O Realty Income

Andrew Crum Associate Director, Corporate Strategy
Sumit Roy President, CEO & Director
Christie Kelly EVP, CFO & Treasurer
Vikram Malhotra Morgan Stanley
Haendel St. Juste Mizuho Securities
Greg McGinniss Scotiabank
Caitlin Burrows Goldman Sachs Group
Robert Stevenson Janney Montgomery Scott
Brent Dilts UBS
Spenser Allaway Green Street Advisors
Wesley Golladay Robert W. Baird & Co.
Todd Stender Wells Fargo Securities
John Massocca Ladenburg Thalmann & Co.
Michael Bilerman Citigroup
Joshua Barber Stifel, Nicolaus & Company
Linda Tsai Jefferies
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.

Good afternoon. My name is Cree, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Realty Income Fourth Quarter and Year-end 2020 Operating Results Conference Call. [Operator Instructions]. I would now like to turn the call over to Andrew Crum, Associate Director at Reality income.

sir. begin, may You

Andrew Crum

Executive for year-end today call. XXXX be Officer. and results all Vice Kelly, fourth Chief President, Discussing Realty quarter will Financial Chief President Roy, and operating Sumit and joining you Christie for Executive us Income's our Officer; Thank results conference

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

in Instructions]. disclose factors call may now will Sumit the We greater company's that CEO, the cause detail the Roy. in Form turn over our such I differences to XX-K. [Operator will

Sumit Roy

Thanks, Andrew. everyone. Welcome,

work of through the As drive impressed to the to forward be promote our our our the business I pandemic. we remote safety and resiliency team continue remain by in to talent environment employees a current of and community,

circumstances. partners clients to I perform resiliency of Additionally, our challenging the support appreciative who continue remain and of under

General grateful decades, the continue our and reflect Realty and Christie contributions with were retire Christie me On serving as X Chief throughout front, to XXXX service. company January in Officer; our Officer, Executive Vice our and Officer at over Words our their as Kelly for team Chief retirement. will management his Vice February, the in and partnership cannot Pfeiffer, team and served we members Executive leading through to and Chief Income transition to Executive Financial fully Bechor many Counsel remain his President, our as will Mike after company will June as Officer, well-deserved Secretary. I'm Vice Legal so immensely Counsel Secretary, over Michelle who XX through year. President, of joined Mike as personal President, team excited General Administrative Michele until welcome well Chief for assisting years as Mike's

and matters, year. the financial a summary including quarter of on Moving to

during the estate, the to $X million continue over in the of and debut Highlights in the unsecured improvement bonds U.K. low largely in and billion the real during bringing quarter, include We while current economic During maintained notes grocery paper $X.X XX-year and invested a which in of us XXXX, dollar-denominated leverage for industries, commercial public low REIT the $XXX liquidity fourth in over environment. rates invested to thrive million sterling of high-quality of $X were $XXX establishment financial year issuance U.K., our including during years Investments denominated concentrated coupon home our the ample and billion we both X billion was successful flexibility. the program, throughout invested enhancing year the record approximately which sector.

our pipeline. We active accretively equity capital in have also been fund markets acquisition to the

the cash guidance approximately to XX the In in in experienced acquisitions as quarter $X.XX of XX introducing tenants. positioned generated over we acquisitions XXXX, of with initial fourth lease end, that To from revenue of basis, properties Of a XXXX XX.X we tenants of cap were are of cap at and in cash located billion weighted rate domestically quarter, the January. momentum close primarily states $XXX average total On we X.X% during the we invested well leased XXXX, XX an of the assets to equity, $X XX raised years. sheet of X.X% million with of quarter million initial fourth quarter term a rated a XX% investment was to approximately of term invested pipeline. weighted lease the our During $XXX the different average total rate U.K. $XXX and from are an of additional an XX what continues through the ATM in offering. approximately XX% a in to weighted balance be average raised Accordingly, the years. through program. during overnight These And address our investment-grade active positioned at industries. well is revenue average equity a continue XX.X year last is are retail invested and properties in million billion we billion, January, of at tenants. weighted we of $X

weighted invested quarter, During weighted cap the initial properties was and cash average U.K. with located term in of XX XX.X at of years. $XXX million a internationally a X.X% average in lease rate the

cash lease average cap improvement. the average invested a properties as cap Of weighted XX% acquisitions During during in lease most XX.X XXXX, XX.X are billion of And XX and sourced approximately These from years. different invested from and grocery weighted located revenues domestically the flow are Transaction revenue a assets. of the from the billion of $X.X leased rated weighted in of in home at lease located states was of industries our to On U.K. rate initial in nearly of term U.K. are XX% average significant tenants. retail XX $XX.X years. average the billion rate in assets industries, of generated X.X% invested a internationally X.X% weighted investment-grade cash invested are cap we years. was of initial fourth XXXX rate in and XX XXX properties at properties with with average X in and with X.X% represented XXXX, XXX billion tenants of term a we cash $X.X basis, $XXX average a a million over XX weighted approximately healthy XX.X the a remains weighted at XX% $X.X in term quarter. industrial initial and

the and one-off during in opportunities. were XX% XX% year, ever opportunities. $X $XX.X reviewed one-off these assets. sourced we XX% For a opportunities were total year. billion most in XX%, the of domestic the billion were billion $XX.X represented $XX.X have fourth were potential Of sourced and opportunities the sourced, The full transaction quarter, year. we international billion Investment-grade approximately Of $XX.X transactions. the in billion the given volumes in portfolios billion Of $XX.X closed acquisitions were approximately, opportunities,

weighted healthy to approximately average of cost XXX quarter, during our relative investment Our points. basis were capital the averaging spreads

Moving to dispositions.

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

largest the U.K. and XX% from our by our portfolio, Approximately leased industries revenue properties. at retail states, traditional revenue. X.X% point XX our XX clients, located from geography service, remains properties property remains of with separate to type, contributes that approximately Within our properties our clients of is stability of low Our rental largest rental flow. industry, our rental which rental tenants to industry component at business. largest At in cash of is to industrial XX% outside Convenience overall approximately revenue. Walgreens year-end, portfolio XX% component stores of in of revenue. were our rent XX.X% well a XXX price diversified approximately retail at the tenant remains retail and/or Puerto of Rico and comes The nondiscretionary

quality to the these in compete annualized these a been U.S. in We characteristics of recent XX.X% operate We with today's allow and of half revenue of Occupancy that year-end. characteristics. do constructive to of climate, tenants remain based environments the not investment-grade particularly industries at on have possess economic portfolio in generated variety of over rated rental on was the continue the been retailer factors e-commerce. bankruptcies our vast retail from relevant have These where more believe effectively number with tenants. credit majority our to properties

the we During released XX fourth rents. the properties, recapturing expiring XXX.X% quarter, of

COVID-XX, During over re-leased X,XXX recapturing have XXXX, rent. expiring over portfolio properties of has remained or of on rent collection our stable released. light across sold In properties XXX our XXXX, properties, listing that with the leases months. we in re-leased over XXX% rent XXX% recapturing were those we recent Since expiring, of

During validates collected real well-capitalized will rent contractual dependent XXX% the large, the we percentages rated due portfolio, rent from XX.X% improvements for to quarter is our high-quality I further the of importance tenants, the collection industry, contractual upon rent fourth clients. which further which estate primarily touch quarter, on of in theater collected in investment-grade shortly. We improvement least and fourth of

rated have primary a we not prioritized tenants as objective. While historically investment-grade

periods credit of to provide several have quarters economic reliable last the tenants as high-grade tend uncertainty, exemplified. income During more streams of

in tenants X industry, in industries, pandemic represent from dollar and grocery of stores Top and the over XX% drug rent the us continues since to and approximately we due the Our stores, revenue, essential these convenience sell theater primarily be December. industries rent uncollected in nearly stores, XX% of stores, all rent goods to rental began. representing contractual Uncollected have received of each

the investment update would As our industry view. industry remains I on the base. challenged, X.X% like represents latest to of theater our contractual community The

do remain a expect in in blockbuster for industry will the to viable future, the budget especially it we pandemic movies. industry downsize high a environment, to post we While believe continue

Avengers: You grossing highest of reached and worldwide office times film U.S. recent might the box XXXX, recall an high produced all-time the Endgame. XXXX that as all as in

scenario, that do not will theaters there underperforming post pandemic industry movies of theatrical that to a given studios and economics is preferred believe, acknowledge in going for distribution the We to continue forward, channel superior a said, will may the that this we particularly Under be survive. them for rationalization That streaming supported changing likely reality. platforms. a theaters versus blockbuster release the be

We theater receivable revenue and continue these to assets. our maintain the recognize assets basis cash a continue total for outstanding for balance of reserve, a full to XX XX on XX

and with off to be longer one do event established a potential not associated asset, closures. of previously During we quarter, the these of entirety lose reserve accounting. additional the we cash disposed for expect theater we properties clear, even rent term, the theater X fourth asset full in To on

total straight-line receivable XX which has As including allowance thus of for no impact. is million AFFO totaled million, a and of these reserve $X.X year-end, $XX.X theaters the rent

on. Moving

rental during the year-to-date. revenue quarter same-store decreased and X.X% X.X% Our

existing includes growth driven is same-store a same-store but have over The deferred extent, rent and is industry in excludes fitness than deemed health the rental reported term, collectibility that and and collectible the be we where in industry. unpaid lease reserves theater primarily it probable. lesser decrease less we by revenue the to Our rent to recognized deemed rent

our additional Now the on results hand to financial to off it like Christie. I to for would detail provide quarter,

Christie Kelly

I with over to our time. with Board joined together as Board the opportunities Realty to growth I'm business. with and XXXX, the firsthand Income Sumit, our I'm Realty aspirations of Sumit forward our have Income our objectives all CFO.. at together the with you, and look working community experienced of teams in our joined and Having I Directors. investment for and talent forward dreams for our strategic realization to of deliver also honored have exciting looking Realty to Income Thank team, engaging

We the our now for provide are our as a have Income for company in overview general to for of and balance invested shareholders like all recent sheet. of XX support who I Realty public grateful over results, our of with financial starting the years loyal would a future.

one REITs with have of structure We maintain only at conservative ratings. least continued capital handful and of to our A a remain X

we yield to maturity Sterling During million senior completed totes, the XXX public our an due offering XXXX of GBP X.XX%. denominated of annual debut issuing for quarter, unsecured effective

coupon XXX sector issued those offering U.S. the record notes million REIT tenors. December tranche dollar through of unsecured each also for and a rates XX-year of X-year notes. of We in Achieving dual senior low in

million We XXXX, market. quarter. the through year forma X.Xx to billion we borrowings equity net January remained the paper or pipeline $X active completed our raised $XXX reduce charge which coverage commercial million refinancing X.Xx. debt acquisitions EBITDA to equity on we million, with redemption fixed year. ended our And availability offering, due billion strong we of annualized to No an metrics was ratio our over $XXX investment raised we and borrowing And of approximately adjusted through X.Xx during done pro X.XX year dispositions under outstanding all the at with in on $XXX impact an primarily program. earmarked the XXXX, during basis, revolving the and of coverage attractive to ended rates which the low leverage adjusting start the program early our prefund for and credit take on quarter, cash and million $X a our January, Additionally, a hand. facility. with $XXX of the in of of income full approximately ATM strong In notes ratio fixed We advantage risk near-term multicurrency overnight

excluding Looking year-end schedule XXXX, overall forward, maturity shape commercial remains of maturities through $XX debt excellent our with debt in borrowings. paper only million

per AFFO representing the diluted statement. X.X%. to basis, a annual during and our on on of growth moving Now per $X.XX share $X.XX the income quarter fully was year

of negatively share For rent XXXX, of attributed which which half impacted share $XX.X reserves dilution, the by AFFO is our per million, industry. non-straight-line theater over represents per $X.XX of approximately was to

on moving guidance. Now to

the earnings introduced with together while industry we pandemic, initial some by estimate, is the providing to of related our uncertainty As the remains our confidence we XXXX in that theater the with $X.XX per XXXX guidance that to XXXX. AFFO acknowledge backdrop the supported portfolio approximately overall combined guidance health end, stability our pipeline. our of and of growth $X.XX, X.X% to X% over To share represents acquisition

In dividends. the for in on XXXth December, we our Moving dividend company's the increased to time history.

to Aristocrat X compound listing growing average our since rate the increased in And at are be a X.X%. proud dividend every Dividend annual every S&P year call approximately for hand only company's of the having Sumit. index dividend have We XX consecutive like of increased XXXX, the we to X year now to XXX REITs back I'd our last our years. dividend in for over the And

Sumit Roy

Thank Christie. you,

pipeline reflect we term. XXXX, we us outlook globe. the ample I business overall As long in scale of for up for sources like the stand size this momentum and around positions of to and Operator? The on At efforts would are liquidity, our it our of questions. team time, value growth to The near-term our our portfolio. our on capitalize investment shareholder the resiliency add open and to opportunities relentless the favorably over behind


Instructions]. [Operator

Vikram from is question with first Stanley. Morgan Your Malhotra

Vikram Malhotra

where you just with occupancy off the to congratulations pertaining -- things loss. that as if about backfill we plans then to areas talk terms of I'm 'XX, in outlined what you of occupancy some other to sort the start occupancy? lose of think Maybe of or on some it. might degradation, wondering as new of potential about role. One, can just that. of two just embedded that recapture sort And you Maybe kind

Sumit Roy

And Vikram. questions, great you. thank are Those

end third the So right at accurate. XX.X%. fact think be coming to at to do end the what year the And around And where And up? was came said the was it going NPC at that you fairly were of question bankruptcy the And quarter, right had that we going XX.X% we saw XX%. we asked, the we was you're was filing.

the then by which happens XXX be NPC. Hut. expecting that bankruptcy -- recall, assets driver quarter, that And we number. was with that's most NPC, run of As market had -- XX% we a did assets to process. guided to we Wendy's the the you were XX.X%. us assets a approximately largest the those We might Pizza have are which to back to of XX XX come XX approximately the during were And be have XX the fourth also and reason occupancy assets why this We rejected through is

vacant in from to net XX You that circa assets. quarter the will was quarter increase fourth see assets third

resolve these assets back, are to got either to good that fact And than take we assets we assets being feel of because we Vikram, a these quickly. assets. well XX originally we were fairly we more assets and had able located, attract that were despite QSRs these thought wanted the lot resolve some to So able very about very able to

lease their Pizza remaining The than is other less most with NPC Huts of term. on had I'll X these years make point

bankruptcy. figure not And even out the the it already would that so our have trying begun alternatives. were filed back, asset well come assets management were if these process team of had fully to that to Knowing

we quarter. able we was This the being in you see these can for a quarter resolution, of to pretty most us. fourth good resolutions have the as So the number record from resolve feel And about assets.

it's are And we right we and amazing back above the TJ, drive place, hopeful a are we've vacancy, absolutely the And continue Ben for in pandemic. to that frictional group to some because process up to some us, to going will because which take -- suggested to particular reposition team be in that assets, always occupancy reposition we want so we and Look, that will target climb of circa XX% have always forward. assets, this does we we the testament job be we to have of an that these do to of time, continue to rate want the very the us and backdrop XX%. who these what that we that have ability despite XX% do going

Vikram Malhotra

dilution you. makes know And headwinds just The I growth, just overall some there's That one, maybe then near Christie, some for term. sense. or AFFO

the sense in versus half You us of this. Can year-over-year year? give the half the of you obviously sort of prefunded just the rough first some growth AFFO a second of

Christie Kelly

that growth, pulled a of to can expect of where ordinary. of probably we're I acquisitions Vikram, norms that second last the bit. where back historical outside a think be nothing bit year terms AFFO think, see out the to in of going I quarter to we similar on But you


Your next from St. question Haendal is

Juste Mizuho. with

Haendel St. Juste

quarter. a last you the decline the X% three were year, decline X%, in yield to Through the Can closer of cash about yields bit in fourth average cash to quarter. first fourth talk quarters in the

So volume also of you drove about you one-off decline. mentioned could XX% just And talk the that transaction. XQ was what that

we should you of type one-offs near pricing And differential about balance portfolios term? seeing how are think what between in there? the So

Sumit Roy

Good question, Haendel. Yes.

was purchased here largely As you that driven in pointed out, assets the lower mix U.S. by the of cap rate the we

and we that wanted on their good XX were market rents. to right here at in that clients were with that some north industrial enhance suggested U.S. years, single-tenant of placed prepared lease look rents industrial that strategy These XX% assets are assets. the that terms of who assets, I you were markets exposure our in had with remarks, around If we purchased the growth leases, what omnichannel executing were well XX-year very

the you trading aggressively. And fact we a more assets know, a had that such, were on that cap bit largely but our rate, as to tend that. by X.X% do industrial for driven as so was U.S. a the be assets of certainly the to And lot downdraft able

Haendel St. Juste

discussed this guide a front. conversation Okay. of think how I'm then color the maybe in that curious, sellers, your should for -- and potential sense what year, XXXX would to or consider light the as And issuing potential part and And have getting on if be might units or about on sellers I'm you bit you might that? of on of yields curious be of potential any with that with billion. repeal, $X.XX sellers we perceived feedback you initial how that

Sumit Roy

the Again, Haendel. questions, for million came early -- were might pipeline, January the $XXX first to we recall that Look, Sure. at we in what out we slightly you time had $XXX market quarter. days good pipeline our we in into about And that had we year. that the had with looked above XX and disclosed million our

the fourth come an So tremendous a had is years portfolio. that's to years ago amount place it with to of in that achieve I were path had look go we seem a I for of a testament sort quarter. don't of at carried the think continue to to to in have and what continued. to the we to come It have the what able developed out that able surprise are a relative pipeline new be very the put we couple to And fourth to now lanes we also that momentum that created that in the it's And that that incredibly the grow think first billion, has wanted ourselves precisely of coming sourcing testament we do, as post large you quarter But we the should if $X we we strategy to amount quarter healthy of down. have into swim forward past. of that numbers able a out

retail, what or to cap mentioned given achieved you whether of the be going sort plan have essential, which to the similar come should optimal of highlighted a to really the in And cap the to more types within rates? to expected though we slightly be rates XXXX. function rate. going that be cap You those If to it's particular to it, even a are expected If going the are think it's to portfolio, allocation quarter mid-Xs. have we industrial to assets to it's lower what more is rates. out. I are cap it's portfolio be mix the of cap to a closed said going now deemed of as especially rates going it's market, portfolio retail higher trading a slightly Having have that portfolios that, in retail, going

gotten And of of north spread. has cost we so the were generate spread to is capital, the basis environment year, which XXX the of we a lot thankfully, able pricing still aggressive. more But for and have our entire historical points

the the we feel assets are the we cetera. what third quality buying reshaping about how market good of of we lines and along quarter, et are So the our with we very in portfolio shared had

drive cap of you the new talked of is Well, that really, question assets us. quarter. is a for within impact or the OP issue be function So the units. And was about XXXX. ability we it's had not last rate to what to our The a going given composition

to to units and that. assets the buy -- retail we take OP shareholders satisfy who wanted We've able We have past. as in wanted were done bought for to proceeds, from this consideration

And of see momentum as So our side. having pay that. that defer to sellers. of not XXXX part picking said are provide take we could equity equipped a Absolutely. taxes? use up having currency on to advantage our big even to of that, the potentially potential to all And I business, that well is disposition to very But

that reason XXXX side, want tend tend we But lot tenants able their to some the or purchase. that interact would And very area own run primarily good we transactions and sellers did play lend we who perhaps XX% XXXX of It's buyers. that to can overall the that, a proceeds assets market. assets, where I itself of we vacant an own sales to the were in you returns. and sell occupied most the doesn't on option generate assets XXXX And good exercising to tenants in to the that's is very As to with. we say, their about opportunistic that of tend be to see, the that why the be existing area. particular were developers And into

So to for side I the is us, muted. think on going the -- fairly be disposition

having the acquisition on et think stores, XXXX cap as not On and buyers. the like side, be especially boxes QSRs lack I increase smaller rates of XXXX because drug aggressive, cetera. the We could see of

especially so And accrue in could benefit, we one-off that potentially engaging our acquisitions. these to when asset are

Haendel St. Juste

Welcome, Christie. to person. I look forward you in meeting

Christie Kelly

Thank too. you Me so much, Haendel.


from next our You is Bank. with McGinniss Greg question Scotia

Greg McGinniss

you. with starting Christie And

First, welcome.

the Secondly, just billion, $X.XX an interesting that you're guidance probably quick. least if get acquisition into share AFFO which be to you end that. you that But of than guidance the to to way given confident real range, more or is of can you're acquisition how thinking going Is the dig at say per top should guidance what we bottom expectation. gets about

Sumit Roy

why then little the that's I that off know towards to hand Greg. But geared question don't Christie in. take okay, I Christie, Christie, jump if please a and I'll it bit? was And

to being of to improve, having it's year I've in and make industry. and going feel shared. this the a the make large, be point that that with to comfortable get we smaller of that function have with. there, to list, today. suggest And range December wanted taken last And range on out represented January to as And in early to For it case close amount And very were the the seen we there was Moderna on fitness we herd was especially we every a of not base hold fair health of about to suggesting ground even that the sure improve, situation to the having that is that that wanted and theater very at as enough have where a to that have with be, getting us, the the that business we that more a could the acceleration upside conservative came end that see we I'm largely also, realistic. we of we range is could is facts What immunity but a potentially year we vaccination feel the sure J&J industry news is approved if early experienced what's range and to now the we extent, and on where to and very confident as going herd happen June, Pfizer immunity. theater to the day, models the

would Endgame we in here the -- point had we been is the set had Avengers: have data their U.S. And sales. -- point The in and China. Chinese of Canada, in other can't. that one Greg, the I ticket than record movies And record the to, they Lunar sales what Year, we the in over that was in shown by seen almost $XX fact, New million had opening that and more can

that lay of end even scenarios. the can't range. various that fair assumptions that there that of And on facts get is we a our do a have things potentially, there you these in fall sort top other that of of the the shown out if is could expectation. When help with And But into model. believe all to go the lead better. out lot a us all so we that possibility And upside of amount us we could place, could to different

is the assets weighted recovery that's XX the that how what shared shared terms it at you we percolates there accounting are the theater with assumptions some have viewing how of going we've You our you the outcome. basis of and XX have probability a favor, cash to the function taking And of and And a that is that we and industry look think what's come on things drawn in and it could But nauseam market. with like. of model. through what up our with the about really play you in think base

are bit is other about. for we part the it like too a And do conservative to sale-leaseback of more transactions. want market certainly good play, If There that wanting correctly And super that's and your is more perhaps view to function then shifts, we of acquisition about. excited clients what with, us intentional super and are something business to upside. pointed of and out, levers say, are is it to that's engage operators there excited in we is part a you

with tailwind. so act too out numbers. look, And potential And could we've come that a as

You've are seen with year. be some during but we our there But there able -- what too, the history that we out about tailwinds. saying the could to early and come achieve not estimates that

So fronts. There have fitness assumptions all we how are the on to made could that made to things the room about and surprising the theater and cetera. upside. and are of those get point about we've business. have a business quickly there's assumptions acquisition where There normalize, for capacity potentially health we And starting are et

So And add. would Christie, else we good. there's to you feel to it pretty anything I'll if hand like back

Christie Kelly

a of range in about acquisition side in on of being and industry. more time much theater are there out But we thoughtful transactions, Sumit. our Sumit thanks Greg, And the can so how levers have to looking primarily And sale-leaseback for I good said, number share. spent, that a as about you absolutely AFFO also the We that backdrop of terms we and really thinking said. terms of the the has really the the went upside question. of in guidance XXXX, per you, everything very bit bit imagine at of Sumit a Thank echo as

where light there right about is And so very we in we momentum the And as are Sumit in feel, and said, business. that, the now have positive good that do of we momentum.

Greg McGinniss

Great. Okay.

investors. top an real my peers increasingly positioned and on is to to environment? question, of Sumit, For second exposure, in provide inflation conversation you some inflationary perhaps returns growing the company with lease is Could provide context relative escalator how TCPI-based

Sumit Roy


a leases little CPI probably but bigger that. So in say lot I these have associated than adjustments. have about a bit would our It's with them. XX%. a of -- the ceiling floor And Of

there it. but especially to tend be in ceiling be does some a CPI there have rising -- with the level a So we floor here to yes, protection, tends associated in the U.S., of environment,

For happens environment? inflationary us, leases have What in The we problem that we've encountered that fact net the nature. an before. are -- this in lease

and to where less of taxes, goes susceptible because et actual up cost, the tenants. are inflation either less an sort so are much expectation environment inflation We by of insurance, property, our paid cetera,

to And from feel going cost we pretty perspective, expected spreads started anticipation XX-year tenure in in gone go as well. can good still And our relative But past, we've -- but issue up think the thankfully, still come tenure all-in the our around very of a have treasury slightly, environment, been up inflation that far, the to We so on And not see has XXXX the all-in is financing. that the what up. ZIP costs code. to dramatically. good. We in down so in today's we right do XX-year able

that. So pretty good we feel about

interest as U.K. we seeing inflation what of well where in are is contained. very are low, the rates offset to now Some continue be expectations this much in as Europe, by

financing super to there, exciting. be cost And our so all-in continues of

and have if largely we and our for up, going we et created some point, the are translate we to translating fundamentals cetera, particular us that should well. at is to inflation inflation growth, so a us fact that all arising leases have from Look, of it GDP these shield expectations feel also better about also better long-term so tenants. is And And good that benefit. pretty expectations different in fact the geographies the that as helps alternatives somewhat

we leases future expiring. market rents, higher years, et so only our on that to But year, And about so start in should X.X% of cetera. much have not reflect this

leases, XXXX, in a we time. bit especially to regards with have a XXXX, expiration marking so could renewal of market our more leases our us some I of And see during to

so from perspectives, feel And good. those of all pretty we I think

that to often follow One tend is up, of comes we capital, found and cap But true. the prior rate continues interest the to up, okay, your what if impact going questions have to absolutely in rates suit is that cost there that our cycles go environment of as in our situations, of than allows lag, And cost enhance spreads is that moves but rate and follow the even certain faster to does maintain the we then continue And us spreads to have. capital. a of well. if it it cap definitely it's sort

very focused of handle increases. we and a some environment to that expectation that we well inflationary interest environment positioned we made the as feel based are an like company. that rate And we've areas have some we are the an well So feel like on investments of on, situated we increases very


with Burrows question Goldman Sachs. from is Caitlin Next

Caitlin Burrows

the -- following the to Maybe Christie call. the question. up guidance earnings just on Welcome to

what's But guys of us XXXX. One in increasing it a detail increase is activity. about and taxes that's how some it the future? was to expected that more related should showed to you on you think income U.K. think And the of I driving U.K. in this function we they're And and pieces activity? could give

Christie Kelly

to I U.K. It you we that think presence. as expect modest expand is, Caitlin. And continue our can increases

Caitlin Burrows


we So you're I don't the go of if XXXX, tax like guess, type a see increase look that of income dollars similar similar just should making investment may dollars rate? I kind know, at, U.K. at if we year-over-year amount up the from that

Christie Kelly

Similarly, yes.

Caitlin Burrows

Okay. sort the place when And give aggressive. I detail right? put been you And were the some to Or kind is and the that you conservative conservative, would the guess, have of to receive opposite if that how Realty be expect think on know in built, that collection when already Income then those could XXXX, extent were deferrals any to we taking going. of you'll when you start in about similarly, reserves of

Christie Kelly

Sounds good, Caitlin.

is we're that we at And relates what can even that and relates are overall deferrals, before are to within as the deferrals of been coming first looking like, months. the payback it we've collections the short-term to deferrals a really all, taking. say think, look it we experiencing due. the Essentially, XX as when I at and I collections

being in on front we've that us. having that. traction some got So been XXXX positive said, we've of All

Caitlin Burrows

it. Got


into and the you what's think guidance gave you reserves that we about when built guidance So guys obviously, range. took the year, last

be but year, you right maybe some took in You that gave is the as the we reserves get XXXX would to in early think amount? even it start not XXXX, we'll whether that clarity on through go accurate, were right it or the to thinking

Christie Kelly

already know review this, group receivables functional. we And yes. our legal, cross a positioning it's and very on Yes, asset It management research. rigorous and through, go but involves you Caitlin, may finance, it our involves

XX% focused health a know, business, of remaining is primarily around the about X.X%, rent. theaters. the the the collections rent uncollected very Where And health theater on have XX% we at the we've when some contractual the the business. And the got is as a of we of really and steady. rent collections. and to been look that And uncollected on the did is our story And you forward, which rent our remaining is terms fitness, so which are position. we look of we've fourth story XX% in now of collections really taken, and company, we right it's close the reserve uncollected solid about our consistent incur really, as base. And take in actions feel quarter, of in fitness you

an in have and Sumit really of talked going As positive we But that forward. been potentially upside we our theaters said us. we've for be view and momentum, still there've front could about, business


question Your from Rob Janney. with Stevenson is next

Robert Stevenson

your Just movie comments a the on question the theater business. on --

type forward theaters Given here? that, would you be an of scale incremental going any buyer of in movie

Sumit Roy


portfolio. this learned of we of this should we of reach question what at portfolio happy have when to well. largely very was some this put to started through have X represent leasebacks this this asked the with through the So we Rob, lessons business pandemic that as other should process this be think is sale the least overall there but And level through business. X% like our Look, last real process themselves. are And I think that I quarter will is concluded together survive operators estate rationalization. But

exposure very particular industry so dwindle X% about the to continue a current to is And good feel closer long-term to idea ZIP is our code. But to our something this that portfolio. to

We think I get like, to our overall over to your it we portfolio. question, Rob. down time, So answers feel that about X% of need

Robert Stevenson

on are European how then non-U.K. acquisitions this what's there? and thinking about over Okay. Helpful. point And at given you going

Sumit Roy

Non-European acquisition. U.K.

So about how am the U.K. I thinking acquisition?

Robert Stevenson

European. Non-U.K.,

So the continent.

U.K. Will U.K., expand So this of point wind Europe? Scandinavia, point the at we Germany, -- that a Is make you the for guys bigger being are near throughout guys going and U.K. the as see should of to in in launching you XX it XXXX -- you expecting in context the expect outside only to acquisitions term? we line about that up or some another at to U.S. the point the in you to to your XX XXXX there? thinking acquisitions months experience and continental acquisitions. the the Europe early are be How in last U.K., addition see

Sumit Roy

European upon, into the and said that always was step embarking be are a path a western We've that Rob. that U.K. strategy, European our first we to strategy, continues

Who and et cetera, in lot doing the at of Western delighted U.K., some -- of have testament we've numbers relationships, our I to a believe, in European full-time Negara very experience the of posted, are in person we We that you has has that is well-established I'm acquisitions We hired office. statement. the to that markets. U.K. another a also -- lot a share Europe with

a the that et be But to do into. we there goal and have constrained willing geography, look the largely cetera, look so And like et be transactions cetera. at in not we to Western to is markets would grow continue of for the to but the identified that transact for Europe right right have able are operators right we it's function And to by prices, transactions.

we yes. see I But timeline to It's a client to Spain? get that function, So or can our to and something in in I Italy are France largely fit a timeline expect who The whether acquiring in a with answer Germany, do target be overall or list. open work you. Western don't to have going I for have categorical into available something for we happen and Europe? is what's don't or they

Robert Stevenson

currency? in if as local the finance And it continent were to would are you to as over at there, buy in you financing U.K. options the the something, this attractive they you point

Sumit Roy

that's And rates cap in suddenly a the factor to rate sense. of Yes, points. basis private financing capital prior starts our I Sterling been when you done we much placement, U.K. more we be that's offering rated, look had lot what a finance continuing in additional U.K. mean, how alternative a Rob. business continue similar is in somebody And to think denominated X to we'll super at continuing do are it transactions. a to as something AX to to lot for A-, continue where of our And allows it cost who's capital, would can, paths sources becomes XX of mean, follow our to excited try you pounds. goal us our XX, euro-denominated debut, the is I we do. as we I on. push about, our make it's create Absolutely. to risk And that, and our raising minimize and and at of that that in debt aggressive. that to But exchange growing XX-year exciting, are we a sort did paper platform did pattern where will we to can we


with UBS. Dilts Brent from is question Next

Brent Dilts

asked, I did want my been to of has something. stuff ask most but So

sector years. rents. intentional, And grocery know bit exposures it's I recent XX% a increased was but in quite up to that nearly Your of

it's from that over perspective? from store delivery you think mostly sector is that store disconnects time we've think pandemic? more the the there's do during So like -- do seen local maybe far grocery challenged risk what customer's from longer wider e maybe bit online the becomes just a you the little stores, commerce viewing you're could you an adoption so how I grocery delivery about talk but of mean and term, any given local

Sumit Roy

we perform. strategy. essential the most find It I still an grocery is the if do in you want on Yes. with, trying that they them that, to go even that a said have to an focus I'm retail have Having continued important to local not business facetious environment, you full. know omnichannel trying to operators don't thing they fairly to be we and fact that are the And is this deemed Brent, here.

grocers the at that market, the collect the dominate and they and we look you U.K. with, delivery click services. they If have partnered dominate

of partners the have. XX%, if XX%, it's unpack of there exposure. getting most we you that and so of our And it's sort not quite but the And

is with of You'll the And balance are established. of the of there thriving surviving environment have we've to or business particular tend done going that this in that is future have services. collect industries the done click that well with in very these having this potentially, the find to got but be [indiscernible] industry, done why to only substantially not very all the so. and be business operators more have within sheet have be which that the just and the but strategy, but -- going it's very industry, we process I we have all it operators delivery of where the to comfortable omnichannel it's operators that or do business is we do new well-established They targeted with. they think we that the that, not And will

are whether our of getting limits -- industry. to within was don't specific no. we I very a or if feel with sort this about our exposure question we say, So up know this not against as good XX%. I would

of to course, industries, go go forth Board we certain request But Our investment industry it policy and this Brent. as thesis put feel And why comfortable is always with, high But we for us makes XX%. to allows to very can as an have as sense. to our the exceptions. back we

Brent Dilts

curious Yes, there know then to power quick Anything much exposure And that market. longer-term But was one. what is say don't were. I Or it. it other Okay. a just expect we your got blip? grid you X really issues you've makes if Texas in decent the thoughts just to have term? just I sense. recently, that about should longer

Sumit Roy

a that's was to is exposure as again, the business want happening the don't short But disruption of far what's in Texas is operators. it's I being -- handled in Texas. it's largely advantage term. that by thankfully, having triple fairly net the our as concerned, underplay thankfully, Well, And

going have be put specific exposure with issues through to And major Yes, being I businesses that so of don't back. making some blip, have clients are as see not come in it. to for they But a we you product to may issue it the Texas. most as this these able this


question is Spenser Your Street. next Green Allaway with from

Spenser Allaway

Just it's it total historical portion for of versus development to a realize commitments your deployment, elevated but looking is overall your small fairly pipeline. capital I norms.

yields could you bucket? elevated? And Should kind on expect underwriting? remain are just if you're of thinking this was wondering So to some you provide what we how color stabilized it I about

Sumit Roy

as sheet one great Yes. reason our This we why supplemental, as another and we possible. of have it in There's a Spenser, that's out a is lay that want question. clearly to do and is the what the gain would rate avenues to open that continue be able north us exposure of a transact you in market. it certain to to at cap clients to

look $XXX million that million so see if on the about business. X of we commitments funded And by is non-retail the will you of largely $XXX it at commitment, have which it's But forward is the of not yet. breakup, side you driven

would that they particular these assets maybe available what in so aggressively able trading And do a and been XX these is XX, us north be of contracts have that get trading to basis and super asset again, today. assets into transact allows type be points enter where XX, is, to

credit, And of this. to would our that than at doing get is, is the And this what market. able on of and to some these using assets higher think advantage scale cap I using the open of be size so our we rates part again,

this side is of repositioning. The other

asked these think you about thinking how about, was hey, I are NPC. it Vikram, who from had assets

able et to as we increase. will business, our And that assets over to have we years, bigger, we've exact tend be of many a supplemental. this amounts. location these a lease which of value-enhancing model. doing part the seasoned something hope, for our same We our that we've few is of simply able velocity will of our role a be being seen, to once given part detail our of capture years. bigger smaller think terminations, start and really certainly, our the cetera, only that And have But by the will been to dollar They be you play business. be you've to history assets. of portion repositioning some and continue bigger in will And and enhance and a bigger rent I from again, a business reposition And

to the And for continue help see just I increase so love business with within of shared business. and I what to this us you value would source the another parameters create of creation overall


Wes with next question Your from is Baird. Golladay

Wesley Golladay

How demand I dispositions. tenants theater impacted a if the know know is for to this by that noncore a quick Just quarter. a stay theater? COVID? were you got are able question that you Do sell assets on for the will

Sumit Roy

going think, to be these Not footprint are is about talked the this we sure. post that of the locations. same already I theaters of exactly that, think don't But some shared in theater located Wes, we've look, pre-pandemic again, And you we've the business, pandemic. prime with

some So a there much mile in on will are be that development some good there's of of focus fair But of of some markets. rationalization. demand news of level given there is the multifamily, and amount seeing of last we a for trends is the these distribution, more

and that, location these that that going and could possible higher to could Wes, quite a But being XX, And at to better see to in question, certainly on specific particular XX top remaining think, But would but likelihood the is tends repositioned. is theta they rankings. acres be performance falls of particular I it given high. that if it the where of the the easily even use. say be if in theater XX, I land, to So potentially it that very assets, not be sit X is repositioned I easily yes, Perhaps repositioned. not, quartile, it

Wesley Golladay

those don't mostly if collected mostly to the and in tenants what are Okay. of theaters, are it that you base? already, outside is know that -- on from for And the much And is you then bankruptcy related did tenant how but could percentage the cash related tenants I you of ABR -- now? accounting shared

Sumit Roy

to Christie, take do want one? you this

Christie Kelly

collections. We we our have look, take Wes, when a at overall --

mentioned that collections at I the And regard XX%. of before theater in around remaining stable to the as and really result a rent this collected think really fitness. is had is the our I health industry. are XX%


with Stender Todd from comes question next Wells Your Fargo.

Todd Stender

to already levels. $X if you rates we if are you between this. and retail few versus covered But deals? portfolios billion-plus portfolio maybe you on one-off And we incorporated if look bifurcate premiums I you some in cap But quote would Can sorry Sumit, now assume acquisitions, right heard that. when there speak a at premiums industrial? can your good-sized

Sumit Roy

What Yes. have That's seen But that year to a question, Todd. as a very come portfolio there even -- very market had of good late traded portfolio last portfolios discount, we in was there premium. seen have couple not has we a -- that expensively. a

quite think this at pre-pandemic I now we to this trend mentioned that XX, that go, tenants trading are some not And portfolio, basis XX a had some so is as I'm But levels and sure seen even going already -- points Todd. industries lower. where and I

industries I are $X.XX be to large If bit a and industries. With is seeing industries regards So not higher-yielding discount, portfolio I portfolio in of forecast, a we a point overall certain do is that transaction, in are to That not that and little premium. not favor operators. the transactions. a it's we will that industries billion, in part and tough a it most think Todd. tell. could to very see certainly to But underwriting of tightening. industries across our today, the are you all made think don't there's tend all especially

beyond I we numbers to above were think that happen, that that the if be with shared have would So you. and

too, a And be business. so potential for that, tailwind could our

transactions market, in over the it numbers which respect And compressed it With months, compressed. several has we cap the -- in it are shared. none X has to know, might months. last sale-leaseback you even have rates, is there As are the of public that X reflected

that probably -- rate lot in say subsequent was transactions. potential ago. certain steady stable. we ones know, In than it's start buyers wouldn't still bit rates. and in it's today engaging are far conversations to I only X the it's will tend then we retail funny, as you more fairly But tended in transactions it It's on go find X here U.K. whether has are the to U.K., industrial, other a So market months come to to X cap the so do as but where all the is compressing. or it's cap become expensive a thankfully, more who aggressive we

be right So Again, we this in we have, very is than an able ourselves feel to like get favorable as feel drive to transactions and our find good. that we and continue that more it but we will interesting do growth. environment the spreads acquisitions And earnings we'll -- now. of we done, advantages that very share help will us be will

Christie Kelly

that XX color, theater in which clients of now, industry. basis. I circle just of you little almost And have right that Wes, to you cash my numbers just the over were I we wanted let to But half accounting. about to asking back know with on million Because give your on some mind. wanted question. cash had $X.X for is the exposure, over And associated a a it's monthly you theater rent I

if know that me Let helps.

Sumit Roy

Okay. Todd, any other questions?

Todd Stender

me. That's it for


is Massocca with question Ladenburg next from John Your Tallman.

John Massocca

welcome in there in starting December, tenants? you on paying any any troubled been say, on I'll to question. mean collection been so provide XQ color X the it off, know or rent Christie. essentially, a 'XX little Are them hadn't versus, we're to October? you. getting here, regards First that maybe quarter-to-date change I any with call of to call, long Thank industries these the earnings pay I non-paying keep XQ any to Has of November, 'XX. can

Sumit Roy

Yes. to February. could probably if bit. in we of that past theater mean, But range. And I early consistent said little XX%. industry the little the recollection take towards XX% pickup at a it's And been overall, approximately what a the with it did the was help as we've relates and as steady. January essentially, start months at still the I health the for a at we see some relatively and fitness. it's majority with And is we look year-to-date, consistent call, that seeing

John Massocca

you've than the improvement and theaters? the seen on But fitness so Okay. far the rather this has been quarter side health largely

Christie Kelly

say I like But yes. theaters that, Like to that would are too paying.


comes from question next Citi. Your Katie McConnell with

Michael Bilerman

Can hear Bilerman. Michael you It's me?

Sumit Roy

Yes. We can in I'm hear when office. the you, Mike. This Philadelphia. is what is in happens Katie

went on We Park if Board. Kite Realty, I have that an sometimes. Duke Hotels, CFO. can perspective. the work wondering CBRE, when provide some lot as to sit you then Obviously, with over Tiers Creates too was you And switch home. merging from well that you doesn't associated you banking,

business leases net You really cost came being finding Net type capital from And to companies and the out company to deals. the competitive terms the those is and different access the with this capital. in relationships in secret what is Realty the where of has. this Income well-priced able obviously, growth other last of longer to creating But advantage the Realty duration company of year. that the of lease very is Income terms board

Michael. your your Great of look wasn't How and prior think you you I hear should raising your CBRE. at and was sort to you It's think I Certainly, capitalized? great. seeing voice at about person. But talk to again, relative Just forward capital experiences? I about to how JLL. the be perspectives company in

Michael Bilerman

broker. enough. a Just Close

Christie Kelly

long that thoughts, really But a for think triple-net time. you understand me the Michael, overall known -- in terms I you've lease of and obviously And business.

future. on Now expect really the at leveraging historically, us being you competitive scale and can and what the what beginning from and saw what really, year into seen is from capital from I thoughtfulness side the our you us us of the think, you going markets

should the can U.K. about As the execute we're of seeing terms and in we're fruition what in at. we debt excited something Sumit mentioned, markets what continent. And on come the to

sitting mentioned, capitalization, really excited when Income the businesses. the as I a you with our mentioned -- net team, have debt-to-EBITDA well. focused We on about aspects, business have that X.Xx, some we lot I on continent and in and team. great really very fantastic we -- And that going X.X% some perspective other favorable to from we as a expect really And a take of Realty sheet mean, can be balance you just protect debt back, as and a look forward a we those at know, of regard. mean, us joining I'm is you believe,

clients. have continue been some potential. as our add long great really We a to of ahead growth to runway value exciting mentioning And us, things to Sumit's

Michael Bilerman

a through quarter the solely in it of As because But is that we that and part issues of about bit on depressing of the of some you expect a of some of acceleration given transaction year, cash having an guidance. side that the as talked this growth sway raised should think a into how should sort volumes XXXX cadence industries prefunding the flow move equity sheer of on about for weaker the you of amount the and earlier -- equation? are fourth call 'XX? like we the growth, should could focused you the transaction growth of the on that little is rebalance how current your think Or earnings we was equity and about year lot the

Sumit Roy

of had was we in acquisition really Not us. we pipeline given market in the an necessarily, at Michael. advantage time, front that were taking just I mean opportunistic the that play it and of point

us with aggressive, you cause to debt-to-equity still keeping managing you our but be will, in expect equation overly thoughtfully to So dilution. can not rating, A our being if


Joshua Your with Dennerlein next Bank America. of question from is

Joshua Barber

to see consider Just kind the latest current wanted about would market of your your feeling exposure? what if in to adding X-Eleven on that's and the the you X-Eleven portfolio was

Sumit Roy

Joshua, take I'll question. that

talk So transactions. we about specific don't

ours. can them. do sale a also client did subsequently is that their and a we directly XXXX other done XX that It's We leasebacks first X business repeat help tenant see X-Eleven sale-leaseback in of You top have with. with

especially an we industry in really X-Eleven business, it's clearly, we It's like that and we that the really that within like. an It's has store their standing positioning. the [indiscernible] operator. -- So like,

implying that comfortable this those increasing and one are see favorable, our in would the very have of we you that And that like And so convenience of is becomes we store very increase. it allocation we do have particular to would in X-Eleven the potentially about industries XX% business. the we and towards curbed get very that ability industry question always answered to exposures a be Is increase to one again, industry mind particular we would case is bucket. to I've that in and more? be have this but question specific falling our then with that allocation, limit okay, event that before, clients a think But factor that that what it's I the And a feel can XX%, can exceptions make we in we industry to. in will could


Your from with next Jefferies. Linda question is Tsai

Linda Tsai

tenant type In terms And competition of what who concentration of larger into these deals be deals? on larger you of take do acquisitions, to get to portfolio would run on willing some done?

Sumit Roy

asking a us general Linda? be question, would the Or whether this to you concentration? tenant willing Are is about take we

Linda Tsai

question at looking who competition. general a When some and out take to concentration? around of more just It's portfolio on are these larger that deals, the there willing maybe be competitors would you're of

Sumit Roy


is that portfolios. X fact and Linda, have about, large that the the size to do talked that's we we the the of things scale absorb So

a has have to into enviable would find if Now would a continue being of particular portfolios define half being I side cash-on-cash of buyers the that billion some lever Most of increase they Then call that about $X But if sort concentration is of that large billion, then be given with XX%, when you peers is by that overall checked, client, of start the clearly, those for they put allocation able do, don't highly a large become already work, to to, you to to talking buyer portfolio know folks equity very excited of plus. preferred run $X up size terms pretty this. in size largely in and exposure there client. It's absorbing preexisting equation. way ourselves that position net playing to us, of billion, super largely And scale size. XX% the questions a transactions assume entertain size. to are in potentially business on rated operators. especially other capital types doing Especially get of these we is And the -- able testament private But it's often. enhance the financing the and once much the when any ABS public can it, I and don't financing $X boxes the available and are those could involved of can of very getting because come and outside mechanism transactions, that alternative are driven balance they who the yield. And lease what our sheet. their

competition does XX%, traditional the creep it financing these be that start would on rate rated players But opportunities that cost to some interest large move operators. the to up. when then that highly sale-leaseback starts group the in the leverage of that's starts XX% for very that So of with to because put direction pressure on has,

with to So in potential what be financing who competition it have the define could to really see going help the be. we coupled to market is

Linda Tsai

XQ XQ? terms collect cash basis Got it. And what in in you the in of percentage just then tenants, tenants cash the did and basis from

Sumit Roy

Yes. I'll let Christie answer that.

Christie Kelly

couple had believe. We a of Linda, I million.


Linda Tsai

it a like of assume should aren't And then just for the some level paying basis, cash sounds XX we theaters on that they're rent.

XX your versus concentrated X are under they you In For XX XX, show AMC? disclosure, another? the banner and Regal

Sumit Roy

But Yes. portfolio. internal we I us our from the as of especially XX. talked December. assets, can quartile. top that's we both answer when across entire the be month with came these when as deemed well It we that. AMC analysis, them And about up was how Yes, did to some rent in Regal, of XX we this the in getting about

that those XXX%. on Not they month assets, we for forward. But of the cash that's some December, really upside going accounting, those even the for us So and XX us have paid us rent. rent assets they paid


the now remarks. will Realty for this call. concluding to I of portion Sumit time, this At Roy concludes Income's over conference question-and-answer the conference turn

Sumit Roy

we you, So Bye-bye. thank and you for look care. the upcoming conferences. Take to forward speaking virtual today, everyone, with us joining at

Christie Kelly

everybody. Thanks,