Agree Realty (ADC) 4 May 222022 Q1 Earnings call transcript

Good morning, and welcome to the Agree Realty Corporation's First Quarter 2022 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Reuben Treatman, Director of Corporate Finance. Reuben. ahead, go Please

morning, Realty's thank call. first Good us for for Agree quarter everyone, you. you and joining Thank XXXX earnings

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

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

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

to report after you thank and we're all for am joining that Reuben, pleased morning. very Thanks, in this strong us a XXXX. start I

the highest starts well record quarter as mark Solutions history. our first second in of volume development quarter as in Capital Partner acquisition The Company's

fortress-like received sheet very three from external to an and BaaX. pleased across discipline execute that platforms, growth to construction all we continue Moody's upgrade portfolio are balance our While

originated lease million. quarter, we were three across our of our net acquisition volume over growth properties invested and $XXX acquisition During just retail of these representing the platforms. approximately properties XXX through platform, high external million quality XXX $XXX first

last impressive, XX% maintained as on least grade and improvements, best-in-class executed retailers. several was than XXX approximately quarter of with the on retail auto being from a years, portfolio including a we million volume transactions our first $XXX distinct farm has acquired The retailers. Parts our service base dollar properties XX% Auto comprised investment focused The Advanced Tractor Auto O'Reilly term Sherwin-Williams, We set of the acquired nearly of average acquisitions property weighted parts. tenants opportunities rent our While the investment of investment more XX during stores, partners rural leading include earnings quarter by in discipline notable sectors portfolio derived discussed demonstrated Supply, diversified quarter operating XX Dollar call. on and merchandise, XX supply, leading and including annualized XX tire and operators home grade Top first a general auto CVS, during Parts. tenants of at General, lease

average weighted quarter the X% X.X the a had a of acquired term and had years. total of cap weighted average For rate lease properties

weighted a property portfolio acquired of properties Excluding during had cap quarter average the XX the rate the X.X%.

respective grade Rentals Sunbelt identified acquired compelling space. ago, years Group alliance as and During their investment first Michigan. Ashtead and source profile six a quarter, with credit we Florida in Carolina, Several Sunbelt partner also Washington, York, we only North the the parent New in and their

reinforced Fitch. by at Rentals the by Our BBB invest upgrade in was decision recently to Sunbelt

platforms. our continue our external opportunities We build three to Sunbelt to for with all growth across look of relationship

XX% $X.X the billion, first activity in acquisition and increase increasing representing billion $X.X a midpoint. quarter full at are robust significant pipeline, guidance a our the to we our of year acquisition Given XXXX range to

will While volume represent for have and or company, our not not record the would we yield. guidance acquisition midpoint of sacrifice our increased quality

we and evolving dynamically retailers retailers that and believe world. positioned omnichannel on succeed remain investing intent dynamic an best in those in to to continue We

platform. Moving partner solutions capital and development on our to

results This provide as exciting and to estate a Led our modifications of of to our around our additions the Craig as we quarter team Operating the well demonstrates projects. construction development is increase through have our relationships, comprehensive and our efforts team the productivity. programmatic real and clock Officer, retail solutions partners Erlich, our made working Chief to on host to by

we During locations, continued XX PCS St. completed our New and and continues Missouri, in Florida. year, the Pooler, development In Saginaw, as projects last X-Eleven on PCS either to XX Michigan Burlington now mentioned the pipeline surpassed that was Gerber during record platforms two XX a million capital. ramp. or completed Rentals $XXX our low new under the in first and and our projects we had development representing Collision geographically our diverse quarter, commenced Louis, $XX quarter, as a $XX Jersey. Turnersville, million we million the development of to total, well quarter's including quarter, in Collision through and and to this end between I expectation Georgia Port first construction Richey, On during have of We Sunbelt call in commence construction New Gerber range while committed projects

distinct. and Our proposition value remains unique

retailers. continues service growth combined platform three solution premier external asset Our for outstanding our the provide country's pronged management to full strategy a with

approximately yield, gross to X months. over of we ground acquired Notably, sold total property points a XXXX and offer We in property lease of convenience cap X in resulting opportunistically in million third initial at thereafter. an proceeds sold over during acquisition received a unsolicited a for the basis dispositions, shortly one on Moving recently acquired the the below quarter gain property The the asset store. just quarter. million six we XXX the was just approximately four during

demonstrates compelling discussed portfolio While lease that the adjusted value embedded validates the calls. this was on it returns our we in a transaction, and one-off risk ground have prior

on or included leases, Walmart at options leases, or and approximately Ohio, quarter, Texas. Buy in the in Amarillo, XXX,XXX feet area. at new we leaseable During gross extensions square options extensions new Best of executed Notable the

quickly lease there of representing exponential is efforts portfolios a X,XXX of approximately As stood surpassed terms annualized of growth of our recent growing across retail decrease end, quarter a our just including At and management basis year-over-year ground leases, end, in rents, our maturities XX.X% XXXX consisted years total in of XXX at quarter asset states, base achievement X.X% properties, remarkable base result XX rents. of our team's properties XX X,XXX annualized points. representing at

stood can points. any open the questions. over call for investment stacked then two-year nearly a than increase more Peter, XX%, and up that, we I'll grades Our With basis turn exposure representing XXX at of to

also Joey. in FFO was representing the of XX.X% AFFO you, core a Starting XX earnings, the which first with year-over-year for increase. Thank year-over-year, XX.X% quarter is increase quarter growth share, highest years. was for $X.XX share achieved AFFO the share an $X.XX, per per per

diluted price offers. treasury within included count of settlement, our forward and reminder, our is outstanding to a As if stock stock equity the ADC share when prior above deal trades

dilutive However, in first negligible the impact was these related offerings to aggregate the quarter.

and continues Our consistently growth increasing strong support well-covered dividend. earnings to an

of $X.XX from a of At for $X.XXX During second of amount dividend February monthly share dividend Subsequent increased excluding of end, of for over the low dividends share The dividend XX% annualized our an dividend amount April. last monthly our X.X% the basis, represents to and lease quarter and over each increase of quarter. range cash quarter On dividend monthly the XX% per the common annualized non-cash per of payout cash amortization an of $X.XXX reflects we annualized $X.XX administrative January, of the per above from the quarter, an below to million a the of G&A or declared of $X.X AFFO per market revenue, below last XX%, quarter annualized dividend X.X% March. first was first totaled of monthly expense we increase and year. targeted year. first total share for ratio the first share. end X.X% share declared quarter was intangibles. the the General expenses per in

percentage invest continue G&A percentage compared last to continue total basis to of we to people is that XX XX year. decreasing as will adjusted revenue revenue scale, anticipation total points points to our a While systems, basis between as and a of in

tax total in to Additionally, $X.X to expense $X.X we to be million million. the continue range of income anticipate

markets in and thoughtful to BaaX long-term manner we've ability further to the achieving our capital markets. the disciplined grown the rating and rating to ago. for The issuer bond Moving the the rating on four Company access our credit with improve BaaX our execute in years rating will which to our our initial quarter, capital sheet to March, Moody's stable from balance Company's upgraded activities outlook. is testament BaaX the a investment as of mentioned, grade public in Joey enhance credit strength a improved and reflects The since

million rate end, million facility, quarter's almost debt million raise As call, forward $XXX to remaining on proceeds shares $XXX the realizing XXXX contemplated in of effectively our $X net and of forward proceeds still approximately starting At of the net Near approximately $XXX upon December mentioned cash swaps on outstanding base of hand forward X.X%. proceeds settlement. at we we X.X of settled end. offering, long-term liquidity million under is anticipated place, which availability quarter, from credit issuance million for Inclusive of quarter at the X.X anticipated end settled last the outstanding our net to of billion shares be we had forward unsecured $XXX equity under have we equity fixing the had million. quarter

of of outstanding X.X net As times, of to our approximately EBITDA XX, March for million settlement recurrent forward $XXX was forma pro equity. the debt

fixed times investment impact conservative to was that our X.X net summary, debt us flexibility five balance value fund that dividend charge to company EBITDA X.X of was while Excluding a positioned of Total the at XX.X%, approximately pipeline. equity, enterprise recurrent with million forma $XXX approximately and the coverage, amortization end pro affords to maintain tremendous quarter and net preferred remains liquidity record well we forward and In which debt roughly of robust to of times. EBITDA debt sheet a times. to continue principal our includes unsettled

in this more of share do nearly covered hedged share us attractive, significant $XXX very XX% to our like that share AFFO teens. I'd our the the year, give dividend. in combined our portfolio, continues per with growth achieving call and per We Joey. growth extremely liquidity growth in capital robust confidence With million Combined XXXX. last staff to best-in-class and balance when single Our sheet two AFFO be implies to with than growth to fortress-like over high per turn high digit our that, back years well pipeline

time, up it Thank At let's operator, for open you, this Peter. questions.

Dennerlein Our question-and-answer We question from Please Instructions] [Operator America. comes will first go now of the session. begin Bank Josh ahead. with

quarter. the So, you during a sizable had pretty portfolio acquisition

came bidder deal that how and about curious the maybe the in like current Just environment? what pool

morning, Yes, Josh. good

I the for talked it it burden. too the think look which call the a on last him for started XXXX. portfolio is Mid-Atlantic, heavy the seller, fees we in about time, for swap private At the breakage at itself, the we to individual to were transaction that

re we that in were December last of and And a believe three had approached, was then getting year, within papered. so, transaction I of last days, December year,

market, And off single portfolio several fully so, there was aggregated over the the owner no years. bidder individual with pool was that a

development so programs. get? of big starts then, development any your number how can you terminals had there and on And Are across record a your PCS pipeline

We, our think time, deploy our sense. to selectively projects want capabilities said those course, to our to going make energy I of rates always look, hurdle, dedicating internal capital. terms that in we've development and we're of No, we

remarks. So, both as made side, mentioned, construction significant development we've in I additions the on the team, we and see any prepared don't governor, the to

ramp programmatic disconnect and think rates opportunity a we're going announcing for pipeline have to and given so, returns private to having the But there conversations of both that there's opportunistically, several -- think we QX. right there's developers step for we're on individual And we number us projects to we projects. retailers continue Then anticipate we in in. ample between with

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

Joey, just last the question. a follow-up on

that of particular of XX mean, part sort the plans point that? the that stuff, was drove cetera? in or of time, volumes at timing, this there I just development I mean, et was PCS of On in expansion their Gerber XX is anything doing this

These opportunities about three platforms. both you generally of across a plans, from look I Gerber continues Generally, operators. would half M&A or grow projects Gerber for part and an perspective, to perspective then what we their greenfield all expansion and call, external projects. half to are acquiring independent greenfield renovations retrofits continue we expansions with tell

critical pretty country, this as So, in share very we a Gerber continues see them and industry market favorable. partner to is and take that

one in are you other deal pretty and you in LA How sold in those candidates? Are the the about this you near-term and gyms other about And be Fitness something Was others? there general? portfolio thinking portfolio forward? gyms disposition the that so to Fitness quickly. in quickly guys fitness locations then How are sold about the caused one versus thinking this LA portfolio the you acquired the the going

a was not looked portfolio of purposes, acquired. but that LA generally but which the simply it's really in and divest in willing a part that real not of we're to at based Fitness low take clarity to pre-close not Home at incremental part or Walmart operator take and was $XXX exposure even that divested -- Fitness that fitness piece love portfolio that for the of LA million was just We're with. basis. unless really LA cost was Yes, to estate immediately exposure, we just on the specifically part cost of health a Depot Fitness We that agreed of our Houston,

just So after as see, the look can close. the or X.X%. gym quarter we subsequent over reported to truly fitness and We X.X% at subscription. immediately with or at XXX sector LA sector, But still general to health Fitness the they're down to you

I really for Obviously, there, of consumers of We to the space the underwrite space think in number us. have difficult still private that available COVID fragmentation but space, sheets. we out the balance just options sheered equity and some impaired today, have for make the the just

have group then Okay. one banks Peter, a the for you would've gotten today, last from if where were your year X versus been or could where of doing debt note you XXXX? me. you at you issuance indications And that end price XX

prepared at year unsecured forward in we Yes, starting rate in have debt X.X%, effectively Rob, $XXX issuance. what fixed XX is swaps base remarks, noted today million contemplated first, that have as the as to place a of a

the of somewhat capital we volatile when been perspective excellent spread and when that In start base the access year, liquidity the Obviously, access on terms on issue be are we but position good unsecured opportunistic and is of it have in debt. depends we from news of a the the in market. market rate, can to additional top markets the terms

go Our ahead. next question comes Citi. with from Nicholas Please Joseph

allocate construction does are how regards in With terms yield? to you relative the what the to development Thanks. seeing and pipeline, of costs that ultimately

net lease. Construction morning, continue the costs Good back rise Nick. across to to Welcome country.

of are return And generally so, fixed we very are cognizant where those costs. These projects.

construction things I to costs, costs, also material, construction that think are deliver. units, factoring are HVAC times tenants most but things and also like aware into roofing lead efficiencies both

of credit access certainty, number think end be liquidity, the revolving obviously day. into I the said, at going so most those. retailers fixed publicly book, that's on the looking being to are we the that construction us of cognizant enter very transactions and But we are everybody continue why like and of return, of with a see be open And isn't delivery and the of having challenge for traded provide to the that facility, be to risk we a to here, us. able to costs to I truly

is that similar there And then, to do a the kind experiencing? yield be about where think you to continue bit? able get to you've Or price forward of come Okay. down expect what as been point is ultimately, kind deals, returns pricing you a of maybe to has

specifically. On the development side

On development?

go Yes, hesitant far curve. very we out too the are to

entitlement taking too projects, ready We at from shovel permitting are an perspective or nothing long perspective. really looking that's

quarter. XX the we see have can we this starts, As

volatility return, are. there, open cost hesitant enter with even going know to But fixed out few a see costs premium. well. pretty where case next permitting structure, in we starts or or without we into the that those what given period We the going a In again, longer we out significant entitlement be longer instance, quarter and are period, to will a are it's we a as have those

question with from Allaway ahead. go Spenser Green Advisors. Our comes Street next Please

seeing the Thank you you. terms deals environment broader as one-off comment Can versus some relates of what are just you it on specifically in to transactions? rate cap portfolio

Spencer. morning, Good Yes.

see I of the lease for but It's of time residential. intermediaries number that sheer fragmentation there going to some you, think see that of in agreements, get have promised the sellers to the specific typically, of pricing XX which ownership, space overall and expiration out which are to trying brokers pricing, sellers. single forms tell we're those very of compare cap starting of instances then upwards. the terms really to But the promising I'll the net in I it's always some get lag movement to cap we're and take upon again but rate market, family also aggressive of think longest starting XXX for I rates to set because brokers agents tone and cracks the aggressive listing cracks. are days, to moving or

versus obviously movement. of we've are rates. you, there yet, we're cap movement of tell significantly the today. And dependent seen ABS on at sides In across and It have availability Those able But IRRs or where quality They generally debts and the portfolio. haven't see I historically. levered portfolios not down the of the of of but gone would course, the one-off, coupon type have really portfolio, board both heavily it's of buyers been debt more buyers upon played looking available pool push because takes hopefully to of equation, the material that on in anything that terms the time. opportunities we're we

Or very the just seeing? is perhaps And ground increases nuanced? pricing in environment maybe then color more and cap of the of is on general kind is just thematic, there? lease -- anything that it And some you're like regards kind rate that to

Yes, generally going the dealing million. light we XX us one-off We've see portfolio nothing always to million we're X ground for thematic. partly we're with really leases and transactions, of points quarter Ground opportunities this then them. average portfolio the other It's take transactions what the said price were sellers that mentioned. large of absent we've the of XXX advantage lease because

the number Don't we turnkey for structure, others lease, There market quarter, cap ground to opportunistic worth ground million pipeline is I extremely in bid $X high have the that there the was on any the off that well individual. during although the C-Store of more given you and an and lease just a obviously are inbound we guys our think today leases see a rate us aggressive material disposed focus safe five net versus acquired by leases as of ground the change as work today. some of obviously done. focus ground on the

Our with Baird. from Golladay ahead. go question comes next Please Wes

this have more throughout quarter. Gerber how XXX get or PCS here? developer year? big You program this you can few think Collisions million? ultimate retailers also a lot be vision about building to momentum the million, Do your portfolio comment program get similar at added we Could million, XXX scale? you And the anticipate over XXX next to the this years? a of you Can the program adding is appears What

with? specifically Gerber With

a but you PCS just Gerber Gerber program, get? will more, can so just there program Well, have similar going program? more to the scale How big it's developer clearly not a the Collision, and that with added be like programmatic

Yes, we're it how and ramped. very scaled pleased and

It's that of more acquisition inbounds you tell core held of agreed provide in company that the had launch that XXXX. more we've the always capability. I'll of And this from and certainty we've platform mentioned, XXXX. development the in to started until I as up retailers execution. As

have in growing interest their environment, deliver -- are shortages potentially country. the this say that that stores developers and I perform cap can't pressures, labor Wall that developers rising to a pricing the should retailers have and rate produced environment their or They're in historical typically promise, they're facing can't rising cannot We being historical and public they Street. the rate

conversations. number a I'll frank. of we're be having So,

like small. Some the today. significantly the fits They launching you in It'd a But environment we're of country. I'll home may price be be up aren't akin in us. ramped interested across business point for the us operator, fit but We doing is family the given those to have that. single too conversations may We're tell them construction for us. not credit

we to had on to prepared and in akin the did Specifically Sunbelt, we discussed a a balance in was position think identifying space access we capabilities so. I Gerber, sheet fragmented it's and early do almost terms to with a in of what thought the remarks retailer to that tremendous

traded So, has specifically core. at group leverage the the just times low the by over company Toronto at Stock three XXX publicly Exchange Gerber on conservative over at Canada boy owned stores, of very with leverage its

in to What's business bumper, heading had it's business you court read It given interesting the your today. potentially bumped little Caliber, that be this you're financial and are probably into collision could be reports maybe entering a to in and you fixed the constraints, if into Gerber, country, if really thing Service not, As aware, restructuring maybe or little there is a scratch out three big Service got media King, used didn't. you with operators of a bankruptcy. their it and a King. about of you something some collision is you tremendous

two tech in equipment three LiDAR, got you sensors, Now this cameras, there. all high of

see accident having down gone. those of Collision rate the of And those cost so of for high pretty used well. the frankly, repairs local could be repairs the and the The to tech skilled going some across the vehicles, capability minimal labor features board the the repair days is just much all shop as safety because absorbent. we to these, what generally of But are

customers relationships a which to companies their and those works direct him. with for as to really and hand vendors thriving. the in centers, pricing Gerber vendor national auto power, are hand the with Collision And insurers preferred so have insurance

really Caliber we Collision. so, we And rental very lead see to taking similar on see the the business, equipment

work to three And platforms. excited them across all with so, to we're continue

are at swaps, Can you that swaps talk you double your just that, potential those of to follow-up debt issuance? upgrade issuance all million a help then, including XX-year will and Peter. for Moody's about XXX for and one swaps? the your the from current risky, the -- And then And does

So, debt forward first XX-year a starting unsecured swaps of issuance. million the contemplate $XXX

hedging They fixed so at a different with issue, the they're effectively as can time rate tenor. So, and apply to have base be tenure at we throughout them effectively any issuance could a I an they used mentioned, XXXX. X.X%,

from So, rush those help is. will terms there's of access near-term no to the upgrade that that ultimately use price we Moody's to think capital Certainly, in to in BaaX markets. swaps. improve And pricing and also public where the

can I in opportunistic markets. when think in access as position terms And terms to excellent mentioned on we dependent and market. that I go of we when that's in the public of liquidity we're today, an be

Kamdem from go Morgan comes Ronald question with Please next Stanley. Our ahead.

Great.

you us the tenant Just, an I the how just of are occupancy update, Maybe mentioned sort what talks give feeling touch seen health recession even about of hearing. that -- you are bankruptcies very or on little that we pressures, a saw was a are have tenants bit of can hearing we sort little inflationary up broadly? and

Good morning, Ron.

look, we position. a very in I unique think, are

critical. resistance, I that portfolio is portfolio this and today, with We recession is we in resistance call what bankruptcies the in for, e-commerce used but omni-channel call, have to a zero, built believe

and amongst are also absorb inflationary And greatest greatest to are the so, services retailers providing core the goods of ability and to the portfolio those logistics retailers our the non-discretionary tenants that compete have Walmarts on and customers. the led in They non-discretionary world. distribution networks by and the have pressures Dollar largest price give and in world, General

right. is for pressures retailer, challenging. and with pressures who pressures, a you inflationary is And extremely it name and it midsize smaller so, labor today dealing Logistical

If to Walmart, price. or can or the Depot you are and Maxx, have The global Home procurement absorb TJ network you're quickly if ability pivot, you that have

talked out and few needs. on generally can because expensive a where We distribution in meet capital in have sheet iPhone the know any can of new price can a micro in customers' distinct omnichannel. about anything come they always once invest and of four Number then how seconds, and they three, balance have want see price back. have We invest Two, lose due in and to today, to world price you retailers customers forms of delivery characteristics. fulfillment ability about, compete have they the to a be. we try because one, customer the macro they test don't And price on transparent that an to

And so, even on the frankly short we their they those retain heavily-focused grow can and customer if in term, to margins, are and bases. impact customers have retailers,

started I of bit sort go cap too before acquisition talked Great. deals that buyer ways. type you just it of back of any maybe But, of other little But, equity of being is think wanted look, back the to to buyer, signs see been And soon just buyer see? to or pool having of private taking the sort sort you questions, sort or have all, about step a of a at it's either I on of specifically, a any just think to a asked rates, re-traded, couple which fair. different sort lag re-pricing, is all

don't participants private not in to much They types we frankly, the heavily-levered and the equity Ron, have are exposure opportunities buyer the just are of pool. that pursuing. types we transactions of

on side, negligible. disposition obviously, We seen haven't very the

XXXX have from number purchasers. a the to our if private competitive seen individual. re-trades. -- is generally gone But purchaser, Obviously, for heavily the levered lower haven't of I've upper teens of rumblings set We IRRs that teens, heard

of if first re-trade do we do they the are generally out deal, they if call. back so, And or a

Our next question comes from Linda Tosai with ahead. Jefferies. Please go

puts see that you're on you track year to What this do earnings last as you The potentially and growth, sustaining forward? this high achieve year. in going takes single and growth hit digit the it key

without to capital, number obviously of transactions of of equity spreads. one the as find is capital, source this across our three sacrificing well obviously country as is cost consistently to team's now cost three across our capital, XX% Again, investment where of move, and A cap investment across platforms moves predominantly grade. continuously debt, our opportunities me accretive ability here number, that grade, its maintaining that platforms, rates into the rates, XX% ability amaze quarter criteria. equity all those all investment cap What's

up curve, we're most going not, the important. changed And not we're So think I risk that's our we haven't tune.

a several team, the have the $X.X to made be the And of we've year never midpoint things to in in if deploying upside. the the investment made to which continues grade, But the at years so that's in the $XX $XXX surprise asked frankly, GLA, made fragmented by investments is team, would of I billion those I we've highly massive additions and XX-plus is -- ARC. to opportunities. of do space, just at Those another envisioned acquisitions me putting uncovering pretty job you, retail team to what we'd would in the specifically technology you then XX% continue, investments just that that a it's the crazy. a ago we're and U.S. me percent types told operating ground, have we've tremendous million million that

to portfolio would XX% to your you unsolicited your said was I X% cap deal. ground lease the that What the ADR? of aggressive the reasonable a ground to lease then bit be that's of close assign And Thanks. of rest rate know for sort

in not a regional XXX I of dripper a sheets. question. from tell couldn't with It ever was was that gain don't asset flipped quick believe great was quickly months I'll was inside. operator. but an that a It turn was four a Wawa. operator, that the you stores career. smaller million It's basis I inbound unsolicited But It $X a couple not not dominant we closing, just something that I've my away. XXX think points that

overall a the ground It operator. the or was that I was of lease is Wegmans. wasn't portfolio mean, of this a smaller think or It C-store. Lowe's, regional demonstrative value Walmart here. I

think of I overall the the it's demonstrative lease of portfolio. ground value

credit So, I'll then, was interesting with to surprised book someone it an leave pleasantly to the was able to be were we game. decide the offer unsolicited that that others with but estate. And real to familiar who

go Our comes Please Kim Truist. ahead. Ki from next question with Bin

your turn full like year acquisition I and I right, of that a business to and you you ahead that start the potentially the balance Just I that? prospects But acquisition you that. CEO, rates, know and that together and tie higher and as rates isn't And do a versus few it, how video the guidance. buying higher today momentum you and have game off wanted better a and about mentioned increase prospects maybe pushing to stop you on do there's balance a more switch versus also can throttle get bit things up deals how mean, a little this

place, have terrific it would I change a we think hedging our It's in answer. If policy question. the overall didn't

so And $XXX at equity forward Peter starting Having swaps plus as X.X% already mentioned. million having forward in priced.

into at So pipeline, also XXX just million some and a let's side forward cost effectively us the gives it into that nearly of post of the $XXX before our settlement term of call on capital. of debit medium outside visibility locked spreads in

acquisitions, or every term XX so, minus been spot cost have we was us. why visibility medium And and into capital days given issuer a becomes capital of we harder. spot getting much said plus a critical always is were emphatic single of we that's to users always decision And if of have purchaser a and

If ago, mean, already what I today months you line. we're financed, acquiring it, was that's really about bottom the think

call, it. are much the to component last And leverage, know today lever what we those said, de-lever. that's easier it's to regards a I up in so, then to and spreads critical And right on of

That external question, makes heading of And so great an that of growth it to maintaining you simulation going you said and your a with to intermediate business of happen opportunities you always game in look cost forward that to try out preponderance that of capacity in that to cap to question. balance rates. answer view said, what's in the have project capital sheet video the at removes have

so, and cost the a is. bunch course locked go forward there right answer medium term There's no And because what makes that think hand. you probably video that But of decision the have us. game of capital your a no balance including there prognosticators again, on is into just a much we easier is going basis with knowing opportunity to at we happen of

of Auto if And kind automobiles I'm can drive going questions But I an think the of client it's one. think barely kind not generation and automobile I in you back to coming of next expert. there's scenario it's mean EV that EV, for about Collision Gerber early, out. I revolution about Parts but question autos. about use the forward. is foreseeable of to on years bear five this sure O'Reilly, less maybe thoughts where a going too And early case think like I'm any kind that?

into alone any The as on any combustion a when can't pole ding light lot little is you Collision fender collision. larger definitely the these parts engine. out your in backing right you parking parking that when shops the let by moving such to less to jerry space, bumper. longer minor it the your accident, benefit in Gerber be used EVs of rigged ignored there's parts you're Well, bump benders, typical the Again, in

a camera a Now on it's sensor.

And fixed, so work. your then doesn't don't vehicle protection if that get you overall system

of have professionals it's bump are job It's not cost almost right? And that a IT today, shot almost shop be an repairs, anymore. so mean, cars. to the it's IT bump These the working I not on a

the of gone. grocery the as are so, shop And mentioned I local days

can't just provide paintings that cars integrated basis You are or anymore because with the out of things to these bump an on high-tech little the driver. the overall loaded equipment works safety all for fixes or

and are today, repairs. was ago. labor maintain working to business obviously years more have several the just nuanced which also to it's get pool, that with those benefits, different But a enduring repairs the than collisions to the can who people, operators very those so, And today who fix those at and is a those it different be very able collision scale, challenging that's have profession much relationships retailers, who and the to

longer-term any the parts But you don't of see risk retailers. kind to auto the

core The they the continue down auto collision auto the the different there, not very cars parts engine, working The mechanics. expand the do-it-yourself customers, their business to which of commercial more been then O'Reilly's working the forms different are business working to They which of to oriented Well, now combustion retailers, exterior two has of retailers door as do-it-yourself on customers, operation businesses from backdoor commercial expand customers different core customers right collision. customer, generally continue struck. working a parts are it. the operators that's on historically generally that's the or they O'Reilly on and or the call are to front the to been from benefit

in there. Now, don't way we really much the see

If market continue you The share same you on road through cars pandemics. their through sales, to their operators the of look look at the age call, average trajectories earnings at to their and and gain recessions, if commentaries those continues up. go store

even can't a the find You of car half time. anymore,

so, And a it's benefit.

there city is look, with in continue sitting the balance EVs Now, especially, and network and continue is with going but operators change premier to are no industry here motor going to the are auto the sheets the store those doubt thrive to the distribution here. to we networks

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

still I kind Maybe would guys. funding and think where or the just you expire given then have year. equity, table? And that you those guess, funding the swaps are I is rates where continue table they also, morning I that the on they do on to, did that off Good swap are. last swaps. a rates on some do today Is higher, rates the if of, where Or questions When question are, when expire, just is regardless do had the options of preferred gone? deal,

flexibility a of to and But terms really swaps can we XXXX. use respect to to roll to us we those Peter. technically is the there forward-started we have we when optionality in and plenty those and this asset this swaps any swaps, use at related really Nate, And the that option if too, point to extend swaps an in With wanted swap to. of year. is available the

relates to option us. for still that's equity, preferred As the an it

always capital the context where pricing, everything longer-term conditions, not look is, available makes are to markets and option in probably most all to that given as forms certainly business. of evaluating, market something at fund sense us. and would want how but our we the an pricing what evaluate we today We of It's we

any portfolio want be to essentially from done A if that sorry question that on -- any bought. a pruning but that portfolio Is is to missed or have? the needs property that is I there it, there every you you property

No, the there. in as to the you CVS there operator few couple largest there, Dollar Generals. Sunbelt concentration, the a of in FedEx jump Tractor concentration of probably will that Supply is in a largest saw a was dispose in look its. intending There's

adjacent the that We distribution industrial the to FedEx, business obviously in We overall believe North with be here. are I the creative not airport. a portfolio small Carolina, or think in will a

that lease than that's portfolio terms We're within dispose we're outside grade, not it duration really XX was any investment And a from here. years we'll unique fit, opportunity. was that existing absent great the why the portfolio that, Other we're cognizant closure asset. ground This exposure, of only our such there Again, is lists. the qualitatively circumstances XXX% performance truly alone a with with entire acquired with portfolio one so, it CVS was seven comfortable the long lease the And that on fit ago, of FedEx composition. store let Frankly, CVS XX% a they're in that retail that of pretty their years of unique portfolio. weighted comfortable very asset very is term. we average pharmacy

most doesn't The XX% qualitative And so, is portfolio. to them. love dispose them, more the problem we'd of don't to one got able assets, it of to be find have them. within of you fit of

on. So, that was creative a the that you on disposition that that's hit here one we the tell asset that the to was There driver I is it would basis you was real intend head on execute that there.

I testament what around pricing see kind it reason there would portfolio seem Is quality, get? it mean, shopping shopped seller want a now to to this around? why of wasn't could the to your but relationships, it's any they would like

him into owns land seller. historically the on years. The post disposed mess country. the to handshake. contractor background of post get converted in number assets office seller mid him ago, XXXX. the leased this a out of on to little something have He been Brothers. have net Toll women and acquiring lawyer/friends/broker, a and to Polti four with we XXs, a of acres the was conversation for our the to sold in that of of started on office His years a and doesn't around largest you would with give started wanted a properties. an Jim, he seller But like XXXXs private He his works that done, he with In I'll house XX done Beltway over office, deal

a trust it's guy he with And whether to he eye so, unique done done guy, could estate, land, something lease wanted quickly. something with get and it's great a net whether it and situation, very for he someone real could someone a a unique agricultural he was But real great get estate. is

[Operator [X:XX:XX.X]. next Please question ahead. go Instructions] [indiscernible] comes from Our

Joey, might rising be the and to seller like better maybe question. psychology a thinking that desk just as to that's more one from as result gentleman estate folks deals well? sell, follow-up looking market on rates psychology. curious across the real I'm in in sounds curious the looking now perhaps and was time at portfolio your his so guess, coming monetize at if the resulting change well, just a holdings. if But It you've to back of that scenario looking seller noticeable seen I a trying

time, question it's you to given any It's it's on broad [X:XX:XX.X] tough. for when strokes transactions, hard When really [Handel], here. many do draw any -- a [indiscernible] at us you good work so XXX

volatility I sellers out a need that bell curve. sellers are given It's this sell will there to say, quick say to I then are owners past out and think there out that want I get or volatility. there the there there

owners And be estate on greed, interesting obviously the and going drive is, what rates, year but as real with I think two see primary said happen emotions, always the seller is that. will it progress both to I've ends sides. psychology cap we have What will through up fear. to

operate then it's whether best, when And of fear that's always will see recession. so the much we we pandemic in or how a and sets that

a given for Our this we're played seen, to we've prepared. see balance when always don't have an volatility as dredge in be to recent just ready always pounce the sheet But is out you. interesting opportunity extreme obviously, there. weeks, And I we it'll see

I But did just want know… you to get some you. from perspective

on. Hang

that fives not the try and merchant wrapped call were labor the It's at else. trying to out. it of who pressure net middle project. to a with the you get developing price qualify the projects developed and in developer the in out projects one, give have they Let see sell building deal have General. a sudden, a one a pretty hold appreciation tenants anticipate to close to brokerage a they Merchant for example recycle more more and not that to of side, or And the they're they on Dollar They the up weakness. did General Dollar Dollar have can't because maybe no the meta, even their And a product developer XX seeing me let's signed to their breakeven that they and leases, that hold loss longer seven. to they all General. project. inflationary that, capital, I'll margin we whatever was X or commission need components where and passive now to a where their owner. owner and zero next And or developers, area existing And that's more costs seven on return to promise term of We're do a

give retailers, number a us pressure in will are solution we delivery. where more that terms in said, led of so, to actually seamless seeing terms provide some And there. you us a predictability they with for can of, That's of certainty conversations

one is requirement to we're though by recycle necessitated the redeployed. that capital place seeing So, the that pressure that pressure, is

that be willing lender do that anything perhaps with you something to a capitalize there any or or would Is on that short-term maybe opportunity? to be scenarios

at something project see done entire But not as a some out. that's But Collision that repeat pipeline. again, with sense taking in looked We've had retailers. it the The strewn us. just placed rule I I work that happening. for retailers relationship to tenants, not across opportunities to in opportunities and of the don't the for million-dollar these in and/or do. certainty with Gerber is over that never going see the lender. country, we we've like busy that. that a in do competency jumping there i.e., for on not discussions can been do programmatic we're wouldn't execution of It's We're core a a make we've premium dollar the is store too that you here, from does we've

any would Did and LOI if you you today, portfolios under mention or there. notable include anything in mention would or that contract

it. as yes, The answer but take far that's I'll about is, as

$X for the to pipeline been have we it think I from includes working larger transactions everything itself on. in guidance million transactions robust the that speaks increase

is that obviously, opportunities and anticipate, pipeline large we well. pretty So, includes larger as the some

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

thank be it. to us everybody joining you you June the great morning. rest of for see in this good and earnings will Appreciate look to It at Well, Nareit season.

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

You may now disconnect.