Agree Realty (ADC) 2 Nov 222022 Q3 Earnings call transcript

Good morning, and welcome to the Agree Realty Third 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] Note that this event is being recorded. I will like to turn the conference over to Mr. Corporate of Director Treatman, Finance. Reuben Reuben. Please go ahead,

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

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

statements for actual our discussed our forward-looking of Our underlying latest forward-looking uncertainties may in see Form Please discussion from differ SEC on risks for XX-K our and number matters the a statements. yesterday's results significantly including annual release reasons. report and various a of any earnings filings,

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

Good Reuben. us. you for you, Thank everyone. And morning, thank joining

the observations Before the a step positioning in some our environment. to current macro like take we've running to as provide state further standard through back the well strengthen our update. I'd market, of steps to as on taken a challenging

space at balance providing stood our enabling with debt-to-EBITDA priced attractively are and in situations. sheet quarter rates continue X.X advantage forma execute sheet opportunity our to have as market. adjust balance the and recent creeping us capital markets quarter’s bolstered Cap to flexibility us transactions most Our opportunistically distressed and capital. At times tremendous end, take higher sellers net significantly approximately pro of provided to to buyers merchant builder the

and significantly incremental buyer of curve the altogether, exit market the the capitalized number up drive yield. or have seen move institutionally investors levered risk a We to

focus omni strategy will capitulate, remain narrow country spread retail balance their retailers challenging As in the a and the on continues with channel ask more strongest in to execute the the our sellers environment. bid to sheets

not terms profile, up will or single sale go We risk tenant curve private of equity purpose leasebacks. credit the sponsored assets in

is the does for priced term the debt working foreseeable market long assumption on we to on are unlevered return future. not attractively that Hence, Our equity. returns focused

to We to without are balance very fortunate incremental the and still spreads capital of sheet cost drive have leverage.

nearly powder times We continues the distress. focus dry that on per AFFO launched preserving uncertainty. Our crisis, and I all now, of been share our and is think to remain of during acquisition doubled to size I'm reset has ready I economic market growth a our platform opportunities on in on seize thrived to that has while will remind financial again once investors after execute COVID. the our for the be forthcoming. for ready the confident company the great Candidly, a that company our team while

retail average off external the XX consumer of used acquired store, representing dollar The platform, acquired price invested supply, XX continued the rural acquisition $X.X our Moving weighted grocery, Over operators. operators, the billion derived retailers. electronics during of from quarter in rate the growth all metrics parts, farm record is leading years, term properties execute in investment cap average auto demonstrate properties invested platforms of year-to-date home first we at states. lease growth million. two will tenants, our three nine acquired to including spanning of on and opportunities XX% platforms. thirds These activities, with least best-in-class a had Throughout base best-in-class across grade operators. great and record year, the on improvement, the than acquired sectors. million third The properties XXX XX annualized of be X.X% more invest $XXX these through properties XX.X volume net originated selectively approximately three properties of to to rent on $XXX quarter external we've leveraging months of properties lease nearly weighted XXX and of the the a focus our

deploy the Given visibility end at the increased pipeline, billion we are into disciplined prudent we high quality $X.X the capital. our and our acquisition remain $X.X while said end maintaining how guidance That guidance of our in billion. increasing high bottom to we of

forward almost on outstanding the of Our facility. that and $XXX investment equity sheet over a raised on debt and XXX balance we by fortified had quarter million of balance balance cash the At XXX, activities were during no revolving equity our million supported sheet. with credit

solution to our opportunities, capital ever uncover partner and development compelling on pipeline. largest our to continues the and helping company's platforms, to team development build Moving

Our is with while risk merchant to funding, in walk with to providing opportunities platform ability to uniquely provide returns. drive superior struggling situated developers the additional adjusted us

of many their partners to fit with dialogue find growth solutions that have strategies. store to retail continue our We

a the two During new as Gerber in PCS Murrieta, including Collision in well we projects Rentals California Wentzville, one Sunbelt as in Missouri. developments located commenced quarter

We year, completed million Collisions the had during locations committed the on $XX record have projects representing total, Burlington. also of under continued In completed of approximately XX nine additional XX development as or a the Construction the we first capital. been months as of well projects. Gerber two construction

on Furniture sold during we dispositions, in Gardner-White million store $XX Canton, Michigan for quarter. our Moving to the approximately

White. Li, to the company's Van released subsequently we As most the Furniture developed previous then was and Love's Art this to to noted by flagship calls, TH acquisition on which was prior Gardner recently

to asset, we XXX% During rent dollars. twice, effectively improvement the tenant release this time the were without of property recapturing able we own

tenants estate XX%, in asset we $XX of the of which approach for an average we proceeds a our of six later, to nearly a ultimately selling and weighted million, three IRR pandemic sold up rate approximately underwriting. now XX, are September So bottoms demonstrates Through gross with properties X.X%. cap real

end lower of range our $XX end of maintaining million the disposition we're of guidance the our $XX increasing million. to activity, year-to-date our range Given upper while

Joseph, States, in leases, executed and front, leasing or extensions the extensions of XXX,XXX points. annualized nearly are two XXX a On XX%, Notably total Occupancy leasable upcoming the options Missouri stood leases, lots quarter retail maturing. options approximately base at maturities over leases At year, and grade Sporting up year during terrific ground continental rents. and with we Park, at Goods exposure leases our Dick's new X.X% for in area. lease stood XXX rents. all XX.X% square representing representing annualized increase portfolio end, XX.X% Texas. We're of our St. including of just XX only properties basis portfolio included also feet wide the quarter encompassed Cedar big investment ticked X.X% base position of in XXXX our gross new of while At United XXXX to leases, stacked end, a across quarter

call portfolio any Our hand open withstand economic that, is the positioned best to With the in country to and and headwinds. for can then I'll the we Peter over undoubtedly questions. up it

in positioned capital with bond end, the million debt notes million in mentioned, with of no Senior debt related Starting $XXX is public we hand. with In very termination, all notes to rate the maturities markets, offering Joey. The X.XX%. another considering $XXX XXXX. we the as sheet, had the staggered active agreements, for receiving At due to approximately material volatility swap $XXX capital maturity of the comprised almost August, and terminated In further years. well XXXX, $XX markets. in headwinds no million connection the with you, and the floating XXXX and exposure weighted are we completed we withstand effective had until eight of effect agreements Joey raising upon capital. average on In of in the quarter conjunction interest rate quarter million, our unsecured approximately X.X% offering, a cash maturities of balance terminated rate our $X.X settling approximately Thank billion swap offering extended or

raised the program, share a we $XXX during billion dollars in half approximately net our of We sold $XXX proceeds completed raising ATM And more offering quarter, a forward of we net forward equity. million anticipated shares September, nearly of additional million million. X.X quarter via During for X.X approximately million proceeds equity net the anticipated upon net realizing settled settlement. quarter offering, X.X million. forward $XXX representing At had million. forward outstanding approximately million the of September settled from September anticipated shares still proceeds to approximately with offering, be shares $XXX million of equity, In we we X.X forward proceeds end, of than conjunction all the

on us $X our transactions liquidity Our including availability revolving capital provided on forward aforementioned of at credit end billion outstanding quarter cash with our more facility, full hand, markets equity. billion than $X.X at

pro was September settlement XX, for of net approximately debt Forma million forward our times. As XXX outstanding of the the to recurring EBITDA equity, X.X of

times. and Total end preferred remained XX%, to fixed ratio, very level unsettled of debt our charge of to EBITDA value recurring was four our impact the at the stood net a forward Excluding includes times. approximately at healthy which enterprise five equity at principle amortization, while coverage dividend quarter debt

earnings, respectively. to increases, quarter X.X% AFFO X.X% per the Core and Moving $X.XX and and year-over-year were for FFO share, representing $X.XX

continue share years growth the implying on single per mentioned two high we in prior calls, AFFO As high anticipate to XXXX, teens. stack digit in growth

to within aggregate quarter. settlement, to a included our offerings stock outstanding in third was reminder, price dilutive prior when deal equity related the offerings. share trades our above As impact the stock The count if treasury a forward and diluted is of these ADC penny

per $X.XXX September. per During over dividends declared share a we the and share increase August X.X% an for cash annualized year. last of represent common basis, quarter dividend dividends from On third the third of annualized July, the monthly quarter, monthly the

quarter over our excluding million was year, meaningfully third of of and third below market dividend While between to last XX of third G&A fourth Subsequent or past core increased above intangibles. prior anticipated pay-out was XX quarter. to monthly Administrative $X.XX range we end, will an by a ratios now a G&A or quarter XX% dividend again for expense share per a quarter of to and from monthly year, revenue XXXX. dividend of the annualized XX of and the $X non-cash over dividend amount tax total expenses We decline approximately anticipate reflects $X.XX per income share The in as conservative dividend XX percentage from cash amortization points expense for General $XXX,XXX. Total share the X.X% October. per X.X% FFO share compared to adjusted the of respectively. we basis lease X.X% the revenue, the the annualized total that per maintain points. increase expense totaled of of basis $X.XX AFFO X.X% increasing share, common to per the through quarter amount

of EBITDA year over income affords positioned I'd pro well times flexibility to call for like roughly our tax expectation of net summary, to that, In debt million. our to to $X.X remains total recurring with robust liquidity balance turn $X.X fund expense this Joey. tremendous With and investment X.X between the Our back sheet million us and billion X.X forma pipeline.

time operator, you, At we'll Thank open for Peter. it this questions. up

[Operator Instructions] Raymond be of James. First will RJ from Milligan Please go ahead. question

guys. morning, good Hey,

Morning, RJ.

season. with earning cost do So it? weighted capital this boilerplate was calculate What's of going start your you current my how to question and average of

forward. Thanks, so raised capital of of needs end, the moving used quarter at RJ. we five. their settled can term markets. This of $XXX of below acquisitions Peter. quarter third first, $XXX in runway during we at always terms that ahead rate during flexibility in quarter, forward the is long to capital we're that capital a the looking to million also in the our with cost mid-to-high of to during when debt breakdown we retain say was million fund provide that also how $XXX the get access our and all-in we terms an includes settled I'd And The significant the million equity And issued but raised X%. a of

during together, a million all quarter cost the weighted at one we blending third debt. average X% weighted that of So equity raised around and two thirds $XXX

Joey in in new our assuming issuance. his the As public is markets cost a prepared mentioned long-term today, sixes to debt borrow effectively XX-year frozen remarks the with

capital to continuing to us going the $XXX utilize at debt, million a fund the equity forward borrowings. would And likely current we cost be the will any cost business a incremental fives than more while so absent issue Today, at have only share any and in similar based forward equity available in revolver for using equity look raised markets changes on shorter-term our of the was that price. mid-to-high outstanding to

going at continue be to to we're importantly, go in going think the only I and prudent incremental disciplined deploy curve time, not same capital, of better accretive. capital risk most And we're terms going to marginally just we're investing up if to it's to spreads. achieve not the

it. Got

equity are some going to for market But XQ few growth. allows there that it's is on of pre think the accelerate the still rates long they your for to is past higher, to a move? into that I if are equity funding versus cost why peers. acknowledge, over guys waiting that you pretty obviously, a higher, executed got to growth the you've moving accretive runway of So have capital fair months, relative cap the expectation move And

Well, RJ that's us. I think for opportunistic

I a the a as to third anticipate similar for cap term well. rates quarter, up in So similar to with tick and credit to QX this profile profile us quarter

of given QX, need end increase of recycle the would see guidance. capital. taking anticipate to the builder So advantage an in I I there's think our bottom we'll in merchant immediate that And the where market

aspects, Going into consideration obviously, forward qualitative quantitative deploy and both as we’ll we take capital.

bottom this was running flack it sheet historically not we've which balance But low is time to we've not, the really very equity lease conservative flack introduced welcomed a for I taken space, historically maintaining from overly I wasn't approach. the think, the first levered you. into think introducing a line net forward taken

times supercycle. the world, run in time, off, within when, to in the levered historical are that near time. be because seen pays debt But back it's be market. these going continue into in retailers the same the to will that going our the and to we'll stay best believe to incremental that race a we've investing low the sheet, And there, at balance when at frankly, So of some come given add sandbox a position point anywhere the at leverage we're I

taking and you've reach vocal that come? the of been Do M&A past lease and that. see one couple for there's your we a you broader the net maybe space just recently. quarters more pretty private expect peers and Joey, over Thanks to think you M&A in

net team. I that to was terrific not First the a we congratulations her space. think outcome lease Mary are But off, for them. and mean, in obviously I only

And very of there I their those sheets their their back balance are of able to the investment strategies especially. drive REIT space given have come which spreads. impaired companies as to equity once think a situated in capital and/or you aren't it's number difficult cost cost potentially you of an know,

ball We'll sheet our next. see REIT preparation my across We obviously, approach, to bent in management. predates And been I here, approach we'll see in surprised the And of what the always happens here conservative follow, historical but so, be XXXX. M&A our balance activity in terms don't have more time that what's across has a that crystal wouldn't for space. continue to

Thank you guys.

RJ. Thanks,

Thank you.

RBC Brad for go ahead. B question next Heffern, Our Markets. Capital Please

what opportunities, everyone. I frequent morning, sort you passing, prepared like? in those? good Hey, Joe, in that of your mentioned guess, distressed comments how And they are look do

need to to recycle capital. the most the in those is think are most right the distressed sell the I “distress” unquote Well, now we're that seeing quote need

with opportunistically capital, need space, other And again, merchant the developers historic across are projects, the you'll capital see into that there XXXX, the for that is to that into or to QX pipelines that them so those ventures. for delivered new pricing, have buyer recycle and or that option isn't XXXX are feasible working a have in us recycle recognized what builders

the to today. we're you tell in recognize that is, seeing will truth rates. And expansion are Those cap the I first so distress immediate that the

continues XXXX, that miraculous level use is The wishful remainder proceeds. we're or of for we're other cash person, a all where in That's for still XXXX as well. the for the as an or bid thinking well. see with anticipate frankly, the things buyer, And that that lag really second we buyer. with maturing, capitulation those remaining. We The the having for more spread see market the ask to proceeds that debt those to seeing or narrow buyer, defined hopefully,

marginally you've basis accretive. invest historically, won't minus. spread it's XXX said solved if or know, of points for plus Okay. you And you only a then I

above So your you for eventually? saying fives, rates do in X% going anticipate you're sandbox the of cap is if cost equity high

would my I'm tell Well, cap going. crystal ball. I mean, anticipate what I into you looking I rates

a approximately the and lease, was XXXX, times. history at is think retail there single tenure $XX X.X% traded, I average useful cap the tenant And here billion about averaged between net XXXX those of rate X.X%. was guide

not I'm what economic idea I have say, So going to rates I of that going to seven of go type are we're conditions to here and today north said, believe sit in cap XXXX. no be going

and of basis with with let's basis, we're XX assets, infusion tenure I around quality and it on think again, the if capital, a with accretive to high unlevered investing not points an call debt, at invest discipline. to think all-in we're X%, capital get maintain XXX and if That accretively, to we X% I an our spreads said, unable can we're back cost there. of going later

to we're going over. not a going wheel. position leverage to sheet is on so we're hamster to not Halloween this And a get take balance

the can So company can best team, our going the going I this we're you without sponsored rate to lead leaseback moving in and opportunities. What will you stay risk private the cap within out assets, this risk expansion of I given best find And that's to space. without confines on sale basis, this, we're tell our up that looking that's at is That's going equity curve. duration short into without at. of companies what guarantee

you. Okay, thank

Thanks Brad.

Thank you.

from go ahead. comes of Bank Josh question Please America. Dennerlein Next of

how comment you Like soon. what are debt? that competitive returning of Joey, or really you've for? on looking the the to to it Yes. comes competitive what anytime guess describe, explore or mean the markets? Hey, does When kind recapping you your debt, Or I guys. I not guys? like want to what debt described market

is of that's all, cost our mean, debt first I look, I today Well, first equity. of off, outside off. first I think mean,

So mean, debt in really especially XX-year true the there unsecured is I today, no market space.

look or today. significant on trading papers facility and the on at You mean we're We've grade not balance to basis. going never investment anyone term variable borrower, historically a obviously can run a where a short been

has to be accretive our obviously debt of to So cost relative equity.

the I we'll think that From threshold. there, see. that's

over. market maybe the hope able already and guess. materializes longer market capital. for of longer look, would I the of see same That's lower I think capture the we'll best that a thinking Now time, is that raise my But obviously said to next it's back are rent in wishful at I a half companies that year that that becomes truly is debt again, supercycle

Alright. -- And how have are in the change understand today, conversations do sellers, they like buyers the are cost like like of what capital like? the that

Josh very maybe that see. tell end that today, sellers this in that we the thinking recognize believe a they year. with ranging. earlier I from even or are there XXXX we'll and distant But we're will seeing position are Fed sellers wishful are wide you still that will more more

recognition most isn't I throwing for an think there hope in the uncertainty, asset. buyer last the it bid macroeconomic of XXXX thing, the the important a is all cash conditions or really and/or loan of sellers

So historical for these in cap activity, conversations widely with brokers, caps low assets historical marketed, bids similar to activity. five Activity out two XX% out high the that or getting quality, and there's are recent XX. that five there today, been rates notes maybe down of not sub to there assets is degree, a are asking

again, the not biggest there, think water. is cold I pouring So challenge

for bid. buyer XXXX for that or cash or I a buyer think throw in in thinking all wishful the it's that to hope return the

$XX in deployed, of I economy some less expectations. changes, as move in think see hopefully there's here we're as to this going to forward terms sellers [Ph] XX we

you. Right, thank

I Josh. expectations say. should Thanks, Hopeful

Thank you.

of from Truist. comes go Please Kim question ahead. Next Ki Bin

Joey. Thanks. Good morning.

next kind I should of capital what if quarters? the over but missed we Sorry couple expect of this,

next for weighted quarter third visibility of there sale I because to Bin. Ki terms or is investment or expect up would profiles also at quarter in lease aberration would near morning, QX an expect lease out term. I investment XX% to quarter QX. this well. I I profile. all average have large pick over sourcing again, similar executed And ground we there We just the grade would And rates that anticipate the of into. was with Good grade But activity to leaseback we years XX -- similar up moderately began cap kicking XX% as

you how at You Okay, and previously, I view pullback. bit this I favorable, was know your volume? know more looking for do and of But taking this can ask looking sheet. with versus buying how to but whack? balance at? How that great of you maybe you cap be it. backwards going Obviously But type it rates balance do higher, with going do tried was we to you balance a mentioned little forward your stab a it need another balance buying everybody. I a and

think it's great I So a question.

is science. more I comments. an get nobody Powell to Mr. a refer XXXX ball yet. That's crystal why hopefully and I XXXX. Peter’s has a think from into clarity back We'll bit not has art into a but Nobody this clarity little here, shortly would

disciplined. We be will

make sure but also to transactions are accretive We a both accretive. qualitatively accretive mathematically are going that

are is disciplined very to to that are the cognizant those in macro don't we've international risks sheet Again, to are and means company the metal horizon, times. sense. of balance the There on many risks. no built this We those or we by for been. they're thoughtful up a always risks. was But here and put sheet, going make this And spreads uncertain like domestic We're be whether lever we're with pedal balance risks. going

has be with to every has dollar we so purpose. to And do deploy and thoughtful,

AFFO basis Okay, net I benefit bigger surprised a report more interest on non matter. really and GAAP where that a question. little anyway, REITs the expense a you convertible I'm issue triple doesn't more have mean, guys an a debt. picture

makes thoughts at for tool a any some Just that's debt. convertible if sense point? guys, on that broader you And

terms companies. sense on for on mid doesn't any any again. I for trading today of of really an haven't in source us make five doesn't in It it. time the spent today range We're implied basis, other or sense any and capital make option for us an convertible AFFO

Okay, thank you.

Thanks, Ki Bin.

Thank you.

Joseph go question Next Citi. come will from Nick Please ahead. of

Do there of sense Thanks, any to deployed? have looking XXXX you is still Money Joe. out how be much

I wish still. there's of it talk did. even I'll lot tell amazing I a the though It's that you of

feedback and that and I've road gotten I we've there's is money shows recognition especially think that meetings, the a that from conferences, my that gotten recent team, is waning. from that

there's that So I'll about the has tell a and lot has gone thinking talk hopeful to you in broader of the wishful gone more sentiment from this. from community hope the XXXX. that there's

has seen is that sheer I decreased dollars. been to significantly. so dollars as space, those quantify to And recognized. beginning undoubtedly haven't the transactions But anybody number estate velocity those the try real of are [Indiscernible] the in wane commercial of

And ground Yes, you rates on lease? leases in in stickiness exactly. cap what difference net versus seeing then, the terms of for traditional are

Really the same.

similar it's that market to hold capitulate. still covering be gotten I to fairly ground broader last in said, sell to is a leases attention couple the ground to the to you very there's pipeline I safe sellers anticipate I bid leases as due on us for market, spread. side still a have have mentioned, ask lot QX of do That that will the relative of I lease looking sizable. We're our net that them. lease probably think ground gotten calls, tell

very you much. Thank

Nick. Thanks

you. Thank

St. Haendel from come will question Next

Juste of Mizuho. go Please ahead.

tenants basis? acquisition on any any Are seeing good line the targeting just acquisition? for are Can Haendel. comment Ravi This you Hi, a Vaidya new Hope you comment or doing categories? in differentials is you the Can pipeline? category on in you're pricing that you morning. Are seeing you the well. guys

will will them I think appropriate. no tenants a categories, So Any holistic but on into tenants you it's categories new tenants we'll that that tell or we into sandbox, or will new I remove insert or don't we sandbox selectively basis.

clip that In rate in the builders sectors of the seeing merchant terms cap sectors store the fast generally growth leveraged few in velocity build rates, builder We're cap to dispersion. drive those have community driven at a are of last are that's merchant excuse by in that growing seeing terms retailers from. by we're and me when community sector the new

Got it. it. Got

higher tend investment the tenants have Just shopping shifted rates versus to one be grade end you're there, know more grade I quality stickier comment the rates how in of non-investment here. but you cap for can the tenants? cap spectrum,

I is I that sponsored have should. rates balance assets are nature, up they those tenants in mean sheets impossible put generally single There Hobby grade those significant rate are our retailers The whether have aren't. it's and private debt don't fantastic don't blowing source near you non-investment said much public so balance cap that's Look, sheets. portfolio assets of to nearly variable is value a equity they're bottom spend today an and is that for see unsecured in would and The are of estate. maturities, are retailers. have those who smaller tell time. terminal boxes on our to are purpose ratings predominantly creditors investment sponsored REIT tenants grade you amongst we them output transparent and tend that term we've have sale Many their the always especially unsecured lease They to funding on the or in strategy. better, residual underlying the a even have would their capital, BB acutely line Publix country. or operators tenants Lobby, top the Chick-fil-a, basis limited I be that access this tier in their net all tell probably largest largest leaseback more creditors. the or to the are real unrated

playing that interest in no space. have We in

think we've never I in outlook think we I see outcome. today, macroeconomic it's played that the imprudent potential space. given that of But it's over ranges the

frankly, because the And rates of specific can't there. so time I cap give instances you don't we spend

it. the Got Appreciate guys. color

Thank you.

you. Thank

question Tayo Please from come go Credit will Our ahead. of Okusanya Suisse. next

bad little about, Congrats that are cost I just could creating through debt, of Yes, you. bit just on Joey, backdrop quarter. a sheets, rising for mean, opportunities the rising of, where about balance on good the comment you side sheets, retailers you U.S? going of also a categories, morning, with a you Could concerned particular everyone. capital on who again, bit your any, going see macroeconomic more in earlier if about become your solid overall talk with in flip balance going just the little kind with and you watch talk cost the list bad any and what's

Yes, good Tayo. morning

terms don't component portfolio. have I concerned discretionary the have We exposure just in recreational in this we the of to we component, don't luxury categories the again. categories, have component, think where

specifically leading focused, recession core generally we and operators tenants the resistant are durable, We’re focused in sectors. on respective those their

every website. -- in So portfolio we're on is now our property that's not really our

you go properties our on website. to of want transparency, XXX, are all XXXX If website, our as

Beyond We portfolio on in free have Google bought have and multiple in real three Earth. We'd one all estate It Bath portfolio, tremendous love Utah. home the it we of in to on main back the at our estate. feel piece is of one all estate, real And offers critical They for the a day, had we to are thoroughfare Provo. and pieces get Provo, them real have in Bed it.

the few single just movie just of really theaters of the of get the will we challenges. have portfolio, those basis. a and don't day, every case by have outside case asset at end we So on a we that in couple we And

you seem simple out transactions Great, versus And then different markets, of transactions type there. in for are be look a bit buildings helpful. lease that's fee the kind standard ground little to

same, before, its I mentioned transaction as No, specific. generally the

market debt as lease as lease deep market. nowhere ground large as is near standard Now the the or

I'll today but are of aberrations. stare there. generally of and terms buyers nothing the the sellers say overly. are stare a gaps markets there down general same, in for general, the So course, and But, down in Both

you. thank Great,

Thank you.

you. Thank

of from Please Jefferies. Linda go be Next ahead. question Tsai come will

Hi, high look you on as that cap digit in year? growth good higher, next might two given teens your move a The high what and growth be stack, earnings year XXXX morning. achievable earnings single and the at of pipeline, rates type view

the of question. come markets is to the it’s where Good a cap uses it morning debt and sources if depend rates Linda, on when obviously going to. move A back, great lot and

overly isn't double AFFO there's REITs or of net thought the if growing thought probably single terms prudent think of of the digits I upper year. next lease in that growth any in digits

there. going sources the if there. going then rate to in what environment in the crystal able I of circumstances to I terms we the to tell overall today. happens the and drive really But we're cap And And obviously, to so ball macroeconomic capital the going see don't And you second have of pricing the wish, be are that had cost be to environment is piece unfortunately it.

tenor store relates Thanks. to has it or as outlooks? from And their the then retailers growth change tone

wealthier will discretionary that retailers we're have we the the No, I you conversations space. in again, not tell with

the to out are speak we're retailers. The strategies those retailers with strategies. pipelines. of can't for built developers I their conversations generally perform today revolve that XXXX inability already store story Their So around on with new having those to with

to comes down it Now execution.

an large example. give supply the I'll ended to stores then farm stores, We a so down in you And a with had pipeline, up XX talked retailer hurtling. recently to developer and three rural who XX

a both interest new lack what costs that the be. labor are growth due loans. promised store and for importantly, to materials, rising in now construction exit in lack on on most availability will retailers rates, mode. new they our cap clarity tell the challenges to you I of execute getting and the growth And stakeholders their speaking, have openings And store then portfolio rising They of merchant the street. have obviously, builder, constituents of generally rate actually to now So

of partners in both us that our And if platforms. to of so there's of deploying a makes we're working all with for terms those solution see sense three

helpful. Thanks, really that's

G&A Just one last one, lower? what's driving

Peter. Linda, is this

decrease the across to and And total compensation a expense quarters that where XX of I guidance of that XXXX revenue. due onetime there decline to second employee our would the basis terms this in assumes we quarter quarter, a stock-based G&A that fourth to a XX more tax, first was the and different areas, forfeitures. X.X% year. of for G&A returns note spread deceleration that to IT to approximately point including level saw in it some G&A was adjusted expense the several accounting and In implies during guidance during similar in

Thank you.

you. Thank

Please question Wes Next comes from go ahead. Golladay, Baird.

did your equity everyone. for ever on your bit prolonged you clarification a we're of than about loans like term little read been time the to target always seeing tenure then a to that. make debt no no Hey, period a where cost And been going is has now. up cost good debt, morning, less there Has of more comment short-term debt,

When remains my basis. a basis balances tenure about Yes, and that’s capital short we credit to carrying as is while anticipate effectively the elevated. on elevated we're not on on of Wes. remain facility a term a swap for extremely here I or our And about mean, variable spreads either remain talk talking cost debt, the inverted today. inverted tenure extended we

term We But have Historically, rate term which debt in obviously year executed to we'll maturities, the and recently, issuer capital terms public we're any going makes base our an risk, loan market. look unsecured tenure any year or levels of available here. most market but looked the XX been at not sense XX bonds and the stack options seven at the at variable specifically loan in we've here, all risk. take in

cap And you're retailers a the where pipeline, year of pipeline that situation, at on this got are made this little your the exit. retailers merchant bunch just to to pay handset swell. bit we merchant have see, the absorb retailers higher it. willing look then help builders of we you a you lot rent get when good their higher rate sense builders background, are in a was Okay, And or there dropped do Gerber Collisions, who at going next really you you headway the have there maybe to look year potentially a

number meeting for a based more looking it looking retailers at larger sheet. respective looking estate to of different internalizing today. heads retailers on been headquarters The keep So fee looking team term, of They're increases. are They're at in departments. balance all programs their of types with to rent, at They're development. at solutions their real looking has they're increasing

we're are it talking Again, basis. across looked at always us just the with looking all of platforms and we're all from opportunities being hurdle pipelines. ground. to an can so they to three different to really types I solutions your think retailers get for in grow has second new always for their question, commensurate To opening economic stores

was just just there something follow going where specific they little maybe Yes, platform that a want to and just work you because where others to them one-offs. if any, about are on I want about there's to corporate maybe bit quite the And just Gerber's hey one a you just up year. provide special probably value one with it’s mean really said, I grow that. more lot guess we doing with of a anything wonder was this just it bit. where we that a I

we the of We've space. owned Gerber I And public would the only Exchange been because talking Toronto had six Boyd Gerber, years. the they're in to Group. specifically public traded by only Collision Yes. upwards identified Stock for the They're say company company on

were the equity of collision and gobble so open because the And cameras King third and because saw, as the of of up Service very payment stores, the Caliber attracted repairs we independent of well we sensors. the as as party net cost operators repairs, sponsored both private space continue cost to new

to can't computer your mentioned before, everything technician on go your a car we we fix a I -- to at need traditional wizard today. As just

the So well into obviously to with Gerber on conversations entering M&A organic balance from culminated rather identify again, which the phase we everybody line. space. Those perspective a of were because perspective. very their growth levered see than We significant sheet attracted can Gerber

was collision big by And three by operators. so space M&A, the the dominated

mentioned, the or, chains, out and became only lack then acquiring As one being I repair public of it opportunities Gerber small prohibitive, frankly, there. pro cost one-off collision

chord there And for us. they of worked both a we flipped to Greenfield and finally partnership and So that hit brownfield development. where that's found a

XXX with of took country. so they clients auto frankly who And active, the business, business, insurers Gerber, relationships the the across obviously, have their and over locations the And very over. love direction we with direct we're

Thanks, it. Got everyone.

you. Thank

Next question go Stanley. will Please be from ahead. Morgan Ronald Kamdem,

As that year, capital. next should because talked ones, about be but going a sort two Right, and those pricing. up? we're of high the sort thinking bit Hey, two acquisition sort And rate they're messaging probably to about cap factors, then right. that expect quarter in coming than slower of the of cap levels? your cap There's that, is that amount we just they're, then think little the are of rates what there's sort two rising of rising, same volumes, rates of you I volume cost of six, quick back should sort There's pipeline.

or be sort higher there But Or So take enough the sense? is just go expecting coming volumes, of this is are cap rates Does give a we a around? should scenario there? where make through? is there that

slowdown. it. out. you us they And don't see dead if obviously it where think I I doubt no quantitatively, No, mean, cap there's rise, see then hit rates you about hurdle for we will volume

And or pedal so off. don't careful metal, the we be careful frankly, we'll we put rates or how will with we to our be as cap move, lay move, with frankly,

qualitative and for broader sense to And in quantitative again, have decide whether discrete market makes on it every be relative at so take the of us. and transaction the basis, look aspects then a we of them, both

a so mode. we in react are And we -- going read are and

And will is I and read a for ahead everybody think not sure. get that's skis, in our it's react fair to we say of mode.

Right. year? health, Maybe on remind this been And has tenant Obviously, have just guys can bad risk. tenant then you moving just portfolio. you to clean a just us what that super

as year, it's pipeline, are like front? Thanks. pain suggests retail going But about or that real So down question two it's, years, the hearing pretty on obviously, anything what there's is, are more the that next three the you that thinking be next coming you the small. to we're seeing

They that's retail sheets the of level. cost will balance high frankly, specific portfolio is either to strong. out take I low to or the capital. COVID. were Yes, it a of pain because sheets I or ability But the a repair think absurd during balance company, access the this from I'll anticipate repair lot sales, so

And so repaired of during were sheets, lot ironically, balance a COVID.

those of deterioration today, normalized the balance seeing more we're sheets to based businesses. think overall their I pattern back upon a

going dependent more time an proxy macroeconomic things, or going But a years, shorter not to think a a over COVID. consumer a retail outlier COVID things. was COVID to And a And this we're get I of got lot of and eat, and broader some the conditions. I lot in to so was very see and timeout, lot the we're distress, even upon see maybe of lot or period proxy not more recession. consistently frankly, people environment. a during the timeout. a distress free and And a for was is told next was and Again, a for COVID got retailers two three I of retailer cheap of people it think

today. of sustainable much most retail of And retailers, these of pre-COVID we're normalized make lot to terms patterns normalization across levels sense sales in sectors of operations. retail a a on-going sales the And didn't so seeing now be an

we're seeing to that Peter, see the think bad seeing it iceberg the so tip And normalization. we're we're of about the today. We're can I today. specifically And debt. going if actually talk you

which we've is only $XXX,XXX sorry XX% debt approximately recorded on basis. Year-to-date, of XX Yes, in terms of bad year-to-date expense, basis or of points debt. a bad roughly revenue

very So year-to-date. recorded expense bad minimal debt

bad specifically of Looking or debt. forward, tenants identify instances we

forward. of we have we referenced, shape moving again, in think portfolio is great bad our debt difficult Joey as will predict But exactly to it's today. So level what

much. so Thanks

Ron. Thanks,

Thank you.

Next question Chris come will Lucas, go CapitalOne. from Please ahead.

Hey, good morning, guys.

back step of a and buckets about at. transaction take guys couple questions. quick look we of that opportunities a you Just Joey, if the think

capital you of at and So side existing the or in the to of seeing cases, one pricing any acquire. than sort deals sellers terms out that market are other might then faster there direct these that you've lease you got the you've adjusting the in tenant all? other, either got deals, today Are differential

It's question. a great

conversations opportunities those of that the marketed bit and inclusive neither are out moving that opportunities little off market direct retailers are generally, sellers. think a and/or direct than shopping. I quicker, thoughts there Those to

little there. reality the of some than speaking a direct I generally quicker, hopeful conversations bit to So cutting that kind think conversations of those out are circuitous are through today's

would Okay, like thank term maybe what year taking And Any swapped five in sense costs for seven look guess, further. I just one prior or step year year question today? loan that. you all to the then as Peter, fully

specifically volatility public the Yes, below think earlier a had say looked issuers more rather where the capital as progressed Chris, has a result, I for to swaps I markets. there's obviously year public this guess to the to lot it sense answer of the the X%. as market would We market. access public an place debt this have all-in in bond the I And that, right markets, bond in term than us at loan bond year, made markets been

loan term markets today, In as year accessing term loans terms the of issuers. to more have I think this banks issued

loans. and bank an particularly sheet term less balance of grow sheets balance five appetite and year seven issue seen You've to term loans,

And it's a term loan to year so, price today. five say difficult we where can or exactly seven

I to think push extend we're it. seeing two options one with or years loans banks the companies towards shorter-term term

question that's for And And last me, Joey. helpful.

and thoughts to you're, as Kroger portfolio risk given Kroger merger sales worried feel Just or that, you about there, the about curious your to regulatory that any about anything you about? like announcement you're a thinking your credit and how Albertsons you're how as

release There's No, nothing [ph] in of provisions any in of no release. there terms CRO credit. our concerns me

safe of is you well we floor, of been on loaded the union as of space hour off to a and paying historically, basis. The continue pick the the some associates an X% broader when grocers as thing interesting tier talking grocery the acquire been the Albertsons. country. more more think thought the haven how will top in frankly that the invest generally. for desire to the long fact. we that them deteriorate. center the environment it net actually interesting Kroger's retail only in has have Or We've as remind $XX I I wages think lease to a time in in space about grocery margins business Both people And been higher a shopping even quickly has

Fulfillment. to of spend so what seeing and with because of scale I the deterioration And is terms in we're move Kroger think Albertsons further margin CapEx Ocado a we're even seeing increase and

anticipate full would the of no our really so consolidated And our concern Kroger I end have no Albertsons existing in guarantees release stores. deals provisions all there Kroger on again, being a spin-off

to was it with what or social consists portion. or only which see tractor was I We in be farm think going here. approval detractor believe the interesting They extended FTC buying. of stores does approximately more FTC obviously months, the had business to XX and and track the process, it's I Debt that to and company of the entire XX%. rural supply divest the XXX

as But process something it to grocers as going it's we're So to there's what to such we food, approval going be see FTC interesting I continue scale. with going seen no comes the on that is when inflationary doubt especially search that like. pressures the food, think very to for look we've watch here, to

safe to going the so believe And spectrum, top haven than don't we're truly because I perceived. grocery investors have of it's the at the generally end actually stay just

thank I this all had morning. Great, you. That's

Thanks, Chris.

Thank you.

will Next from a be Suisse. Tayo ahead. of follow Credit Okusanya question Please up go

this and a again over a grade feel in out it the you investment of -- cap cash other to if your cap flows on the most recent while, Hi, yes, what give us grade The to point. just the you gap spread a the collapsed two had of get sense the and was one. again on, sense gap market, gap at could yield a very transactions kind cap -- non-investment quarter but cash because six claiming quick rate trying a between gap are this rate, out like the the to

came us breaking Publix A are at traded there retailers, unrated. cap close. non-investment spread the or is Again, our Lobby, unrated fil favorite Chick very the you're that through, of rates, grade all Tayo, parts really up grade the for Hobby really investment aggressive some dear, and between

they of Some owned they they although them as they don't but of profile, trade rating. but if a investment are private carry credit were held third companies, family closely -- because perceived grade the party are

in there and about to of point that in real XX a given credit six, we builder number that see isn't rates QX we more up basis really this within space. two. there's cap in we XX merchant that as quarter estate, invest this dispersion. this opportunities so, across ticking anticipate by again, probably And driven really other you a wide a of It's XX average And where I'll term probably tell factors, the to point of dispersion capital.

On your five. probably mid tax yields, like we're

Excuse me.

again. up breaking You're

your [Indiscernible] six, two were I yield; Cash your thought for the and yield cash quarter… yields

No, no around X%. closer,

around is yields cash The six.

Yes.

you. thank Great, Okay.

turn our That question-and-answer session. the over you. Mr. Joey Thank remarks. conference for Agree We'll concludes to closing back

everybody couple Well, to catching today. you thank for in and opportunity my to nose going you. look it. weeks. joining we forward blow a of go Appreciate I'm to the NARIET in get up Thank us

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

may now You disconnect.