National Retail Properties (NNN) 31 Oct 242024 Q3 Earnings call transcript

Greetings. Welcome to the NNN REIT Third Quarter 2024 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Steve Horn, Chief Executive Officer.

You may begin.

Holly. Thanks, everyone. morning, Good Third Earnings NNN's Quarter to Call. XXXX Welcome Chief Kevin Habicht. joined today Officer, our by I'm Financial

This has relationships, management apart and our year, active mode and strategic by NNN NNN growth. acquisitions delivered delivers consistent our with sets our that what external call driven we us performance, portfolio

tightening results, $X.XX. FFO XXXX per of share Given our our range to year-to-date guidance $X.XX we are core to a

by are our XX% our our are $XXX original to acquisition raising now the so guidance, pipeline we increase midpoint Additionally, This exceed we to of million. showcases execution in buying strength position the ability. and

the selective quarter. approximately through $XXX It's while opportunistic raising deploying On The long the million this largest we periods. our XXXX. program since capital has shape quarter and ATM markets great capital to NNN in actually fall a capital front, being through duration economic of raised volatile of the discipline

NNN's sheet, place does maintaining today's more like of needs a XXXX discipline importantly, times the to execute capital to NNN balance solid of put if to deal execute markets. remaining macroeconomic XXXX In to any, limited, flow but buying acquisition in conditions, with reasonable access a

to acquisition of months. of Add ready in after deals of on right nothing we quarter, the $X.X on billion to the volume of high as free first already position, of cash percentage NNN's our opportunities through are capitalize industry-leading volume line At had when a completing liquidity we flow present. the end credit, the million the $XXX million nearly drawn cash $XXX X

the Shifting results. financial to the highlights third quarter

and maintained remains XX% is fraction or our diligently with Frisch's freestanding pressed perform Plus the X,XXX long-term it's to average Boy. and of XX XX.X%, a NNN challenges. single-tenant which Lots, again. to of above well Our levels XX to minus been we've only having been assets. same working mention Big tenants Kinston ] term, years of few occupancy the and ones continue time vacant high have time Big and of plus A recently, portfolio [ properties resolve

But because specifically ], underwriting windows. of cons [ restaurants with boxes rents, reasonable with feel real upfront estate the and drive-through regard to good small with Frisch's the about fungible and the I

have list amount inquiring at all operate we estate. peers this of fair Kevin received detail to We the continue later. ] own. a real calls the Lots about more inbound the will time, watch will And about provide Big [ X

Turning to acquisitions.

rent X.X%. we an million at transactions. with new included actually the the would invested the projected the long-term term result that's initial of lease. the result We the $XXX X and in increases properties rate cap duration of And an XX.X of a years, During yield. over of sale-leaseback quarter, cash lease X.XX% in average It

needle at for roughly NNN's have XX cash points than of still $XXX X move period belief invested cap months, the The were in of the XX deals XX million, we the basis which $X X.X%, NNN rate smaller first of a wider properties And under million XX XXXX. is which shareholders. that closings proves comparable about

as market than move year, today and into to head stabilizing. like as of part, fourth for rates up the tick opportunities we we're line don't better and are As I they it pricing were months X I'm deal feel the quarter the most seemed, for the does first expecting quarter, quarter any for way we move ago. XXXX. fourth through cap as the the either deals material to see well be the

X.X%. X.X% cap been rate, also million at During X at the quarter, vacant, we we've reinvesting properties, which of proceeds included $XX sold X raising and a

cap a rate. an if don't to path now good which at included the reasonable see overall the from X.X sell is proceeds assets frame. mission continue to of sale $XXX raised a approximately X we The Year-to-date, a ] it's nonperforming always clear of we'll vacants in So generate spread. vacancy, XX, income to we time blended re-lease million but [ rental

is sector. sheet the of one still in the strongest balance Our

facility mentioned earlier, of I no plenty capacity, credit balance Our as has outstanding.

next until weighted and of maturity. beyond. More fund debt our the well remaining importantly, maturity XXXX guidance is acquisition NNN our quarter industry-best an isn't XX.X maintain fourth to we year and XXXX, debt positioned

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

Steve. Thanks,

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

higher With XXXX. quarter, Okay. share $X.XX of is press is $X.XX report results. share for that, That per FFO quarterly results core up results were which $X.XX year-ago the per X.X% for over share. the or morning's than or AFFO $X.XX from results headlines third release of The year-ago X.X% $X.XX this third per quarter of

relatively million with And we XXXX. $X.X recall, termination income, the of well. year lease of you as for first high the in did X termination as quarter that for fee include $XXX,XXX is of recorded above-average which results may and income quarter quarters us, fee third Third compares this lease

compares first for million of the for $XX.X X million XXXX, for that reporting lease with first termination So the of months we XXXX. and months $X.X X fee income -- of are

over fee X the about last we've averaged you look back $X termination lease If of annual million. years, income

well quarter income normal. incremental with in good But a above So this is line without our even year running overall, and that expectations.

and $XX.X of million G&A for revenues expectations the for and for of X first line which was the end, at in is represents XX.X% expense months, the with quarter prior flat was with our the X.X% Occupancy and that was quarter again, X.X% quarter guidance. quarter. revenues

the income, respectively. was and X.X% quarter operating percentage for months, X.X% G&A a of X NOI, As and net

noted net on the I about shareholder playing accrues valuable other other I our net company sectors. the and think highlights of puts which the a all us efficiency field benefit this As REITs call, lease across It format, think metric on the level property to is share you as of lease versus a a returns. all -- lease the net last

all approximately after Our the AFFO for flow first XXXX and of of million payout X resulted X full expenses the cash incorporating anticipate $XXX increased And months, flow of the quarter third payment in rate, for for the we all that's dividends. cash coming and was currently million dividend that XXXX. and months year approximately of in $XXX amount at free dividend ratio XX.X%, this the free

place of ended $XXX annual leases base We in XX, rent for quarter as all of million XXXX. September with the

take did so that of $X.XX, did the range account We And tighten guidance top leaving affirm the XXXX acquisitions and all and would bottom into unchanged. but midpoint dispositions our during completed quarter. the the by

$X.XX is was a which So per stands now $X.XX guidance, per to to to share. the revision made FFO $X.XX $X.XX now new AFFO similar share, at and core guidance

quarters are in Badcock Tone credit of on a tenants owned to bankruptcy sold Steve now. and both guarantee talked Furniture company couple who ] As ] FRG that named with of yes, by July. for challenges, previously a [ mentioned, a Badcock having quick a FRG the in [ we've about Can which update place was was few Plus for filed

base X.X% of stores, representing So XX about we rent. to translates which our in Furniture annual Badcock million own base rent, annual $X.X

are operating assumption working We through we'll that an unknown But get bankruptcy way process. the is it's still precisely these properties in back. when as its

FRG we FRG do leases, own its challenges. but We these will guarantee recognize may pursue of have credit the

for concept The Frisch's is the been second quarter. the third half note only in several rent Midwest quarter, has us in hamburger paid big tenant rent Frisch's decades. owed owed a They of third half the that is around and

Frisch's and translates annual XX quarter end, base $XX.X properties of own X.X% at we million. representing rent, that to So

claims provide situations. here to protect pursuing [ ], information due want to want these don't various some in I in detailed interest the regard get did we to too to plans on we're While our

basis recording we collect. tenants so what actually are Both cash only accounting, these of we are on

the that level, provide over has assumed points fourth basis period our February. rent We some the XXXX the given any us should better we in XXX issues in get our in Over incremental loss push quarter. but the think these generally clarity to years, these situations quarter, obviously, of estimate, could guidance which guidance fourth X allow X when tenant outcomes us will in on we

kinds historically of part tenant our are credit normal These events a business. of

sleep. production, run, timing not which If get whether too So re-lease long some in as perspective, may likely loss think we rent, decide our about market long or to much as as, is redevelop don't headwind. we back, will from any be the the manageable suggests properties be our sell, rent lose our that far rents But too experience a are income the in it we gap properties. there

problems estate we Long with increased the reasonable tenant rents the at earnings time to quarter. in -- that challenges, might like affirm our NNN our able the Despite in I race deal know us credit guidance followers these said, that our opinion, Real leased whatever allows position. which to win were come way. and we second

the to balance that, sheet. With over I'll switch

little of $XXX.X very high on issuance. billion quarter on as some cash So our that of sheet in million share, over $X.X equity a the with generating in third amounts Coincidentally, amount -- the no net to the stock alluded an XX equity $X.X $XX we When we our our months, quarter average price, XXs touch after ended line. per we was bank XXs, did sell proceeds balance yes, to, million. outstanding at and

any maturity until as XXXX weighted XXXX our in and we're liquidity years XX.X at due position at leverage into end. and good we So have stands average don't debt and debt XXXX. quarter finish very We roll November

acquisitions cash capital property our our year-to-date Maintaining light $XXX flow free XX% with of million million and footprint, million of $XXX $XXX proceeds. of of we market disposition funded

and of on approximately acquisition the full should of and cash XX% the For disposition our property flow acquisitions based we XXXX year, fund free guidance, disposition with proceeds. midpoint

X.Xx quarter of for as EBITDA A charge encumbered quarter. at coverage couple book debt X.Xx, end was by fixed a assets are XX.X%. metrics. and was coverage And to debt properties of gross at reminder, September third mortgages. Interest our the XX. Net leverage was Net X.X none to

working are are focused sheet. So we a controlling in closing, the through underwriting to on equity we which while risk us property means capital, balance believe appropriately on sound ensuring getting we returns what allocate remain and maintaining sufficient

is whether share mind, free produced at equity long issuance new or equity proceeds the results by our disposition growing adequately, In over that the flow, valuing term. -- is of equity cash heart

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

first [ today Spenser Your Green Street. for Instructions] is question ] [Operator from with Glimcher

you the the transaction aren't talk Can just about norms? far market? about competition And Do just you how compared level of being the thus do for to relationship you, deals market in talk just can XQ, historic from tenants? that into coming sourced deals

No, absolutely.

definitely overall coming market, I opening kind remarks, the as to in the mentioned of market. So sellers back like the are it feels

acquisition it's like sort opportunities up current a picked the advisers/brokers relationships feels and/or little a is just market, if of Our bit. team of to through lot M&A has deals it bringing

do average redeveloping months space And transaction starting kind seeing larger definitely it second-gen really and it's our to market are opportunities. growth. in current assets, good is And was relationships we're the ago. today So the of than X some

very competition the of bit highly in has been the smaller I of deals. as private a money go. money market. isn't in working to it. participants don't maybe But it's amount It much a so when and deals for far little for really and been it, that years did, day, does they come the like the the feel the As I've competitive those XX-plus market, affect at looking the starting of end we the NNN come into private mentioned It

the bit the But most the In part, why fourth a competitive, it's it's flat. rates but again, we more, third quarter. think that's little quarter, bit highly decreased I in overall, little for increasing and a felt cap

know just occupied I of the just very the of scheme dispositions quarter And portfolio. and the assets some detail But were your in then the that X rate you the industry sold on provide on are terms assets? in then marginal cap obviously can during

Yes.

was an was not the -- cap X.X. them assets, say, being of And cleaned in. rate that up would part X little some past solving We kind X of then a portfolio the was this baked sold on auction bit, I it were quarter, of used. asset we urgent So future auto issues. care potential and the assets Out sold the

Your America. of next Dennerlein Joshua question is with from Bank

Frisch's, you would on you bps, Appreciate far like I these all assuming as higher. but the color bad where know go as in and I both guess XQ typically XXX you -- now debt? mentioned guys are Badcock. assume update the tenants

Yes. Yes, fair is Kevin. This question.

So are also roughly And our worst that loss our points the guidance. assuming how middle that is case, that typically assuming us much all still Frisch's, put As ABR. in XXX quarter? X.X% basis always virtually let's assumed the the we I loss have we points fourth plus note our say, rent XXX of of in Badcock -- rent I would in guidance range. assuming of of would mentioned, basis

point. have don't particular, this visibility mean, pay Badcock we're to is how beyond will when, bankruptcy. in much that I So that, on is. going part who, on at Frisch's speculate we in and in not not good because really

And said, even get think like you -- challenge. XXX the points us that worst which loss, is a guidance to total to adds bit basis of a rent I case. little our But range, still middle assuming of so the I can midpoint

I And on we in to conservative understatement, little know, who of guidance. Maybe terms tend know. a time the bit as have side a long that's us for folks followed be an don't

we a still in guidance to challenges. with range maybe tenant our even top the shot half So get of these credit have

there? going other Are to Okay. should kind I run any And appreciate like just that. like into there out XQ of about X adjustments that like maybe the follow-ups. or any rate think strip one-timers

follow-up time And a down answer, properties? then like on of maybe kind how give think like of if about these your do tenants the kind we just back

Yes.

in folks I did like really of concern level yes, no, for kind those tenant said, we which like pathway to think Steve So a others the Lots. there's has. have to getting mean, is of we leased feel X currently Big all we're not pointing Lots, but Frisch's to and remain and Big he a of stores any that that mentioned Badcock bankruptcy, open

other would mean, particularly I guess. talked We've in term point still, challenged. But the at are recent nobody in that that like that tenants feels that I where you we're see worried I near home about goes. about quarters we'll towards,

Downtime.

Yes.

So properties yes, re-leased and/or months the as alluded we get that back, it of in I takes several If and that kind kind my when of to comments, get gap. of them to timing and sold.

kind issue really kind And -- so that that's period. of of that the

and very are seeing use robust, we retailers I'll properties interest very good that, retailers. from number that and word, said a Having as in of Frisch's credible our other Badcock

encouraging. And so that's

kind So down maybe tenant, of time process but of work bit XX that. new the be months going that X, prior it's kind to tenant to through whittled a of X, to from a gap

with. like we And very portion can feel any there's the prior deal note in at that don't of headwind then day, to we large end if run, of really the recapture the our a have we rent, of again, long

pretty our despite seems today coming way. about feel where we what some have pending to good vacancies So are we

rents space. I properties, like rents And from what like there's like locations. the we that's existing for all existing with pretty consistent, our other interest demand -- think frankly, the retailers. retail shopping strong REITs, strong from you're on say, hearing center experiencing the are think, I I And probably We

Michael Your from Goldsmith next UBS. for question is with today

and about credit the good on it. of how lot A detail you're thinking

have be year? traditionally, we but you yes, the think just a XXX more than to like, -- would you maybe approach any you've points, a differently bad what XXXX, Just about be normal maybe assumption about debt as like talked the in would basis would like

mean, is I the answer. might. Yes, we Yes.

out guidance. put XXXX haven't We

re-leasing on in any get getting point. will maybe as too a to this think in do assumptions out we timing, particular to to at that fourth kind to I'm little be lot is quarter So as we're terms Frisch's as well of cetera going this around et and I being a of properties how back. learn Badcock play reluctant both able

So probably. assume next say to we question basis would number that year. I'm XXX for there. share number? my will per results well a the points mind I But more still likely in But what's reluctant the we're is think out is put than And XXXX, positioned yes, we to grow

probably when We'll this obviously definitive I at into February. that's go point. be So all we in to more want release

I first that, the do rates No, What just sequentially. you saw came like understand how the And points some fair. basis the that. quarter, to better fourth opportunities that's within down in And you're also compare totally you guidance, the expecting on the they visibility cap just quarter? by for right, then you acquisition third about have into Can talk acquisition half? clearly, XX pipeline. the

further So expecting there? are any you compression seeing or

So much we're seeing. quarter as will quarter fourth far in is pretty line as the cap be third rate, the what with the

-- it deals much way, little in either bit and there Now line. a might some price different, might go but pretty

close average As the smaller fair question, there's leasebacks. vast that that's move as I far result of get the of been size first activity think equity and I to been XXX% to relationships, million. and as deals, our our of overall M&A Spenser's a deal private in $XXX do the groups deals But through to seems mentioned, the have to be amount the opportunities, quarter, a as to to the sale looking are increasing fourth that we and majority,

So deal calls advisory to the a we're seeing of fair us front. amount on

Smedes is Your Citi. next question with Rose from

you behind through the for the decline is AFFO updated wanted about at midpoint ] pieces I ranges. of Smedes. to guidance acquisitions? This SG&A the moving [ despite Could $X.XX us maybe and on the some Matti just ask Farges higher lowered walk

the little well the range and much that make share which getting $X.XX FFO too on top on read the tweak rounding core per to range into to AFFO as that. bit same, wouldn't I there's bottom. yes, the of of both the as that, from is a On kind just Yes. Frankly,

much tweak Yes. of so the guidance. of And yes, terms in too wouldn't I read that

just think circling guidance ahead to on have do into any XXX plans amount you you're XXXX? back as basis you from And to increase to loss that credit baking the assumptions, points

Yes. Yes. not putting I Like guidance point. said, this at XXXX we're out

we lot going As I Badcock months But light Frisch's little or is be we're X next play how mentioned a points a out. of is know going the basis XXXX. whole terms as in might XXX alluded in to more to to and enter

And so that will inform our that. around decision

as And years so we a I said, assumption. will prior think will that have whatever assume, it I we be in as be conservative consistent

a And have so meeting it. -- slightly exceeding of guidance only and/or -- we we but will long guidance, history raising not and hopefully so

that so think we come will And whatever still I with, prevail. philosophy out

Your is for with today Jefferies. Tsai next question Linda from

losses? help Regarding Badcock, does group rent the franchise offset any guarantee

Yes. collections, Any reduce obviously FRG our loss. obviously, rent would from

And bankruptcy. say, that pursue to they Badcock in still in as and so in typical, rent bankruptcy I we, guarantee, pay typically intend is bankruptcy

So to pursue we we will to but will guarantee. we related extent -- losing -- Badcock, the FRG are rent

then Is there be much And take? re-tenant, Boy? a And any And it read clear how PI Big that concern? that We [ then like would going would leadership. there color set ]? on isn't time to dollars

Frisch's, are sold some currently, assets in we're issues. with are we team. management now. your of -- work the were the not the They echo but over I'd third sentiment, right bankruptcy to where quarter and resolve Two we As now at far they're Frisch's. tried mentioned, going at as in quarters are as several we Kevin probably management

the managing actively portfolio. are we So

we forward, hit going a stalemate them. with to of regard kind with But

So legal rights efficient. our pursued we're exercising and

take to and to will, on it lieu our rent to higher, a order is of no trying term. predisposition you relates lower rent in lease to tenant of giving improvement bunch the question the the been observation It's a TI, And buy part a that at of as our over follow-up years second frequently, to little higher end. in get dollars economic value is that have that of end tenant money if the

operate hear. is you -- therefore, dollars generally as trade-off. that more rent TI to you're And safer from which what and tenant not the up need And you exchange dollars end we've TI the provide frequently with to return therefore, likely fewer an can to no wants put a much to on lower to inclined rent those been investment dollars, And afford we tenant of and the well almost standpoint, extent them, to at. take one a profitable get return for that and in we all a dollars store think as going the a

to could -- obviously limit be there to all these, our it's of dollars some while materially. is So TI related that inclination

discussing in a Is lease XXXX? spent elevated continues you then And this expectation year-to-date. current some how income level the term bit been has higher fee time

most least competing That, that's we us in on give typically X Yes. And by which be going deals to come to guidance each happen. of part about, when because hard process honest. the them don't and any involve know it's have priorities, to those parties, for at of

And feel to comfortable giving so us make it's prone degree would of a not that predictability guidance.

We do think an active outcome it's portfolio of management. generally

portfolio that you've if asset. got you're results. and things. rent an even asset with way tenant those your store -- It a it's paying good and our level to know dark help a open might or and we on underperforming underperforming paying be based look and But asset So all and dark working for we

then a good the for they're tenant generally the It's [ lumpy a thing is something getting We fully it's time at and to comes is, third notice we those that income. on a it page on getting rent good not solution so X ]. that a same tenant a quality whether the but And think parties same feels look to than It's about be the clear. we challenge, different it's property it's always a value. recognize do. party -- And thinks or ahead, But whoever new a buyer, will it. of

It want money good good those think of a income, it's However, and to and because we it we is it's make. decision it's don't attributes. economic not -- do to

going be hard predict. to as it's that so we portfolio, giving just it it's -- guidance work we'll forward And we to pursuing won't so our because keep related but

today Ronald for Kamdem next Morgan is Stanley. question with Your from

ones. quick Two

of any I'm of after experience furniture, watch bad the sort Sorry to to like thinking of are put out what about of sort the this figure wondering, back go sort implications to the been sort and you're Just of rest list? debt conversation. of how Or tenants But Badcock. the I of the how impact Badcock cash thinking the this just have sort and of basis to other the announcement the sort guess on accounting? the about does with you're of trying sort portfolio

Yes. I don't tenants think read-through don't to or outside of the I Frisch's, of Badcock other -- any discussions don't overlay any there's our we've directly. had we today, think particular

list basis AMC Frisch's been cash Our has rent, COVID, obviously list bankruptcy. it's be since to honest. on -- tenant in is it's is since our that of and Badcock X.X% still --

cash is And list. our XX% so of base that's

is any our tenant it's issues concentrated these reading only Big handful -- X but through at so that way not of fairly too, we're obviously so of our yes, credit on Lots And rent. any point. other in with material it's there, tenants. X.X% tenants of to But this

of just I sense. on transaction rates Got switching obviously, sort then Makes it. seen -- the gears the just bit on back little up. side. a we've wondering, guess And I'm

so up You acquisition guidance forth. took the and still

So you're impact. seeing any really guess I not

rate Just year building into the how get commentary as pipeline cap and any on sort next of you commentary. is

The pipeline, midpoint. increased to We you it. the yes, acquisition alluded

range. that the there we'll I quarter, fourth confident yes, an should So be hit uptick. feel

start of of kind deals that a year-end, change of little to deal to industry, been get deal I get Ron, being and rates typical the the and to take in to the market, days market. when bit said, sellers -- our to think contract done push under XX it there's Labor backup comes more It's Presidential tax -- closing to we certainty election and a But near you tax especially more when codes. might year has kind rates recent. in post that Day or pretty And all volume of unknown in the get it's year-end remember, coming in XX kind by

in down So the are as line to our in deals way, as lot either starting active of secondly, looking guys, the deals we're cap from currently very not rates, fairly as mentioned, at few a the first same I select And difference. noticed the pipeline, the quarter for I've as deal pricing far fourth price me. of are quarter, with much and the definitely pickup deals. quarter, they're the hall third we're a a far as and

question Rob Stevenson Janney. Your with [Operator next is from Instructions]

right, I Holly, can Rob us. hear All we I don't think on. move can think

Your R.J. James. is from Raymond next question Milligan with

day. It's a busy earnings

Rob's So other on probably calls. some

Just the XXXX? continue that is expense lower And the G&A for driving year? guide and to curious, what's into going

couple Yes. I mean million there's a is, variations, midpoint, which some XXXX, dropped percent. of it the I $X.X quarterly a touch, at but about we the is for range guess

think So lower just -- I would just kind some of accruals.

numbers inflationary where work point. it it think don't we to guidance at will I some But think mean more [ I going out of kind we I soon, this much -- put will have of from as have you that. increase than ]. look we'll sort those again at XXXX, move but are through

it. Got

of with the outsized elevated acquisitions? know just number, that credit next term potential pretty credit And a or picture, XXXX, drive this to what's issues, gap and sort but share some year, Is this fee issues timing the of alluded that bigger the growth the is current per year? so offset I to with

is we'll then know you've opportunities. will any then that if I of but year. driver. normal about the million, of primary that don't rent the Obviously, growth -- income go like $X see loss. our other it in that lease And embedded, there's some offset that's helps term got obviously, income if has Yes, rest X, the portfolio to per

Steve Badcock pipeline, I The and headwind. acquisitions. need our think portfolio pretty has -- as a fourth for to, clearly the the volume and Frisch's by implied news alluded the to growth year. headwinds those rent solid, that in our pretty looks and from good and that's looks acquisition is relative will but it get yes, So term the existing total quarter fees good the offset to The are

feels like it's pretty good shaping quarter first And so well. pretty as far, well, up

are So drivers. know. too have you the don't as yes, here, levers Yes. We those many main

[Operator question from Riley B. today Instructions] with is Securities. Your next for John Massocca

on The in payment XX% was quarters? occurred for rent touching in some just Maybe that that past a Frisch's XQ, the second. case also

as rent. reported second reported, No, we quarter full

XQ was a XQ. and between that So delta

that's, them. half is rent So million it, call from $X.X

that's third so of in And $X.XX headwind. about quarter kind the

then guidance outlook this troubled guidance. on Okay. of is a little reimbursements in maybe looking The previously vein. the tenants of versus of a of there else that that? tenant X kind XQ And kind for little something worsening Or same up kind maybe your real net estate ticked to driving a mentioned? you bit expenses, the tied bit Is

Yes. Historically, else way generally that. No, driving think about rent we the nothing loss.

assuming, XX% basis it, XXX show about of if XXX expenses. call So rent incremental of points up in loss, we're rent we we'll XX that will points basis have also of or assume -- property normal, loss typically our the

have pick when So property up property you to obviously insurance, a you and get all back, things. taxes those utilities,

our we And what so minds, do. in that's

loss smaller to goes property It's that. the yes, But amount. obviously it drift connected. much So higher, expenses that with typically, yes, extent along rent a is

retailer notable some the what's than years. about then driving PE, there of kind multiples kind is something you're of Or of And the that? past in kind it termination of and I same thinking in talking higher there? the else Is kind M&A of income, mean side? lease Understood. about -- expansion

or backfill get current discussions it's that when termination tenants kind a sell And out a we of active lease driven in going hand by have that portfolio lease. it. of somebody's bird a management. to really that to It's really do we we're want asset usually with And going to just our

portfolio conversations that retailer be will out years to asset, down get and -- poor XX, the lease. it's of really a to performing having is on it looking left there So management, XX comes a

lease fees, the pay on term the get of correlation asset So the and/or usually out years direct multiple the lease remaining of a the to where they'll term of lease. rent a

side more the notable that or macro else to something tenants there Is making receptive something conversation? on that's

makes on in the base our carry conversations that routine I think on NNN what unique basis. with we a situation tenant

landlords of will you them problem. that we'll no, just say, work where that So rent, a lot they future pay a know the with and be have it

at it's the the making stronger portfolio really end of So the day.

of end call for now turn to over and the will question-and-answer session, reached have remarks. I We Steve the closing the

morning, at Thank this weeks the we'll I'm you. more in us a sure joining for have Thanks upcoming and NAREIT. dialogue lot

and conference, this at disconnect for Thank This lines your you your concludes time. you participation. today's may