National Retail Properties (NNN) 2 Nov 212021 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the National Retail Properties Third Quarter 2021 Operating Results. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Jay Whitehurst. Sir, the floor is yours.

Thank you, Matthew. Good morning, and welcome to the National Retail Properties Third Quarter 2021 Earnings Call.

call Officer, Financial Steve this and Kevin on Operating Chief Horn. me is Officer, Chief Habicht; Joining And we're occupancy pleased National and Retail to rock-solid report another with a acquisition solid increasing volume, sheet. high balance and collections Properties rent quarter for stock We dividends. making XXXX of in our increased dividend August, consecutive XXnd our year common increased U.S. other XX Only record dividend growth to companies, X REITs, other consistent public can offer of including only that impressive track investors. FFO guidance per this morning to indicates, are for And XXXX $X.XX our our core approximate X% of share, press release range performance. increase as per over which share an again a we $X.XX XXXX raising to reflects We're also $X.XX growth of approximately issuing share X% guidance for over XXXX FFO to per $X.XX, midpoint reflecting core to from XXXX midpoint. individual XXXX for our the Kevin factors behind and will both provide guidance details XXXX. more on Reader's Digest cylinders. all National the humming story of is Properties version is Retail But that on the

to of Turning highlights the third quarter results. financial our

retail Occupancy XX.X% from to X,XXX Our continues perform properties of above remains and prior well. exceedingly of the long-term our freestanding XX%. portfolio average slightly up quarter single-tenant ticked to

impressive rent operators our national including reasonable very rents. We of the and doing and of real percentage, of higher for a Moreover, transactions XX% and low well-located percentage validate large cost significantly these parcels rents equally deferred quarter. those forgave at at regional results strategy property of third with we direct companies, of real investment-grade favorably believe previously we per to no the tenants. other collection Collection with rent estate sale-leaseback These high compare also quarter. remained due collection estate announced results an during retail for

portfolio do programmatic sourced transactions, to long-term repeat which tenants up. are with relationship which of acquisitions, ramp primarily sale-leaseback continued from our Our we

cash of properties cash quarter, third duration million $XXX years. XX new an we at average million and in initial X.X% we've at XX rate lease with an properties an initial of rate the years. cap X.X% of XXX and invested lease an average XX in cap Year-to-date, duration During new invested $XXX of

the returned which $XXX we've our of million accordingly. million with to has mode, million for tenants XXXX have ticked as to of of majority and we acquisition business XXXX our of relationship range the increased growth guidance $XXX Our acquisition We've do a anticipate our our run And initial in issued transaction million. up volume acquisitions typical rate guidance $XXX we to returning to volume. range pre-pandemic $XXX to

over acquisitions. sold to properties, During now we've the raised divided of from and properties third the roughly sale XX million of Year-to-date, we $XX quarter, $XX raising into reinvested properties. XX between also vacant million new proceeds be leased equally properties,

over and by remains With remain advantage and the billion XX sector in to credit, line notes October, of future that a debt of balance XXXX interest-only well a no almost of may average in sheet material X of positioned in issuance balance September. have duration of by the of of and sheets of highlight in acquisitions strongest X.X% cash remaining million one maturities until opportunities years, present take our million our our balance after redemption one -- XX-year $X.X sector, Our strongest X% highlighted our $XXX $XXX on preferred debt weighted themselves. we of our fund

Well-Being roof. under their personnel our We talented XXXX hard our once that absolutely fully the professionalism. in are we resilient a together and of our I'm proud reopened flexibility, you to also Award and as On better one I to and company's front, certain thank all say office respect recipient. again recent I'm Cigna want July, work, for recognition associates

aspects our approach to reiterating of long-term all by our close business. me Let

staff that, play and upheaval is per share experts. to be continue strategy believe at during put own for durable the XXXX again for prices multiyear a basis rents, more that we and will right of and great long-tenured at our look leased resilient well-located acquired to diversified national creating on low-leveraged beyond. reasonable by the once strategy, as position long-term in on regional XXXX reasonable and proven turn call to guidance. crisis to a our period and third details approach strong broadly Kevin to has real supported and and review quarter a and sheet balance results we us This industry to a we has tenants over portfolio consistent of of offense Although to a and ahead estate refine With growth I'll all

Jay. Thanks,

As usual, statement. the cautionary

expectations in the headlines our make peak taper that the to this XXXX. AFFO scheduled will time disclosed actual results detail did of time revisions per -- of per quarter securities $X.XX be of the Today, of first the $X.XX certain share in press significantly of down second in from share the law. That's $X.XX for AFO discussed $X.XX that's third we up are future XXXX. results the federal preceding That's to and and greater FFO reported income share. actual may morning's this statements, matters amount release rental under to $X.XX the differ that, million from company's mentioned, With $X.XX from and per statements the year's statements quarter, could this after statements have forward-looking Jay statements also the to $X.X produced from may forward-looking rent $X.XX company's to We may not per was from accrued materially this we as deferred of release a AFFO preceding included for would payment changes deferral prior beginning $X.XX, from without footnote morning's We that filings up press risks repayments considered core per share levels quarter quarter the second that forward-looking from quarterly AFFO these quarter. and in result in made. and which half adjustment results off third release. the for to $X.XX be Factors cause share. from reflect with the SEC these The differ were report in third largely

Excluding months repayments, all was X ratio fairly with levels. that's consistent for payout XX.X%, and dividend AFFO the our year deferral prior first

We all at the September as really base That's with was Jay occupancy with fairly quarter, As the quarter recent the $XXX by consistent XX, and expense and of for XX.X% largely million third incentive end. million for of the noted, quarters. leases months rent place for quarter $XX.X X that G&A increase was in driven annual compensation. ended is quarter XXXX.

increased -- our rent to in annual quarter third in the by guidance $X.XX the We to for of a quarter reported AFFO increased XX% from to $X.XX guidance I'm to per or a range XXXX. range represent continue acquisition reduced to the increase similarly approximately approximately with previously core to -- from of tenants, per $X.XX the of and to XXXX activity. range quarter. acquisition XX% up headwinds X% we base continued XXXX from $X approximately range guidance the total Notably, to which third our That's about collections strong improved and of X.X% per As Jay mentioned, this a the from $X.XX and XXXX. that's of up quarter. to X.X% a strong range XX% guidance increased share. for a the to collections share rent $X.XX share, incorporates third $X.XX Today's despite levels in it XX% Collections sorry, exceeds rent, million cash-basis share remain $XX XXXX results FFO first and of did the in new quarter collections we today, $X.XX of our second and per our

million in on press unchanged are release. with for from acquisitions And to versus the they're the this $XXX $XXX to of previous increased of million quarter's the Some acquisition X exception that of today's $XXX million. the Page assumptions last of guidance -- guidance million of guidance guidance noted largely $XXX

to million disposition real Page million volume $XX collection million, and million; today's over That the back the We rent $XX rent XXXX $XXX of usual XXXX share We've both high and the we towards $XX remain set of to balance results $X.XX with of the cash net loss sheet. AFFO of X% of to at we're Largely million between of and volume total $X.XX over XXXX $X.XX our deferral tenant XX-year the offering X.X% press of X.X%, in noted core base rent assumed increase XXXX to hand. of XXXX acquisition scheduled initiated a press half XX-XX the slowdown our million, release of also for X time, second have optimistic ended the of includes on In to to using quarter G&A and years. guidance we $X.XX first guidance guidance $XXX $XXX.X per million guidance potential reimbursements a XXXX; collections supporting third in $XX represents million FFO high loss of to that repayments million. XX September, reflects X.X% of The Today, assumed that but expect as of midpoint $XX rent of and of have X.X% assumed estate for rent expenses we as rates half million; $XXX was drift skewed will on guidance. Page per a assumptions levels share. at rent. of debt X.X% continue potential the loss. $XXX and Switching expense completed annual result in to share, on release. assumption level per

end used X.X% redeem However, shortly was after preferred $XXX stock. on of to quarter million cash October that XX our

million bank would at a approximately basis facility outstanding $XXX and our on forma have on us $X.X end. amounts left no that billion cash with So quarter pro credit of

in XX.X interest a fixed our Weighted average remains excellent rate. now average is liquidity debt X.X% maturity years So approximately weighted shape. with

of maturity debt that's is in debt next Our due $XXX mid-XXXX. X.X% million coupon

that preferred quarter for forma and fixed pro gross for good in coverage liquidity A the is -- completed XX. XXXX. the for was is of soon that's net XXXX. That and and balance Net was XX.X%. positioned of and debt-to-EBITDA leverage not assets was with preferred X.Xx, the redemption debt to shape, sheet Interest leverage that's on X.Xx couple forma pro redemption coverage the well debt the very And end. third September preferred. book after dividends was at X.Xx charge So for we quarter

So XXXX on as noted, term positioned our consistent be remains And that basis. year. to the continue a share looks Jay We're endeavor another grow on to performance very per into continue we as XXXX. results focus to well long solid to

that, up to Matthew, we with So open questions. any will it

McConnell Your question Instructions] is from first [Operator Katy from coming Citi.

your little Katy. where acquisition you're light relative bridge the quarter's help for a could you on But opening Decraene remarks, between XQ. were a volumes seeing pre-pandemic I'm was you Parker talked about of I'm a know, a $XXX is running model, implied It's I you stand our looking at comment gap today. about quarter. I million, at do little just guys fourth wondering levels. what sort and about guys Jay, $XXX if to to back back XXXX, in million to This in obviously close that to bit able returning just your

you about could as think to touch sort just as potential ramp to great. if just So of on there's that 'XX that would continues year how and the well, to for any grow, that if for up be that

look at think That’s the is right, of Parker, midpoint. midpoint Yes. guidance, you Kevin? that if I the million, $XXX yes, XXXX

rate, relatively – run consistent point. I overpromise of it in So XXXX, want with mind bearing we our to that don’t kind that’s that’s and pre-pandemic think this at November here the is of

quarter. a kind tenants And mode having of And back run it’s a that deals to quarter so matter acquisition into this is growth the their third our and matter the timing. closed third in for of just relationship slightly of really rate numbers that last relative elevated getting

relationship one So as any particular kind properties, lines single-tenant with in in relationship retail we level other But that pipeline of properties. of lines Steve trade, results into and quarter’s acquisitions and that to their that. And also folks volume trade new do tenants and rate. acquisition in of are that macro of relates flow all feel tenants about in much good growth kind we the level, our continued I we wouldn’t we ebb read of general in too quarter’s much run feel are expansion too of in at it the In read But building wouldn’t – off good ultimately XXXX. of and of still way retail into building I volume. we the company the the business any that and particular acquisition that average world relationships about have

question from coming Capital Your Heffern Markets. is next from Brad RBC

the through relationship the acquisition channel? quarter amount can you with came volume in about talk that third of the theme, Sticking the the

do Steve, to you a bit? that about little talk want

Yes.

relationship. a This quarter Our than historical norms. X/X historical lower was third than being about little that bit

year-to-date, portfolio was that X/X, -- the back call a XX% They to but up a we But to to and was a carwash one at relationship. for arena. while, it significant be not there we had Now it we'll was that it that did enough a took company for fiduciary responsibility good out auction. talked

But those will someone goal business repeat a done do who we've previously once not first you, with tell to I relationship, Brad, that was then with our deal the folks. is

it into been the a while relationship transaction, so goal in turn is our there And not to one. they first may -- have

little recovered. The that just area then to that would what's full-service be And back path one the that's a restaurants. tenant? then to it. I'm sector's XXX%? lagging Got one Okay. on still curious, every effectively to is close bit collections, getting And

I focused it's Yes. back that And towards course, in to largely one -- be but next due think XXX% particular It's before will full-service year think on drifting it happens. restaurant I tenant.

rent deferred, Kevin? has right, that And been

Right. Right.

for scheduled farther just road. the repayment down it's So

most. a schedule has extended more than It deferral repayment

So that will catch up in time.

Your David is coming Securities. from Toti next question Collier from

questions. X had just I

-- little of value The to the of that what's seeing first valuations. in what What's pace should of you talk that markets you're compression? if compression? the there you're continued assets just the that looking bit of could range one Is a at? sort is And the transaction relative about

his Steve's at flat back, The cap little a to cap step I that say would David. macro you'd upward just me a all. would single-tenant Sure, say the still in the -- retail sector level, flat? at rate not sign say hand. to downward we they're trend. rates or have with continuing Steve, giving bumped

remaining So see rate's -- but And flat. we're continuing let's cap and say we're that at to near flat historic lows that.

sale Our transactions in driver this cap instance, of value repeat on where build relationship their these rate the the is doing focus we proposition. with is not customers with -- tenants, that And partner. relationship with leaseback as are the business only capital

are retailers, doing acquiring our see who to directly worried of initial cash reported a properties in And bit lot you so a that rates higher little cap other you'll that what are we than see generally business the when they're with the reporting signing one-off long-term market they properties directly do out call retailers. lease as a about that Also, opposed sale-leasebacks we with the on. folks

lease, slightly So own long-term we better that and get lease. get negotiate property, we we and our

XX that achieving of So of I are. want than comments. at I that from single-tenant that's think like to team estate companies average made really for duration materially properties -- opening I And I my year-to-date, how see am our emphasize note -- will lease And our we the are proud is acquiring years. that you real most in better

the when gets factored comes of us, to to it all comes rate into underwriting. evaluation doing that with the -- it along our -- cap and when So to underwriting and

little just long-winded just answer So this. But you of a approach cap versus wanted only. way truly differentiate the focused rate companies a kind I've we about they're of bit how look at given we to of things all other where on really I

the at Is your wondering, picture. do sectors any you of something a are that AI industry sort of advancement you that people be appreciate does tenant and categories, think? with is risk there that could machinery? And I or that you're... the for you're of segments seeing of last there replacement impact detail. just very question big very, I'm Okay. My any believe

one out with is their be real when our And be all location, good those high-traffic It’s with reasonable these – in to big the a attributes rents good will it We economy. demand, you our they refine by and that with relates real that national look to question. along the what’s it to the to own – roads attract locations trade. business I and But very business where perhaps property through is owning to shop. a couple – convenient what real business their trying how are but in operators. to large market we demand their indicating what to be kinds other in parcels live – to better all going to of expertise to companies kind impacts have focus regional business, looking from the business it large leased companies the are see us I that ‘XX, want continued out portfolio, with estate of and through would demand wherewithal the And do of – share estate their it That’s and picture into having I continue that, scale. AI, for take doing model. is people operators. on work not along our of at operators. of estate are us ‘XX is is that that recession I out. customers and utilized to and big that that want to tenants when I high-traffic figuring they’re types before to that found roads But figuring us as and future, of future has into small going There’s the as is are of get business and pandemic, they helped got run points all do line a financial how way and regardless automation, of make We areas run think people. perhaps with And perhaps What fewer but figure they have there. –

Wes from Baird. Golladay Your next from question is coming

cash strong you a balance have pro the quarter million been the sheet. pandemic, forma averaging this And around of even cash redemption. guys have the you balance preferred $XXX for in on Since

that throughout So year? plan large I guess balance next a the is to carry cash the year,

is that yes, Wes. has XXXX -- XX we been did years, entered a that's This correct we over not the debt months, been a correct. No, the XX in the in matter saying timing of you thanks, early offering. Kevin. last as are case. And was of Yes, But typically, over part that last XXXX,

gave And the us just of lot really -- eve so of on literally the the on that eve liquidity pandemic. a

real that net pandemic. with kind we usage our that worked creating any through so liquidity we stuck the way of And without as of

but historically see revert some us of to involved think you'll facility. -- so more I usage back And modest normal, bank which has our credit

the thinking eliminating and a then balance cash bank out we dollars it couple start about the line call So on longer-term capital. hundred of million before

So the cash us coming in back normal -- we'll think I shifting you'll profile see more to quarters.

would capital of when say, our it's indicative and philosophy well of it too, I it deploying is that and long-term raising discipline. priced with available Wes,

was the available. the it just to And so was a right so it for made time thing us pause tenants being. raise on do their But sit our sense to in that and acquisitions, we -- capital to it it relationship when taking to were

And guess, transactions then half this did you, what I first when in the acquisition on year. more you doing their sense. driven I than Was tenants by did Makes your it M&A this, Yes. M&A? activity, of guess, Or growth part? is the more you with organic look at quarter's the

Steve. is this Wes,

couple growth an sheet as organic industry, transactions, of funding of more of and M&A. one mentioned was carwash sale-leaseback really all there's them tenants. the that It the kind reinforcement rest tenants. of part wasn't the much But balance the then was and quarter in are M&A. for larger I a But was with This about

credit guess, your general we at next well, anything tenant just the higher guidance standing as this to than the I roster? that there current it typical definitely is when then And X.X% reserve, Or for out the year in level, even NNN Okay. is look year, caution? you is

And concerns assumption X% it’s to there’s investors Yes, realized, prudent what or That’s of Yes, frequently, course, now. we’re that. that have, but I cautiousness. always we just due hopefully, worried we about we about. that assumption have general our drift note a think communicating X% a for isn’t say, conservative in like guidance. can, just to in back And to we that nothing do

from coming Green Allaway next question from Your Street. is Spenser

pricing, the can then industries In you terms rate disposition what on have remind made to cap regards what here occupied they been? the And you just have were us the also today, of? comprised dispositions guys in of

of Kevin, have front do you you? in that

vacant The rate the X%. properties. of cap million properties, that. A is was $XX different per miscellaneous, of occupied XX There real million quick. I'm at looking convenience the dispositions, a million a stores, list of of any se of to $XX related $XX wasn't that just sector was And of of here you variety handful and and will. couple -- a was our That restaurants portfolio, real handful if that

really So assets. approach out bring -- line property-specific bottom-up trade-driven kind very and as We well of as decision not of to might a note. nothing for terms what pricing those sell stands really It's it's in of generally. market what take of a deciding so --

So at occupied a that's was we're cap occupied. X/X the it X% But X/X on for the equation that. with looking vacant,

And still X/X growth be in tenants. of expecting to -- not. curious of terms are your growth are I there kind you're you your seeing probably more others? guidance Great. any just versus are driven industries know just you're about than relationship mode existing where that I'm by more think particular year in customers, next guys of then

miss anything, Steve, can add you let at me And -- Steve, portfolio, those stab I look this. trade the I'd areas it's on. lines say, in of just in top if if take you our generally. a Spenser, really, across But I'll

to auto service also I and collision trying I consolidation Steve, think trade then has possible we -- at as some QSR building miss to, team And of his on of fast of The grow anything? our a some business continuing tenants. working in store for relationships proprietary repair. lines as and always, as business. are we'll keep year, moment, lot did try other going growth expect next industry be but on to as relationship Steve possible, carwash business, pool food new convenience some as that long the to

lot Yes, just we’re service of kind into establish platform. to industry, equity coming a private money of really seeing it expand. trying The auto

So the looking are smaller third-generation second-, QSR, we’re and within growth a ones. cash of get buying owners. larger QSR get seeing a And just to out of that of They’re the the lot franchisees We industry. lot business out.

we’re that of a activity seeing in So sector. lot

Your next America. question Bank Doican] coming is [Lizzie from of from

I'm you labor industries to broadly on for your Dennerlein. combating that? I that wondering Josh thoughts of your would challenges could you're impacts particularly comment considered. thinking future hear pressures around addressing are just how from tenants more on was fields being in. certain specific if and How be to from wage shortage, you are It inflation to great any

Sure.

Let the we rents. and the that refer low reasonable with and been want look And leased you some refer rent price me to often your are to tenants you've what low as security. what along mean, of high-traffic to location focusing along to the Steve, reasonable balance way kind of possible think or as for and comfort talk want from at enduring what maybe more a strategic that margin with turn level, a properties we primary that, safety your we high-traffic at primary often security deal it as is on I that a as the I'll we real over on I what as of low-cost we have can to a sheet at as is focusing acquire possible. even Those road that that's focus you've can for as store-level then, what -- we But -- builds [Lizzie], heard low for a tenant's performance rents price roads. estate on than in I But to. a good strategic talking about that

properties and trying that And to are well-located that's tenants locations, is you've you of of income where highly we there stream But be pandemic increases through allows the about our to have to dividend we're keep that? trade, you through and properties growth. that's rents. those occupied. reasonable what now that, And the talk and line are helps level. telling stable it of remain the what have the seen and so macro to want that us at labor recession in situation and that those And long want about share to tenants the to history build all want Steve, find, of regardless do what per

Yes.

to are they're the to restaurants of combat the and the wage start top more with, starting is becoming or the Specifically, industry up. margins so shortage, inflation. the efficient hours. labor back finding day, the through stores employees, restaurant actually when Early able line in we'll shutting they employees. fewer QSRs are consumer slowly now kind full-serve and But their wage of stores. the But the QSRs with certain their -- we're the convenience What inflation, fewer that's of wage inflation peak were be low on hours down have kind they're pass convenience to to coming because

large close Yes. tenants. I'd on say [Lizzie], that, with just mom-and-pop to don't have We regional Yes, and deal national tenants. we

of of the one the they're consumer. on are this think that some I questions, point the they're And -- of across to they feel on focusing like management. automation some pass they and the different they And lines -- of can price, so labor to earlier can and take trade they that

your areas provide... I very for any away And growth. the on historically? If like just maybe largest to X-Eleven? has commented can you Are us in you my from or tenant, again helpful. perhaps portfolio of question, diversify remind then just exposure there That's plans been tenants what mix your of know you industries second certain could

right. Yes,

the for past looked has similar portfolio pretty Our years. X

change things validated costs. minute and the locations of -- about with I we're consistent reasonable So that ago: lines generally the you the things our mix. good focusing a pandemic the of of at there I assume top be in going kind continue that that the to of trade. to going hasn't been relativity one those should we a to talked -- all feel like rents And The reasonable big think between approach on

continue more in still one theater that And underwriting are so very where are special bigger uses. boxes more is to you see very be we industry and prudent will -- The movie have that remaining thoughtful us special-purpose cautious.

an Our about right that going they've job in tenants -- sector. our are track paying the us. But great a raising movie us now. with be theater on money, of want of cautious done a trade to forward. And tenant is rent line and that's they're primary still we right AMC area

forward. than of to other theaters a see keeping likely rent that the going income focus instance, like down. of durable rental us stream. keeping in continue any down we and So trade, pretty that, you're cost line built not what going feel we're And the buy to And on we many -- or the movie to regardless

from if and fits we approach. and portfolio priced rather is a We make don't reasonably portfolio we Yes. location to these the Kevin. and decide our "Let's bottom to start the -- at standpoint, of good a there say, terms in bottom adequate it's up buy we back there. in have sure lines million our it about move that than up to this. is properties way X very in side a don't X just then a approach the We -- note fits to from $XXX related One macro work and decide it we And think and We're trade states." top-down in diversification. sit start in of property whether worth how don't the of But

top to tenant. last add, maybe mentioned X-Eleven And our guess you [Lizzie], I one thing as

X We have directly X-Eleven. done business with

we ultimately in or portfolio one know did acquired All operators of fashion that I yields sleep of – about is who by we we in if would is we another. in by but our of an the not acquired on operators of who ours, X-Eleven But in become originally estate transactions that. it anything – worry eye other was some And ever That regional keep bigger don’t exposure to our best and X-Eleven an our will strong have X-Eleven X-Eleven and did – also We tenant extent that at grew lose future real get portfolio. happen, were would real our the the happen. with X-Eleven the best that. even estate it, some of over would but prices that, not

is John from from Ladenburg question next Massocca Thalmann. coming Your

into to loss in loss is back the you're just guidance, of kind X.X% for XXXX going baking XXXX first X kind the the outlook. of the current Maybe and credit actual what guess months to of of the in credit I the remainder year? compared result

I about to bit. little a need that think

basis. X.X% way the it's, basis X that the and think think on X% call cash about on tenants, it, I is about I -- the about accrual about

point all So something probably that's all that, XX the year, but in, months. in, basis at for points, probably this like sub-X% X

outcomes. Okay. That's I'm kind helpful. just of maybe -- guidance historical to kind of versus trying

So that's helpful.

late pre-pandemic, point kind -- we're would on but post-pandemic, than probably pandemic I of instead that post maybe think of out we're currently. been question. less Fair points basis Yes. given pre-pandemic, which number I year. we XX would But a have

heard returning us have we days, think you that to not-too-distant small which future. And And the never that those pre-pandemic number the probably in number. are so so talk we -- about it's to look forward to a extent

So...

a And Understood. bit. gears then switching maybe little Okay.

in et how can leeway of terms lot -- of maybe of As of kind rent new we but where free additional or new think current put I kind a of maybe inflationary your a drivers more floating there's leases? transactions portfolio, the push lot rent environment, kind kind kind of guess you tie same-store in about with But -- at of those all if is in in know to I kind CPI. of cetera. is them you're of any particularly leveraged capped escalators to in escalators. of it CPI Florida, kind

size tenant us I sophistication the with, increases. tenants deal business of is large rent operators year for better we with. and increases, may uncapped core give That be and our expect we the from much want our long-term do to you we you tenant can core of you of operators get that’s per that we in view do a with. CPI John, And national are kind the That – and don’t that something that – do better business the than the that smaller it, that and for our average expect underwriting you not to regional X.X% relationship of not should to strategy. – get you extent for these the building that do market to of our a think that that so of than Yes. any just our would and not

So annual continue I the of increases. year assume think case, that, kind that’s per to you of be should to just kind X.X% going

One Capital Chris is from question from next Lucas coming Securities. Your

couple Just year guidance on year? quick follow-ups a cap for expectations change Any next to relative this rate the to assumptions. of

guidance, range? we the Kevin, bit the I down X.X X.X, it bumped a of to next little kind think year's

compared Low X compression, XXXX. to XXXX to see cap overall range. We're the rate some for expecting

the XX% think had Okay. I thinking How it you then acquisitions expected the cadence when you out to and of you or XX% back are be laid front 'XX? sort is for looking you that guidance, about how end mentioned XXXX And end.

for XX-XX. assumed We've well, XXXX Yes. similar a pacing cadence and as

then should slightly How about expirations volume? thinking 'XX that we on And sort embedded retention Okay. of What's lease my guidance? of your last be rate are for in sort question is your elevated.

I think XX% rent. the our lease to the tenants the rate historical renew long-term then the of at current XX% time, is

same ballpark stores. And you are tenants something so that the going forward. really expirations year's should in assume convenience up I think that next make Steve,

is and services the little QSR. primarily majority. But Auto bit store, a vast the auto of convenience service

Yes.

not use going Chris, be it's -- you if to think by I the long-term assumption, much. off the take

Jefferies. Your from is Linda Tsai from coming next question

consolidation. you You bit mentioned talk a just about driving service, you're this? Could auto earlier in what's seeing little

institutionalized private auto of I've Mavis success that of success collision We but as sector Wash carwash lot it's big a think went We carwash was This coming classified Steve. There's well. the think sale the money to that's well a the Mister equity And it of a really lot this an fragmented and Car And been service. tire Wash repair. highly of carwash. light the as I money as service, I has leaseback. classified auto sector, equity into then driver -- Mister it and that Car as kind into is a private It's sector. money flowing seen

way best half given lumpiness seasonality the of you and Do what's to the capital-raising activity about timing between XXXX? the anticipate second acquisition think of first volumes? then in And half

Kevin. is Yes, this

don't we you will guidance I to leverage-neutral capital say should in on yes, expect a manner. So us behave raising. give

And on will And and not long so a -- and we deploy have want deployment which We to has annual been somewhat are even sometimes But with XX the quarterly of that irrespective well don't whether to tie case And capital our I want connected in basis about, want an on run. for there's too, the or basis. the we say, as minds, we've an when to pricing, that we at the quite last over capital raising directly of opportunities immediate need. whether capital years. time XX somewhat irrespective we capital the and when raise priced, good talked friendly. it's reasonable particularly capital available markets get

And behaving over assumption. year of things short-term a a so in on think of basis. good aren't a should manner particularly connected, us would we -- the those next leverage-neutral you directly be always X course But

[Operator coming Stanley. is question from Instructions] Morgan Your from Ronald next Kamdem

me. from questions quick Two

the XXXX. XXXX versus it the on that's conservatism loss usual Obviously, X.X% X% and talked of into basically looks like baked you rent some rent about loss. Just

driving conservatism? data tenant? Just that it looking trying what's what causing that conversations the to it Delta figure the at points out having today? Is you're with what's you Just Is are just curious, variant? conservatism,

guy... Besides Yes. conservative I'm the fact It's Kevin. a that just

Driven by wiring, Kevin's Ron.

back there goes we adjustment. worry we it's general that cetera, issue comment And transparent pandemic? investors holdover forward. or concern about particular to we have then is And notable it part tenants, than just no -- or post-pandemic are that earlier with more going are late et a our just guidance, conservatism my than And so or that. though, are we just people. rather of particular optimistic is conservatism that if are In a It they can But a behind one. make --

So...

maybe different asking helpful. And That's then in a Great. way. just question Linda's

that fire. As year's keeping funding in mind you're preference to it, is you're maybe do there mean, the thinking Is do point, market we a a on of at I the this Obviously, is and think debt Or sort a there about maintain next But of acquisitions sort leverage-neutral. debt more how of trying preference? equity? about that? than to

that exactly I for us position. certain take year, this be not will say next year, where I’m but you will it seen have

so used the raise think a is year preferred, redeem done of we’ve X X debt that’s maybe of – that large a chunk raised attractive equity can not this I portion offerings do this refinance way just interest we a that’s have and think we any to Granted, to some issue But year to seen you’ve XX-year think very markets because it. when issue debt, us debt been X% about of equity. we us. that’s the

And so that’s what did. we

don’t capital. the that debt we’ll other what us of have moment, necessarily next not good good that’s process a pricing for but in But – drive so terms And or going our equity. the decision-making way at will for we read of see on a forward. holds portion And of a – preference year versus one strong

the queue. conference will further the Please no to go now over host back There ahead. for questions I in are our hand remarks. closing

many all day. with look us talking Matthew, We you, forward of joining at over few other and the for today. and NAREIT weeks. virtually Thank conferences next thank good to you Have you a

gentlemen. event. Thank ladies and This today's concludes you,

You this may and disconnect a Thank time, your participation. for at wonderful day. have you