O Realty Income

Andrew Crum Senior Associate
Sumit Roy President and CEO
Paul Meurer CFO and Treasurer
Greg McGinniss Scotiabank
Katy McConnell Citi
Kevin Egan Morgan Stanley
Rob Stevenson Janney Capital
Brian Hawthorne RBC Capital Markets
John Massocca Ladenburg Thalmann
Todd Stender Wells Fargo
Chris Lucas Capital One Securities
Caitlin Burrows Goldman Sachs
Call transcript
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Andrew Crum

Thank you all for joining us today for Realty Income's second quarter 2019 operating results conference call. Discussing our results will be Sumit Roy, President and Chief Executive Officer; and Paul Meurer, Chief Financial Officer and Treasurer.

During this conference, we will make statements that may be considered to be forward-looking statements under federal securities law. The Company's actual future results may differ significantly from the matters discussed in any forward-looking statements.

We will disclose in greater detail the factors that may cause such differences in the Company's Form 10-Q.

a call limit everyone in to observing portion the the be participate. the of order will two during question Q&A opportunity We to give

the additional would you to you ask If may like reenter queue. questions,

I'll now our Roy. over CEO, Sumit the turn call to

Sumit Roy

Andrew. everyone. Welcome, Thanks,

half pleased first complete very to are solid quarter XXXX. We a on another solid of

to platform during the we invested historical quality first investment approximately XXX positioned to we at on through estate above the quarter, Sainsbury's. Kingdom the approximately transaction Europe. our high year. invested $XXX are a million During United capitalize with in market significant X.X during spreads mainland Which or pounds international average. British We and $X.X plan half of us billion in brings to the real the the X.X as the billion sale billion million continue well Of UK, leaseback in invested quarter, invested well a to addressable was our grow

size, portable of developing leaders to believe have transactions scale, cost our with operators. further as look industry Sainsbury's, Given our expand relationships we platform. we forward with ability other sizable portfolio We to a execute in like capital we international class unique advantages, best and

the ratio finance on entered debt of a availability during second of activity. billion full half the well EBITDA To our XXXX with of We $X capital virtually We investment of X.X billion attractively line quarter, billion to priced robust raised $X.X equity. including positioned our $X times. and very

stability ties, to by which geography, flow. property a extent to of continues Our cash be and diversified industry, our portfolio contributes to the certain tenant,

remains XX is our located leased and our nearly remains X.X% XX different revenue our traditional our end, rental XX.X% revenue. property properties. rental rental largest in retail Store of in tenants XXX largest XX% from quarter industrial Convenience commercial Puerto were UK. the Rico, retail of The XX.X% rental industries at at our outside of component at tenant of revenue. properties states, At of largest is industry revenue. Walgreens

XX% e-commerce possess characteristics from operate variety These retail service, Within in approximately these factors majority of been to price where We industries environments. portfolio, compete business. vast today's a more our believe low with to relevant non-discretionary, our their these tenants have point overall retail our and in bankruptcies economic of characteristics. with retail in do have allow tenants the not component rent US and that a recent been particularly climate effectively of our comes

portfolio weighted is properties ratio X.X credit is feel continue about the rent our investment-grade rated a X.X with from median basis, to on times We in while average of tenants. the quality four-wall annualized or our good coverage The revenue the approximately times. rental half generated retail

is of quarter. Our on watch based properties with consistent Occupancy prior relatively years. the the our was rent X.XX% the of flat list versus levels few XX.X%, of at last number

We be in continue to XXXX. XX% occupancy expect approximately to

XX the recapturing rent. expiring re-leased of we quarter, the During properties XXX.X%

expiring the XXXX, those on listing of During sold XXX that have or Since XXX% rent. properties, in re-leased. properties recapturing with expiring, re-leased were properties of first rent X,XXX recapturing half of we re-leased XXX.X% XXXX, leases the over we our over

during first X.X% year. rental the Our the of X.X% same-store revenue increased the and for half quarter

our of to increases. continues XXXX for runway be X%. leases rent have projected contractual approximately Our Approximately XX%

to results. it on to detail hand our Paul additional over provide Let me financial

Paul Meurer

with for provide I in statement. highlights Thanks quarter, financial our starting income items the the Sumit. few a will for results

of year with comparable which and first in slightly the G&A stock periods. higher revenue, G&A date, year-ago a percentage costs annual be Our as the our expense Consistent to prior to reimbursements, proxy. half X.X% and of were timing the X.X% for associated was excluding the and tends year of of meeting vesting years, quarter with below to both due

expect sector have REIT to margin G&A net our the below XXXX. lowest continue in lease ratio We the to G&A in remain and X%

Our for quarter than to is a available year range. quarter, or reimbursements, our X.X% X.X% X.X% per represents non-reimbursable full-year we for expectation the as cash of date, as dividends Adjusted from which which percentage operations was and to revenue, the increase distribution property cents actual excluding XX in the funds for or X.X% share AFFO X.XX% better expenses have a was

conservative we've few and our a structure, of Briefly turning least remain AA to with continued to ratings. we and capital the balance only sheet maintain REITs one at

approximately UK. offering. May, transaction Sainsbury's And We billion via the we XX-year notes our capital allowed the private price of partially a of order the support us acquisition yield a Sainsbury's we XXX currency the hedge, issued fund X.XX%. much were second at pleased abroad. the during allowed acquisition quarter, $X.X and with mentioned long-term million who the our of senior unsecured from The interest finance ever first private rates to Proceeds offering participated. in the taking very portfolio the while placement favorable Sumit of of low we denominated sterling pricing offering of to high finance us raised for natural book investors In to with denominated appreciate the As activity. quality sterling advantage

out other in facility XX-year The senior to nicely allowed we we a of yield as unsecured fit our no have offering the on notes in our and XXXX. X.XX%. issued debt maturity $XXX of June, bonds schedule revolving In borrowing maturities term us million at credit

quarter, overnight a times X.X with offerings. During second we quarter EBITDA common $X our thus $X revolver. approximately billion the the finished to availability ratio of combination of full virtually of ATM debt billion of and a And issued we equity and through

of is at remains remaining coverage lease our healthy fixed-charge tracks Our weighted which times, years, closely X.X and average term. maturity weighted X.X approximately the our bonds average

maturity schedule schedule both in just million XXXX. debt XXXX is our debt, remains and only due well with with of $XXX million of overall excellent laddered this debt shape, and coming thereafter Our maturity maturing in year, $XX remainder the over of

summary, excellent So, have we coverage in to in balance our strong metrics, great liquidity. sheets leverage, continue shape, low and

call turn back to over me the And now, Sumit. let

Sumit Roy

Thanks, Paul.

term generated of leased quarter billion in different weighted total second XX years. XX the initial On lease a invested assets XX.X a average XX XX% an revenue During states properties are are XX% XXX of retail. the approximately acquisitions cash at X.X% located their tenants, in basis, are investment-grade rate These in cap to United and XXXX, approximately with from Kingdom and average tenants we of industries. total revenues of of from X.X

the discrete grocery investment represented of of more quarter, Some industries stores, We transactions automotive approximately and quarter XX% second was and sale significant in UK leaseback our volume services. second theaters, closed the XX transactions.

in pounds UK. properties of million an International billion million during quarter, of average average initial XXX with a to million cash during X.X% approximately properties X.X average invested International were XX the of All weighted or are quarter lease grocer initial lease term average $XXX XX XX.X in cash at leased XX investments the X.X% $XXX invested term domestically cap of rate years. rate cap with Of and properties the years. Sainsbury's, as XX.X the in at top was weighted and a

at properties revenue of invested Approximately located basis, of acquisitions XXXX, X.X cap were $X.X from On investment-grade total a of XX% XX.X revenues $X.X the retail and cash dollars XX in of an four billion year-to-date, term and billion Kingdom average [ph] a the our in XX.X rate an with are year-to-date leaseback XX properties sale nearly the average rate XX% a was are with lease XX X.X% years. in year-to-date, average average the invested transactions weighted independent industrial. million generated X% United was XX% above transactions. are we lease X.X% domestically Of Year-to-date cap US initial years. XXX of of term XXX weighted US. from and states transactions billion from invested tenants. investment volume cash closed and at initial Of

domestic XX.X and Transaction opportunities Of healthy, the the portfolios second Investment-grade represented international quarter, billion billion opportunities. the $XX.X we billion sourced XX% assets. the were continues opportunities were quarter. approximately to volume were the approximately Of flow sourced $XX.X and of billion quarter. sourced or during one-off billion XX% remain second as for opportunities the second in sourced XX% during quarter, $XX.X were the $X.X

transactions. or approximately XX% transactions. have total Year-to-date acquisitions second Of billion opportunities, approximately we sourced and the sourced assets. was the in of XX% one-off billion one-off $XX.X potential these XX% Of were of in XXXX, $XX portfolios volume the closed the were quarter, billion $X.X in volume

non-investment US from to low around from trading to quarter. range pricing, high the rate in high cap rate X% are Investment-grade to properties cap grade second cap X% the rates range. properties were essentially in As are X% trading X% and unchanged

the are properties trading cap the types for implied Regarding the mid are X% low cap investment-grade X% cap to properties are X% assets in Kingdom X% from or Non-investment-grade range. investment-grade targeting, United low rate rates range. of to we trading from rate

investment healthy Our weighted for well of basis both investments domestic and spreads. average for averaging cost the international of to basis were which relative XXX points during capital above investments, our spreads approximately average XXX quarter, were our points historical

cost a We year as weighted cash nominal yield define first of less initial average investment spreads capital.

continue on only capital invested the has our XXXX expect to we a investment $X large corporate remains acquisition to at lease scale, of pipeline, pipeline Our basis. on publicly-traded and pursue remain net $X.X transactions the billion we cost leaseback robust. robust billion And that size, company negotiated guidance Based to sale

program remains active. Our disposition

an XX XX a unlevered proceeds of year-to-date cap of rate properties realized and of at quarter, X.X%. us million and net unlevered for for of brings cap $XX cash During to an X.X%. we sold This net X.X% X.X% IRR of the cash realized net million IRR properties at rate $XX.X sold

XX improve our properties XXX parameters. of XXXX. the We recycling benefit sale in assets, to into of that non-strategic through We and portfolio anticipate continue of million proceeds the between dispositions the our million quality sale investment

dividend June, our XXXnd company's the in time increased for In the we history.

approximately of based an current XXXX AFFO equates guidance. dividend to increase represents period on XX.X% midpoint of the Our ratio and payout over the X% a annualized year-ago

We of a XXXX. dividend X.X%. company's dividend have annual since listing increased the at average the our rate compound in every year growing

proud aristocrats are to be in dividend index. of S&P We REITs high-yield five one only

completed To wrap it up, strong we quarter. another

perform portfolio Our well. continues to

and opportunities domestically new positioned growth Our we and investment remains to pursue are well strong, for pipeline internationally. both

Operator? open it At this time, like I'd questions. for up to


will question with first [Operator our from Instructions] come like Nick Scotiabank. Looks Yulico

Greg McGinniss

How Greg investment with be prior range color acquisition about McGinniss This for any -- And this was year. interest environment Sumit, the appreciated Has based -- would environment acquisition more competitive the acquisition Nick. rates? on commentary, become table on thinking possibly is today? like some it on seemed lower you an range are guidance for there.

Sumit Roy


acquisition have our of reaffirmed guidance. As we obviously today,

have side. domestic We've sourced allows far look XX especially at and XX and that share the and feel we dollars beyond historically. if year-to-date, you sourcing, high sourcing about just Yes, of us done win a that to the is billion range on today June, comfortable million the the US capital that the If we done to levels, domestic we to very through is we deals, we've guidance continue of going have competitive, on have rate historic the shared it's cost at our you. market end you but pipeline the run the be of about of is which with focus basis it

Greg McGinniss

other following the with noted expenses lower full opening Okay. been have items. than guidance you year your some on as range. property And just comments, up Paul,

take year? there's should in Or we side, have Should that to half slowdown the we mean year half results some higher. to guidance? of first back On opposite interpret versus rent how full the that same-store going the growth be been

Paul Meurer

year. guidance time. both doing those And of running thought No, of make favorably. of specific wouldn't lean But certainly that we prudent I I downturn to remainder was those but a this -- the in well are change think that partly a towards suspect would year of But we doing the normalize timing rent such wouldn't both think of it -- the back probably not at we rent just those both in property We've contractual related where our remainder the those this through growth year. either of the trends in at the year, running lower, bumps of addition, been areas continue expenses same-store with with of to to pleased will this guidance is.


Thank you.

with next is Christy from question Our McElroy Citi.

Katy McConnell

of on mix some Good looking the about of the or at for this as Christy. Katy you far between rest do that are Can the on types And provide how you that US today? deals deals underwriting color the is morning, versus you're year, thinking the potentially abroad? could you international in McConnell as

Sumit Roy

UK, continue and I doing the be to of US the -- focused, has -- you The feel person, to -- been it's the to going about the answer you with optimistic that levels. it's the previous touched at we're here vast With in the underwriting. to line. know, I'd over that -- today But will of I'm that our and majority deals know, of to the not we US, historical deal flow respect it we tell you we so UK. be regards question why wouldn't the it suffice do to to volume transactions be, to more few precisely have know, see you original a realm the we're the finish exceeded know, say transactions getting the the transactions has position you possibility seen it to be, a in in out going

[Technical processes UK, our to in about did in we first the And quarter Sainsbury sure feel with sale we closed to having the our leaseback we this the closed footprint stand place. focused, that from will the establish range was good financials, vast the when had above in like transaction, make US of said we very second books we is the goal will certainly majority our be where know, You some would million are but the UK. [indiscernible] I it where from Difficulty] $XXX in today. today. be I UK, around delta that's resourced billion, say the was $X.X still right


Thank you.

Malhotra will question from be with Vikram Stanley. next Our Morgan

Kevin Egan

for Hi, on this is Kevin Vikram.

I represented underwriting Just was that pound. I the to British quick transaction, me. a the to for I what I be it know Sainsbury was going question $X.XX, a of terms but is majority original XX%, there about the in anything be $X.XX believe of XX% vast should know we there the the remaining now that hedged, about? know is it's thinking of be

Sumit Roy

using on recall, the we principal XX% you XXX% transaction, generating And flows the off basis debt. the keep in denominated only the mind if an we XX% of financing, the are also the that of cash the domestic know, annual finance financing of you equity entire way is was hedged transaction We because structured hedged. was No, that, balance XX% based. and GDP

you impact the volatility hedge know, And And very, you cash not XX% that, previous keep statement. has comfortable it the to very very market that in currency the my zero answer. on feel know, on continue that are we we see our to heard you but So the flow in you going next to limited UK. remains

proceeds. be to of We able deals seen have plenty flow to those invest, reinvest

and So, you to zero flow is very know, going have the cash little impact. impact volatility

Kevin Egan

going Okay, just XX% is the to assume it so not safe that then [indiscernible] is it remaining it's you think? not [XX:XX:XX] Basically, repatriated forward, hedged?

Sumit Roy

to absolutely forward. is That Absolutely. our strategy going going be

Kevin Egan

about Okay, and million. us give was uptick what a there me, charge impairment, in of that about? then noticed was just think slight one it color was last I XX you any impairment I on Can for

Paul Meurer

when asset, gotten you You'll much see the impairments more company a think has of few our size how of base, about larger company, etc. size

related see our or describe more as But sell a through to to work the we that aggressive opportunity will, approach management have larger also it's on and asset something So we maybe we -- that part, have I then little much a -- opportunity you -- quicker, don't assets to for there. more an what a you'll redevelopment quickly, extent wouldn't bit a releasable passed know, little redeploy you'll you'll capital. that number would

a company. materiality give non-cash just of value. it's And impact it's statistic of gross those And context. to only kind one X.X% Obviously, our about So kind some XXXX, along of lines. to represented since the book it

issue significant a for not really it's us. So


you. Thank

from be will Stevenson Capital. question Janney with next Rob Our

Rob Stevenson

afternoon, guys. Good

the about months either your have selling chasing you into redeploying capital on retail? amount industrial the deals robust are all higher that part retail the and those capital industrial portfolio of where thought yields several last the Given guys few assets, or and yielding deals, over pricing on domestic given

Sumit Roy

And, to cap decided some I to of you of of diversifying see the management the fact, being know, good our asset a has XXXX. across asset industrial uncover held in in has which what been opportunities higher have the, lot We of tremendous the side, down currently us can you doing. you this some coming go on for very you company. we've tell that types created team able through retail It side in value Despite stead. you the is that rates on know, path

the long long tenants right for you and by maximize And value term, not as time markets, know, believe long value is if similar our the with to as right you we playing not we markets maximize know, IRRs. assets So, and the believe can right we superior we We the IRRs hold necessarily will long-term game. is the to -- going driven trying that creation in the company. create industrial be

sell aggressive could -- we strategy. -- really at you industrial not that our we is yes, So, incredibly know, business -- portfolio rates, but entire cap a could our our

Rob Stevenson

Okay, tomorrow you're and accomplish up what industrial G&A you you take and today then of much up there what need going looking being retail. to office to are guys to are traditional versus to And wind Europe, over main, up going to to looking want to? how at get headcount pick this and

Sumit Roy

I’ll our sure that that from below focus bit in right bring My run which of the been goal has down years, it first. our over has couple the you for company X%. G&A have around is the last answer rate the XXXX is X%. seen And to to been last make

what rest to help the right do, going for in not and is being the that that terms the to of change. company UK, the of in Europe, of, will to objective team able regardless the we change size So you not -- know, UK manage

are a the to acquisition we about spoken team having there. the in team I one think that in right acquisition team member move basically of the building UK office UK, the senior to already our You the see members, process out are I've absolutely of

it And initially. etc. of of there be and the accounting bring that strategy one servicing, the We today, scope better team felt like effective bring will dictated is rest supplementing we in to we But person, be makes to point, be model, more the an buy we going sense, that side, cost portfolio inflection we to are And that continue the at to that far sort is in the And that on and additional going assets least those where an goal is portfolio the and by than build. to over as is do house. going that let to not when process day to day with to functions one. it the -- in and do house. It's of But the the that's time such going outsourced is that's dictate the goal occur.

Rob Stevenson

And then targeting Are in office mix industrial? retail terms of versus the there office the industrial in about question over -- terms the you now? of Europe,

Sumit Roy

are we Yeah, sorry, of I'm going the time, said the that that in questions. to going not to we Look, clearly to retail over no portfolio to office very oriented dwindled. not our always are Those US, say it's continue with in age, strategy have in pursue. core forgetting here that has And, office unequivocally for a of fact, asset the with. been going office. office assets ours. we're a investing stated and two and has company predominantly primarily types industrial Lon-term to product. business want old we we've love that leases be parts do tenants But we

geography And will changed. don't has change believe because the so, I just that that


you. Thank

from come with RBC will Hawthorne question next Markets. Capital Brian Our

Brian Hawthorne

-- make Hi, help or guys level fluctuations that there ability a starts certain you how out? to slow to Is impact currency does volatile your either the that acquisitions?

Sumit Roy

certainly that it's helps the trend us. Well, going

shareholders. opportunities what's is you view vis-à-vis as environment question for dollar. -- The the it Brexit draconian think, pound and today, know, accrue the invest, continues to long know, create us know, and then to our as our house value is very is, our the of is You the continue risk creation And, propitious for a your some invest of to I that know, not where and that on just long the but operators, tremendous you you value to view gets by tail you non-discretionary this game, us. depreciate to mitigated i.e. continues

current for So, to realize that economic to in can we right tough it's be is, environment have unprecedented perspective, the we environment the for that, actually unfortunately, sort because us spreads of it's from say do our an but investing investments.


you. Thank

from John be with will Massocca question Thalmann. next Ladenburg Our

John Massocca

in Good Diego. afternoon, good San morning and still

Sumit Roy

Good afternoon.

John Massocca

Were Just Western sourced of of transactions billion the $X.X or quarter about. the in all international in UK Yeah. in of any the transactions the Europe?

Sumit Roy

saw majority billion predominantly was there UK, but Spain, UK. $X.X we transaction the was Yeah, of vast the that one in

John Massocca

and theater of what industry color maybe the that some was impact and domestic kind rough one the exposure rate? cap it could your Regal on reported you maybe was increase transaction then transaction, and the and size Okay individual to in provide was particular had the on if acquisition what of the

Sumit Roy

and low answer piece last the I'll that By mid to X% cap large theater transactions first. occur in rate range.

you did that So was comfortably sale that this range. that leaseback in we assume can particular

this this very million off But roughly we these said, that having and $XXX and of I one-off us felt gone are liked basis. World. something it that we the what for assets precisely were to So, their the with looked the this the on per a so would the that was $XXX like was was us transaction. we really comfortable at a million, of were have We assets are that's by XX the ran, It look with demos a picked right at. We delivered down theater it of was we that fairway appropriately for per type happy we their qualities like in looked as screen, out sales priced looked and profitability Cinema we portfolio sale was at screen. we leaseback very and and assets, that size and the Sinovel in terms and


you. Thank

will next Wells Stender Fargo. from be with question Our Todd

Todd Stender

tucked lease, on to maybe annual Thanks. escalators on any specifics any And there? stay the just in Regal, term? the then the And

Sumit Roy

it annual were talk were escalators. to can pretty on cash flow make down Yeah. right a you We that specific to metrics where XX-year these that I fairway would XX-year hurdle talk the at transactions, this with leases. to coverages rate theaters, superseding growth about annual you of so believe measure had want precedent assets. or and the really. not the don't typically was assume our These either were see and of we leases but much want We all these

Todd Stender

Okay Pretty would clean. here. but did placement Sumit. A-rating I Paul Thanks, there you to got the so an bond, do of Is operations public And then offering be placement, teed offering. the private just do the to order the Is on is at you years, over you What the it-- first? to have the guess private investors next? next up the you've UK XX the wheels, debut is that with and then there? grease would speak

Paul Meurer

necessarily. not mean, I Yeah,

wanted did currency create So we was to natural what a we hedge.

we and fascinating relationship bond have that flexibility the was, was to here know was mortgage placement we predominantly So debt were it well. wanted we and same that the placement same alternatives, And the bond looked we course US and what a do, in one that offering, terrific investors with a was to the the those maturity could debt excellent. side companies shops. size was of talking favorable terms offering, insurance of public purpose. private private be whether depth real do for a public life essentially the the And at with financing unsecured that we real, offering that market, on really we most what the was that of the pricing all the the US in of then

them. So to the XX year. lease we wanted, so wanted were kind the of we to length length amenable an that We credit which improved more that again were to They with do of course. a quite match was maturity

the we bond That in market explore. of we'd fashion. that quite could feels there like uncovered entering is market certainly something consider that that And want to offering Longer public depth term, significant. we

But the went. pricing we'd to market how want up with that the real before depth in of little of brand think to making a meantime, excellent more and there side, and probably decision. private the is a that pleased in bit commitment local we’re the I build placement is plenty


Thank you.

come from question with next Our Securities. will One Chris Capital Lucas

Chris Lucas

everybody. Good afternoon, Hi.

quick this one. rate rent guess, growth just impacted I a going anomaly are running expect X% had more longer the that we on bumps. that is is about rate the timing an you I sort same Or is you historically? guess profile forward? can haul, you bump some year, something within Paul, that by, -- guys Just seem X.X% thinking have that at this this of the of the over to this guys was noted be traditional more generated

Sumit Roy

letting in that kind been answer Paul's Yeah, me Chris. question,

So me. forgive

step You are happened know second is that And noticed quarter our that what what have in X.X%. which of all second which typically quarter this of them. quarter quarter, to some could you resulted there had the leases and growth to structured. few were the XXXX, into the straightforward. every growth, happened -- leases to step annual that's XX% were years, in built compare that second if the in leases is more a we it very Quite in years They second that and was have be this don't coincidentally how growth three every fall of what of just five

And why now that following had year. continue that And we they've growth so reason that you're that, XXXX, believe second the that's to to see yes, year, the this -- it And that said quarter continues that case. rate within X%. Yes, have around always our run to that's possible we not slightly right our it going at portfolio, not in of is the the but is be X%? is

Chris Lucas

you're have of sort sort are more year’s. I down rates this just of trying were rates value theaters, guess, there first you're wondering, guess results pricing dealing I Sumit. kind pricing Or last you, I And were and you, sort I'm sort last portfolio to a just seeing year's the last versus that more with on better mix while relative of, Thank I'm of purely average, of that than last last the this Certainly, is year year? issue year. is year’s? just great. domestic the predominant just to than last versus some year? this to is year your being Okay, cap maybe rates I between it this the year’s of cap then better get generally, just guess, that portfolio quarter quarter understanding

Sumit Roy

saw question, properties question of why the don't cap Chris. the of in it's see The year. portfolio We been too around we versus you mix Very a higher buying. type of much Sure. year tenants, discount rates, the that movement reason this predominantly see a of type good that assets, we've last the

As other they some cap just about to mid-Xs they in high-Xs, we've cases. higher higher yields low-Xs, we've assets talked on, closed rate the some theater have the to assets, that of the assets, tend on be tend

I has seeing cap driven than cap overall think rate. in rate shifts predominantly that our

what certain sectors But in said moved, and gotten they've have we're cases, given rates despite mix. cap driven environment. But Having steady certainly expect, that amplify the that's predominantly opening remarks made I've and is cap true by intra you as cases, would seeing within closed. property rates remaining in the remained the that some are fact they've the higher somewhat some you're more that that, retail, on have us, like we aggressive, us flat. sub rates around in large, for by current seeing cap And


will Goldman Sachs. next Instructions] Our with Burrows Caitlin question [Operator come from

Caitlin Burrows

just up that question. last on Maybe following

on so of you done potentially cap do that could it this going acquisitions. your continue you the or how historically? what far you've mix you impacted has assets go more back to expect I You're guess do Numix called to forward, talking think year certain about rates

Sumit Roy

and trade at to to you same the create cap more continued driven able tell higher X% of love mix see therefore by rates. and high post but is to be we’ve happened just that it the saw cap value, fit our cap I'd that available like we'll some answered criteria, we aligned question, opportunities rates, that that investment Caitlin, the for, Chris's our to so it acquisition everything needs And looking but it the we and to -- be in that to continue market. able we're always our thesis. mix opportunities higher like just transaction rates that to happened I fit it

so higher continuing because investment averse we long fits wouldn't philosophy. just as has to do count And are necessarily it not to it that. as I our transactions, yield, on a But

Caitlin Burrows

just very deal levels historical, flow And or that were of then you on deal I know, you domestic maybe volume side. earlier the high seeing flow. mentioned

particular, wondering, you you anything think that's that, driving that just is can in expect So of there activity levels continue? and to do

Sumit Roy

sort particular a we the see that operators propco find haven't to get sourcing opco, do I of of turn what we of were this are supplemented be highest six year point one highest are to are But, of can normalize that know of as sort year situations be next answers volume market, of unprecedented on. to to discussing the as the the I which do trend larger UK months, just even ourselves there in happens terms why that I in come this of potential No, out We seeing that, that well, by portfolios a over the course, is market? could in to sourcing. if we're think, have lot in year had there to case. sourcing, not going some we with seeing that of we our past. to It the years

is it's, and So to I any cost excited it. able causing so capital about what ourselves it, reason about excited very point we point But see are variable find that and whatever it act the a on phenomena, with for really is one we're the it's this at of to be very it. we scale can't we just, to


question-and-answer now the Realty remarks. like call Thank would concluding back to Roy you. This conference of Sumit the turn to I call. concludes Income portion for the

Sumit Roy

hope Thank to continues I look joining we of rest you for And all you. the the summer. forward us today. the everyone Carry. everyone Thank enjoy upcoming you, conferences. seeing Thank to at


gentlemen, Thank you. today's this concludes Ladies teleconference. and

disconnect. may You now