National Retail Properties (NNN) 9 Feb 232022 Q4 Earnings call transcript

Good morning, everybody and welcome to National Retail Properties 2022 Year End Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Mr. Steve Horn, President and CEO of National Retail Properties. Sir, over to you.

Jenny. you, Thank welcome earnings and Retail fourth Properties’ Good to XXXX call. quarter morning National

on Chief Joining Habicht. call the me is Financial Kevin Officer,

As with reflects, X.X% release million. acquisitions this in $XXX morning’s produced XXXX of NNN’s nearly FFO all-time an performance along high in growth press

headed impressive our of the addition, well best-in-class XXXX. the at The end an team year of with of surge XX.X% company of XX.X% high here the In collection occupancy all the positions concluded and year uncertainty rent into driven by NNN.

only A few report, of XXXX the its XXrd dividend highlights of and of I Equality XX Gender sustainability am Bloomberg of the released the positioned XXXX consecutive REITs what proud that for included inaugural increase, and future, Directors One, in NNN responsibilities Index. Board corporate accomplished. foreseeable annual X

is increase payout building the on share continue our average in While to form. acquisition, top-tier in per activity our at at FFO blocks for single-digits Continue by to change balance ratio, the the our our management to there this helm below bottom-up long-term approach, shareholders using remain a value simplistic risk the XXXX, objective. annual a sheet that most strategy realize our and mid do growing multiple in dividend over disposition focused setting achieve years. to We maintaining execute

solid we a were XXXX. as is footing I stated earlier, in NNN As month into

our drawn year First, billion at at year acquisitions. on of $X.X high credit end, million $XXX fishing all-time had line after the NNN

for dispositions $XXX execute sources, facility year. to Using free million amount I neutral our use those requirements mentioned, a reasonable credit the manageable XXXX availability option to leaves cash million of strategy. of of leverage the equity the NNN $XXX keeping of to have flow plus as three We with roughly a

slowly allows cover longstanding quarter, acquisitions price over selective being opportunistic XXXX. I sizable discovery will NNN of increasing to continues. The our years quarter with there quarter fourth and strategy our capital further XX fourth The out first cap still third of while XX as higher quarter which change are the by initial evidenced raising NNN’s not the in points XXXX. expansion to than being basis shortly, continue cap capital opportunistically rates have and deploying we will the for seeing Secondly, been rate

highlights X,XXX XX.X% continue, Shifting our above continue of to XX% long-term a freestanding of fourth to we to plus results, exceedingly and portfolio the consecutive levels occupancy well of financial for single-tenant average remains high which our properties the that perform or of expect minus quarters, two quarter trend maintain fraction.

XX.X% The We City, minimal or have also of NNN’s effect in limited, NNN. headlines the etcetera Party zero, Regal, filed the some cases. quarter. rents Lobster, Bath, near-term certain that collected are Red for is on if retailers, exposure in Bed not have assumed fourth bankruptcy recent

Turning to acquisitions.

During and you invested the million duration term cash associate years, in NNN with XX cap an just of with XX deviate. of of initial north a don’t average lease at properties X.X% typically rate quarter, and an $XXX we new

from trend historical and our we grade this our from past deviated the typically, of majority our deals. we While deals quarter, target investment sourced don’t relationships

NNN opportunistic. position the be in during was But to quarter,

to the to stores our press in drug increased X.X% noticed you release, As exposure from year-over-year. X.X%

importantly, form. given estate real return run. the with But is underwriting more particular for at the drug the and real as portfolio well-performing that opportunities play, standards, long excellent estate was the in time, the viewed pricing market metrics to locations Over line estate an lease excellent our transaction assets, real lease the This form. portfolios, we capital passed the years, on deploy NNN because risk-adjusted not store best

disciplined underwriting continue Currently, bid-ask of spread volume adjust we thoughtful continues continued emphasize transaction. has NNN and to the period discovery approach. to and price to leaseback well we are through maintain into acquisition the sale our

our duration with stable our lease over average with a relationship tenants lease years was XXXX and XX net XX/XX more long-duration market. Our slightly landlord-friendly than

quarter, plus $XX million vacant raising cap at X During the of proceeds. sold X.X% assets, properties we X

year, of at proceeds cap XX we from assets. million XX properties the $XX the For of raised plus X.X% sale vacant a

path vacancies, one within continue job rental do always we reasonable see Although is to non-performing a income we to not assets, a release sell will timeframe. if generating clear to

our updated let call more over to guidance. and quarterly that, detail me the and turn for on With color Kevin numbers

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

yes, ago XXXX year results that’s share full share, that core AFFO per $X.XX that and for the share is of FFO press XXXX, X.X% share from With reported or up over per increase $X.XX or a quarter that’s fourth way, morning’s over year quarter XXXX was XQ of results the headlines over we the share X.X% up for this FFO and of year out per $X.XX per core also Today, fourth $X.XX X.X% share of ago $X.XX quarterly were results. results. which results release per strong $X.XX per report

usual, rent of income quarter. $XXX,XXX without have would rental the for deferred which repayment quarter adjustment As $X.XX of produced included fourth accrued fourth our for share AFFO quarter AFFO the did in per we footnote

an to AFFO represents X.X% scheduled that $X.X in share repayments Likewise, the produced in increase of income the rent AFFO which deferred XXXX. deferred without over full adjusted adjustment the the would of very mid historic share X.X% on good press continue These for year repayments see rent off per share that year in growth per accrued $X.XX rate. can but of XXXX, our of us XXXX million they results as our included details we XXXX similarly for result full rental of a and Page have core above the notably in growth single-digit and materially per is and release, the XX you taper in FFO provided $X.XX headline

per redeeming most X.X% in our have of we did annual included added did the $X.XX we probably added which for have the some talked probably some prior the something which which Admittedly, $X.XX share. results. range calls, to These tailwinds we preferred refinancing $X.XX tailwinds, in in share about a notably in XXXX XXXX,

there full deferred year. We also Cheese in was ‘XX. from XXXX. – did in we of did that executive increase savings the resume have our which a XXXX in beginning position, cash generated added repayments E. at $X.X the Chuck one We rent less about million in And $X.X rent basis million G&A of rent some

we Of good created top XXXX balance all on of of a cash million that $XXX accretion invested, that, course, on with but entered layered got once year. which some of the notable sheet,

move me But let on.

all and of for AFFO XX% $XXX the that year of free for expenses about and payout dividends full the Our payment approximately the ratio dividend cash XXXX million was year. after flow full created

XXXX. $X.X end. with from acquisitions. XX% about the the prior of and we million flat Occupancy G&A fund approximately and the for our levels. We note think at quarter the that’s with was But $XX.X the of XXXX quarter XXXX year quarter annual down X.X% XX.X% ended As full it December funded equity rent from quarter, revenues million this for more probably XX importantly, G&A needed of $XX.X $XXX up and flow up that’s total and came for side in ended That’s and as was leases it, over million expense at base for in free basis ago to the X.X% all year. of points place of cash NOI. the expense year, year X.X% represented million XX,

of reflects range a to The an share. of guidance FFO to the guidance also $X.XX FFO midpoint to was tailwinds will per Today, growth $X.XX I that growth created per mention guidance in helpful the per of in $X.XX just outlined. in moment. XXXX, the core guidance that headwind about last XXXX introduced with and that X% share guidance lack bar in we were suggests of more and AFFO X.X% year’s I XXXX And in high particular share range growth XXXX Core $X.XX XXXX. a modest one

on discovery, like are rates this coupled I coming along, with that we with, along. move but price say, all repricing the new cap continues slow of to acquisitions All it’s of is dealing

I’m of million of sorry, million half release of to – of $XX XX% more XXXX, guidance first acquisitions modeled running are XXXX our on Page XX% acquisitions, of little dispositions million. XX-XX the assumptions to of million XXX than XXX more G&A second and – for include expense XXXX back-end to typical a in $XXX supporting half $XX We and weighted of to kind assumption. today’s million and $XXX $XXX million the at in The at our $XXX press X

the that’s do, we general we despite of that of half than fact points loss. assumption rent that usually loss As our guidance in of we typically less assumed experience amount a and have XXX rent basis

XX repayment. time, notably. in – headline And XXXX million deferred that’s on deferrals is basis is the of on but owed note is the release. rent Page scheduled sorry in to continue in what the one Tenants repay press slowdown headwind I The rent $X.X detailed again, am cash these slowing

on assumptions in that regarding over leverage-neutral capital usual, the run. guidance for we don’t markets manner capital As assumptions the to markets any except we activity our general a give fairly intend of long our behave

most our feel now, have We for years. where are we we comfortable. can done in hopeful XXXX as through higher we But guidance this is move

in deferred which weighed note quarters. the Page side AFFO XX AFFO repayments on faced guidance, details accrual our headline basis, slowdown rent on Quick on our recent growth the we has

guidance few in guidance With that’s AFFO is pennies more XXXX completed, our today. largely these back annual AFFO share and a than the meaning normally with its our per Core relationship usual FFO, is to Core repayments reflected our FFO,

good to the executing of capital sheet. share did $XXX terms per over line quiet We maintain bank quarter a switch fairly of quarter, level. was in with issue and the We activity. $XXX and of trades leverage liquidity in market me plus availability. $XX million million over a equity the Let profile fourth balance Fourth

you sources. those million that, million million. about $XXX that’s of last our $XXX funded operating after If those about funded issuance $XXX dispositions property flow million, and our acquisitions dividends of being funded with million total cash and year’s equity equity acquisitions, $XX of think funding funded XX% three $XXX of of Sum

years in can. line bank because few our nearly to use bit a begin we we a did largely of After no usage, XXXX,

seems which years, average be longest weighted XX to Our maturity little is now a industry. the among debt the over in

net line, $XXX exception and debt on with outstanding. our is X.X% debt maturity million in a of outstanding is coupon fixed which million with debt our $XXX bank the Our mid-XXXX, our of all about total represents X% of the rate

net was XX.X%. A assets charge couple us gross to to Net of and for interest debt-to-EBITDA stats net book coverage coverage – debt fixed – is book X.Xx, gross X.Xx. sorry, was

continue So navigate think shape environment. share to capital very has adjust focus the the a in new growth we appears seeks per to grow in which in marketplace to volume little and sector’s results, downshifted over good as recent we’re more acquisition the of success. years getting price, better and past environment minds the is is months primary measure The disciplined be the elevated which on market our to a to X uncertainties

gone long enough. I’ve on

Jenny, questions. up Let any that, we to it open add, with me will

your is Heffern line from [Operator question Brad Markets. Instructions] is coming Brad, RBC of live. first Your Capital

morning, you. Yes. Good Thank everyone.

the a between that spoke store you’re you I’m narrower the or was You push investment about credit a just grade spectrum sub-investment bit one-off? that a might grade deal if up curious quality spread if and deal. drug seeing deals

since the deal. essentially already lot Yes, significant the store. our laid decade drug competitors a had NNN store this that’s strategy kind It on specific then economics We position, deal lease but above a Average of going really X.X% that cap jumped where average don’t the balance of in and deal for economics XXXX. and we store the the for a was get was in is company average. to sector good. term exposure in We isn’t because is low to were great we change were do was to And deals the our was why into of our drug above sheet it one-off a drug rate willing quarter.

have is a to thoughts you list, that. few debt get AMC, the that so? or where the tenants watch given Okay. no or interested Got it. but small for obviously yielding Kevin, Thanks I’m mentioned on on And XX% your you a exposure,

been Yes. at years as the But for list perpetually still I little pay lot folks, of rent, feels bit of couple I guess, on that’s left. have well, mean a the our they on last current rent liquidity point. to a yes, this more runway like

if quarters. news front. see they to here But lot I a X.X% the to some share They represent more have the coming on in to will and – our total We of raise ability rent that continue have capital of ABR. total don’t

you. thank Okay,

very you Thank much.

Allaway Your your next line from question Spenser, of Green is Spenser Street. is coming live.

you. Thank Yes.

current conservatism grow waiting your guidance on guys base to Just to know spread new adjust. tenants? now I back to tenant maybe to how – of on how curious that going prospective continues versus mentioned But right you reflective just wanting you’re is see bid-ask the of that acquisition not guidance, much conservatism

Yes. said, is pipeline. in we here everybody robust what Spenser, as numbers the first deals quarter February appropriately behaves with close. That pipeline we early sit XXXX. in if our Comfortable our conservative and we’re see always yes, fairly being for

been answer but our pipeline are current it’s your development pipeline is feels in XXXX, to Our robust like for it our development as years. growing, X question, relationships as

very So X, we our M&A pick relationships don’t always much growing. above the it to no, that. guidance, board. this comfortable they the we’re slowdown, feel time. as that as there Where want skis goes, up our And we know, hasn’t acquisition at year get with picking with X-unit of the seeing still time across operators as are But through been up our we you comfortable

embedded your Okay. you assumptions Great. some in And provide then on rate can guidance? color cap

rates as quarter. cap expansion disclose your we second fourth projecting good half the here points picked we don’t of seeing at our as first XX this for the as mine that the the the basis guess guidance, up We we And the for but half were Yes. XX, in given in quarter I’m sit that year, year. first today of then – point. is

Thank Okay, helpful. that’s very you.

Thank much. you very

is Dennerlein question Bank Joshua is next America. Your your from Joshua, of live. of coming line

store Yes. on drug deal. to I wanted Hey, follow-up just the guys.

have Just rent straight curious, drug have I think the in really built just might from past, much away didn’t they bumps you because stores in.

or rent bumps? was then a this it different there where Just sale kind was curious – if it of And were marketed leaseback deal?

Hey, Josh.

the as rate deal – deal mentioned, store cap of the square leaseback. per that It fourth set the they are tenant hard corners, quarter. drug this play. the was Therefore, XX% think numbers, rent sale But had was of market-rent the more average estate developer was the very in deals. are rents, yes, I so it north So it wasn’t for properties But XX% I a importantly, on foot our drive-through. very comfortable it was was a real

play. estate really average. it X.X the real acres a was So was

for typically and on more the why That’s a in than lease that market you the landlord-friendly So would average term store jumped we see see. drug of yes, lease this above one. the we got you deals

And Okay. It some that. of your I XX top us in looks you year-over-year. Could other then other of trade, lines increased just at looking appreciate saw remind like kind what’s themes. that category? just

Sorry, up pitching income, looking at? what are you. other I’m In you to

at in other it over any of kind kind curious themes you what up the and there kind in you – sup, other of No, of are kind XX of of if just if course there your top any looks it year, of was of increasing there? X.X% that is list bucket lines like is trade like looks what’s portfolio, the the on XX Page of the

circle that. I and little mean, color you you give a can I to back notable, nothing on mean, maybe I more Yes.

you, Okay, you. I circle fair will up enough. with Kevin. Thank

Thank you very much.

live. Your next Ronald, Ronald coming is from Stanley. of question Morgan Kamdem is your line

versus going we a just Just XXX expectation based in year? based trying But how already basis points to seeing to in appreciate debt, on this assumptions on that you’ve assumption bad that get is you’re what just basis conservative Hey, that last Thanks. year, your figure year to on list trying historically, that hearing based watch the the the that. back this come points what to of, just be is you’re could the is obviously, portfolio? closer below way on sense out XXX

any We concerns. any visibility near-term don’t on have

so XXX may I So yes, bit little fine. the still year more. seems basis But this that points like sentiment feels a a share retailers your struggle where

an it like but on moment, contemplating we’re like radar the get utilized there occurs, more Time the environment that’s got that get not that But might might reserve about past. see than prudent. nothing will what – it’s it in so will the the might unfolds. said, at typically near-term more more We And utilized, tell. I like this us than year how has that the sufficient fact worried feels be is we being that

in just ‘XX, then flow million in to $XXX dividend at And like Great. of that cash close looking the the after excess the was I looks least think at it K, statement cash base.

think sort earlier Just FFO the But comments. missing number make of fair a is as anything. sure range mentioned similar I in to you opening we’re your given not sort for guide? ‘XX that well of a

Good Yes. Yes. question.

So talking million, will repayment of it deferral the close out lower it, we a was $XXX in about. a think that probably the was be number number. about which about rent and – as about that take it you’re way bit And to little slowdown, is ‘XX touch in it so the

acquisitions. fund So would about after the about and available dividends others expenses, is to flow cash number is suggest $XXX free of all think million – in our we being mind all

sneak then Got it. in. I my if And last could it one

rising can are capitalized quickly, be I’m rates, surprised sooner faster you on opportunistic. they well – guess, I and more are not Just cap guys

points bump a maybe in of question why to here. before, a in little a hurry rates XX, we You expect be shouldn’t bit pretty XQ. had But in basis asking a up cap again, XX the higher

The of to to the deals the we in market quarter, closed the to see quarter pricing accept deals that again which second seeing that we starting started we’re most we’re the end we’re points today, that in is XX the cap first the are the near XX going close fourth quarter pricing seeing that we’re basis higher where and rate. likely

a they where be may I they the are access I say which able may market seeing cost, the they a debt do little get, also the or should sale-leaseback when say, they Now have to but and sophisticated market, bit be seem more not higher. or that’s significantly they pricing to

Now XX/XX still fairly and little sticky. or in is yes, our increase seeing accepting the leaseback years the then sale the are is XX-year holding they willing that not XX/XX that can do still increased – they of understanding you’re the a market get unless But But leases, to increase. robust, X bump. market rate we’re cap X, the cost debt are market the market, you

Great. Thank you.

much. very you Thank

next coming Citi. Nick of your from is Joseph is Nick, line question Your live.

on as just seeing? of what the maybe and XX/XX compress that kind there market that was that spread bid-ask comment, currently Maybe Thanks. last of we’re some

again, of that say broke me. part up on Kind Nick, first You you? can

deals How channel leaseback? that and out? spread, really What of versus close the particularly market. start that Yes. could playing No, see actually see come XX/XX that the it’s kind some the more through sale make bid-ask do you on to

in portion $XX X% such going mean had that assets debt that I $XX cash where gap. not X.X%, might always bid-ask small are spread the market, to to are see [ph] there it’s to a on financing. our you those $X flow close in because I is XX/XX I’m them people still you the out require the comes XX/XX are returns. see the If much dialed wanting I going market but $X what those much. million that of that deal take the XX/XX the looking really But to to take to rates to it’s cap million, close we there to million Nick. that buy market speculate, moving from million the require so all are don’t don’t through

makes $XXX are guidance particularly for sense. on thinking are million those, you maybe about $XXX trend to that then relative rates to where And No, disposition thinking your you year. Yes. pricing going acquisition just for million cap forward? this How

dispositions, estate rate that they offensive So, dispositions at when a somebody a kind you the look cap offers the we real it’s just – us love of that lot more. got

you So, renew trade sales from they will X deploying we defensive what because not years, are they our now. we then sell of in years significantly will have going because are X of capital know some we that And to relationships at.

XX-year, So, X.X we money just cap rates year, we will spread. acquisition we the at sell be But where kind the same going those. would X.X past deploying and time spread into And expect new are cap. exit will at overall, were those got same the cap, we the I leases. like typically XX-year this or of see forward

Thanks. That’s helpful.

much. from next live. question very is line The you coming your Linda, Linda of Thank Tsai is Jefferies.

Yes. Hi.

relatively contained, assuming credit In of being loss occupancy for year-end? at what are terms you

occupancy. assuming fairly I XXX that utilized, are would X%, fairly assuming, point mean I occupancy. doesn’t fully loss there like But maybe we say, there flat basis a are the happen, guess We potentially. assuming is it’s I gets suggest you flat

some then beyond during in about talk can the And stores, you invested the Thanks. tenants of the drug you quarter? other

representative capital. service, it’s year. And was year did we child quarter, it we kind of wash deployment all the the the of is what auto well. was a year. some And service roughly did as for Auto big within the XX% daycare sector of car – During of services then our

to And pipeline does the ‘XX compared then make-up? of you what invested in how in terms

next said, I continuously that our forward. That represent like for say tend being looks current is portfolio team from acquisition with relationships, think our to fair make-up, the majority our our what officers deals to we of the The it’s again, looking coming vast opportunity. going

our look there in majority, So, done. of up. current portfolio we will throw we lines will in vast like historically haven’t two trade Linda, But makes that the one or

you. Thank

of next from Thank Massocca line your you. question Ladenburg. John, live. coming is John is The

what’s in of XH? understand pipeline, you the to guidance, back more to acquisition of in quarters call the versus the Going transaction where on trying should theoretically XX-XX split into for you have are less kind positivity visibility a XH Just broad driving seeing but flow. the acquisitions kind

XX-XX robust had The and this We fourth close we the a year. taking to are approach quarter, have split the we that discovery is conscious made gap. decision price the the less

So, less that we are year of the close XX%, to first guide bit planning little do a in typically would the we to half to.

Just go. being a little bit more the and selective, no pedal need to down put

Yes. the market I get world capital is mean with as estate others, world. and market to real cap rate caught rate trying I think up interest

and And that few ways quarters little a probably a been got so going on process to have has for go. now

And so hard. doesn’t need pedal compelling real very push seem want to to the volume a it

about year. then might to the transaction a disposition we of call, that things, you notable those? was how also on there on the the timing mentioned slip I And think prior this Okay. side split should remember from earnings

front-end And so loaded a to potential ‘XX? in there is be for dispositions maybe

the for modeling $XXX John, throughout purposes, mean I over just the midpoint just million that evenly – I spread year. would

then more XX-year balance and one today debt, the kind where in we stuff you are availability and the the rate And curve about debt How a interest on of quick about term term think one just versus in should given shorter longer how range feeling Okay. sheet. markets? attractiveness the of is

I have bank noted, issuing and our no really small be debt Yes. long-term near-term as used not We we don’t in because line. real to any have plans part have

to So, have environment of in we that rockier. where the able little luxury lean the on a being rate is market this

progresses. And so see plays out the will we that how year as

XXXX I a don’t did, – any mean said, long-term of like chopped debt. lot wood in I And so we we have on

debt pushed out I our debt years, maturities, We there. the average weighted like which of XX north is have among maturity said longest

debt little the and a year we and possibly off to tail even long-term need now see to might things a start maybe normalize So, point not flexibility from to where rates a bit might bit. where at this have issue

sense that But folks, near-term are weeks. no plans guessing, probably lot the recent here but near-term part to see, backed decision. up we will in I make of that we of have debt. in rates need for of am makes of the long-term XX-year So, where kind a The issuers unlikely recently curve today

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

Thank you.

you. Thank

question is your Wes line coming Your next from is live. of Golladay Wes, Baird.

robust you I Hi want comments everyone. like and I development how pipeline X have the years. these most being about get? million this for to in am the about construction. the could know is $XX looks to projects, just the curious commitment It pipeline under to big go what

Well, had rate about million a of run pipeline. have historically, pre-COVID, we $XXX

And land, will be think good they – would ballpark are that to do to a once So, ready commitments. figure land. purchase It’s about. the more then it’s don’t we long-term the buy we

of window. kind a So, it’s three-month

mentioned I Bed, Red still you few just one Regal. & you And Okay. of have And you or the of Bath lost you think one going comments few part in Beyonds then that point, see a your, and over Bed, Bath years, I were have guess defensive last your did you dispositions them? back these to about tenants then Lobster. the have did At named. We just do

No. Bed, they we the still And they real We Baths Bed, and but have are were not fabulous on future, be are still Bath they it’s initial in the them because estate. may good three estate. have, closures. list real They of

are right. with The had land, are and then good interest be to we in comfortable you we replace as we Regal asset with well. will Chicago we getting able that that. one are that very So, And

I I lower. for Kevin, issue a you just debt, willingness guess since have big, lot And on know of nailed go bottom with to you having rate guess it. rates rates are the to Got floating a more by for that long-term you debt, recall I

luxury – said, shorter bit. probably go wouldn’t for and able me. rate market I kind like sort of for the the lower, boy, re-price we until Kevin’s of I underline edgy a being the rates themselves pivot but no, just But out have variable Yes. we that’s to call to term debt

environment. this the we are going so honest. if for to to But – to have of see in And just real that’s They issuing are our the be rates to luxury going any have way lower. go in be we model we don’t dig bonds needing quite we to don’t we But to market, and work this feel not fine, will pressure to.

everyone. Thanks it. Got

Thanks.

Thanks Wes.

much. Thank you very

Your Suisse. Okusanya line Tayo, Tayo from next from is question is Credit live. coming your

Hi. morning. Good

just of credit of that perspective perspective underwriting worst-case of given of ensure at around conversations to an nature, losses scenario doing kind from guys Is make out if changing? kind you retailer okay. even anything Just credit things it kind different are of least happens, the of some and monitoring you anything that or guys kind a and from this credit

pay lease They doesn’t This sale There want you business where want to little to a then No. do can about self-selection the buy And rent a for is essence, business difficult leaseback, market a the they you rent are at you process. your thing in cash end day, we the is we desirable understand. can who real And rents. rent, a if our first. years low tenant kind replace rent, while ensure near I beautiful our credit the understand to gets are of a that’s tenant important, you is, underwriting. of XX-year, we do is, real downside, highly and estate XX-year a with years. market XX model is high our relationships. that XX model sign to NNN’s mean When And flow. that estate if

is self-selection process. there So, a

are with underwriting. our comfortable very So, we

have crisis the kind the you during of tenants. of pandemic, financial we during rent As or ability great the paying maintained saw the

So, we shifting are yes, not yet.

just guys of I rent track it’s and things then that most a published. your on you ratios quick not that. Got know of if coverage nature, even it. And all follow-up

rent what’s You talk along about of just trend different there wise, another? coverage any kind the there with especially happening particular trade lines? trade coverage on of real the Is pressure versus one in line ratios, kind

get changing don’t No, get data. a there meaning is that recognizing we lag, on we the real-time data yet, nothing notable there

some it quarterly, And so some actually of it annually. comes of comes

night is not particular lag any factor. that any we have so us And so are always there that up seen at far, keeping lining. in But levels

you. Thank

any queue, over and will hand the end in questions to that’s more closing no back of now have the remarks. question-and-answer to for Steve appear We our Instructions] session. [Operator I

the everybody Thank up seeing in look will season, Thank conference forward of and many you. you, joining then. We Jenny. the this call catch in morning. I you appreciate person upcoming we to

conference everybody. Thank call. today’s This does you conclude

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