Agree Realty (ADC) 25 Oct 232023 Q3 Earnings call transcript

Good morning, and welcome to the Agree Realty Third Quarter 2023 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Brian Hawthorne, Director of Corporate Finance. Please go ahead, Brian.

Thank you. thank XXXX joining Earnings and Realty's for everyone, Quarter Third Call. morning, you us for Agree Good

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

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

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

joining Brian. for thank increasing operating performance nearly growth our we in in an high invested our Good to and manner. all-time I'm while high-quality another disciplined today. of of XX%. We you a morning, X as executed to all across opportunities strong all strategy you, quarter platforms pleased Thank report us external investment-grade exposure

which will more investment-grade record for the exposure strength Our provide is portfolio, emblematic cash our today's flows of durable in environment. of

maturities a quarter and net to at debt paired XXXX. end is X.Xx with debt material recurring portfolio balance conservative with sheet Our no EBITDA until

stringent criteria. quality higher during and cap push maintaining quarter the to rates without continued sacrificing underwriting our We

fragmented market. will given competition track albeit anticipate rates sandbox, slowly steadily this lack will today's the of targeted and lease and and of makes buyer persist of continue dynamic in of space. and the be higher, nature net to a execution our cap there to large the us consequently, Within We our choice record continues capitalized move

for We an position in are enviable year. the upcoming

case until Simultaneously, inflationary growth This with material is in base of growing loss a no assumed for per deliver or provide revolver borrowings of of over Our outstanding a the with combined fortress in case in headwinds. the curve. additional of returns stable maturity true sheet will best-in-class current us has portfolio debt this growth forward Even flows. to growth, at enable sets conservative avoiding next absence XXXX, external XXXX, amount, and AFFO dividend refinancing the capital cash yield, absence single-digit X% the balance external the X%, AFFO year growth. over on G&A this SOFR our minimal current share stage cash lease and basis. Embedded or in growth maturities our credit any are even on base in high

discussed underlying As the risk up the curve, avoid investing estate. high-quality previous with real in calls, on we only leading going operators will country's to capital continue

convenience farm our quarter and spreads partners, are and supply and retail sale-leaseback are high-quality we improvement home to with stores, store off-price auto allocators of $XXX parts, remain risk-adjusted million and transactions rural leased in and The net cap convenience rural assets lease reflective approximately invested quarter the ensure leading clubs. relationships properties We service, provide the operators tire appropriate best-in-class supply, acquisition operators retail in our during this of funnel including $XXX acquired including executed broader farm million. strong auto warehouse properties, sectors. sectors to the and in While several retail, will that past continue are disciplined quarter, for market acquisition a our including XX rates capital to conditions. This pipeline, we our and XX

we've It is of for than of term X.X%, average leading base properties year. calls, prior a XX.X These XX% expansion the second rate on sale-leaseback X We a our comprehensive from year a on estate point to cap be volume weighted states. the ability to XX demonstrate As are with acquired XX-basis acquired derived mentioned spanning the $XX higher all XX% during another has on of quarter. Through at We focus investment-grade execute for full-service, properties solution of our the external million than rent us full or retailers. example operators. X rents basis this operators. metrics activity relative weighted is approximately lease for was approximately acquired platforms real opportunities billion X net from average best-in-class leading total lease The years XXXX. $X leveraging in and ground XXX XX leases year, of quarter, acquisition to of Over months investment-grade continued invested quarter the and base retailers. representing the annualized more derived increased annualized first points retail growth X.X%

increased continue $XXX committed see of with in activity DFP capital development to over year. record of Our programs million this a

team in Our developers us provide and while platform with continues funding merchant situated is to uniquely providing the the opportunity with opportunities, risk-adjusted uncover drive to ability our superior to struggling exciting returns. to lock

anticipated totaling solutions projects that projects to XX Construction We of continued their development new $XX with growth during during X within retail DFP the strategies. We in with total continue approximately million. costs million. quarter $XX to the many dialogue costs fit of have quarter anticipated with commenced partners our store on find

quarter up wrapped $XX past Lastly, X with this million. costs on projects total approximately of during construction we

Island extensions year, California. we over XX,XXX-square Rhode million gross first a XXX,XXX gross X.X Marshalls area. a XXX,XXX-square of square & and the North new Notable square on to in just quarter. during X Napa, Kansas; new in foot XXX,XXX-square or options Providence, the area HomeGoods leases, Lowe's leasing. months extensions on third the extensions options Moving executed included of leases on leases, foot new Wichita, Walmart in or We leasable options or feet leasable executed feet of foot over Through

the position or of leases remainder excellent base in year the rents for X just basis with are maturing. XX of annualized points We an

ground XX annualized now Our representing portfolio a exposure strong X,XXX XX.X%, investment-grade of reached XX%. base very record best-in-class quarter leases XX.X% XXX our the rents. spans properties approximately total of for including again, remained at and Occupancy states, across

role to at Erlich the Nicole focus relations. Growth turn and deserved. makes to I this his has Witteveen to tremendous I Peter, over Chief her accomplishments Officer. and tenant to into newly growth of congratulate on had call Craig where Before promotion the he platforms Officer, Operating created will very career full has devote stepped external Nicole now our want prowess well her operational throughout promotion her Chief Agree

to help team our Ed Vice the experience, it Executive up questions. hand of our pleased management extremely platforms. I'll welcome Ed to years we and he I'm for will can open has President XX to Eickhoff call industry over asset and optimize Lastly, nearly then of as Management. Asset Peter,

year-over-year core September. for Starting Joey. we July, the AFFO This increase. per X.X% increased the you, third of quarter dividends third the X.X% the X.X% earnings, share $X.XXX with period was last Thank cash year-over-year FFO per represents for year. $X.XX quarter, for declared and third per of to than In a August quarter monthly share share same higher $X.

of the XXXX. conservative XX% raising we payout quarter FFO for AFFO While share, quarter again the of increased third we twice end, and to our year, per core per maintained monthly dividend our ratios of XX% respectively. Subsequent per October. over reflects past of share per per $X.XXX the monthly increase dividend quarter dividend share annualized from fourth the dividend cash for of or $X.XX dividend amount X.X% to share amount over share annualized The an a $X.XX over of

held expense revenue. X.X% the General market quarter. and unadjusted quarter-over-quarter of noncash totaled X.X% adjusted $X.X intangibles or above administrative million expenses G&A revenue, the of and steady below in at amortization of third for lease

quarter. still points full the minimum to expense $XXX,XXX decrease to of of during G&A approximately expect year, X% revenue basis we or a was lower. Income the For adjusted third tax XX

tax For between the to expect be year, million. to we full income and $X.X million continue $X.X expense

to capital activities. Moving markets our

equity the settled during ability via million debt net the $XX into market-leading quarter ATM the During on access term support forward further was loan relationships program rate to of our is from banking price balance key $XXX X.X-year X.X us loan. Including a to market, of of financing the sheet the X.X-year with forward of period. the X.XX%. our we $XXX extend than announced million X.X-year closing of loan, an of quarter, Prior the shares realizing we we fix period, X.X sold proceeds almost term Including than previously the the term more $XXX impact The term on equity term our strengthened shares allowed into the net swaps, forward shares XXXX. for interest to maturity of SOFR the at approximately our per to proceeds in bank million. average sold fixed the and over strong the and starting demonstrated more during share, quarter closing million entered the at the approximately swaps $XX loan million. We million

on Joey debt million on maturity $XXX material As $X revolver cash quarter million, of excellent hand. with our position $XXX until we had in of of than total remains liquidity schedule and end, maturities our no XXXX. At including mentioned, million over more availability

loan revolving and and commitments $XXX lender our facility additional respectively. allowing accordion $XXX term addition, to of have request credit million, options, million In us

debt X.Xx. of to was XX, As recurring our net EBITDA approximately September

in includes coverage while and Our was principal approximately total preferred our the remained position ratio, debt XX%, a very healthy which to enterprise value X.Xx. at charge dividend, amortization fixed

on Public pleased are the from made well achievements last recognition This back our gold of our on to team. With that, we've our recent These Steering as Committee ESG and GRESB BBB the call to upgraded I'm provider rating B demonstrate MSCI, over of our that upgrade to I'd objectives last leading to ESG turn report as like B testament from to ESG Green significant follows Leaders Lastly, Joey. Lease discussed I from the indices, to our and that that call. outstanding D efforts week. progress of score a Disclosure a the the quarter's level

positioned are Thank in for you, seeing provide operator, to we summarize, markets. At consistent questions. well up earnings we it this will open and the and time, despite we a today drive well-covered the dividend turbulence growth To Peter. are very growing

The first Instructions] [Operator Eric Citi. from question Wolfe comes with today

get to determine under the quarter. fourth your about guidance you're framework And level Just now that be investment it for $XXX sense going have of to acquisitions keep the whether make for the portion to right can it, to we as quarter, you call the million to remaining, curious what's using contract acquiring. of think what

you to of Eric, here what first, it's billion. it's release changed going we forward-looking we phraseology Without the I the flexibility statements, we're terms $X.X guidance tell I'll in in approximately year. giving acquire or any to think that Joey. Well, that notable maintain this

I But us billion. with billion And so $X.X not decisions acquisitions between macro make the really and we $X.X could want watch billion $X.XX it's here not. approximately to prudent some or anywhere think for that or proceed whether be and consequential specific on to

in So hence release, maintaining critical. the verbiage flexibility, the approximate is

In the have we rates deploying are creep at to will going sure going the we terms being of is two, think to we cap at -- And things in to up be today's think one, acquiring patient framework, least to think that capital that semiprecious. we're here spreads capital is without I make that improve. environment, framework where continue

could million kind the And million any would just the just in share growth above full that in more in the X% sort be full on guess, year to of the fourth include when get the $XXX you of understand just if even you grow, quarter? per of can X% that lower impact fourth that, additive the sort then trying Got end. mentioned to you mentioned the without that quarter next I'm of did doing you AFFO it it. mentioned $XXX of your Or there that you remarks. Does with I $XXX million whether that acquisitions or you acquisitions. than

clarify, it, and of really It's X%, and do truly is golf base terms today, that to case. immaterial base of $XXX embedded is immaterial a next just call in [indiscernible] range size range takes up the I'll And which on Joey million-ish there, that of ours denominator nothing case in that call year. in we

no the we're capital, AFFO activity. fourth confident during so doing anything. we're execute That's of that the no grow And regardless amount X% acquisition going to without acquisitions new very of year quarter over next new that's that we

that so very case. the strong, a we I'll And it, base again, call is, think,

Bank of with Next question comes Joshua from Dennerlein America.

Yes. their retailers to our as were spoke were Joey, hit goals. about with constructive conversations you at try of talking we last opening store some on having they time kind you conference, them, partnering with just

that? on the what's Just latest

executing I anticipating We're conference they I faster to than private tell to continue. on store you and aren't even conversations but that are quickly at unannounced, builders conversations those projects merchant would that retailers, Those from going new And realizing that are come deliveries announced they're both think the continue. developers and fruition. that your

return so activity on going be meteoric patient the in we're XX these and us plus come stabilized assets we've Obviously, on to days. to rise past rates or and XX-year cost XX that And to these the yields cap the seen over to the allow here.

if have we're they going And come self-developing We're Those here just to few they it's only maintain without putting think going and one and like have So of anything I to the into to on quickly. I capabilities. jump viable patience said, conversations not sheet that those us. too solutions balance continue.

willing. it's us But appropriate spreads. be for ready to risk-adjusted And again, the so and got pull be trigger, to we'll

then Okay. rates through others back, dynamic back, to cap to trying pulling you -- might just the be color. take pull do kind capital put that think to like of a like how be has like I out guys appreciate much to so Or I'm it's just is just while. And we if just think are work, there like that wants there going that have assuming to respond?

to through the dynamic? Just trying kind what thinking -- of you're market

latter, it's be work Well, the much put not that certainly has to here. to so capital

think the XXXX higher. is market even and XX% down over I edging

transactions XX%, massively. are commercial estimates Some are estate at real down

now buyer it's we execute. discretion our so and And the choice of and want here to where at remain we when look,

frankly, We this the to I think move that -- expectation back to balance clock move market, we plateaued space were very large the continuing. I've That's last said execute last have that if few and a and fragmented roll in like that would year, put heard we the pre-equitized and we of we of year size in heard what they fragmented and they ourselves up. fall a the position in standard going cap the of capital rates when wary happens comments markets. sheet, slowly a ours. answer, the net illiquid We comments think baseline see we were the lease, I've months. abruptly. in to may not

And do prudent yields up. to so therefore as up, we'll we see creep we when those and yields anticipate continuing deploy creep capital

BNP. from question Nate next The comes Crossett with

are can aware for other then you for you growth X% The tenant issues about your maybe talk next credit year, Rite then be should loss? what exposure? And just percent assuming Aid And of? any are we there

the hit I'll first first, question the Rite Aid exposure. -- last

upgrade rent. a have as we're as Rite place, the significant so well We once into in sublease already term has We investment-grade prime we a acquired that's entering with investment-grade a lift former approximately portfolio. X an a credit Aid from lease, with our XX% and will Aids rent tenant total Two, increase already already Rite at rejected, which tenants. subleased to there one anticipate been in the -- of

have the Aids portfolio. in So X Rite we truly

with it turn the the to acquired I since over retailers launch in of case, and case, growth new base get in the back about already reiterate in prepared activity frankly, includes before legacy if X% to XXXX. have net to said talk haven't no were platform acquisition very the again that Rite base spaces. Again, remarks, rejection as to already national the we're those to we there received G&A, I XXXX. I the from significant them that take list, interest Peter inflationary want a which acquisition -- We initial are real rents with and are comfortable of none assets, These and estate on Aid

so it's is base anticipate the And building case, the give and those is turn it materializing, that basement, but baseline, I'll don't to a Peter it I to that blocks. over

talk to of drivers of next through share Sure. being the Nate, of growth north AFFO primary just X% some year. per

of should of about drive growth growth from in about the is impact typically the escalators in portfolio, the bumps First which lease X% X% We internal year. next of see portfolio. rent

about. we well X.X%. rate growth financed already closed raised acquisitions, mentioned, equity we as impact second coming very forward of The run have been we XXXX which with year of loan that term as $XXX the talked rate of will which July the the as And million driver in accretively at the be into Joey a

free have flow, annually we either those reinvest approaching cash Lastly, which proceeds. $XXX is million the to amounts that use pay or can down we on line outstanding

per plus in primary year. the X% are the AFFO those next so growth And drivers share of

first Joey but As points would basis we compares loss fully more of loss so offset year in to that of of XX we a points longer-term We've the XX X XX months realized assumed credit points. that line this well that's as of through of points trends loss. as That's And a mentioned, terms that loss X% basis by credit than in average the the our there number. in far credit credit growth be realized conservative loaded with in number. year. G&A basis That loss in XXXX XX of credit the well, as below basis

So that basis feel is we XX points conservative. very

That's next your to Like just up. like Okay. on like lever And if then were helpful. tolerance leverage. to do X what's acquisitions do, year, maybe you

have here said market us. The XXX% debt. $X in We accordion. I billion full have call, look The unfavorable leverage at market the revolver our over at availability last we bank effectively the excluding open, but open $XXX only XX-year under is term Yes, is million we loan cycle. unsecured a in to pricing.

no as that spreads. transactions provide on not that, we problem are a ground not will Xx -- is us. until to invest There's sitting XX% investment self-caused AFFO XXXX, self-inflicted with execute approaching flexibility at self-created XX.X% X.Xx to and to now a create debt headwinds, that That's liquidity immaterial spreads our over levered frankly, wounds. that going wheelhouse. problem. no grow spreads I portfolio for as no not to important sitting denominator, grade, We're is something has significant so do, do will the We're here on no de will And what at or problems not is in growth. What we're piercing to to refinancing frankly, in not leases, with or -- get minimis we here treadmill, maturities just strategy we material we're -- going drive think, is necessary cause capital or is the our

going prudent turbulent and read them disciplined be watch to react going are in We We're play and out times. accordingly. to and

comes Haendel St. The next question from

Juste with Mizuho.

the So in Joey, here that wanted curious What's up to what you're guess looking higher spread looking about follow minimum perhaps your spreads the funding? term appropriate I you're dispositions. your does I near on a of comments in maybe role then that of the terms cost environment. light current underwrite mean? that of And Will in to risk-adjusted capital? for I'm play greater exactly today

at we'll Certainly, look dispositions.

we We the potential a not dispositions about have down or a talked that effective, historically. It's high-quality for XXXX I've the portfolio have if road. most that we source that are dispose can go into choose market. so we but time efficient to that us

needle doesn't to frankly, today's you which move And for risk of I'd case sense. you in a compelling did in the right, or make also sub those estate quantities, platforms, terms X really points growth without here mark deviate, appropriate real But duration qualitative In ability across AFFO to investing capital, doesn't environment. earnings aspects. XX, equals tell it's isn't unless external appropriate such spreads, And XX market basis massive then underlying there. because the much the

hurdle looking minimum maybe And be today? you'd on in rates, that to more invest a the bit the spread

sorry? Will you repeat Haendel, that

color how cost you level spreads, environment? more color bit on require on the about your would risk-adjusted current versus the some appropriate you're of that of capital in maybe thinking spread perhaps what A today

Yes.

a given there I acquiring certainly. think think doesn't -- -- purchaser buyer. again, in this won't XXXX sub-X [ can the I [ there's outside I of a ] make not acquiring, environment, time. the I succinctly That think fairly be sub-X capital -- we be given don't will cost at of We out sense our of ] say,

if XXX we improve acquire Second, to point XX that transaction going aren't in going our is to not qualitatively we of platforms, One we of spreads to portfolio. be improving reaching any either. note could sitting thing in terms would -- in have specific. this PCS would at ratings Again, we duration, but looking I qualitative We where shadow aspects a is scope like-kind a the basis portfolio to again, development We're acquire exposure or project, we each XX-day the investment-grade we're are here have depending asset look of where the degrade to period. don't in record today. Again, number don't it, here. on insinuating

is driver sacrificing risk, for us project the quality, the fundamentals. of same And that asset or based then the underlying upon viability spreads estate so, but of the And driving are time, duration the #X with not credit long-term appropriate estate. that at the the of real real

The comes Heffern Capital RBC next Markets. Brad question with from

do you that Would activity cap rates be like free But stayed that have flow mentioned rates to both you debt current have acquisition capital still you something cash or of actually flow cap deploy? that gradually. to you level? capital at the cost levels, sticky and beyond use that to treat deployment? would how you would free if think just it Joey, increase cash ability you Or expect would the

in Well, again, for XX-year, take time. that incrementally continue rates the is very seen I to adjust we've it case after you, the think not would rise I tell cap -- to will

is think I unlikely. highly that

to find not think, again, event capital, Second, provide Peter delevering golf XX-year leverage over the frankly, I'll raising walk spread. In investing -- range, the opportunities I don't think do? and impossible unable to case, we that And any reflects uncover X capital, all neutral, is whether X% back the just any platforms taking reflects tell AFFO on adjust and referring you're they that any base stays not back can if again, will likely to what or growth the X.X% the through lessons. there that in I what start unlikely those we we're appropriate or this I X% to most you opportunities over event, across gave which platforms X will

Okay. big a activity largely development does a then have the go? if dollar overall, Or decline of activity? And enough. you it development mix and where is that acquisitions? Fair in first do Is

I would assume Look, seeing it's of we're activities. a types hybrid. different all

funnel platforms. as Our as all is all of We're opportunities never growth different X been it today. external has wide across seeing types

so really to specific duration And again, here when looking you transactional -- get individual it's X it's you're get and to the the at merits those those you DFP, points, and when or considerations, projects. really of development

And be allocators so development. that XXX-day ground-up appropriate risk, of an have or existing for we and premium will be duration building whether retrofit the X.X-year disciplined again, a capital true

Milligan comes Raymond from R.J. next with The James. question

question, First, third what the impairment. drove quick a I'm slight just in quarter. that just impairment curious a million $X

renew is for one The we're tenant's lease. they've and that the targeting recorded disposition. not Yes. to lease to impairment quarter The is that related during asset expiring, that opted was

as to industry what color Any is in? that tenant

is Yes. sector. the tenant The grocery in

price Okay. willing share, equity a what current -- or guys And And at to I'm at in guys below around those issue to the still to for stock would conference line to you a ADC last to you change change curious, that sand? equity would for be at what wouldn't be need Or is levels? commented need was follow a the willing the quarter trading Joey, on be issuing just call, up $XX that levels. you just that a

returns rates adjust. this going focus the to have Cap the driving of here. end would is and Again, have to we're at on day, adjust to spreads

childcare, what risk not is entertainment off going in We're the interested the wash line the going look the you, if be shifts relative rates family time. is and to we again at with tell the enter accretive we're case. capital that's And not would accretive it's spreads space, cap the line, private leasebacks are, cost entertainment -- them move, I'll if line. The retailers, are take sand -- to appropriately the into or our anticipate red incremental of which go to move, in were cost at -- that's We'll we firm sale those basis, so not to where appropriate wind we're that -- capital going an curve. car equity-sponsored that invest and and

So types provide going for of of at unless risk the which shareholder end at these won't again, the the yields, raising day. curve, capital returns do, doesn't we up we're significantly

My you're guess, second thus bit additional and earnings last a give on REIT net little transaction I question, of the, third Joey, sort or report far the lease market. to commentary

Just more you in trend quarter get sort will outside transaction how as the of volume think next ADC, fourth and do broadly, of we the into year?

-- Undoubtedly, we're There's and significantly rate rethink probably the slams the that the who Anybody and terms pedal environment given in in in. the macro goes or no volume environment we're in that of now against pedal grain the question. hit transaction light right down. of down needs to that position

from comes Fargo. Wells with Connor question Next Siversky

ones would the the term the looked just market what of the sense Peter the loan. at any swap of instead were again? math loan Could A you that in that have rate you couple looking quick market, for on unsecured us walk the through then term on And like? event

Sure.

million loan that there's into, at X.X%. the hit term entered swaps mid-Xs to of in all-in then were top swaps and on rate, fixed the the gets spread an on we to So including us closed that, in July, entered into roughly mid-Xs. $XXX that that that's Those the we a

for strong on could loan outstanding to is that million option a accordion loan. debt today. $XXX that term on that $XXX We continue of we today mid-Xs that We term group. support today, have option also the bank tenor term an loan the exercise from to have in likely only million or with look pricing have our accordion And a bank and the we different

certainly for market And so is us the I debt bank open think today.

issuance, of XX today points up issuance call, our terms public the XX-year XX-year in significant rates August. a for us since likely be since And unsecured the in a Xs. basis last would In early high move is there's about been obviously,

Late Joey. died were for in rates the looking those one footprint. reconsidering rising in somewhat conversations there I'm some to there out out and the their operations that maybe commentary those of then expansion blue-chip was have And expand it. Got if plans? retail just then, wondering are retailers since those context certain maybe summer,

builders reconsidering moat any those challenge they instance be, be and expansion X.X% continues to the banks morning And is the the anticipate, and where regional you which is plans. the to plans. it at their expansion who choke retailers XX-year that SOFR it point. where would seen this execute is, the true and frankly, that to as are The lending Haven't merchant method with continues and curve of typically

between conversations day, developer to them return tell that they're profiles that they continue. But they and us return to retailers I'll the retailers, that want call those work anymore. up so need a growing move getting grow, every telling and them the retailers can't And or historic because you, make

so going those trends nature if seeing to but a sense I a dialogue retailers can parties. upwards. fragmented to makes we're of see slow have the continue solution continue continue. we're albeit and come We'll But to with shift, those that and And of both to only shift think see gradual we're because we the it's a space, seeing for

Ki Kim Bin question from The Truist. with comes next

rates rate. the at couple and to can quarter much but it so the a you're change, closed has conversations X.X% least. changed deals cap you a realize were underwritten months how look at on today, this today? cap from deals take at to far X.X% ago When I a So having you while those Obviously, probably that of

at volume be tell their move that continue that or e-mail a many It's of year-end rates. is X% the to have say, these asking to of of are that by conversations immediate yesteryear. range gradually, for anticipate liquidity. that I election. asking our pricing really air. hopeful we I'll Those should owners printing the in cap a their sellers truly strategies. We the one-off closing Well, is some in Ki sell north things end, Bin. closures in are sellers There the year -- blasts and front QX. up will one-on-one, need those manner. we anticipate in get how the Again, That at year-end a XX-year still with rates now see This are still you by still a X the moving rethinking and I want in -- rethinking X.X%. and are cap they handles amazing that are Hence, decisive challenge quick closures, still wide

honestly, we'll execution our those frankly, QX so were of transactions, equity here. And And and move of pricing. a at continue letter That's see terms to different XX upwards, and again, to cost right transactions close you're days to intent average in different structures debted prefunded with from closing. that

they cap So We'll pace move rates to for move what upon up. impossible tell to plus continue up. us It's sellers we're individual going going see dependent be or will to environment macro be you difficult the frankly, really to patient. That's here.

be? you would if accordion if to bank to debt, new debt, had not what rate new just but And had that feature, the raise you so on raise bank

the that's net rate loan, cost a fix term exercising mid-Xs. into July new into the accordion today would enter the $XXX swap entering a or loan term the on we on that whether term to million be loan, in a in the Assuming

comes question from from next BTIG. The Michael Gorman

Joey, obviously, the market trying of just a acquisitions and about lot capital to I'm the markets. conversations triangulate,

move Xx? to ATM towards EBITDA will where close debt Or the if you thinking the also in you on right? comfortable the versus are issuing through you're get you of think to about next can that your we be we strategy to today, your would the So months, the seeing finance enough ability volume? your given marketplace is cap about As flowing pricing that X over end what the year, actually see deal rates the you how pipeline, up we seeing are

case-specific and that's again, EBITDA, if I it was the that really exhibit issuing frankly, discipline. to that saw and us. sitting would for sizable, ATM, up in I But risk-adjusted was, tell capital nominally. X.Xx, patience likely of something on to But most it's likely we anticipate Again, we're debt I think terms at migrate notable here, appropriate would possible. we you, most

your on of markets you just underlying leading seeing the in because off the of anything retailer tenants financing kind then maybe of take them macro of retailers buy Are the or shrinking And for that's targeted of the data some the to environment? target Okay. box. your current in on side you or the list the

here retailers in no, are that but through evaluating if investment really their portfolio, balance large would investment exposure risk balance we're aren't Again, have generally out our within or at "sandbox", or sheet challenges also grade retailers sheet starting always inclusive the and them, grade. the you performing, liquid within We calc, there. some both the biggest of refinancing any seeing primarily with looking them ran we're terms of they're Generally, challenges. they our any spit how and have headwinds world in

private of debt. have Some unrated The retailers. them, no or frankly,

a our not to yet. If consumers of trade-down in consumer portfolio seeing I due behavior, of material it through to would the in the any we're the slowdown tell retailers see the flow inure you again, probably -- we So that benefit effect. in would

Stevenson The next question Rob with comes Janney. from

like pharmacy the looks What and issues has that given in Joey, the on added you store in adding you the it quarter. space? a closures few CVSs going

X us, specific the go reduced you now de which closes mean major very the out years with it through portfolio, with targeting I jointly obviously, our store are CVS our a pharmacies including Walgreens, you Rite I at de basis ground overall time, fairly X.X% peers, to leases. At or low now Those low extends in blend the peers, relative for Aids, our very portfolio. exposure pharmacy mean most and the end. a the are of low it's is you same for to Well, be per bankruptcy; the We're it retail work are the if top we've minimis any and and and, Aid, the closures When store are used square piece and/or here. a expiration. stores high-performing Rite through on called of down that's look tenant minimis. their lease aggregate, frankly, for that challenges; assets. to rates would occupancy to primarily partners rents high that's foot, going tell I stores,

we've a to a world. the in think now which but successful integrated omnichannel we an cost portfolio, curated in And and health care so vertically structure world also has pharmacy be

closely specifically opportunities different in we with and that with stores the space, work than the to there's across X rent street. $XXX,XXX very with that to acquire, the -- per pharmacy only in we suburban year are, prototypical and/or so identify the tenants frankly, $XXX,XXX And pharmacy high-performing competitor a

and be out assets then And how commentary much there helpful. to on that's even you've those? inflation vacant demand pricing and for buying assets, Is have marketplace I about something should mean Who's sell soon to That's How in existing be this thinking is cap the given is Okay. faster? that's given talked you about assets asset performing rate today? vacant vacated, that? market? grocery box that the we that How gone south on assets. nonperforming that the

specific, case really It's Rob.

community, -- referenced -- a on a that grocery closure But in community. that which a took If the in thought that second frankly, small them space they a basis. more has several you and asset was had go-forward rare in upheaval store on the very format, rural viable have it they for frankly, Peter caused a fungible hometown, some was store the years one in store, the box in we an acquired impairment grocery was ago grocer's

over but upon with demographics In board submarket of the the box, terms the that for asset vacant looks micro that and and fungibility box. of the activity obviously, it's also really based all really transactional -- pricing what like,

it reuse when day, vacancy, is demand at of a box backside for stress the the to wanted a the have were box, if that And so and has a uses. always the to adaptive have fungible to we end strong we curve here which on the we of

you're today, a going large in X reference If those to likely challenges. most have anything you over to get Aids, if being we it's smaller format our format large again, were to if have we're say So to have a demand. box, vacant I'll Rite box back, going and XX,XXX feet, significant

today a cost lot challenges them of we endeavor reuse larger it that boxes, is to That's is so not the And on. something of want up box. Redeveloping to adaptive cutting related very the challenging. the with

arms tenancy get we can focused on And our assets have but so also smaller those in again, that high-quality residual the that around. we're place, the

grocery And process the to looking clear, that? of sell the are trying box, that? be you in you're re-tenant to to Or

will disposition. That be most likely a

Next from question with ] Fagan Al [ Baird. comes

right the And The those first investment-grade competition ADC target relative is, the deals year? does of what now is specifically to like one for the tenants? beginning

that's said always output. really an We've

XX to in an retailers rating -- Our best is country. rating XX investment-grade our on the really the output focusing

and working Chick-fil-A actively and or a future in that -- with. we're target We carry another in targeting being lobby, have that with work number Publix, that in the Hobby one Alta today the portfolio actively retailers of don't we

us. that's really for the second question? What So an was output

It's for on the competition investment-grade type... those

rare At today. XXXX with price dramatically. little buyer, competing has the points Very private which slowed it's or we're at, the down

very environment. in there's so competition this And sellers' expectations little themselves except

Helpful.

X the signed the quarter, or quarter of the to beginning? On the development closer this half that deals later guys you in was

have Peter, off you that do hand?

have timing hand. the specific off for don't No. I X those projects

Al [ get Yes, to the back ] you, can we on specific timing.

The comes Stanley. next question Kamdem Morgan with Ronald from

ones. quick X Just

the on X pipeline. So

over I think talked X through. about you coming

from all? has pipeline the look that mix? trying this in Just if of year, whether size it shifted, figure at or out any terms what to Just does did in different how pipeline curious, early tenant

again, same the election, to similar we've is continue spreads seen year the and to mix our where throughout really Tenant the will in as as subject are. think at executed we risk-adjusted years is Size, appropriate you've be past.

that number on the given in letters agreements, a our have are rapid whether properties pursue to we control. We'll cost we or So make of close currently are we'll remain be to relative or have decisions. decisions want executed we and want in currently weeks disciplined to patient of rise capital the not we under We're purchase that the intent the capital, under -- make assets of nonrefundable upcoming those allocators. acquisitions and on XX-year

the cap acquired And rates differently front? are shake from as those of well opportunities about portfolio. the any leases ground Great. are during And out then of the behaving the lease as Maybe you you market? talk quarter on rest the on ground how seeing opportunities the what -- or can sort

QX our could right the now, of we the what no pipeline -- as based market. what behavior rest I'd and as has election the Really, proceed you, upon change really with tell of we differentiated source. that well than

that material but there Our leases. trends leases. standard of can throughout X consistent plus a has versus the you percent, net or differentiated or been see call no component it's QX minus year, ground pretty typical pipeline it, But that true

The Tsai next Jefferies. from question with Linda comes

of year? next deals your What as grow And to year-to-date? headed that percent would expect have percentage sale into been a you leasebacks

Linda.

sale-leaseback historic year, of always couple XX% comparison a And with leaseback. potential transactions our retailers couple years did past continue couple working and a this sale cap rural this on of notably the in evaluate down transactions. So most approximately us. new That's leaseback engaged We're worked rate to -- sale retailers of quarter in for risk-adjusted to it and about again, farm active with in returns of dialogue. comes market. on was supply been We transactions, that have new space. that to XX%. We'll here, We're

now? you clearly, been right how a have then by happened. people think thought you I retailer do And in the might hasn't environment about but that think now, recession

ago? environment about versus, so consumer feel now a better say, do overall quarter the you And

a ago. landings XX again. to a tough have we talk It's remember days. quarter of think hard been long I Look, It's

looking I a think really and not trifurcated is that bifurcated. we're consumer at

consumer I seeing think multiple we're pressure points. with data on that different

-- based not going is in brick-and-mortar retailers a portfolio environment goods with is consumer. experiential-based importantly, one-of-a-kind this discretionary that There's services we've or not the the guess no going largest I through most the This I all. of portfolio. we're unique think landing this portfolio. it's is hard landing at history. a the And been soft primarily not pontificate do landing never probability -- It's think a an a unique in to consists core of in a that so to or and But and But country. watch or I'm again,

would our that the that consumer when as I And and the absence to year, well retailers the that the take been retailers, recession the as today. balance share a fulfillment expect weakened these strategies are market labor all invest that's consistent within in to significantly, from seen theme have retailers if So and price, largest of the retailers we've sheets contained smaller share. portfolio, world that even is in in are taking outperform

see And taking out we larger of We environment so it X prints. in we prints, navigating are the those We retailers part. most this there see to see it investment Depot's really Lowe's in Walmart's the see it still prints, hold. in in Home it all today are strategies successfully

if so had and will portfolio discretionary-based would if be concerned again, we ultimately, And benefit. do an luxury-based or I experiential a when this retailers a portfolio, I or recession, in think portfolio enter we the into

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

seeing Well, thanks, forward to We again. joining you everybody, you for Thanks time. talking us today. look in near everybody's or to and appreciate the future, we

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

disconnect. now may You