Agree Realty (ADC) 27 Jul 212021 Q2 Earnings call transcript

Good morning, and welcome to the Agree Realty Second Quarter 2021 Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Peter Coughenour, Vice President, Corporate Finance. Please go ahead. Peter.

you. Thank and XXXX joining earnings everyone, Realty's for you quarter second call. thank morning, us for Agree Good Discussing our Leopold, results Agree, President on today's call Chief Officer; will Executive and Simon Chief Officer. and Financial be Joey

the considered the language. we forward-looking securities through will under turning first this statements certain that cautionary call let federal Please Joey, Before me to that run make during note call over may law. be

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

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

first lease of our concentration continued Robust strong achieving investment a than investment raised record investment you, quality during of $XXX more nearly to Peter. pleased year, record increased six our the and further XXXX. Thank start volume XX%. to that months very ground grade high report the our exposure I'm and activity to of we million

that the ahead. for the positioned quarter growth more in balance our capital of billion strategic during than quarters markets continued Our and our by supported company $X fortified were transactions best-in-class activities investment sheet

with second leased operating retail rents investment These weighted first term lease second platforms. including sectors cap the acquisition in across The the tire than acquired quarter, service are and XX high-quality improvement, were off-price, best-in-class distinct parts, to in external During grocery auto dollar $XXX quarter X.X% store, of volume and representing properties platform in weighted novelties, XX a growth general originated XX average more our The approximately tenants of XX retail craft sectors. properties properties of million had properties lease XX record three Approximately a home properties operators spanning continued ground merchandise, acquired net of million. the $XXX during annualized of these our we $XXX base acquisition platform. originated from of first average invested while XXX record our opportunities store, convenience auto a and acquisition $XXX and rate through the in XX XX leading while Roughly XX% the rent from half Through of annualized metrics into acquired the leased invested retail this of one-third retail omnichannel focus on grade months achieving comes retailers, base net derived retailers, million XX.X still activity assets. our million from year, investment almost demonstrate best-in-class in results. we've our is year sectors. lease leading six states years. of the

our $X.X and to acquisition date visibility full-year our are billion guidance Given into our record increasing XXXX $X.X billion. to pipeline, we acquisition activity

on small this format of several target During and the including in we unique transactions, on a executed past Athens. Georgia's new campus quarter, University notable

another unique to street are well our with We pleased as relationship portfolio. asset growing extremely to target, expand add our retail as

Texas, Michigan, million. XX in during with $XX Kroger is at The five-store space. base a e-commerce located initiatives, year XX significant Mississippi with With and new each leaseback sale sheet, into top our quarter. invest to the for fortified of Ohio, dominant fulfillment in grocers net X.X% and significant strategic a in approximately moved continue We subject transaction market stores location of annualized Most grocery investment to Their the in Kroger rents. and this balance is are investment Kroger's transaction our omnichannel strategy. lease. tenants emblematic a are of leader course

which located strategic is another Additionally, acquired. operated example of York. we Wakefern of a purchase I-XX interchange the a is for New diligent asset is that tremendous every on in estate the we of conduct on operator we Rochelle, that ShopRite analysis at closed and a by New ShopRite, in yet the bottoms owned real

years acquired as built Parsippany, recall of to We've with quarter XX upon a term quarter Lease Carolina is New may of addition portfolio. welcome square total our property at million. months this in ground is leases that and $XXX second during leases ground to in investment the was acquisition located North XXX,XXX acquired Hill, The feet first Chapel Finally, our the we've in for fourth and remaining XX year Wegmans leased constructed ground lease Wegmans. Through over we of the momentum a ground Jersey over XXXX. six Ground you expense. The growing our Wegmans of first store over of the

ground total more representing quarter than was investment this second of leases an The $XXX contribution million. to volume XX

New quarter and Downtown in well Cabela's the as first lease Wawa properties store their additional grow Albuquerque, New A included portfolio New Philadelphia. Jersey. our to Wawa our flagship capital and at during Hooks in in Whippany, first as three Additional Supercenter Mexico, acquisitions increasing notable XX Walmart assets Hampshire, ground Lowe's including our

XX% average in and majority X% tremendous when growth activity, of average and tenants term, be risk weighted XX.X and at of end, term rents only close estate stood includes portfolio the per a lease assets of acquisition the industry best of building real a to is in returns base a portfolio includes quarter leverage leased to now track the company vacate. of rent lease annualized Inclusive expanding second square our to record portfolio. escalators result of at to that foot growing continues and nearly tenant strong course retailers and the of lease a credit, attributes our and relationships continue XX.X% very look average of rents of of exposure record ground adjusted of investment ground years. improvements to This to source potential unique mentioned annual from to rent derives while wherever free $X.XX. this the diversified We forward has underlying portfolio sub the additions country. execution identify quarter a to reviewing our As lease grade overall The the

XX, quality investment was total of representing two-year XX%, significant exposure exposure improved portfolio's grade June points. more on our basis, our our continued The approximately highest than a basis building investment of a has basis stacked the the our disciplined grade X,XXX As portfolio XXX investment growth country. ground of exposure demonstrates by and On focus nearly increase year-over-year lease in points. portfolio grade retail the

were or more first-half that and we to in of the in completion Partner compelling XXXX. second to year represent development during completed our new Florida. Port Naples, during Buford, Capital partners. committed a Collision commenced total Floor on Development & of either than opportunities six the quarter net of PCS Gerber I'm continue lease a we be will with Solutions and uncover XX platforms, in projects announce construction the completed Moving in Decor and quarter Georgia. construction quarter, projects our with subjected development first retail year million. upon in Collision a the Georgia, also We commence Three to under to in Gerber we capital Washington, Pooler, including second rent pleased grocery will Angeles, $XX our during had of the Gerber anticipate outlet a

We to on next our additional opportunities time these the later capabilities retailers. relationships net on we work to will this focused next will Saginaw, during our forward subject with look our continued on omnichannel on first with update Michigan. at X-Eleven XX coming anticipate leveraging progress year the quarters. with in Construction leading a continue the be providing X-Eleven We year new of full an into year grow quarter to to development anticipate which Gerber our that lease. We take I quarter remain place in announcing delivery year. continued in first and Collision

to continue front disposition best-in-class the our retail the on during record active quite we also portfolio strengthen While we're through investment quarter. activity

cap XX gross rate of continue proceeds total, and $XX of seven than to of properties weighted year the $XX with a approximately cap Walgreens disposed sold X.X%. as six a for as rate of we through We of exposure of reducing months well franchise first we million proceeds as In more X.X%. properties average average million weighted the with gross restaurants approximately for

year, million are we year, guidance the of end while first-half remains the our $XX approximately the during at activities the of the to million. $XX disposition disposition our high-end Given raising bottom for

proactively has leases XX been efforts Their just maturity addressing team to remaining basis to three upcoming XXXX the management of also and points lease base asset representing Our diligently rents. annualized reduce maturities.

year of White are Furniture leases, notably, lease have on executed XX Michigan. we area. store During to net new Gardner leasable quarter, executed extensions we Loves options Canton, with new square XXX,XXX second or our former gross the approximately only backfill a feet to extremely Most in pleased

Van preeminent Michigan-based commenced classmate time to with I TH century. is As high state retail this the Gardner flagship acquisition and than Lee. in one recovery rents the more since prior of was brightest this the the retailers of we been released by by minds for in the and the the would in operated, has just note bankruptcy. full month recall, one is Van us former of furniture rent and Art may school a the this second is prior of close recover one in on over Company industry July, effectively delivered have to The to Gardner led allowing to Art developed the asset mine. you of a company's White June Tronstein, White space furniture we We Rachel XXX% family-owned downtime.

Texas Michigan within to to and in lease. and and of transformation Roadhouse in Kmart portfolio to the Central well remaining retain only our from Michigan also Burlington We to team portfolio. two Lobby date former her of shopping Commons are during via unlock University's we support center embedded an transactions hold flagship to re-developed Hobby extremely the as campus. of partners of Pleasant, chose added and located addition ground on to have the this I'm shopping main Michigan, Mount the Central These asset. that our for pleased have Rachel on to one we very pleased across our centers Alta decision To announce legacy ability are this outline the emblematic Space value legacy

square XXX,XXX the X,XXX of During hand feet properties leases With XX, area any of approximately first June then XXX and XX.X%. the occupied extensions I'll retail including executed we of questions. new options to up year over nearly across or and call the XX six remains Simon ground expanding for of as our portfolio can states, we it months gross leases, consisted leasable and open and XXX% at that,

core from the operations per second Joey. Starting you, for record Thank an year-over-year. XX.X% representing share, was increase. $X.XX, per a earnings share funds quarter for the was from funds XX.X% $X.XX quarter year-over-year increase operations of with Adjusted

analyst second the from estimates growth in which share As to above penny within The quarter. share Per forward and impact per outstanding XX%. deal included aggregate the share dilutive a when related to half for trades to share, current $X.XX stock full per our per FactSet, a reminder, offerings range of offerings. year is if count of year-over-year our settlement stock implies treasury price equity than to X% $X.XX less diluted ADCs these AFFO was prior

or in visibility lease X.X% this investment on last of of expenses expense year per in call, operating end below-market view given of level As pipeline quarter. the upon current and expect share intangibles. growth range amortization the of as X.X% the growth the mid-teens. our administrative continue quarter's this G&A $X.X higher broader totaled and mentioned we to - environment. this Building toward achievable X% to AFFO excluding the our and million end above and total the two year of in noncash implies was second XXXX General revenue stack growth into

revenues. and people anticipate in our invest in of revenue full business, will impact the lower growing percentage G&A total intangible be year a as amortization we the X% to continue of we total facilitate area for as lease excluding to systems XXXX the on Even

income $X.X acquisition last billion. tax approximately for our expense team mentioned billion As for acquisitions on of our quarter, expense quarter $X.X Total for to our within new for second current volume the G&A based reflects G&A year was range acquisition and XXXX. for expense volume guidance $XXX,XXX anticipation fluctuates the

approximately to $X.X tax expense income be anticipate to million. We total continue

the the rates from swap to for approximately the Considering the Moving offering million used million XXXX costs $XXX early the X.XX% terminated X.XX% million of all-in in our dual a effect unsecured notes of offering, loans XXXX. termination. Notes $XX million. in X% down May capital unsecured to bond tranche pay term quarter, $XXX onto repay due of loans, completed Notes senior total $XX Notes net $XXX with of senior all termination that related unsecured markets swap the upon for approximately the X.X% million we In term the proceeds agreements, million XXXX public in of our XXXX million for our respectively. the $XXX are blended and of portion of activities XXXX agreements unsecured comprised we and and $XXX We receiving terminated offering, due of connection related the notes hedged

termination a added average extended our have one-time nature reduced weighted received nine million approximately in term of The these rate we net X.X maturity of approximately the Given closing June, of weighted X.X%. completed combination the debt approximately to loans of core stock. to of prepayment common back and to all and costs, proceeds interest of In AFFO our unsecured Upon we our public offering our FFO the $XXX effective shares offering with amounts average been measures. million. also years follow-on

forward proceeds to $XX into with sell ATM million. At aggregate proceeds million which agreements of May, our and for million. to cash entered settlement. net in under we common proceeds $XXX under in stock X.X had liquidity be to settled connection facility, we balance to a credit sale net million sale our roughly we quarter-end received agreements of million raise at from quarter-end. outstanding the strength XXX,XXX offerings shares existing forward anticipated Inclusive shares roughly be of program X.X of net on In quarter, remaining of proceeds hand shares second of net an upon us. for anticipated settled million approximately are approximately the huge had anticipated During $XX continues our approximately we approximately forward $XXX nearly The availability and sheet available

forward X.X XX, of net our including our June equity As EBITDA offerings. approximately pro-forma times, debt recurring to outstanding was

of approximately five to forward X.X debt impact the to debt Excluding fixed XX% was approximately unsettled at net coverage of quarter-end equity, our times. times. Total recurring EBITDA while value remained enterprise was charge record a

$X.XXX May per annualized second cash last quarter, dividend of share the for annualized The second June. per an share During we of an the X.X% $X.XX monthly $X.XX over amount of dividend representing of April, share year. and dividends increase the dividend declared quarter monthly per for reflected amount

share $X.XXX X.X% respectively. July. share for the dividend second XX% monthly Subsequent share of conservative ratios dividend were FFO over dividend reflects $X.XX and With Core for over to the amount third share payout the per Joey. dividend per annualized $X.XX per an cash to we XXXX. AFFO share of call the like per I'd a turn monthly declared annualized Our amount quarter to or quarter increase a of per of from of quarter-end, XX% back The that of an

questions. At time, you, will this open Thank operator, it for up Simon. we

Please Bin Instructions] Ki first [Operator question The ahead. with Truist. Kim go from comes

your lately. the to has in been I at X% that ago low mid-X transaction then back in the look buying I then past, when past years in and Joey XXXX and like gone the XXXX the in So Xs down and history, yield think few you've a

at yields. trying that targeting a expecting I'm it you're leases, if of ground because types sector the like for So have when or compression be look future. investments guys to curious foreseeable is it low cause the you rate lower is cap that which certain what X% understand just what is across of I'm was, from should and that nevertheless just we you the

range. to of other ground see rate that the cap target generally assets. Kim. continue seen think we're so question, within is said continuing the we've turnkey so several see retail lease to we've with cap since to rates years us of very we acquirers what that appreciate range change there fall speaking, in at historically the I a lows properties don't acquisitions I out relative generally sacrificing launched and continue acquisition historic capital platform I our today, think think The cap quality towards and as to seen I assets drive there we chasing compression yield. the any no, that high-quality from you've Yes, we rate make, But aggressive you'll of without high-quality lease in XXXX we've

it's so changing, creating a through doing but see transactions. the of job we competitive a And don't that sorts fantastic is environment all team value

lease lease help that forget Okay. portfolio does just segment you And I me reset, do it when And are understand, duration understand question, about today. portfolio there for or how comes value, will lease the that? market you can second ground and to, happen? the there, rent what strategy. what come is built the of that your is increases is fair trying actually to is when eventually thinking I'm contractual

lease of is lease about Rent square ground in is the per approximately we years remarks. annual term the so only grade. prepared X% foot weighted with is $X.XX as mentioned XX.X and embedded growth XX% Yes, average portfolio investment

a overall perspective, look from trending I'd of our unique think you is return very growing obviously estate, but our I that XX% towards real at you, a when sub-portfolio portfolio. ground portfolio. credit, lease tell So it and is

that for sheet. the get want building improvements We typically an just sitting expiration is tenants don't very and we opportunities are failure the or their balance now. find That on now. compelling Upon there continue give premises to entire effectively free rare, auction, to renew away to

upside, failure lease the the it's exercise so, is expiration option is leases compelling or well. very as an rejection that once in upon contractual And to bankruptcy or broken,

the look the in sheet the the paid So, you end, profile, real and that underlying when not for. the I residual front our with lease combine you growth credit tenant that estate, at value think portfolio in economics, duration, on balance the the embedded the that's

Capital For pretty New we it's return. Jersey the risk-adjusted example, compelling acquired that with the and here a the Grill Wegmans Parsippany,

it X that whatever when reset has an option, rent is increase So or adoption? percent say is you the type on stated the fair based that contractual market tenant option of value a

is base term increases exercising The former, then contractual pursuant throughout the increases contractual options. so the vast to any majority

thank Okay, you, Joey.

can Operator Kim. we number I think Thanks go to two.

next from comes with go ahead. Nate The Crossett Please Berenberg. question

Maybe just you kind following value us helping lease? of track ground lease lease of of basis cost terms versus maybe up on of ground on question, value optionality appraised the that's everything of provide Do can in that you that your ground what guys us the the portfolio? top

that we out No, and not looking asset, I we're looking perspective. when price we're first We're building, off, per if single and specific really use. we're to asset-level replacement then every not at looking think, the that appraising going acre acquiring were financing. at not and price get We're look, valuations per back, at looking we're for we're that getting pound rents that at in

ground to sense, sitting rate leases us our So on give ground ground square on a you building foot range to acres. again Walmart parcel to from leases Supercenter XXX,XXX range of the lease acre chase XX Costco McDonald's one the a just a

rear, feet were square building with one get plus back if And frontage develop to and building of Walmart case store formally up takes in vacate a effectively which in would analysis the Cabela's or think store. individual analysis back a we foot at parcel asset, XX-acre free the tenant comparison our six C-store, are how are an a bottoms that's for free C five is different first XXX,XXX but we the we have if where XXX it different any each reason. constructs. to the Obviously, of is very to that in estate back, those obviously the for used the building day, C-store, a real so this of Wawa to outlets square very for we could they're XXX,XXX always the foot be in to to able and end every improvements the to And it understand to C a were store, I really getting so always

you versus the the on yield wondering in I if What quarter the parse think leased Maybe, was was average was stock stock. could the I X.X%. ground out yield non-ground leased the

Yes.

of have and Just it rate we're X. I that April of the is the X range, right buying really a front range. in low me generally at don't between in speaking exact that end in number

general a ground information prospect. higher of frankly with extends with things what number leases Sometimes in that's the working options We or acquire a we're doing ground working leases tenants a exercises such blend longer-term but in conjunction, with and medium-term tenant we're of really as asymmetric and or here. or conjunction on and shorter-term range

year. Maybe and last but. curious left like it's what's renewals just just one the not one on on I expectation on were pricing. this spreads lot, or is know what leasing the a kind what I was of

Yes, option foot asking has XXX spread, positive former was a Van, leasing so And Mount then effectively every of to really the overall year, thrilled is in Art Loves it the extremely things scheme JCPenney, with have former I White obviously. significant this single something Burlington Gardner is de added obviously pleased then or we're to paying former a That Furniture we're where there. exercised ridiculous, a Pleasant. they're but minimis have the been very to in mean,

Gardner we're that store It in now to Van As state. business rent we thrilled the relocating They have this they've take effectively to street, over I in And remarks, then essentially XXXX. family-owned company Loves Tronstein been think Loves White, is store in a or XXXX is been led leader asset. stable by and prepared years, market, since and fourth for of XXX% they've down a today. been has in from which I flagship. the from XXX and the This generation the White have time over Art is to recaptured their the Rachel mentioned for the Gardner second

Katy The Please Citi. next question McConnell with comes from go ahead.

other the and similar at acquisitions, portfolios of the just this relative pace total expect So any ground to on whether acquired that future you pipeline the to deals looking lease volume? quarter at keep then deal did

We small acquire just during some the diversified Nothing material. assets did portfolios Katy. morning, of quarter. overly good Yes,

ground next tremendous again In opportunities executed a all future. but Many opportunities past here, basis, the couple in lease job turnkey look terms has similar significant to on we're to of a the in ground We're the we've exposure. to to team see go-forward about on them ground opportunities. and In it's evaluate the originating pipeline the a QX to whether they're terms go-forward lease excited or originate those going on able hard we'd portfolio predict what Never we're of continue our so lease XX%, to continues the few approaching that very opportunities. of quarters thought here do best a

great. you, Thank

is adjusted lease how ultimately trends. space you've XXXX and expiration, renewed Another, does historical on of percentage what that to compare that

XXX% ultimately Obviously, we bankruptcy. Loves the renewed. had Effectively was

ABR have trends. leases retail at X.X% everyone year in ABR of very rejected. JC any In where I rejection we've is unique probably So so of Mount actual in we of on bankruptcy caution in broader Burlington XXXX. this expiring. where situation was a they de XXXX. our that and took rejection remaining The Obviously, leasing emblematic JCPenney only signed believe the minimis Penney place activity Pleasant and not X.X% and I

that. would not I trends to everybody caution again, any so And on see larger

Your Stevenson from next Janney. Please go question Robert with comes ahead.

of also, I the days are Joey. seen rents theater relatively trade these values and asset it's market some doing sell are know small your pre-pandemic wanted and any portfolio? in to versus but the have rebounding of where you portfolio, assets your to piece down a movie those then how if theaters where you

paying Good Mafia been they're theater today, portfolio or haven't these operators, five we've the since Red transparency, the pandemic movie in the movies all to is obviously a looked Rob. the helping of the Full in got a movie morning, I portfolio. started, theaters rent, but number at

movie want movie exposure theater weren't in do Space to interest before see theater years adding too. kids pandemic. We the no have additional We adding several theaters, for movie My exposure. Jam

have that, context the think we'll docket put that plus don't estate the business, of residuals besides just fundamentals to of the real we this the on So portfolio. in here, but makes on the sense

sell has XXXX those But, wanted or where hope a you significant today to want sell or minus rebounded enough hold rebound it XXXX haircut for you'd of that get there plus a I guess this to to is bigger for could a or and if that or is you of bit those? on out

portfolio, good there lot today, pre-pandemic as in a the theaters in means, Regal you It's saw think weakness comfortable have question. operators, we the well say AMC pricing but again it's Cinemark. that sector five very the I wouldn't with market levels any I'd in the we're large is by feeder a general. pricing anticipate of with in that that I liquidity pre-pandemic the

very of piece so. will just the the if a minimis. we're of And comfortable, one in again It's, see the It's de theater, opportunity fairly & so divest minimis Buster's it's Austin de we're holding very we But them. of like five of divested our we assets. to do an portfolio we and Dave comfortable a with

still now to White are as sell Gardner a that basis. and is to time guess the how want be longer-term there then XX And adjusted on asset I risk segment going years this well. days, a you now the about with then lease And furniture as you these feeling whole forward on

now Ashley But White exposure have minimis de - have to we Gardner in with Furniture the very furniture, one portfolio. and I we believe

cyclical most for highly the in space, estate bigger obviously it's real So we've the with lack macroeconomic market, furniture generally the trends, of housing is the stores. acquisitive never been space furniture parking overly the in of to related the the problem broader

grocery the XX,XXX one good a stores you furniture for grocery so operator park a parked average or so per operator. and take X,XXX soft And foot square a frankly cannot store

a to almost so it purpose the effectively theater buildings we're biggest that's like station. movie becomes So single the challenge, or gas in

the never with here. have We're the And in so obviously space. our a White Art in we his Obviously, to to been develop Gardner thrilled conjunction we've Van flagship van TH Lee. predating attracted overly furniture death

We opportunities, will goes I the everybody asset through hadn't all look YouTube at seen think who if video. this

on has the traffic retail it sharing one State Southeast in This thoroughfares IKEA location in largest the Michigan still is and Michigan. with signal it. think heads three a a premier of I van of retail up our

this to been is going long divest do White makes is Gardner that for us sense on do move or for it time fantastic for They've a if in look it. going So sub-market we'll to right to store and street year. from opportunities the and fantastic any down

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

With had expect sheet what at an regards balance we regards your to time. amount relative any one the to a forward Is absolute ATM? basis with or there under outstanding targeting the you're should forward issuance strategy, on

of capital look Simon. I'll we're have enable then to touch settlement growth historically Go we ahead. the with over cost continue to five on four balance and forwarding and pricing. will attractive Simon. range, to continue we'll equity opportunistic reduce at is our of sources to to And think, any a maintain like times I hand sheet to of in our to seeking inclusive then be capital going

portfolio. of efficiently combination access generating institutional sort and got very of very just is equity, this balance mean to capital to common leverage debt, I we and already forward improving and we equity in Yes, while billion sheet's Joey growth saying, the FFO price shape, what great $X little strong year high quality an we're great straight echoing and over the raised obviously

we way, the more of other So its we toolbox and I ourselves to to is but in to company think give it. keep keep growth funding our at sense to doing can don't look find this the it's we that we'll at If end certainly ways change day it. tools and we're right working makes plan what going then doing and them, we're working think the some

volatility, of equity a the in that think in it's of do there some of, like in cost obviously, level a what matter Is a reserve about no mind but in you you terms way. gives issuance of kind the kind hold have set of terms markets capital, you that

we you number is that, a decline over see there So mind, time. have that in is could

you the ATM kind of quarter, forward QX sorry, on having an offerings well is of be kind just this end. well versus going your quarter on in the Given kind or as amount follow-on as on a thing the of it or in opportunistic raised to basis to as

think as it of an relative wouldn't I level generally. John, absolute or Well,

an maintain hedging Forward have to we equity visibility overall of into is we capital. cost that our of policy medium-term part utilize

that a hedging the pipeline, of more strategy control we and policy. so so a ago our going last the forward through regular we policy hedging again transactions. and to our it I used volatility the XX% conjunction larger we done of macroeconomic that marketplace happens rampant, XX-XX what the cost who to on transactions They sheet overall forward several capital, inflation knows grow, starting on why an We're So on was the we just of CAGR. way we're goal have very there's the whether obviously lease perspective down net know to structure equity knew out haven't with stack come at side, us into is a hence we follow Why our gives but in of take strategy in of QX looked forward guidance we've are seen this is, And we our have XXXX or is in part The similar number and our going the been swaps margins increased suit it's the it, ATM said REITs ability it's balance have way or growing we've on out runs COVID visibility derive believe then we the years equity the of piece stable that overall companies here and have capital days is side? been regular of two have execute working We don't And utilize an or the equity. still of visibility we're the historically here. forward acquisition we our assets. beyond QX. to debt is ATM we XX%

on that a a but to was bit dispositions in That regards like disposition outlook know on you kind sounds end kind go space, And focus down makes already I bound sense. may it restaurant lower with zero that in dining is of eventually something is for terms we to side, see up there little the the or on of then casual touched the quarter, that can a where of exposure.

a sale aggressive Burger two we In continue Yes, environment. very a closed Wendy's, franchise divest generally the restaurant King. QX, speaking to of of opportunistically we will into fast-food

selling We I very we have of continue the many majority them. assets. vast see think left, frankly, those sold you'll us don't

us. so food winding for space restaurant down effectively fast And franchise the is

then or mature those portfolio. the pre-recorded the the for terms of In only or designated our portfolio, there and unique of a right so few so vast asset the the grew it's sitting in about and that asset and - one we have portfolio I are the call lease ground and Jersey, that on ground that's similar it's the of assets talked very we're in is it's one very the positions, New ground dining majority I dining two to capital building lease built fine it's a and with in assets build-out leases, entire beautiful casual in category with very capitals Parsippany, the a but rest our the dining sector dining casual casual obviously entire part comfortable as think the

selling is anything XXXX see end talked out the you pricing potential guess I maybe that of of as the kind ground but sorts terms And low-hanging leases call, of be space and as in kind category-wise? we'll beyond dispositions going any more we solidify in the kind you dispositions, restaurant theater else ability into you're about that then not think to as fruit of obviously, may on of stands a up you there

exposure, we where disposition the have flagship exposure, only two last now has New tell & obviously Buster's our our restaurant reduced the our years the Orleans. Dave I activity several the reduced over Walgreens exposure, in pharmacy you with including effective

place, has roll properties, those have than said, the entire I would That portfolio I of we assets. had never XX back the bet think portfolio we'll if think divest less I whole opportunistically of we a a XXXX, as clock to in assets of continue the you, XX today. legacy to been when remaining we being better

new XXXX legacy good of we in and the portfolio so in So a it's been lot have, place. that's it constructed a in advent and acquisition of mind frankly our a we're doesn't with challenges an since have omnichannel future platform

Linda from Please with ahead. Jefferies. next go The comes Instructions] [Operator question Tsai

to With a the Grocery that of largest almost does quality it your portfolio of the overall tenant percentage now to your take you average. these how whole? expect XX%, credit as grow would compared tenants And

morning, Good Linda.

stores and fall grocery XXX% There obviously grocery by grade. is a exposure in is it's for into nearly led the merchandise, general now XXX% are now by or Our doesn't us. effectively Walmart investment Kroger. led Kroger

So acquisition The credit. Kroger the we The Amazon. shop acquired obviously is credit. for Amazon are rate as has Fresh wait portfolio Kroger

have asset We New a the now on in portfolio inclusive HEB, in lease. the Publix Jersey two the ground one of or two Wegmans

balance be breed focus micro invest our or omnichannel shakeup who grocery years, macro have several of in future invest significant and/or to that price over going is so, of in through best industry may take. the permutation on an And operators in and next there's fulfillment think the the sheet to grocery whatever in we both

best continuing continued It's roll only of capital shake whether that's transparency with grocery and competitive it's stores X% and out so And space. a the going to very be national to with highly think the is going the be full margins. so or the in and out breed historic on competitive super-regional in invest to be top to Amazon we'll industry we place price Fresh year

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

much. we everybody. safe. you, very Hopefully, everybody you Well, thank see soon stay Thank in person and

concluded. attending today's now for Thank is conference you The presentation.

disconnect. now may You