them structure programs to ended our through Our of enable expect of second of quarter, we're We their that retail single with with the we interruption rate fall but is with XX.X%%, operation. occupancy full will deferral hope rate occupancy to period an and back get businesses this X,XXX tenants the quarter average to in

We an initial at in slightly acquired first quarter, properties rate cap XX of X.X%. investing over $XX cash new the million

relationship As investments tenants of usual, with do business. market our were recurring about two our whom thirds off with we

or beginning postpone quarter downturn economic to we saw in for muted was compared as volume prior grow. We late cancel scheduled some acquisition the acquisitions quarters. Our elected to to the

advantage many at highlights over Properties We a raise tap $XX of XX proceeds National X.X%. capital generating other again, a million of Retail recycling for sold just properties of quarter, Once over during to also our strategic cash rate the ability REITs. accretive

we in of the Impact mid-March, April. approximately received the of beginning businesses XX% of retail the due month today economy pandemic that for on to and rents our reporting COVID-XX the sudden we Due are

entered deferral such of our tenants approximately or with agreements annualized XX% rent base representing We currently into negotiating are agreements also rent.

our While to we a individual of rent quarter discussions paying on three are deferral net dealing late case commencing tenants Generally, case in Generally a through current base late months rent responsible the basis. XXXX one involve be basis. deferrals on deferring with second deferred an rent the by with triple repaid for XXXX. charges to remain

tenants We to agreeing forgiveness with as are rent. funds advancing tenants, to are rent or be discussing not nor we repaid to

or May involve felt to fluid remedies. balance moving cases tenants, the in these which to some We about did to deferral of all ability earnings over these to many long of on that time. and term rent we situation. our remain or chosen their which pay in of of reporting tenants reporting reach arrangements, release. not tenants was only do of collections agreed with Consistent results June many some immediate monthly advance Many for so, approach we said, do quarterly, I pay agreement or tenants hopeful for some the anticipate forgiveness, this fast to our we not April could payment of or pursuing our rent dialogue practice and way are with insistent of not our with second quarter far not rent legal As but as have tenants the wanted those so are we that

to before you Kevin, I call that April. quarterly dividend remind over stock our turning in want Lastly, to we regular the common all declared

and impressive turmoil, the of will our we consecutive the means philosophy sheet our XX consistently no work dividend a indicator years that do current to through for believe, consistent policy value conservative of economic balance is business of our is as dividend board untouchable. We the dividend continue powerful review and increasing by our Our streak model. however,

Properties its its tenants and So see ahead normal. reality in planning new for current you their to the of businesses with us, quarter first behind National Retail address working capital, the the conserving disruption

balance and the on for details of position first Let over XXXX. more quarter, me the strong to call our liquidity the around now thoughts turn Kevin our

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

release as payout rent consistent few this prior XXXX, FFO ratio quarter, quarter, first XX, for focused which just consistent core $X.XX and on And of quarterly revenues end. ended our I'm the per March XXXX and XX.X% at million and annual G&A XXXX. guidance. with headline was we base prior the are in our at But that’s was before the quarter. with this for full of expense higher first Occupancy $XXX.X quarter XX.X% quarter leases first about that quarter of share the point. for flat from morning's X.X% levels. results year fourth was the AFFO that a And for and all was dividend the of place year X.X% of couple projections and with that's With than guessing the results press quarter of comments

those February we of As million paid used cost that XX -- issued coupon I We Jay amortization debt year expense and weren't million $XXX XX-year off $XXX due proceeds coupon. as due result mentioned, redeem $XXX on of XXXX that those 'XX March, accelerated $X.X million note maturity $XXX of X.X% they X.X% XXth, quarter half million interest about a with our March note notes will in unsecured we million note and in note XXXX. with discount of redemption. of X.X% early and a in plus maturity first includes to

Absent non-cash But cash pandemic We we over liquidity million line. core prior enhance representing results. was pushed that And incremental States, have average to ended per United just bank $XXX weighted share, our transactions interest outstanding though debt on this beginning maturity X% as FFO $X.XX in year X.X%. importantly this weighted our unfold our rate would on more flu growth the maturity our the of report and of with of to allowed us million sheet. expense These the balance quarter amount pushed the to next no average XXXX. a to on years debt have with $XXX transaction XX.X

next very capital few we're good the during years. obligations liquidity So three position a with in

the first and Leverage very strong. debt at was metrics X.X was times that assets was flat fixed EBITDA with X.X was coverage XX.X%, gross was March coverage times to for Net Debt year-end. time charge X.X XX. Interest to book quarter. remain

excluded have note note and and two of $XX Only properties amortization, would X are been fixed you our coverage totaling costs five and those million. interest million mortgages, $X.X If times X,XXX of X.X the times by charge. metrics encumbered respectively for discount

Jay we the of duration the associated market produced and of and will the out. earnings able virus the mandated new to we're shutdown, a things what capital the light uncertainty the turmoil. As in this closures guidance also withdrawing our we mentioned, morning, announced are economic pandemic XXXX by store like, normal read shape might reasonably look we play better Until recovery the predict of and how get on not the and

involve an XXXX individual one Generally, over from as three tenant period 'XX. month deferral with that months of of mentioned, dealing on While a with to of to we're late deferred Jay they these rent basis. either paid rent deferrals late

number So with rent forward we them to a will work a owed to path our to continuing be tenants us. to of pay for find the

help get work future. has too rent approach in the of allow get shutdown, to and tenants to the the and side to distant the them not then Our other with been repaid deferrals

too shutdown much duration the balance. on little or deferrals reasonable with level rent the recovery. does of have This but our uncertainty make shape clear the we’ve may we not and too So if the of much we're struck hoping a subsequent done depends of it

what to a that end opportunity to Jess questions. As the in global economy that, coming for with and undoubtedly and best work give to it the we years. to continue difficult be will XXXX will succeed any end the And up we through open work we

We'll James. Raymond Instructions]. Collin to Thank Mings first at you move [Operator

on your it dividends you increasing potentially given First quarters leverage how elaborate question you dividend the few me, untouchable? but track versus wasn't you flow acknowledged for to the aligning Can just a and plan dividend margin record, just with from cash on balance in a also generation track highlighted record quarter?

I way the not policy term. is on or our to respond two longer I’d reasonably of we is but what one rather quarters guess the set over think dividend on that the is, basis sustainable

and cushion you the to some reasons through dividend going into have ability go pandemic payout support through like did like XX% of the we to we periods to one going is challenging like XXXX-XX today. So want as and ratio we're this provide

and a So comfortable regular quarterly as ago we were go. dividend couple declaring things we evaluate we'll our weeks

Jay that in going current downturn the healthcare clearly to one I sacrosanct. driven coming where to that years of degree dividend to our quarters. we're it's the timing on months But While started, The mentioned, I that's will shape with XX-year decide results. how our gain And policy challenge of reiterate dividend, a of more the handicap the quarters to consecutive in play as guess have we going in of a obviously policy inform it that out. the pride But our as difficult two help not we're thoughts increasing by will visibility and and based about some is it's or hopefully dividend not recovery. to appropriate coming

that a Collin, a helped are And again, in liquidity just recently. make decision lot we position very very, that highlight to easier strong

relative initial Jay, on pay I on provide provide to May? aren't many from that plan based collections tenants? April what And received that don't But going have any or can may indicated to just anticipated to in or they you here May, tenants there paid heard collections color you've recognized be are you in And April updates. monthly in

Collin, real you there May. give no I can on is color

this. your though, it approach really can that you just to about question in be May the talk One though all I then rent you've follow to think agreed April deferred. thing moment and if to to our about May rent think for extent to on you deferrals up a will your expect

term I cases a think it and bit little in our customers his very tenant comments mentioned our Kevin and I long many our taking are for These little we're in a customers bit my they've comments, long it been just toward a mentioned in a time. view many, relationships.

not are but firm fair want but to the looking nose of customers, be this long-term unforeseen the And with unexpected to so our disruption. in punch we we in anybody middle

to working collaborative So a this. tenants through all very taking with our we're approach

that to point. just Jay,

have to, you to any just the or negotiate these or you the additional in agreed simply for thing tenants exchange for it you sort deferrals, have As agreed your is payments picking them off of deferral granting now?

Generally, fast, is moment, about, Collin, this do deferrals things term short and to simply soon with paid just Kevin moving relatively while relatively back deal talked to at we wanted what so as are fast. that, rent get

at And so we something at this and these work short deferrals. our again, moment them to wanted try that did the not push wanted term with tenants. more situation to, with look initial to we as We just onto deal

go McElroy We’ll next Christy to Citigroup. at

And off straight converting leases write were normal accounting? rents It quarter. lower rent. straight How than converting receivable looks convert like non-payment with to environment associated in you piece first the about recent to more context you needing rents the in potential cash current of basis trends of line any think for the in just cash Did the the quarters? do the towards and any to basis line

will No, amount first process Obviously, higher question? deferrals obviously, have the any of second quarter, straight for that quarter. materially we last in of forward. the meaningful there notable was in accrued part rent line off going of wasn't write What given rents, be

Well, the more, about I how for it cash to guess leads the you’re basis. just needing potential convert to thinking

probably How on non-payment second about as are you've the uncollectability potential we of and the about for So had think the… thinking you quarter rents. XX%

now, but know to have your Yes, at to of we will fact, need the presuming amounts. And approved as something vast material not that to point just don't deferred that going with collectability if go recognition. we're these where and kind then in if go paid will along it's as amount, get that get right probable of plan. become think to moment, that's in majority evaluate a we're of to deferral to the cash we a we we point basis you a deferrals the accordance may But these the

of then rent and many for have sense didn't utilities their think pay also just us in expenses for pay did do the taxes? And you and property how not a XX% April, about operating trying that to So potential like the P&L, we that paid have expenses? and rents are have some How run underwrite expenses your to tracking the that of may historically and as burn you operating not deferred. that do not how cash are you non-payment are cover through

our of those those in paying expenses. agreements, still The that vast are paid. majority for the get requiring Generally expenses we're deferral

if, We are a paying rent. about not if use to that expenses of one rent. that's for the internally only assume the looking are just that to about going we only level that, We metric defer And where is rent. and to thinking equate property tend tenant to base XX%

a million $X was along there's go rent property might say that. let's that with year, expenses $XXX,XXX probably So of

and if the play budget internally that's that or we way project estimate way ever one to that's that. when into So comes

pay lastly question, taking got taking balanced understanding recognizing view, you're Collin’s of a follow-up be need to relationships you've you're the on and to you approach deferral then and just ton negotiations, long a a that And term collaborative. rents. that Can you deferrals. you've out, But break of XX%? out of tenants pointed also are that I can kind your these as national of you requesting rents lot had know XX%

you're talked legal you those versus actually you're and those how having XX% remedies? ultimately to more negotiations harder ball, break rents, So of out wanting terms about playing between that deferrals would pursuing that in you’ve what on collect

still But we of take. your that a in a vast at -- if at felt the feel arrangements optimistic too willing folks turned I that that hopeful, tenants far certainly I we we we're have so strong But haven't Christy, of good and and word like with, maybe that didn't so anecdotally those payment weren't like the pay get optimistic point. deferral you or lot that that don't we're some have think the could too were majority they need we the -- answer into guess I tenants to to we I probably steps moment the and but play at think question. that a look quantified to will dialog the way are and of think with taking

Malhotra We'll Morgan go next to Stanley. Vikram at

for net really triple triple get just the this way. times comment updates kind changing of Maybe environment either of everyone. June or mentioned, historical model be be, very Obviously actually on but just stability be the providing maybe expand to net sort you and a to I’d I May company or encourage I good of in know given you first. won't the May and June to

any So can the that to months. give the next helpful over color extend few you would be

deferrals Just not months, wondering couple of on tenants willing will discussing. if paid, term you around the on and seem deferrals, in like still paid near-term having said Would exchange them to or come you're something out but given pushed I'm else about the like just they be not doesn't certainly you for they’ve talked have provide that and it pay? in the say that

Vikram, is with each basis. case discussion each case a on by tenant

a to with tenants. to do discussions we we and if for to so with getting the dealing deferral a work simple time tenant may and that intend is arrangements. pay occupancy the our is the challenging said as simple And exercise recognizing everyone, trying just it to moment, are on We for But our them keeping rights. the agreement. this this And with you other tenant those approaches rent back into kind don't in enter have restarted of yes, and well and deferral choosing about we not

may of tenants some some article there’s of be have they And sort in Chuckie sort bankruptcy restructuring. out an I restructuring, know then Cheese, or just may on announced that that any

a updates last around thoughts any call Cheese few specifically? Chuckie it You quarter. tenants on did Any those

No nothing news kind what's the of there. beyond in

to then want correctly. sure is just the of issue? shortfall hypothetically focus, It dividend you up I quarter, be is long say Obviously, given second heard just there on And make use it you to it when and to sacrosanct. But dividend, you be position, have last term, two assume proceeds the one a may a or willing the intact, as liquidity track this key if kind over fair as say not as I would a the you to is let's one near quarter to keep third other view lever that record.

think Yes, our a dividend is multiyear I as mentioned, philosophy Kevin approach.

And so or no situation We’ve so approach. ourselves that doesn't or a one month so. quarter long-term one affect or quarter that a positioned month

what a have too for I things And ability all everybody dividends. on comfortable sense many, about or have the then dividend going two, we we're not with greater meantime you time. hoping I think better better the have a period very long the inform hopes for that quarter months, over how And are a of in shake we're visibility once to hopefully next think and matter to is decision we'll then that our the of our in sustainable But out.

last I that you investment actually are deferral, tenants Has your I true of group rents? the and one tenants think specifically, if XX% have around And requesting grade. of color some paid just may, types tenants

Yes, we've grade by on high investment success had getting very our tenants. rate paid

RBC Hawthorne with to go We'll Brian next Capital.

that of any of the rent they paying tenants full Are paying question them from -- rents? rents. are partial or they me, one paying Just month's

All are of rent, paying them yes. full

at next go to We'll Janney. Rob Stevenson

about aggregated non-collections lines XX% you what the is non-payer. AMC XX% that On primarily I is well-publicized But trade could a of talk in? non-deferrals, obviously, mean, and

trade at But stand troubled are business than in the more the a lines is any of expect of that you down, much there is no other would there's list their characteristic. pretty these common lines in when industries through kind shut don't being are think of -- Rob, portfolio. real might where I looked that our lot you tenants of be different that

restaurants, under of to in-location revenues tenants, normal ability when talking you what's this XX%? of you any how trade they at and both I their service. falling then to mean sort they're back have lines rents I is pay the come do And their doing if and limited revenues two you service much with different only? a I dining the mean look -- where and very does takeout of full XX% normal not of as idea quickly? the Do mean, are

it's is think comes where to it's too it others instances, And early project strong I the end. to out and some not. in business try at takeout the

safe reopened are operators things started employees out way really on We of companies see to we business just to casual They're restaurants and their it one hard work. their So, food towel. ballpark. very relatively all for and different are the get that working again just all good tenants, talked determinants to all to a on I they're trying, trying dining in general working lots about any that serve will get hard that's are a in well restaurants the a of and are get of it's conversations restarted. lot are kind all of over to that's their what But the our The are in get make fashion to businesses say we ways notable. thing they having smart themselves working throwing open. figure are doing What customers. with

me. last month, school electronically you're given And are what of for from to at the the do by some the what your payment know you what tenants And old in paid really of one normally? get point mailing in Kevin, paying form versus that sort dates, then various percentage check? month going a

XX%. it it's know XXth in usually don't answer, fashion. we've very I’d or a that. that but Yes, pay XXth, form the norm exact month, high the read usually good percent by how And go. mean, it's quite on we're mid but some good or by electronically call have obviously, the going -- follow didn't a I to read on got April a I

April, was occurred month. all the was what’s the question your normal. discussions In through Rob, and normal was Kevin's the answer what

Green next Spenser Allaway Street. at go to We'll

I just think portion open. could of is first don't that on tenant yet. share base you touched currently your we Maybe what

open. real fully closed maybe We anecdotally, closed another so half, fully there's but around partially don't anecdotal. Those think rough to there's XX% or maybe there's and probably close, closely, that - and open are because maybe and close But open fully that's track Spenser it’s partially very open, we numbers. partially percent half, quarter

Just that was premise that my mandates. kind are given open states and their starting some fact of the left of just the just closure slowly question, second

guys any your was states So were curious the I reopened base as if tenant sense just encouraged or given that you mandates? in maybe some to reopening lifting of what -- portion to able up of

to we've information advantage gotten positioning come extent The that that. the customers states to in, to able more is, allowing of they're to themselves be that are take

So right fluid yes, it’s that number you're moves. a

And the so get openings will if expect better I that we think continue.

your one were on those the cap just occupied? could disposition which quarter on if more you the you And sold assets that were maybe I during may, rate and provide vacant,

of XX mentioned, rate Jay cap at, reported sold, I believe. of on vacant total six the at for or disposition about proceeds $X.X million. terms X.X% the think properties And we I were

no was vacant… the Spenser, on And rate there cap

Todd go Stender to We'll Wells next at Fargo.

but open, tenants? having on volumes you that and concentration it's any down. industry are with comment details, just you. largest because Thank just your Can space, you're must conversations maybe or then Difficulty] [Technical traffic guys be

off. do to need to half your again, hate I Todd, you you. question of to was But cut start the I it it first

just because helpful? you're about. Maybe largest industry on must Any the tenants largest down. and comment traffic just Thank details be stores, with talking what it's volumes you. but you're convenience open, to be tenant, comes seeing, they're would your what it When exposure

where was convenience stores their they're up. And suburban And more of a convenience Sure. our convenience gasoline traffic yes, during at of as And of is on month Convenience the one April. down. two-thirds business store businesses sales. The you sold is number of store on down, margin families go store the remained inside may kind of the necessities. the get the better, solid of locations arr a to but recall, about gallons profitability much where

inside in the has with stores convenience sales been So portfolio very the our solid.

real So felt well a always good like as estate. we good business that was as

And so far be proven the itself pandemic, to case this again. through that's

[pointing] think cash get on, thoughts get happening? can Do just more you're of see you real Maybe [financial] you for going deferrals? what some you'll share now. some more some outcomes describe estate the are term. negotiations maybe then the the outcome? can that Obviously, And that you on rent from But are some tenants,

good Well, face tenants right having other in might, kinds things types elements that other the road. come we able negotiations about into those of documents to Right not now play be do short these we earlier, then and I of with our to they right Down get wide and craft cause. range maintain moment, I expect punch duration to we're our changes a as simply the as tenants the a be or good quickly longstanding future or to relationship we what and forth might back currency our is partner down was But with with in road, nose of business just always as will, our a tenants other the deferrals just road. that didn't with will them. we about down that fully discussion tenant to the said want of we now a try do didn't the we just that like have the assuming what disruption lease in for want the now tenants,

dislocation the you line ride tapping sit you about Do see that markets need then now. you the see and tapped this liquidity? cash just do And Kevin, kind line to how in of haven't to on think now? And credit to right just credits right of with the out

XXXX-XX I obligations, draw a bank Obviously, their have don't the a where than in have and know as $XXX do million good down material mind we banks or investments debated REITs capital a and bit liquidity just question don't internally could more different but And this change debt no they your we've But challenges got Yes, need liquidity. the now, it that. of and down view either. feel cash, new and really a draw we're for didn't back then then have have they had may we need are. we little well today. with the this spending, of done we we of line we we're today, number to to

-- Todd wobbly to don't being your we at think Yes, view also, so as the point the markets and capital moment. I

extent sense that quickly. that the And we so do all watching to able like to at But that but on there issue most it, about was now. we we're an right we being would draw have felt don't likely

Dennerlein of We'll America. go Bank next to at Joshua

I just tenants was XQ. on the your known just in remarks you pandemic? there wanted related touch that to to opening the kind that move any in of something outs comment base tenants or Is particular following about

No, rates general I we of at just more high our running comment it's occupancy been the end long for that, think have a a time.

seems may some. to environment it in this go current may And there -- that expected down that reasonable so,

how that specific So even there. deferrals this come of granting, then And range then And kind one you what's that that to driving range? in nothing up do for you're of with rent the three months environment?

try will said this you good our shape It's something to even said, and was with the do lift figure as to what recovery. at and couple customers certainly that of and said, we Well, a to impossible, weeks our out exactly short easy be approach Kevin the ago where today term the where start moment. just when will to

to the behave is the tenants take thoughtful, good start months, just reasonable along National out how is three steps play to bit. because the discussion to And everyone methodical let's behaves, out itself the going we way. to while this little Properties one a figure which said, way we just then feel like with, a kind really over typically slow, tries of with Retail that's So period time is

Yes, too the judgment day, too between out. are we've right mean the see. and going I of right doing much about at struck the said, end And little. doing we'll like difficult it's we're but know where it's things to hopefully, play to a I balance call hopefully, But and

it's pandemic, now of does kind general just since up that change and three follow of pushed Would it's any the that And that, months be that payback? deferrals. another kind of we as have like it's on kind helpful… thoughts same How one rent the maybe is you got economy months three on from of would out, think we like

about the I'm get those answer to deferrals still is speculation discussion But that have fashion about deferral It's the a we trying in business that. too hesitant that extent a get struggling to these definitive then the have we to tenant's and lot greater to need to we'll just a periods of discussions. of end

currencies or or out to flat changing other one other lease other greater As I to bumps, talk documents, lease a that term either changing tenant just besides at landlord there's about a rent lease answers, mentioned to the create can things. or of the value property, some

discussion extends in here have the to it discussion and this this so than we April. have be may wide to the nice a extent conversation with longer we first have And tenants, problem wanted simple second any for ranging more to

me. from question last one And

like of that’s any have, common exposure kind as you curious as that there deferral industry just from themes rent the how playing requests like that saw the you Is XX% far on more out? of or For ADR.

common and Josh, home of at I stay that the looked shutdowns list orders. our into of and of the think kind in most coming sectors see of the if affected The where they to from. were were portfolio, you’d trade sense you as lines by

significantly restaurant family -- sectors businesses So the entertainment in and and those their where affected. are movie definitely health the and and tenants the fitness needed sector theaters, had

Ladenburg John at Thalmann. We’ll go next is Massocca

Understanding of your would see need reaccelerate activity? it’s maybe and times. kind still pretty acquisition to you What uncertain platform to

no that. answer John, to line bright there's

in we’ve said, itself this great position recovery see out. plays just and as kind in position are, stay we're of how financial to We

But And those it get have is We you more to definitely science offence, at acquisition we'd we're the of -- when moment. and the hard moment is light to been that restart playing be a where that okay, that we will an are I end than paused say. to the came back anxious tunnel. were that first this see the the quarter art some said hopeful for the scheduled able of deals of on we paused,

transactions. to traditional partners of a out kind potential coming seeing seeing leaseback or of with have are And third party you either sale are you deal for party I there, transaction guys been of you? lot But your maybe, third you potential deals know market flow through some

are deals rates say hit low. seen way adds, John, you a back of we -- broker cap at of in I'll busted higher haven't coming so the much very the lot We still market far still are the cap that or anything. where rates XX/XX exchange

the the bid all between yet into big the really the I hasn't transaction market effect it gap itself the right ask of think this worked and I think.

But invoice tenants expected that the of you given paying who pay kind with of or fluid the going maybe Have that for in indicated looking opportunistic back have did of later May? some been of may in have off? of they're the kind kind And its were of April, receipt light ended that I have timing then kind portfolio. know maybe deferrals you up XX% rent. bucket seen in saw to people And any and

of that’s yes. felt able the see kind -- pay some to after We've available we had were we've Short with of to conversation to wanted was the answer discussions tenants. that relief there a were to that tenants rent. and what with have for good, paid they each dialog of with candid over, the tenants. bucket we want these was in our What open, one the long-term We're is this in had

work process. go honest is whole with to feels through And so right and this them the to like have conversations this business full way about this

given And the Has may, of the backdrop your on then last leverage at quick changed one, one I outlook all? if pandemic.

materially. think don't I No,

this don't And we're above more wish always we're and when of we liquidity. unfortunately, have, average obviously, comfortable had we -- think, leveraged you but conservatively in you fairly have think less are. you than amount leverage I come and where liquidity I

So we're in pretty good shape.

And the operate so, I balance in we at point. think would this don't sheet there's change way much the we'd

such leverage Our us positioned good what now be right has on in to shape this. outlook for is

Linda go next Tsai to at Jefferies. We'll

going since tenants you those options think has tenant when you are during sense in dispositions? the remind would occupancy second, But be you’ll you vacancies. who the likely more know I then. or think mix that those and changed could base crisis? First, about us XQ, was have for And what down Would of then a financial occupancy backfill trough

what recession off, recovered XXXX, XXXX, in First or dropped second dealing too just the us right with into in it's to beyond, to at and strategy about depth the vacant or think occupancy of those the in for it properties. XX.X% a back the early XX% I couple question, quarter, properties become years of range. And as your talk what the second might for

on philosophy is job those properties. long-term one Our is vacancies that to re-lease

vacancies for of And I expect out that that this so that would any pandemic. job come be will still one

that. there's operating out now re-lease would change if deal And as to we're do seen couple I philosophy property, to last better see off significant to vacancy conclude But think we our general us vacant portfolio. to the what's there in to sell you've how after years, nothing of would the cause properties that us that than us the about the about efforts with you in

thoughts world as on terms begins face-to-face think in Are differently, of the is then transacted whether to necessary? you up. And transactions do might open be deals there

visit to building there's on to know time, in early less necessary think relationships early or substitute stages Down to road, maybe each no each an folks tenant is in but other the folks a the face-to-face XXth for existing XXth get travel with there for of the relationship. other. I think do We for visiting

at to Michael We'll go Gorman BTIG. next

rent of that of for I Just Did in any for housekeeping wanted April. of quick then deferral. asked just subsequently understand, the XX% a collected to me.

in So the XX between is release? XX the there any and that reported you the overlap

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you the We at right lost highlight…

Instructions] move Milligan RJ [Operator on We'll to Baird. with

quick How Just been about, dividend have stock? of the dividend. my the idea of but terms in have question, or most think you questions you answered, in paying of one do considered

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Capital next go One. Lucas at We'll Instructions] [Operator Chris to

your Two you tenants I about investment quick very was of collected I if from the credit the in you to sort good. grade guess grade ones rent , mentioned tenants reference you guess of for just will? profile me. up future Jay, think rated your of terms earlier rated curious acquisitions, how investment in move

real we estate any them and evaluating the TI the will without well parcels and focus And lease for reasonable on been the continue located our do always at about reasonable acquisition to has acquire thinking where prices tenant our time putting renewal a high that. leased rate. a always we're landlord were in XX% we incentives. we strong renewing and and for us lease get tenants But strategy tenants pays Chris, tenant high rate that, lease the other rents. or the occupancy dollars of to

And that and by investment tenants. grade you acquired really continue not their philosophy. should investment or regional grew to to likely expanded in grade so grade expect follow that when we're were investment were that The properties. the have we portfolio They were we that acquired tenants tenants

sheet better in view grade balance We along estate that of at And fleeting. so the real we've price. with higher got tenant credit expenses right the tenants worlds possibly investment still good best and both as

view this should our every growth to day. the lower All have now about and right moment, inclined -- to more our But which at got. thinking those to we feel that said, property. we're price we're that hasn't more I per I stick would strategy we've with say, strategy but more migrate a lower so have far lower changed And yield, so that when initial properties, it nice it's it of

profit you're or one you a deferrals those size approach And term? March margin, on or being the then to all based relates on are fits sort to it as Or just Are giving. trying rent of approach? individual that tenants simplified their it tailored remaining to

one not It's it simple. but we've size been to keep fits all, trying

Chris. work to figure if we many have have we way. what out conversations works We’ve in small, tried But to tenants what for got and the for sizes, that and don't them seems too structure and direct candid deferrals to maybe with medium us we’ve just -- so our sizes. large, And then haven't

to return with Citigroup. McElroy Christy We’ll

here Bilerman Michael It’s for Christy.

the to security of lease and your to of not spent net you, to of what outside I have tenants CapEx you? they paying and make terms when payment in property guess rent you that tenant make is the your do the taxes, half obligations sure everything being paid are Just insurance,

of is part Michael, we've of the at tenants is It tracks end got that. of the with group the the of all deferral. a and it the part that our of discussion front documentation

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have the you for you obligation, XX have know some didn't XX% their do of that XX How got but pay could paid? obligations, there's haven't still you -- become that for got rents deferral, up only that’s is your rent, other all which actually XX% in of been asked XX% still of asked you the tenants even the in XX%. deferral, But maybe to April, of

servicing said, lease I Like responsibilities. tracks that those we’ve group got a

group But the deferral, then at the going math of do -- are mobile haven't taking that I your paid they working rent that that XX that the mean paid the that the have find when rent, what you you your it bill, some your their haven't point to back paid the XX haven't XX have what XX% say what plus you that you they not fund? of those come, come their insurance being bill? How or obligations just and those not haven't paid? XX. I you to packs tenants there's simple haven't do deferral, in are must tenants for out point point does will know asked paid of

are is of for out the due, We the typically process bill we find after tax notice part that.

with commitments likely we deal they're honor tenants that we think that So, to making to the highly are large us.

obligation So taxing find from to we those tenant’s But the got directly bills the or authority I the you're and it out do paid we've what understand saying. insurance when aren't vendor.

funding the we're And worried it's escrow than may end we tenant structure about, about on basis we what waiting you're if one a an for may smaller it's a rather and talking it's items those but often and where situation to get of not the monthly those escrowed year.

decided say It’s that have, just not of making have tenants with contractual theirs. of you, vendors other they're same tenants your the half your matter with who’s fulfill obligation to to if their decision not the

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that about Michael, something we long and it's hard. think

I'm one feel average. the the solid couple too call you do we're liquidity dividend these about of what like to April. longstanding at soon the to as judgment a two say mind, next make Certainly, just of for after that of We like quarter. But But see policy to well months be month to as next a going do the month, would we how because are months play let's [May], it month, change position in keeping talking the deferrals out. quarter, sure seems on and need always dramatic one in our a dividend months, for policy. it next we make And enough are couple a to change

everything's the one there many changed lasts sometime don't currently those worse out about making you ability you wish back how afford months rash shutdown a I our than as metrics, out. to if today. we'll And ratio, said, and mean folks two I But leverage dividend sooner. it's quarter, it more that the say, can anticipating always dividend how see liquidity, decision, things plays we're think And what the We quarter plays our have us just sheet see to Yes, payout are before balance sure it we and look policy. and buy not visibility.

months from token, quarterly the short think to from months the now, think because can't you to dividend taxable I you the sighted. to so my cash be get your even now, I have the earnings that's forecast much it point pay can a out same may pay pay income to That’s will required you ability your the or cash six maybe maybe XX How and for wanted me lower, or there’s even company? of is, struggle forecasting out, not or lower. year. your have to vantage be if But of rest that uncertainty out the about from

We saying. in one easy you're totally where it's but this what And call of at the day, and an at we're the not are. end understand comfortable we time point judgement it’s

follow our question a Allaway as take Spenser final up with at We'll Green Street.

Just more, so one just curious.

So the tenants hurt went perhaps to primarily cash the that pandemic? preserving the deals you it this of so were at with this Or out was that industries fact point? assumed that you during more the due quarter. would in back disproportionately be first to decision do in Was this

wouldn't was I'd we due we paused And them, to cash. backed completely it I Spenser, our say to our out say marshal them. desire

when said we later have look preserve we say of that that said, instance, almost but say As significant preserved we questions we money and these the back on end the we few cash. we let's and quarter in Michael's approached, should acquisitions we said deals ago, moment a have yes the from

for comments. any no holding, I'll additional management turn with other the questions to back or conference closing And

this All for right. joining Have good morning. Bye us you thank a We day. now.

today's conclude will that gentlemen, and Ladies conference.

You this have a may disconnect at day. time great and