Agree Realty (ADC) 20 Oct 202020 Q3 Earnings call transcript

Good morning and welcome to the Agree Realty Third Quarter 2020 Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Clay Thelen, Chief Financial Officer. Please go ahead, Clay.

operator. you, Thank and Realty’s everyone for us joining Good quarter thank XXXX Agree third earnings for morning, you call. year-to-date Joey of discuss and to this me results. course will our be third joining morning quarter forward-looking we that note certain maybe law. during call, under Please will Securities Federal this statements make that considered

contain containment Our actual of the to indirect Please on various risks, to the the economic its actions for effect scope, and our of and the duration significantly differ COVID-XX our mitigate earnings Form matters forward-looking pandemic, any underlying yesterday’s taken uncertainties related in Report results including and pandemic pandemic our a tenants. reports for statements. and XX-K uncertainty our Annual discussion filings, may the impact subsequent including measures the latest and statements direct a number from or discussed on of release the of forward-looking reasons, SEC us severity see on and and

non-GAAP core filings. Reconciliations directly of will or measures financial financial debt found now GAAP EBITDA. AFFO to recurring In operations earnings be addition, to call website our the to release, measures measures, the in and from can operations we funds or these SEC FFO, funds over including comparable discuss net adjusted core and most from turn non-GAAP I Joey.

Thanks, Clay and thank morning. joining us you all for this

wish our to and listeners to of their and all would very a navigate continued like challenging safety health First has off, year. I families,

We have got a to lot cover.

materialize quarter pandemic. many We to early a the a of activities. summary down began had QX the So, and of during our third our outstanding to accomplishments of in let’s quarter the depths get truly year-to-date that

to $XXX net across acquisition than we platform, XX record originated high-quality quarter, volume three growth of acquisition million. representing were these lease million in external the more invested $XXX XX platforms. of During our properties properties our record retail

our of opportunities first comprised volume on This leading by intensely of While auto acquisition tire X.X% the lease sectors. of achieving is challenging during times, remain and from distinct Arizona. We The ground and in again of leased we merchandise, including properties quarter of The home term weighted XX.X off-price, properties a convenience demonstrated performing best-in-class our on acquisitions including in grocery store these tenants small improvement, approximately number again weighted located finding quarter, a XX in quarter best-in-class notable had third being was retailers. Camelback once parks, store, had the years. target acquired once The auto Phoenix, Road. executed during grade with are operators volume of focused XX% retail during derived average store, and operating XX quarter the sectors, service general record XX% volume cap on third location acquired partners. average to leases dollar acquisition rate a and XX a investment high format

acquired of currently Chapel to Wegmans store. ground their also subject North is is new Wegmans Carolina. We and lease first XX-year Hill, completing our a construction in

stores in California, Goods combo Home combo barrier HomeGoods first the combo the near Eugene, TJ the closed high in store. acquired in TJX campus, we Oregon’s Oregon, on Napa Maxx and during we and of two entry addition, In to then we and where unique Marshalls purchased Valley, a quarter, markets, University where

Wegmans, purchase unique the source total a five lease ground lease quarter. Chapel properties We Including acquired continue of $XX to several we Hill, opportunities. ground and the million execute on price during for

assets Today, Walmart, Costco, rents X% and the lease rents. ground annualized Less portfolio the deleting Home operators end, derived a total including Home a included Depot, grade acquisitions all is than or sub-investment Depot Wegmans, X% quarter base unrated lease spans leased remaining our grade lease in of in from retailers, of Home is these and XX% our from nearly of in Pittsfield, Additional retailers. Walmart Massachusetts, Depot XX ground over of rents the were a Walmart X% and Paterson, Arkansas. Lowe’s Wawa. At derived New and lease Jersey, Mena, ground ground investment portfolio our

country. to ground continue have $XXX year, look opportunities months lease and you properties, XX updating net We I million grade million Of XX% uncover derived spanning a properties further investment leased the year-to-date, X platform. was $XXX acquisition acquired of acquired leased the retail Through ground the Of the across record while XXX forward comes next from quarter. base $XXX states an across rent acquired via exciting we to our rents first XX% the nearly of the annualized million invested, XXX are assets. operators, unparalleled from approximately of invested year-to-date

have Given we grade $X.XX at more portfolio’s first $X.X by year-over-year billion X to of record stood already months end, increase than basis of impressive billion. increasing the XXX more year’s points our of X million X,XXX of year-to-date balance basis points. strong investment through exposure our of guidance At from pipeline our last XX%, increase we than and acquisition acquisition volume quarter to of to Notably, previous the years XX%. a $XXX tax are surpassed and $XXX fortress-like a an million approximately representing volume, range year, acquisition XXXX our a range sheet, billion $X.XX

in on investment trajectory. focus to positioned omni-channel our will an its leading anticipate concentration retailers grade maintain thrive upward that I are environment, continue we our As

that commenced during committed Tools platforms, million. the those to Three had quarter, company company’s Harlingen, on performing Columbus, our including a supply to expected in this quarter capital projects and second projects in to anticipated quarter the represent completed Texas first development a cost with months on $XX of PCS the development were construction projects and development Construction the Maxx target the adjacent during under interactive million. PCS Freight over partner of Burlington completed Weslaco, or TJ of just completed development high of which we total and $XX the company’s X year. the capital than either in total quarter with during Ohio. Texas, solutions continued Harbor the in and be first development fourth third is The during more two with XX Moving of year

Our retail growing with vacancies, for looking results new of partners of to work team’s the these source backfill during with developers partner times. our is identify effort uncertain as screen to as our potential to pipeline candidates, well a capital

diversified our record our While disposition investment efforts. portfolio we through have through asset activity, portfolio management have strategic we strengthened also and year-to-date

for million a cap exposure rate. portfolio. sold During short-term X.X% of XX we totaled with XX for the under our of franchise months the down of the is for $XX exposure approximately the to X a Franchise sold XXX a restaurants, cap the basis we rate branch a average lease Since very by proceeds of at two million, gross now year approximately X.X% more of restaurant the reducing approximately third including quarter, year, X%. and proceeds our restaurant $X.X first a bank franchise Dispositions beginning assets, of weighted have assets mere approximately gross points.

team addressing management continues intently lease maturities. upcoming asset Our focus on to

lease X.X% lease our of their only annualized rents. a maturities remaining X As at of that just expirations stood XXXX represent efforts, base result

acquired extremely rents XXX progress I Wawa XXXX capabilities. maturities remaining XXXX new that the from XXXX material maturity. roughly the serve made the quarter only lease to lease and intelligence have largest time pleased the quarter basis limited of leases with All lease am to These the XXXX as exposure three expire points three to the and remaining. our we three represented reducing acquisition We at underwriting locations. acquisition, that annualized of course our to three end. on our testament Wawa to in during for extended term X% executed was maturities, or all over leases were Notably, XX-year our the announce base set also year XXXX of market the extensions with At

contains effectively we and occupied of portfolio retail average a XX The growing impressive the properties term feat fully months first the in consider X,XXX across our when credits a XX.X% at an surpassed for represents X,XXX assets count now year, remaining XX, X property September and added. of years. the of our has X.X you portfolio have quality increase properties This of remains lease XX% the total states. only and As weighted

investment remains recurring flexibility EBITDA. to a opportunities. forma strong balance for very outstanding At than fortified position. net end, more on equity, as X.Xx to in pro forward quarter very million balance to debt our have approximately With look our in tremendous sheet sheet high-quality we Our continue $XXX execute stood at liquidity, we

of XX% the received of entered XX%, source our rapidly payments will During received rents The notes. unsecured rents. our reimbursements. quarter approximately our was million collections payments a of the growing completed third and and offering extremely and provides highlight X% recurring base third July, for I XX% we of rent and approximately XX% both from We X.X% portfolio we of respectively. $XXX deferral operating August well-received that raising of rent September In capital inaugural public course into quarter, our senior portfolio offering our includes company. new quarter from data bond agreements cost representing aggregate,

have In addition, any adjustment charged we bankruptcy calculations. these COVID not reimbursements to denominator cost related include base to the made making rents tenants when in and and operating

Our data. investors actual provide to our collections to goal was XXX% transparency on

Our underwriting of a and portfolio collections quality demonstrates disciplined importance the data approach.

inception of and quality platform our focused since We XXXX. strong have acquisition fundamentals on in credit been estate the real

development, thrilled during our most pleased dividends times. expertise our invaluable to as immediate am constantly a our stressful the to to to Officer. position welcome our operational moment Chief Craig his a contributions many growing organization. Coleman an Director would talent, After paid I and Our take Directors. look I forward our processes, of company organization to Board am Investment Craig’s Erlich discipline business in marketing I I the growth. our Craig equally future. these And for improve and to sales and as our as has join we Mike like seek welcome of on scale as systems impact continue company, future develop made have to to contributions and

Vice at Hilton. as Mike, in Treasurer Mike Hilton, of familiar banking held management investment his at many you President are As multiple and to with the time Prior currently and roles he serves consultants. Senior

systems of excited experience To it uncover growing balance capitalize sum company up, and unparalleled an country, in sheet opportunities markets, and board. that one strongest to enable finance, to the we continue well-positioned in this on and and the the with industry We REIT are processes our our innumerable incredibly will people, that is very portfolios retail fastest have environment. to Mike’s the us to capital

to handing I our And have you, they Clay. that to has achieved. would the over of couldn’t entire thank ADC overcome patience. your this proud the outstanding you that call Thank challenges like team. accomplishments will more the team I Before be the off Clay, turn and I it for

with our Thank you, due start capital and activities the update had capital another over markets active in completing $XXX of unsecured the offering Joey. will inaugural highlights I senior We from balance a our markets public of notes quarter bond very XXXX. quarter. sheet in million X.X% past

sale agreements approximately source anticipated through we of this On offering $XX At new As had continues end, shares our of price meaningful this April forward XX, the active X.X anticipated $XX near-term net at be shares transaction equity we an of $XX.XX, with Joey million than upon are proceeds total Steers received were net XXX,XXX ATM million our million X.X settlement. of Cohen approximately & Cohen to with $XXX forward to the forward common of provides grow. from settlement, than approximately a raise of our we transaction program million. million markets in capital average liquidity the & gross more We completed for which offerings, into year. more shares to again stock proceeds. quarter as mentioned, September net entering in under ATM Upon equity sell settled and of us to settled proceeds in capital Steers remaining and company

full capital with than access In dividend capital activity free company combination quarter. during more markets million $XX in after and we This $XXX also our through million to addition the provides the with our to activities, liquidity. revolver, flow $XXX million raising disposition cash our in nearly generated roughly

amortization, of of to Total debt debt was net value a As charge equity company ratio, to which settlement offerings, was our approximately principal debt outstanding end net X.Xx. approximately approximately our the September fixed recurring forward our EBITDA EBITDA coverage recurring at to was X.Xx. enterprise at while Pro XX, X.Xx. record quarter XX.X%, for includes forma stood

of the X% per operations quarter, Moving to $X.XX, increase X.X% was increase. was from for core the operations third an year-over-year. earnings, funds for quarter Adjusted share, $X.XX share a per funds year-over-year from

was trades deal to core to from AFFO for offerings price aggregate $X.XX $X.XX approximately and both above The quarter these During the include share the share equity quarterly dilutive offerings. GAAP a third past FFO the roughly under per were related stock settlement, impact per event for FFO in forward diluted per count revenue. expenses measures to On to or the our was lease core and the as the impacted and year-to-date above of and and share Treasury two has below – included AFFO the prior recent and by delinquent quarters, this X-month period. offerings. total in we totaled G&A General $X.X treat COVID-XX revenue of basis, market X.X% X% dilution and within expense a administrative quarter to non-cash the deferrals elected related intangibles. related excluding FFO have share million. our amortization our our been stock that receivables

recent the to range and a leadership agreements, impact anticipate now as excluding for revenue team lease intangible we XXXX, below the employment X% in and the above amortization. percentage changes new and total market G&A to the amended Given of upper recently be of

was level our The growth. team of as in and on this properties in XXX the we X.X% decline consecutive to invest percentage increase. share future company the a support our our XX, years. G&A anticipated sheer of and a adding year, September of representing XXXth approximately dividend, expense IPO company’s XXXX. stockholders to $X.XX to investment cash the of in to dividend current platform of since a year-over-year on to continue X October Given paid revenues per expectation continue record the and We This anticipate activity

increase For dividends the X.X% the period comparable first company year, share, the of X XXXX. months of the over declared a in $X.XXX per

share FFO quarterly AFFO Our XX% for per of share respectively. and the payout quarter ratios third XX% per were core of

the our XX% core that, For back payout are X payout turn and share ratios per like months well per targeted the over company’s XXXX, low of would FFO With covered of dividend. call a ratios reflect the of AFFO to to XX% at first These ranges were of the to continue end and respectively. share Joey. very I

Clay. questions. up we open any you, time, operator, this it for At Thank

come [Operator from you. with Thank And our Instructions] Please will Crossett first Nate ahead. question go Berenberg.

Hey, good guys. morning,

Good morning, Nate.

of view? you causing seems the the are there hit some quarter what’s Hey, the quarter if flow characterize could bigger wondering you every acceleration deal in your going a in it like bit, little beat think and to Was kind it boxes lot. I or you by a

kind what’s of that causing acceleration? So,

remarks, Well, quarter. I prepared properties think we as in the almost acquired upwards I during mentioned of XXX our

So, I ground Wegmans including are boxes we Home and required. don’t there think and the it’s Walmart some necessarily while leases Depot bigger

current into we a that here positioned quarter those marketplace capability is of and are that a saw guidance a perspective company this think projects from our number QX. I opportunities the we take that the this opportunities of in sheet and balance advantage to in forward quarter, obviously see increased significant perspective into

of testament really it’s enables really, our country. enables uncovering it’s balance team to across but think – cost it, I it, our unique sheet a the capital opportunities a the So,

what bound the is, quarter? a mean, assuming I an throughout I guys like trying the max your current or people realistically added is is achieve few sense like, it I I you there Okay. know, guess based that just of quarter, get you question busy this could a my have to resources, am like, entire amount upper on

portfolio team only properties of continue members, I as systems, we surpass but the Yes, invest, we in XXX see in XXXX team terms mentioned then our to maximum anticipate prophecies. most properties, Clay year, I our notably, we I are a adding to not and would you, tell don’t we amount. new this this adding mean,

three execute. there So perspectives to is is it. up course, And this, support set from the of company all of those to sheet continue to balance

our best while class don’t discipline, is we I bound, uncover, by see So think that in maintain quality an I in retail. of limit we that opportunities number investing upper set the

then is can you? can how you market these market you lease leads And of kind you one, Obviously, for at total size us for and looking helpful. But come guys? you net huge. to how us opportunity for of that’s just remind is what leases the ground the big deals kind is addressable the what Okay, ground help are

Yes, in net the entering really new your have of and new data constantly development any terms you I don’t either either first or point, property market the addressable with count, market, is of I $X fluctuating number or sites. tell new transactions from that

Now those retailers. brokers through there direct developer us transactions by come number are a directed from to of ways

our turnkey, significant traditional in about you, Depot most or first apply bottom and And also assets X% during then ground we typical obviously, Home Depot Massachusetts, so wide lease Walmart, Paterson, the from a for would notable outside our just the ground assets were a the capital in are X% long sourcing now in ground leases methodologies Depot quarter, of tell Berkshire. wins up investing notably, to both Home I Jersey, turnkey Pittsfield, New the Home the lease, and term at

So the find opportunities. are these year And will number we of to again. There I ground the lease of continue our for anticipate a pipelines by end increase exposure QX.

change is as normal versus that because has ground acquisitions lease now Okay, been in or there pricing M&A differences anything? it right of Is pretty any the thing COVID there that consistent?

than been pretty number are leases. in it’s similar you, our the ground XXX are valued acquisitions. leases is long developer with overall they XXX direct a tell on term That short different between like, term with executing points terms whether of said, basis average will turnkey not of our partners, we historically, fronts, and blended consistent I materially inside of that

Okay, guys. thanks,

Thank you, Nate.

from will come the Haendel St. question And next

go with Mizuho. Please ahead. Juste

my taking Thanks Hey, good morning there. out questions. for

and are how you? Good morning. Haendel

you many up guess too. going wanted thank Hope And figure forward. is, are question quarter, I rate the what question sustainable level on us. here news, a Joey, great, out is the you. the to I on am surprised the I certainly acquisition Nate’s the run of follow that to trying during

is the this much how So a has you capital during reflection what commentary your quarter more lot obviously raised during that year. of bought of in was of to spillover refer

from perspective? ahead, should the do quarter, How number? a implied million $XXX about look that’s quarterly term the the we runway as in how So fourth and we that near square acquisitions think in we considering

Well, I tell guidance perspective, a the our of pipeline. from a reflective of are the latter from appreciate the quarterly part environment, the think of answer reflective and question. question And we our current of is I think billion what in today’s I I point you is bid with that increased $X.X seeing

transactions advantage terms is honest estate In the good in will we a for that forward and take the development of all I of execute a look be whether as opportunities sustainability of don’t of where capital basis acquisitions sustainability, us those really solution, go or for at real are a on us. marketplace I on will partner transactions myriad opportunities question it other core,

So criteria. be of terms in balance and real and being construction spread why capability see find as infrastructure, will sharpshooters, anything investors perspective sheet and the a to able we not hit the we on the that’s we you our and investment to are execute infrastructure, question portfolio positioned are from estate support to sustainability invest is we Nate’s but back we really to simply in continue will

and am XXXX I from that’s policy more you, here, that and overall your on industry the then potential potential including consequences a election limited direct public what Okay, not anything Maybe but to the perhaps to act? of indirect repeal to view companies on And shifting perspective perhaps on curious radar fair the repeal. a the screen specifically is your just to repeal potential enough. concerns the and

about I the length, significant XX that was think talked restaurants remarks. think XXXX year- think the and in nearly a I number or number most franchise it XX environment, notably we to-date I prepared have I in XX at year-to-date, sold into

tax said, have I more of – is category. will frankly XXXX significant I forward is material price where the a always into we leased net estate repeal changes any so to implications cat the And assets fun point activity. go hesitant structural real lower just That potential with in real I imply XXXX that changes lease see regulatory overall going stability important am commercial or the What environment. we the and of in the the property as asset of be outweigh flows would think net think which

call, in in in malls last lease, of net form office, and primary debt a continue very or underwriting lease power the constraint. it’s underwriting assets, very the mortgage. stability competition challenging, or As majority net lease under century the format to whether are underwriting centers, challenging, typically a up of said asset anchored net overwhelm time CBD I likely XXst mentioned through run they regulatory a secured changes centers whether on lodging it’s small is in I or secondary frankly, are shopping need against the the or to the in of environment. think of grocery any time any investor environment strip is most is appetite equities a for XXXX suburban They going investing purchaser they That when we the

is to for some competition going think the of clear XXXX provision So the us. out anything, frankly elimination if I

Got and that months peers, think last names credit here guess high a at attention more. curious attention come the the certainly level, sort paying strong am fast the and I for potential you your built should just it. Thanks. to Got offensive very I it. and some obviously, is issues draw some the a with pockets of defensive if if Thanks. embedded is the overlooking capital. perhaps at underlying a perhaps It lower risk But curious credit you conservatively pretty attributes, issues? here of industry one of multiple far have enough but a flagged the attention with platform does curious pretty certainly bit little trade, time your too of some obvious perhaps a to but stock me guidance within relative certain of not certain your tenant catch-up few too third paying and hopefully raising for the think market market you to some enough of

I will I think one not this, I out it’s price, you but this question. quarter Agree I it. be stock tell Look, reinforces appreciate am all Realty a complaining about there about. great generally to what is our

have sheet, We best capital. base, profile, fantastic best cost best and balance tenant the the the of growth a

at we And this a so rare are point. thing

We defensive those world are both the investment to both to of uncertainty. pretty we solid a guard certainly today’s things growth against And place. it’s company there the in uncertainty lot also S, one and best-in-class same a are of a hard at find in is time.

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in, market do real to come in do will what can is work so get day-out that’s high-quality investing we the And day-in itself. and All take lease we of let and and care estate. best retail net we do

I you. Thank give the floor. will

Thank you.

go Katy And Please with our from next question Citi. will McConnell come ahead.

everyone. good and Thanks morning,

around how transactions or price pursuing, attractive acquisition, the the your larger in are pipeline case So you in are of process for today? changed more is of and any in portfolios seeing the size you thought opportunities deals

not Katy. morning appreciate process has thought question, good you our tell I changed. would the I really Yes

we range something million resistant $X.X the stay start and transactions omni-channel from are again, to the prefer low from $X.X We $XX we perspective foot up are the between, our from for mission in the on of world those O’Reilly transactions transaction, and world doing way mid million then like ecommerce marketplace, it typical all a broad, retailers which in We million away it’s dynamic Wegmans Auto omni-channel to But involved. addressing. and really that a the Parts we just so critical bottoms as as are a resistant abroad a or underwrite in inefficiencies up. recession best XX,XXX and the because an and

estate and price tell you as the is are I course, as point, the underlying credit So the last piece the residual sector, input we’re pricing. probably the that comfortable long there, looking would we with probably real last fundamentals, of the at. That’s

point like tent agencies talk categories you that the some happen And do And Okay, about handling were then for expectation box what’s fallout your they this great thanks. exposure of of or gym? to approach high-risk to? generally formats, can at if theaters your you to in some with have the fungible less

think I well, purpose single those we Yes, historically have structures. avoided

the And is leases. then boxes of an skewed for XXXX importantly is the absolute in risk you, those that de minimis real very identified underwriting rectangles you at why are today have I both fungibility those estate and done toward Lake. and we see like categories ground relative course, square basis Of tell in us Sherwin the us. AutoZone, we our Williams have foot O’Reilly,

returning And nature. general so are perspective a single very is from general purpose in those obviously boxes a challenging. Those on

have LA premises. portfolio, you fitness I think we our drill if into six

real extremely are estate. Specifically, quality high they

quality Costco’s really of as high hard across premise talking pieces real from in in assets, about our Ohio, estate. You and such are corners LA some urban the Columbus, nationwide headquarters

think we will as is we those once a as And investments. theater So tell on would made a always we go, selective I pay far were But theaters it theater. probably very those when out. you the residuals

Thanks. great. Okay,

Thank you.

from Stevenson Please be will with question ahead. go Rob next The Janney.

lease foot leasing year, of half square the discussions renewal the and quarter, as you you over roll the XXX,XXX year next here do in and XXX,XXX the year-to-date forward of a the versus On third with tenants? sort are And expect with what expirations.

Sorry, that a us Rob it part everybody? the cut out not repeat cut you would for was a sure off if for of question first

you date, the rents expiring where and paying those Yes, discussions did tenants XXX,XXX having of you the it? type third versus to sort renewals in quarter out leasing with is new and next, XXX for the are year do of of you to expect, over year as what

got it. Yes you. Thank

the of years. contractual with mentioned, So TI, as leases maturities X a give the I our increases component That concession XX-year we are or did Wawa XXXX. was every extensions, in prepared not those rent biggest remarks the XX-year

page them the As expiration release XX you of has of can X.X% have for see remaining XXXX rents. five up total that come on of majority only leases

is terms as it anticipate there. ABR the to management of at and team like historically very and so, so rent think an of occupancy remain well And de elevated asset any monitor and portfolio don’t square and so continues we in we footage engage proactively in as going is to total X% level our material ends it minimis disruptions

like include our a would note, a maturity So, year pop even Halloween we I four remaining up fantastic this in here leases. we’re as profile. a things leases, from in position in lease temporary store

embedded opportunities redevelopment executing be of couple a have in there on. we so will potentially And

is portfolio the think we very position. strong in so And a

it a fourth range the at sell? you saying look to a take of like if is you of to given sensing then implicitly, there your are part of now And XXXX million get that chance some like bank is for where $X now remaining done? quarter? the on smaller high-end and is hit And there about good not part disposition between into something range earlier and dispositions ballpark year? chance somewhere know year you it’s quarter market, plan end guidance the something the going there things are so, or $XX and your into deals about mean, players the the I the of you – first that next is are comments million I turning Okay. thinking the to or of is to fourth a mean are is accelerate that urgency time in and that these you How that I your and branches franchisees

the mean the a now as Bell on high-performing franchise truly is lease it’s of a majority Taco I just over with master think discussed, X% and we franchisee stores. about inverse. that restaurants, I is

just really restaurant our have to over guess, ago years a exposure, X%. taken just few to X%, down from we I franchise X% So,

free. comfortable, would but stands us a think of just On you comfortable a more X today. all building a and say they by unless where at lease end, restaurants couple risk may to are GAAP, we a restaurants structure dispose exposure ground year or adjusted very are for X.X I that warrant selectively get you see very are basis, terms of So, franchise we in on don’t we

there here is going a take think is I what’s the to of no be democratic is if but on really. Senate anything, interesting if Biden and flipside, Presidency the by sweep is the democrats that predicting more means there takes the and

going the So, I to opportunities acquire opportunities, sellers the focused fear of but potentially the what some only inverse the or in on be question, to back – think sell is more us materialize repeal flipside for will property results real what year am very election by in there. on tell early interesting time could that subject is urgency once obviously I the XXXX to end, the to to that

out Okay. I sellers incremental these And demand just cash? up part one would you back being, mean, guys, do on want to of the from what me units there transactions take the wind guess I all last or they in days any then

OPE units?

Yes.

tool belt. you, our it’s tell would no, I tool in a

utilization in select of at units currency. terms looked have of We transactions as

It’s never demand of to the doing OPE have right have we incremental as open not an holder something unit unit We we seen I any you, are transaction. But to-date. for would that today. tell transaction OPE done –

guys. Thanks, Okay.

Rob. Thanks,

James. next Milligan be will Please ahead. with from question go Raymond Our RJ

will ultimate is sector will just is probably we have broadly, Hey, that’s this good September, what rents be? to as visibility going on that curious, to when morning, sliver follow-up you guys. another in when I of of just for for And strong obviously, unpaid so these think fallout a have much you longer rent resolve the wanted am there that take fallout on quarter the I to rent, small timeframe the tenant questions collections you Katie’s collectability buckets? industry something rent and more visibility, a or will the think for uncollected but potential

some I tenants from in that it’s been have of foot visibility. So, in clear has litigation. I potentially obviously, profile to XX,XXX think high withholding going that unilaterally tenants. for Simon up and been are rents collections with to time crisis them and to that just we mean, identified, the the a have take at perspective regard get I this at-risk are The sectors with health mean, stages different Gap those we

continue XX% in collections are we October see anticipate I around at be that going to to level. September, think to rate were I at

think relative collections a is exposure minimis I And to don’t very on underlying so with to liquidation our there. is those us is X at-risk great strong, especially are our these What with And crisis case to estate store so real going gives these worst would portfolio, see underlying those again I drive issues. the then and see tenants and is a I positions. number taking confidence basis. point performance are our with I be to the positions Chapter extremely an and comfortable of here we scenario limited absolute health place de going but out continue resolution our secondarily, of we of think in

on lower to for what testament the you sure a what trended meaningfully yields moving versus rates cap type am then And rate And thoughts but of assets, in guys going part the we a higher I Okay. rate terms couple company, over in given in buying so are as forward, cap cap to acquisitions of years. been that do cap as general? your to of expect just of how average buying past are mix you market in average Walmart move trends that’s has quality rates, you have going

to Well, market general going I compress. will in anything rates be cap if to think continue are

down we we will you basically in outcome almost a that’s I in tell basis. X.X%, an basis And point I think front on not at the to have obviously, sharpshooter. I least, market XXX terms buyer. a it’s us. a pretty, band year, XXX approximately, it’s plus there, quality. phenomenal testament then from We minus, it’s unheard XXX XX% a or of and the think are about of are when acquisition blended we yield acquisition, And investment for mix acquired It’s grade volume cap a you it’s up for of And a continue the to on X.X target team.

years over to significantly. all our given to significantly, dropped those performance So the factors obviously, of last Treasury capital XX the think we here year has dropped few of cost be And going I mentioned. able our I has are maintain

Great, thanks guys.

RJ. Thanks,

And our with Linda ahead. Jefferies. come from Tsai next go question will Please

taking have time? could of as Do question. comprise how for portfolio you your thanks much Hi, sense my you a over overall

and a such it we don’t Lobby It’s Linda? that fans length, target. I public. I Hobby don’t to and XX% the retailers. question. number Obviously, as and Supply talked same a No, over we at about Chick-fil-A are continues Tractor a know At And it ramp have good We have today. target. of in huge time, have

remarks doubt, continue There’s best the retailers sandbox But XXish the we in anticipate opportunity, to going upwards. really no really mentioned in trend the start number that capital. so And of depending where operators we and deploy we that prepared with to it’s that I to be that country.

in highlighted quarters. own the and This that in didn’t of quarter, two four I Wegmans, had we added target the prior we portfolio

the will be will it’s trajectory, present will materialize. And so I that how that in opportunities really what opportunities given number the very continue far increase say to it fair But increases, trend themselves. see to think, subject to we

going can like forward additional have relationships look you like the to set and opportunity does some developments this? for you to the on color then for the initiate And new new what potential provide in Thanks. developments pipeline with tenants

Well, I be be on it in foremost, to us. has to there, hit the it first for it head base you and think has relationship

opposed And single a it interest as million we million so no several $X takes the XX off on months front, have tenant. for for to doing in $X to years transaction XX one a to development ago,

and and to we excited what provide not, unable new portfolio private this on of have with is opportunities had you we tenants here. their execute think we our focused screen to our announcing relationship challenges I X.X% number in or that and for But are anticipate find sandbox typically quarter, development to number QX. in putting start three struggle are tenants developing that projects, sandbox, made efforts based in tenants relationship frankly, to returns our vacancies fall to we either had legs so course, so continue have work to those well opportunities see as our similar pipeline or have them capital backfill about with the QX as tenants, returns are And our we And developers that that to to a team the own as of tenants that, they stack a and together us, appropriate believe, of our or project pipeline activity outsized on. we within and our at opportunities continue existing are working that

take return opportunities and development to that we and us that like. gives prongs So our growth profiles PCS platform other of the risk advantage thresholds two fit

in do going how developments to then acquisition? And compared they from Thanks. on yield rates cap

it’s Generally, we X significant projects put are XXX ground a to on process, couple from XXX to that to points a and development typically development last at the On months. organic go at acquisition basis, looking yields. we probably basis the PCS basis X XXX of above spread. Those shovel points a XX-month a are to again into if least XX higher side, going through

developers’ capability leveraging the our in So, we capabilities. cut effectively development partners’ the or by cycle half

ramp. some we so quarters think in opportunities and unique years to front the to and I upcoming continue see And continue on potentially we continue that to will

for Thanks that.

out continue you what ahead, the guys last one, the main cylinders, one see to looking you just risks? So fire on year to do all as

from pandemic tenant with portfolio SWOT credit fantastic there have we a in a lease in are the of threat a see a The maturity basis. threat from a it’s have standing difficult inclusive our risk from our best risk embedded But our analysis. the very standpoint, that tough with retailers our a a Obviously, is as are sheet matrix. portfolio I there in risk update main to question. difficult free very quarterly any are we In on Well, position. standpoint, standpoint, anticipated risks basis, on our never risk it’s defensive balance assessments and to internal a we macro oriented we country a said, now find

which earnings, prudent in difficult that the our and any to the I growth with mitigate given we the we of risks, capital, capital hedge opportunities risk well alone. the front think the $X a that net this balance on external a front have the external combine and over that are raising most voracious decipher and You lease in we read think, have is of billion risk external I us we a that manner our ability very grow to we sheet raised have, it’s over and year in user

our what derivatives, transactional capital provide us things best the forward using like so real estate cost do on is that terms front. we execute to of And and swaps do stability offerings other and the of in and equity

Thanks.

you, Thank Linda.

ahead. John Massocca Thalmann. from comes Please with question Ladenburg next The go

morning. Good

John. morning, Good

new receivables into determined be or if and so, accounting to cash doubtful how quarter much? anything put the during Was

We tenants had two John. morning, now cash a added basis. are reflected on new it. being Good That’s

X the very that so immaterial a from total quarter, us. for roughly to impact brings addition So, impact XQ is in for $XXX,XXX, total X to the last

of Okay, we months from and of theatres think year, of risk from about million how is or and kind the so as transferred maybe specifically? comes industries, that how this $X.X of X understood. much much today on the And higher kind of in the then rent uncollected maybe first

an is back half on basis, is If that retailer $X ABR. are potential about my X.X% an you looking is about this the to picture accurate think think the theatre what we rate, total doesn’t question million. challenge forma collection credit talking uncollected the can I I conservative I and assumptions, we rent a gets have pro paid a are of at relationship give have the we shareholders given deferred monthly That’s it are and theatre guarantee rent to talking under we given really in you at basis, deferred XXXX to

to amount, this a what be on our would minimis we in even minimis theatre this we X.X% to have mean, exposure five portfolio have really all and very it’s a XX% I and that with it And October, on in think company I clear theaters theatres with think September, the with clear so given think is I theatres been in very we hesitant the focus I de exposure, focus And I total de collections in have our in anticipating been aggregate. misguided. to-date. collections XX% of disclosures

or kind I to mean, I space one maybe a Busters theater kind Dave guess and be the default, there was in of what either DMB and was financial? on kind of to or time the impact

in launched unsecured in year. earlier they Well, a million $XXX offering Busters million yesterday $XXX Dave bond the raise and equity

Busters get Clay a the retail into experiential think specifics, So can this entertainment mean, I X.X%. total portfolio, I or think have portfolio the of retail is in but total and in we Dave three again, I

what the detail in I one maybe Okay, of guess last drove the impairment kind quarter? one,

Fitness filing which non-collection in bankruptcy Hour embedded Hour the XX included included That’s XX asset. fitness XX Fitness in Hour a our health is that The related to one that data one our XX%. was Fitness, the or collection and in which portfolio,

Okay, that’s it for me. Thank you very much.

Thanks.

go Please Todd comes question Wells ahead. Stender next Fargo. the And from with

been ground what acquired weighted term pretty guys it some have the lengthy about in the were, of Hey, acquisitions thanks. in leases Can that kind probably expand lease at pricing maybe shorter the Most average of at and QX answered that shakeout just are front. looking is they you But the XX leases the might my of you years. of term on the quarter? Thanks. on questions

XX years years Yes, Wegmans. leases XX the from Todd full good ground range with morning to the the mentioned I

term our is slightly or I the the our from underlying to the core shorter use to years average performance lease continue term organization no our mentioned, shorter the those for a Wawa XX.X estate, understanding tell do will weighted we acquisition, material to overall given but they shorter intelligence did years. a and with retailers, store shorter look obviously would is including including four market as the Valley, as well relationship to acquisitions, I but Eugene, make opportunities TJ real six years, we combo deviation, acquisitions, Oregon, our ground relationships it So there the for under add HomeGoods, XX.X this it partners, competency make Napa term some term, being significant were you, term are with above as the leases

but then next we left on about the you creation years the Thanks. Wawa that we about Is to you that lease speak look lease is the guys And didn’t properties? renewal? and were going to? you what piece. what kind component? That kind of you it the maybe the Can more where that How leads were at value many rents hear on what touched when original lease maybe they acquired renewal are before, of me

notice XX-year were they Those bumps as the one are working same time, period. expire bought an rent full about to typical we Yes, Wawa, Wawa gas when years remaining believe Mid-Atlantic. time launching so a now also Those to set year and I Florida with the after X.X development with at acquired X.X there were was non-traded stores and is about years the set are them leases the X REIT every X years those to when in convenience contractual from the with fixed at mid-XXXX. aspects we acquired platform. option We in we Last on XXXX acquisition Obviously current Wawa. store leases X leases X in the in rent. expire years quarter,

in expenses period. out door us, was over big it win rental increase the aggregate the a So, XX-year no in maturity TI for dollars, with no rental fixed increased lease rates our and rates, the largest XXXX,

Thank Joey. Great. you,

Thank you, Todd.

be Lucas Chris The question with go Securities. Capital will One Please from next ahead.

Hey, guys. good morning,

and to trying of the two you of is what you a thoughts or a policy, a capital, forward? targeted past follow-ups. guys of the in dividend user that more external the significant external at mentioned dividend but through of cash or payout it you about terms retain as the going know, acquirer, ratio? are should Joey, FFO in policy, have that, pace just how be per with growth any share Is thinking you Starting slower Just I capital we to of thinking slightly growing dividend guess

appreciate the question, I No, Chris.

lower understand in remarks. of source to requirements of objectives. prepared mentioned I investment it’s have obviously I to think which we the material that it’s we dividend We stated or a as they material end But investors at Clay XX% ranging are say a and rededicated understand capital, are of now individual the from range are yield that should different there first our XX%.

desire broad the raising continues range believe at policy that increase and anticipate to objective number should which a of in those the board or think so, I middle one find the reduce satisfy obviously the transparency payout dividend in predictability, hopefully terms to there to ground dividend least from is a sustainability And is we board QX, of there. payout because that

that competition had for then the underwriting that. we understand, a on And something better to as leading guys pullback? thanks success be there quarter, deals? hit sort going should you about back just Okay, guess, just as transactions for it rate the to you I that, to this going Is relates to trying there the Is thinking are quarter? more is, of

a deals. terms thing in is have growing developers, in real from estate share are underwriting The positioning company and constituency Well, every has the I direction headcount as in presence market retailers, sellers, our changed also tenure end team only probably a and from so itself. ground, our and about I improved whenever coupon those best with grown a think and talking frankly, on taken a and and we can’t experience has is that them. market real asset tell tell you hit you, and compliments are we But serve scale we you jump with acquisition can so is there of of and of in about a I we an is in brokers service get also to has market results. the full our about a approach. our administration, This definitely we a every And on, not are them, we And are piece team, estate scaling that’s the only relationships simultaneously from in more that we company challenge underwriting transactional problem or would not CEO’s capabilities the retailer is has I has I I clipper, as active lease our frequently, dynamics for retailers are the you Lake grown our just our them, are think the management get is this partner and ratio I see same. our heads and in big is mindshare tell everything with growing, to

you. Thank Great.

question Please And Katy Mcconnell ahead. the is next Citi. follow-up question from a the go with

Good Hey, morning. Michael Joey, it’s Bilerman.

Good Michael, you? how morning, are

a of liquidity? opportunities Street, an To with on last that Market you Is see flagship for further have retailers Wawa there either opportunity parties relationship Great. May more make go urban area you capital? into to that deploy buying the very control of you would And you locations that from the sort that for you third clearly – them. that $XX bought from street looking one an is are million, retail direct properties or to for close as

question. It is timely it’s a

acts because think showing what pieces But of of college the the certainly do we transaction. background, not the a they when us. you we they on the urban find revise documents do need typically it’s majority of not we revisions Look, Town on Hall, through in thought is an urban Wawa then truly of some urban to be we real lease, college It’s have create hit you there. that or capabilities and the is I are Biden for I do, I do what typically going they campus to tell dig environments, have town teacher It to transactions. on component don’t lease do. A and are the tell the Eugene, here. the execute Oregon the whether opportunities the in credit to of north appropriate will condo structure, But it’s campuses pretty we types so. outsized explorers time type unique some estate, time just we I which During was not the fun. net

growth a think a So one catalyst. near-term I necessarily in pipeline, it’s an the opportunity don’t like opportunities, two for us there similar are it’s but or

fit [indiscernible] so… deals, in have third anything type that be that there Was tend of would purchase to quarter chunkier

Yes, would stores quarter. leases, but that combo through you and comes went third the Paterson, nothing no, Walmart Depot mind we no, the to the purchases the I and the that tell TGS in with quarter, obviously, the notable Wegmans, ground the urban during then Home

on we back that’s when million, second July, we call, half was your $XXX quarter million back the the of had to to if acquisitions. then million, terms dial guidance what now activity? And $XXX implicit to of effectively for Clearly, $XXX raised in million increases looking that overall you some $XXX sort in pipelines, what to at able closed and drive that in least of time, identify at you were at moment increase you are

would two further very had called the, then during with transactions that to the early window what’s So, or private wanted you, a with placement an back that on, pandemic The the plus steers. the trends we with of it even depths would ATM activity. recognize the tell we those very overnight quickly that with I grew opportunity I the commensurate simultaneously those attack. and We merge take pipeline Conan and transaction

markets. us. literally, remarkable pipeline March was Obviously, to quarter, very reopened grow. end it’s dynamic so read of for quarter And the The year effectively the equity been since continues we a when this a

day would earth already day. And Our or extremely the I are QX pipeline is for question? have on fit team your within fluid, and our tell it’s you, changes our there that it scouring out pipeline strong they nine growing But that QX Does people we sandbox. growing. to and acquisition is answer opportunities

July half. should the to was do the million was there are deals know of that in something back had in lens you if going we I Yes, $XXX

here you to a it know closed I what how if pipeline $XXXmillion. just today, just forecasting are now Clearly, was the is, to just just don’t sitting the later X of months there number – has pipeline? And allow just you the a are the of versus or ratio almost it. You do doubling trying to is being and been rose, pipeline questions much around understand this dynamics,

as know visibility the depth guidance had the we time and of into I pipeline. of the increased, breadth the

because things during provide obviously also a in. can fallout we but both range, get added Now, diligence,

transaction of execution is average approximately close. Letter Our from days Intent XX to

increased give guidance, So, buying we are that give when guidance we we it. into not after

into range. guidance believe fall will we We as into this Hence, pipeline increased well. that visibility have a the that time

Great. but want capital talk And of their lot a which you obviously raising investors terms but little bit deal your the opportunity the deal didn’t single investor, provide one basis? obviously timing and in and in about for marketed direct structure, good as was other to cost, you about of how I good all with a maintain on probably, have should company equity ATM well, just an forward undiluted a investor, quite a different shareholders for capped also that ATM, ways also stake think large then then straight to did a

Right.

we a of quarter capacity the two coming cash level about a Given is at the there one have should how replenishing to certain think you that about in that given forward, terms timing, always volumes is the look targeting acquisition equity? think and that equity of do executing pipeline then the or and how

on forwards. still think is did that raising page you unsettled and as We nine of Peter myriad million table X on that at a fantastic given with of well articulated job I Page in equity helpful. undrawn $XXX have activities that Clay the shows table and the anticipated release all you Coughenour our Well, proceeds from

still our So $XXX we within have stay in range. to it several hundred power targeted leverage million buying call

many times in have think then ways and all were to continue needed, optionality source you we by to transactions So we that myriad great and $XX we you would in when obviously, to think by about. million. was that creative that are that the the on growing was of tell using our it flexibility if will frankly, our table, it they success, gives of raise capital flexibility been fund are talked unsecured need although it the and and time you discuss we offering different And opportunities us tools oversubscribed, and And are we capital are optionality we think that terms frankly equity, the when upsized provided the I capital, raise to take confident take we be going when and pipeline. we opportunistic a of mechanisms is advantage to to we

are acquisitions, pace of if million, year, you million all here just of Right, that of effectively the pace, you by to two with on but sitting was will the you what March same probably of keep February given next $XXX be or quarters $XXX the utilized. called

just another how investors And how at right two? And many a about million? capacity? quarters mindful ahead, to runway, so least $XXX it’s of that quarters and know million you should want lock have you whether question don’t to I how do likely be in of want you’re many you thinking now have of $XXX do

quarters of I think a the three in the I is, in maybe maybe binary one terms not think quarters quarters be the two day, at large honest. of in dimensional question. of and to and of great end runway, terms pipeline it’s multi it’s maybe it’s quarter, how all It’s

basis? it equity is raise cost, how absolute we efficient so what can an And pipeline can is large do How that it is, the as on obviously basis. share we price an

basis. all a that to I regular So do us time, it the give on forward in way think point articulated you tools

markets stock so interest the strategy necessarily taking external we in not mitigating obviously, price. the table strategy side, is similar some not of one terms the off in totality in look volatility, on quarters. our because of thing capital And debt But control at equity our our I number that the risk to rate do of X fund to of

can’t sheet this we overall at I an us herself re-lend. we tools That sheet execute disposal and we it’s that can put different our are and would strongest use deploy lever strategy that never in balance as tell to of What position keep hedging to will we to So I our to one pipeline. the the you balance guarantee this here. said, on continue going

you the health most fully And I then and your of during may not quarter. from being and XXX% the going health would getting up paid entertainment the open. one, paid amount XX% last be going last to not the collected assume from fitness fitness a entertainment, tenants quarter, and XX% to obviously, significant

it’s How much did no same you lease most of us you believe upon it but it come and walk other And your specific? the to than are know the door to through you of say of fortunes? two don’t I what asset much had help is like smaller doing a in it you for so How able haven’t? little how showing are is finding does guys, much I when get amount recognize deferrals a specific success portfolio your are if I not better? agreed maybe collect getting paid, industry the still big bit when others, would the others to contract of up with being you

collectors, exposure piece critical payables Clay not de Clay collection first the I these are our agency would Peter look, you No, Peter tenants me, here. to minimis and we I the and a their – are tell right. given here, Yes, of

a significant we are assets number leases. remedies embedded we fairly And same At underlying theirs. in we so in estate different that holding collection the the those know as have well have, that as estate real very not we we aggressive can time, the we of underlying of our are in be efforts, confident of real

we hard company, number aren’t largest pandemic, And you benefit so of not out tenants. landlord, we at-risk a we we the de going we not to we Number save our of going the minimis we beginning have took approach things your to I line one, are tell aren’t exposure shareholders. – are at that these will a to for hand two, not the that

have deal, that look you anticipate that and but of at we we it contractual in rights as payment that consideration, and adhere to notably a to give to If and most something can you well to we we going we make are will want the adhere rent.

have tenants And understood so you, I that. would tell

constant and consistent dialogue. in engaged have We

has Clay collection it Peter’s of and involved Some agency.

potentially significant tenants. it of terms has notably, a more of aren’t creditor minimis out friendly. It’s these us in just lot think and de could is end to day. think the frankly us that I easier in point we headaches Some to I pay or deal of of with But been it’s to a I most pay most landlord the would us, cause we at the

for Thanks time, Alright. the Joey.

Peter tough Thank collectors. you, Clay are and tough Michael. guys,

go The Tsai ahead. Jefferies. with follow-up next Please also question a from Linda is

range again? Hi, and leverage is available you remain just equity have is a in pro forma amount range. thought the of a liquidity terms on your to about What on forward comment there within that range And targeted internally basis? different your of

have effectively Xx. range range Xx we – have from we to our No, – Xx Xx to lowered have we our to stated

I think that’s appropriate.

of of that million at at forma for As settlement We pro X.Xx. were are we equity. X.Xx in $XXX XX, the September

optionality flexibility again, that and terms which course. So there capital, of will have deploy significant deploy to of in we we

we deck shock notably And uncertainty, so a deliver company that’s the appropriate especially be this the execute if sheet leverage been recent trajectory that. balance more operated think is think position shouldn’t look when at to investor we you able at can a in to on growing our conservative this Keeping anybody. most returns easy. we to Xx, are a is leverage to is given environment, at Adding I has that’s company critical, Xx never above It the a that profile.

Thanks.

Thank you, Linda.

turn to any over closing Ladies Agree like remarks. and I question-and-answer the concludes would our conference for this Joey session. gentlemen, back to

luck season and Well, rest for their the to during your holiday you of Good everybody season. and wishes earnings patience. thank best family I with the

Thank you. soon. talk will We

has Thank you, Thank sir. attending concluded. The now you for conference presentation. today’s

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