VER - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to the VEREIT 2020 Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. to President conference VEREIT. of like Rosen, to now Vice Senior Investor would turn over the Bonni I Relations with go ahead. Please

Bonni Rosen

fourth Thank the us joining quarter XXXX you earnings today call. for VEREIT for

our beginning Tom a replay are at being today webcast call the our Chief Paul in Mike Rufrano, Relations Joining Chief There Chief of Officer; Investor time the Investment a Dial-in me Officer; and is Glenn Operating call Financial is our of Executive on X:XX our website the at Officer; our vereit.com today. approximately McDowell, will Roberts, section. Eastern confirmation Chief Today's PM replay Bartolotta, be XXXXXXXX. for X-XXX-XXX-XXXX code with Officer.

remind which Before this annual actual could statements these I today. differences statements turn not call are results to the from forward-looking the be filed factors filings SEC to that and earnings may everyone in over forward-looking. call Glenn, including report facts like historical are our that will certain materially detailed VEREIT's in these differ would cause I

law. SEC stated forward-looking except our obligation by fully expressly in to disclaims statements VEREIT In addition, required intent as update any more these reports, as or

questions. We to by the will Glenn, call opening conclude the let you. line today's turn for me call over

Glenn Rufrano

had Thanks bit one hit. to year Bonni, I of its If the the offense. pandemic and a legacy today thanks time And last transitioned as compared to ago. company for ever déjà the in felt settled joining issues us. then that presentation vu, and it's At

success the progress, have verified may many also of ways business it paused our our plan. it While briefly in

liquidity. in again offense greater once are this year We with

review and available give Q&A, for but will only market. we not a today transaction Tom As Paul, the along Mike also present with of be

Now let's I on before XXXX, present XXXX. later get thoughts our to

this work well thank them. worked I home. year as mostly from enabled we us be to and effective team Technology Our

XX% ending times during with $XX the year, quality resulted AFFO in strengthened million high Our ensuring the during of XXXX next or and rent quarter in of income into collection X.X% at of worst diversified portfolio deferred fourth being XXXX.

enhanced billion an including was billion sheet our the an was million $X.X share lowering million. balance closed provided our of dividend, by on accretive press while was rates exposure investing trajectory. equity And active unsecured capital, million. by remain have flow $XXX was million million two $XXX raised AFFO the per enhanced Cash extended at reduced which XX.X% Liquidity from financing the at investment-grade duration to And million last to the Our not of times be beginning of $X net $XXX of on with diluted decreased will $X.XX and ARI and far X.X quarters XX.X% to further from by ATM. now $XXX year was reduced debt-to-EBITDA our We $XX prefs. year-to-date. selling over off we was of office in additional by $XXX the guidance. increasing original

grow the capital are and we in Tom? to Let Tom portfolio the now call discuss to me markets us over opportunities to XXXX. that available the as hand

Tom Roberts

the The down activity XXXX compared year-over-year. December year. to significant $XXX of end get with fourth more back Thanks transaction of quarter in $XX accelerated to towards with in a only levels to Glenn. billion market transactions in second then the billion to took The and in pandemic $XXX the due the started pause normal quarter billion X%

brokerage XX% with it's there lease trillion, single-tenant private market the build-to-suit will public the approximately X% balance XX% the different product in continued highly expected funds, $X.X or is to net be approximately which With increase universe of forward fragmented leases of estate in the market sale-leasebacks, mezzanine were through the in remaining to in existing debt, real XXXX. We commitments XXXX, XX% accessed avenues. with community.

experienced has on average. sourced $X over to of per billion acquiring $XX billion team per year, year $XX Our consistently billion deals

to acquisitions, our fewer As this focus expected dispositions on increase activity with Glenn be our far volume. mentioned, repurposed team to will

QX million in number in properties quality QX, purchasing sheet, channels we model and non-investment-grade million assets to opportunities of On office. $XXX accelerated has partnership. we and discount preferreds service providing by industrial balance industrial mezzanine growth. and portfolio debt in in find invest long-term AFFO will XXXX, Our partnership will of industrial million properties We of of quick paused our investment-grade In QX. acquired retail, a into in to $XXX and position QX. acquisition restaurants, acquired $XXX source The

weighted Our acquisitions fixed to annual with XX.X with the averaging X.X%, increases, term average years tied of lease CPI. a had XXXX property and XX% remainder

contracts is team with see signed to $XXX confident as $XXX turn We partnerships on of negotiation. million growth pipeline very XXXX flow good we and we our beyond. active our have guidance. engaged million Paul be the of and activity call very opportunity achieving letter and I'll over channels Both now deal fully in the or operations. of continues intent the under and an and in to excited over the are have There are over within

Paul McDowell

start Tom. credit on operating to an collection, on normal I'll then metrics. Thanks, with tenant overview and rent move

our the geographic industry throughout private versus location. the Our diversification, investment-grade portfolio to continued public type due breakdown, of to property pandemic, tenancy, and ownership perform underpinnings

came on XX%, the relief. adjusted rent XX%. collection at XX% for denominator at and in have QX rents QX rent pre-COVID QX not and are any Our percentages we These at based

approximately in percentages basis scheduled are will that of This our based is collection collections. rents had Glenn and reflects As current on XXXX, XX% impact will guidance calculation tenants. characterize change better discuss the normalized percentages XXXX with on our from January, excludes that very now consistent that collections positive And of disruptions a to rent In and modest X% we get tenants, pandemic past cash later. be the about of the the XXXX, scheduled more normalized rent. move the rent of collecting beginning in we collection

and in to the of improved the approximately QX, public XX% during our within a retail, tenants during benefited continue closely. watchlist Over pandemic, to bankruptcies portfolio which and company We the with and tenant's our within in experienced weighted major approximately no portfolio, the have able for public. credit overall and quality pandemic. remain portfolio because tenants, part, are in of with several tenants This our within investment-grade XX% who is monitor we our investment-grade total retail, XX% XX% slightly. large And equity-owned consistent credit public we private of amount the go

have announcement, company of led XX% They year Most Red strong Golden XXXX. Red to we XX% Union a fact, were last remaining our In portfolio the so had notably, Thai that far group credit and their in largest news tenant Lobster's between public over positive Lobster received the acquired refinance able by from position. debt and also of successfully liquidity Gate a recently Capital. our

Driven public In GPM, Sports, now Investments, Petco Topgolf-Callaway and with addition, early brands, all are close c-store owner merger the companies to year. set Academy Albertsons this

We business seem Supply Tractor our brands rating. a to the also been and attention adapted have had an have their in plans tenant name in general focus the the both pandemic, are since tenants our better. receive top a industry pleased beginning of Restaurants and are the that doing investment-grade and successfully we of

this improving our correlated directly improvement to in this seen have collections rent steadily sector. We

XXXX, dining previously but Additionally, keep also the our casual deferred repayment pay not XXX% been bulk their for at up tenants have of amount. with that rent with of restaurant only to rent, being the able

executed feet almost office, Turning early leases year. to to feet, feet were on included renewals. retail, activity. restaurant. XXXX prior our non-COVID roughly square with of completed the XXX,XXX an during XXX X.X had square of active compared square incredibly team related The million industrial, Total leasing We year million X.X which feet XXX% million leasing square of over million X.X more XXXX, activity square feet and feet million X.X for square X.X of of

on an had of an recapture the early recaptured XX%, the leases we to and these cash have total of rent leasing Many leases, front exploration the on built-in very initial XXX%. a square X.X approximately the the additional This XX% at increases team bringing during feet has renewals. an length renewal the million the early our ended impressive activity best square XX.X feet including schedules, on in quarter been bringing approximately extended Also, by COVID-related over XX.X%. which is consistent basis activity leases focused million year, For square renewals the done to remain of We newly rents illustrated X.X Occupancy of year. additional prior being of effort. million total feet. throughout

the for pandemic, approximately lease extending we levels where roughly have cap last at this leasing remain a averaging market to X.X%, properties par focused to and we of two year. sale. then has we during our contract the blend-and-extend range, extensions In and been those on placing under disposition properties portfolio. XXXX, is with office managing our in large continue tenant meaningfully We XX% of successful XX% In long-term reduce another new in sold completed experienced with we office rates and have been on averages on leases, retention XX%. line which Office we office retention property with and addition, good

percentage in portfolio, rollover With of next not of of for years. impacted. very the be in X% the and year Our of each should expirations XXXX. with NOI Industrial when looked XXXX three at a rents next X.X% context rollover the under manageable, rents of much XXXX's the total X% half each the of this portfolio second rolling X% overall office over concentrated year, from range office through in to approximately is and of as materially office XXXX

occupancy a larger XXXX, have effect due industrial on footage. could For to rollover square

have with approximating square us segment turn presentation the and income. a found our also is ability Mike. protecting of been spreads. we be year, rollovers Further average and in per investor closing, foot, and and rollover with In our economic today. However, good very portfolio's re-leasing I lease manageable the can performance now rents our to of pleased portfolio call with will the manage providing end concentrated towards our details good the with $X.XX filed terms, durability to retention over information

Mike Bartolotta

and cash AFFO some you as quarter included as categories: our three These $X.XX providing the us XXXX February, deemed AFFO $X.XX executed our of for thank items the guidance will all future agreements and quarter those highlights, I'll the the are are financial for some joining I cover the QX that probable effects of COVID-related $XXX,XXX. collection for that was break COVID-XX metrics items Paul, fourth following XXXX. for and was Thanks, earnings, the on some in included. our and of year. for deferral where as of flows not are of in rents today. out well totaled

QX. in this receivable. XXX% included XXXX AFFO. collected into million in of amount goes $XX.X totaled This a XXXX $XX.X million Further, was in very is a XXXX Executed material approximately rent any going which rent rent or as only amendments $X.X totaled owed and For what million to of specified related expect And which forward. QX. a blend minimal abatement period $XXX,XXX contain we an deferrals for don't was extend of

amendments $XX.X these not related For rent. we any of The XXXX, XXXX reduced effect this totaled AFFO to and million. abatements amount negative material do anticipate

Lastly, which a pandemic, of for of XX related we cash represents from reserved announced of as collection in and allowance on that of impact probable general rent to not QX accounted was XXXX. thus rents COVID-XX rental being $X.X million the million December $X.X revenue the represents and million for basis $X.X tenants of

million for covered $X.X represents and in feel for from our being also reserve the which rent cash allowance amounts us $XX on million accounted revenue to more related general projections. downside give confidence $XX.X on the stability well For to we of are totaled XXXX These basis. rents represents of rental tenants the XXXX AFFO a million and reduced COVID-XX,

collection $XX.X For travel we figures from about mostly in G&A other XXXX. the less $XX and pandemic. year, range X.X% year of of at assumed due these for XX% $X.X tenants to for our guidance the of due $XX have loss expenses or XXXX for a below million of ARI. a million the rate cash ended to basis to Implicit original million in these only tenants guidance, is million

million. net is XXXX our assets million go lease to for range X.X% which compared approximately year G&A million original for estimated approximately size $XX to million of guidance our in one $XX million at the is Capital approximately of sector of due approximately came to expenditures $XX to Our scale. guidance and X% $XX in both the and at $XX our of the with revenue to back lowest

to be last in we the $XX averaged this Over $XX million. has to and years And million between the few $XX of amount $XX million CapEx range for expect million. XXXX,

Turning to comprised our balance equivalents cash credit $XXX the liquidity $X and of billion, in $X.X million and billion quarter fourth of of had the end sheet, cash at approximately undrawn. company the facility corporate

the of reduced we by unencumbered ratio which secured our year, addition, X.X% to an In asset million we and for XX%. had debt $XXX increased average cost

X.X% refinancing During advantage rate choose. a interest company the redemption we We're XXXX and investment-grade REIT's conditions billion the of which at of preferred environment our low and million favorable debt very manageable high-quality any issuing some rates other lengthening at Series announced $XXX leaves company's for of the take to pre-payable F debt the million $X.X stock. of lowest the This able time of history accretively the companies duration. in outstanding $XXX is

reflect from rating that Fitch flat a receive We support level. great community and at us though continue only one the our and income spreads has even rating agency BBB fixed to pricing

continue agencies although stability REITs two to our the are rating we of strive of the the will the our one rating We upgraded pleased, even pandemic. of rating towards during other depths maintain and we were to with few our outlook,

side, of $XX. $XXX million $XXX with the in quarter an equity its price ATM done the program fourth company million at average On under the issued

Our increased our to coverage reduce has remained ratio preferred times, to at due been ability our fixed healthy accretively XX/XX/XX three of X.X as times charge which stock. mostly from

ratio Our of are weighted XX%. net investments our and fixed. six XX.X% is debt now debt-to-gross years estate average real duration we was The

Glenn. And the reduced to Our to turn back times. call with net debt-to-normalized will EBITDA I that, was X.X

Glenn Rufrano

increase. so with dividend $XX cap rates of and on the and productive Office Thanks rates took $X.XX our during QX revisit and have the cap and totaling concerns. X% given estate X.X% introduction will effect the QX position decision. XX% million dispositions representing Mike. Office markets reduction consider capital AFFO Board between I'll $X.XX, Almost and We $X.X ARI we'll $X year and XXXX. billion the between acquisitions flow to this investment for from million increase operations portfolio the increase and dispositions for per The cap for The midpoint. the million. the the mitigated $X.XXX non-core focus between type of considering flat dining, pandemic year-over-year of for between $XX property dividend acquisition consideration this of between occupancy rate to $X.XXX at dividend will performance XX%. the of below creating from far partnerships with ratio last growth will vaccine $XXX payout later or size therefore guided of investing. X.X%. the and $XXX low take this on to the and spread current a liquid duration million and the Real and our markets at million increase share and leases closed and cash a year quarters the ourselves increases. envision XX% future guidance capital and of tenants investment between in last providing and billion find target casual this now $XXX to into average for two opportunities turn continue in of between guidance assets. Strategic year we average the providing an X.XX% AFFO its the a the average year, Acquisitions a year. million $XXX Strategic back $XXX When those to the dispositions include XX.X% with X.X% and X.X% average of dispositions XX%. to million

dependent year diligently from beginning ending pandemic Bolstered funding to volume. consistently cash will continue and acquisition our estimates. XXXX had to and we we success. collections cash external volume XXXX, $XXX increase from high raised, in move this not the achieve equity by to have work million the of rent the By We flow both on are

growth. quality Our providing number and acquisition portfolio AFFO of a model channels to opportunities find has

and of in which questions. appropriate now the fire breadth additional the the bring finish our mentioning forward. is With help They Board our how strategy in expectations. making the of moving competencies, pleased Almodovar. I core me open Priscilla with by I'll and in will Susan for the will guidance the Skerritt decisions confident we addition team and is irons, us certainly have call

Operator

ISI. first McGrath come And question go Evercore ahead. [Operator Instructions] our of will Please Sheila from

Sheila McGrath

Yes. Good of afternoon. a Glenn, lot you fourth issued ATM quarter. in

thought a position your perhaps process in year your the this Just there of XXXX from view and point going ago? sheet into balance perspective at

Glenn Rufrano

Sheila. net question, well. it expand little a talk about -- talk that bit like as Mike I have and debt-to-EBITDA I'll maybe

hand sheet to I'm as end net the and what balance certainly of this of Mike our aspects over last review debt-to-EBITDA. do one going of positive as The the difference. at end on well to it year So all to cash year is it and the

hand So it Mike why over don't you? to I

Mike Bartolotta

million of a and $XX to of drawn line roughly million $XX cash end that we the $X.XXX million we've Because year at of down of year-end And of you? million first Glenn. to made the the place really of up are look fully it's billion. is in our liquidity and on XXXX line that's sheet billion point. billion. I had those made $X the XXXX at $XXX this already Thanks, $X.X of about undrawn $XXX at million and last million basically debt. cash had Sure. $XXX end cash is to liquidity. our of more mean, less And We just of Sheila, of total a comparison two of a $XXX million available really in And pieces. I hi, that's up difference liquidity of liquidity. how at year think $XXX and balance That's the

line. going make forward XXXX have have to into balance acquisitions. and is that ready a move sheet We really fully a We undrawn

kind that loaded sense. And of so it's fully in

think the about all you debt this we were year, balance thing to this our of year. about other we accretive. point when debt think They I transactions that highly $X.X with added this the had sheet billion at did think

As cost that and was debt we cost we were And added that lower off. statistics. you were see debt that the putting in books higher it debt we on our paying

the last -- debt Glenn to X.X% years. debt was the to million mentioned without without you'll on X.X at which prefs pay future. the a did we off year. portfolio you prefs outstanding X.X We're $XXX see announced through X.X was of year and benefit we years. then XXXX paid million And X.X off of at And we prefs we're with the went into the increased Our average during X.X. now at were as, this our that That's net another net flowing during our we just six $XXX our prefs But last if January. that But of from of our in know, year. to in take our at debt-to-EBITDA off end went year. last you rate average the what outstanding as now X.X%, year And EBITDA account the

dropped were you can significantly off. to that down it we see that as able pay So as

Glenn Rufrano

if with that was presentation, And cash the appropriate. into this the in portfolio year. acquisition did to why collections beginning balance not the deja of the mention the now pipeline our move $X year differences unfortunately And sheet Thanks, Sheila are pandemic all on the we so I prefunded That's Mike. we believe fact billion. almost that improving vu bit all has between is we of and question as year. -- given but there's $X.X billion our are been middle, have this the a The differences the your in of last

about this feel really moving So into we good year.

but a we're in. it's the delayed position like year, Sorry, we been

Sheila McGrath

future? It's or pressure at are that nice types With acquisition? see segments Great. you this to year-over-year the growth and you And types hindsight new for tenant year. One looking with question. alternatively have segments there any consider might on pandemic certain AFFO guidance in of more the written-off any property

Glenn Rufrano

percentage in part The Tom. percentage of of percentages to portfolio of industries. XXXX I'll retail of industries, metrics the construct properties, back with the certainly that turn credit, over was last created portfolio part of around of

we we've built have So more we importantly the created portfolio. disciplined been how or very in

sold five We last have the billion over $X.X over years.

property consistently buying, we very good we right where dispositions casual is type. because now But it property good list interested And metrics. we part cautious we forward, in a want percentages. be speak a our of would of is it Going It at be type. metrics in look those we we our increase And dining. to we're very like it as not don't of just are about and now those may what terms on

Tom been groups don't to industry you interesting of I turn and interested seeing. that could terms you've in be we of why it the -- over In opportunities some

Tom Roberts

Sure. Thanks, Glenn.

in retail in -- mentioned casual not that that theaters our discount we'd acquisitions. high would be and non-investment-grade you dining probably always areas be on. focusing The of would industrial As be QSRs opportunities list we like

Some have we've opportunities performed really two examples years. unique that the than -- pandemic or concepts of cap transactions maybe on three the we've good and higher are worked are there over are the last in sporting the some rates norm where think during market I year the well

So home in the service a really a we those the home good that tire, there's advantage opportunities C-stores lot. market. been extent and on. have we're in pandemic to like performed some improvement, furnishing focus of general to well a operators Automotive obviously, able we take is certain active market we've during that that in

lot The land of that a areas. and associated rental in some year is because assets storage equipment other last of with quasi-industrial the we buildings with it's area acquired kind space these which yards

a of product types us. kind So active the summary for of

Sheila McGrath

Thank Great. you. Okay.

Tom Roberts

Thank you, Sheila.

Operator

go of next from Please Caitlin ahead. Sachs. Goldman Thank Burrows you. The question comes

Caitlin Burrows

or events any bad either to assumed impact credit guidance XXXX about relates Hi. that guidance bankruptcy Good in whether what could if are that's debt XXXX and if was it results? afternoon. I how wondering you talk to as additional compares

Glenn Rufrano

to one, credit we do sensitivities Caitlin. vacancy create and On credit obviously ranges. take that I'll loss,

Mike That's which But also and we we're vacancy is higher We and have year a year. had and we guidance, variables probably X%. last what loss than sensitivities between difference have, around through all credit this X% little and has this. and a gone ranging the

given which reserves relatively those We have last we substantial. cash-based Mike tenants, not year, have general has reserves essentially. you we And a did COVID also have for numbers. which are tenant

have of very additional those XXXX this we think did And represents should two so in combination in provisions And we fairly we XXXX. which have the income what all those be. of not quality

Caitlin Burrows

Got with it, okay. topics comes risk. I its then And inflation one know that leases of years. sometimes has up is in flat exposure investors the to recent VEREIT And reduced

So would or just you keep could go rising should and people mind? through what rates impact inflation what in you think VEREIT on generally have

Glenn Rufrano

well. Sure. bad think good, inflation, stagflation. and really that which It's I'll inflation. of I and think and cholesterol, as as me, tell maybe analogy the silly bad take good I lived When XXXX good never had we XXXX we but cholesterol. it of and when unfortunately I bad make through have there's I you'll inflation,

this inflation. think think good So at I stats are the today, inflation least could we GDP or inflation, about see know we I growth for think When more. what when be bad about it inflation year All we is. X%

I'd their ultimately start the our it be good well. good it tenants, saying, by helps is inflation, increases So inflation for us effectively if volume will businesses, out of

XX%, as balance to start hit Mike us, there. where of about the could indicated. X%, levels would We're sheet. think I we we as go then, So inflation And the plus first,

going So primarily exposure any We've there. need. have we're we to equity all not raised the

there. exposure have to going not we're So

increased. been have durations Our

up over few maturities coming the years. have no virtually next We and

all standpoint, protected rents any calls From can. all But inflationary operating about growth trends. inflation portfolio sheet he the addition X.X% X.XX% as very that an fixed our to current Paul between we X.X%. to and assets bought, against out balance XX% there in growth. had have the with we So tied the we leases Tom And the year X.X% is mentioned, in the just collecting last

lags always timing. some have of debt. cap to comps but could question have a just we operations. equity rates in of course. increases come It's in If acquisitions where we normally, are And back And usually that are follows inflation life. there's debt. It always dependent upon spreads protection So

So last estate we a real thing it. never say inflation the how we anything. hurt in inflation about think lot. is think little about a I'd That's And

Caitlin Burrows

And then one thing. small

Sorry, in looks fourth like quarter was the if it. It mentioned expenses. million of $XX you non-routine there

So should whether what could wondering any to, this expense expect mention related just forward? we was going if you and similar

Glenn Rufrano

Mike, to it over to hand I'm going --

Mike Bartolotta

Non-routine?

Caitlin Burrows

for It litigation was line on and expense. non-routine the

Mike Bartolotta

Yes. some coal I relates that from eventually had That that into old and we stemmed litigation resolved. to gone I'm fact days the sorry. it. litigation now some Yes, our and investments about was back has had thinking that been

what And was primarily It we on million. $XX.X for books the so was that was about that. put

Caitlin Burrows

one-time? is this And

Mike Bartolotta

a It's to a non-recurring No. happened Right. event. It be specific issue.

Caitlin Burrows

it. Got

Okay, you. thank

Mike Bartolotta

Sure.

Glenn Rufrano

Thank you.

Operator

The next Please question ahead. Paolone comes from Anthony go of JPMorgan.

Anthony Paolone

Okay. Thanks.

it of want One to how Can investment be? an as some quarter. target did big being category that and you about debt mentioned you might areas you into the the how you what at falls talk mezz in was you're looking that it, originating

Glenn Rufrano

investment-grade then it -- properties. our go I'll relates the for to All this partnership. to we industrial developers industrial present press debt Tom. me, investment-grade relationships over I'll expect to I'll we into have Sure. to with ultimately, this those properties and hand mezz And

priming through doing which did is by the we're deals on product part miss what the in think we I taking else? very so there? a mezzanine What properties excellent program, safe anything good partnership And relationship. for almost are Tom, always

Tom Roberts

covered. Yes. venture. go well venture that, assets And the returns that highlight into industrial venture it's to X I covered. as and for times high the they're they're X.X single-digit pipeline mean really joint I mentioned, Glenn guess, they're only type I'd and

return the that. like like the building the and we current We pipeline we return So like partnership. for the

Glenn Rufrano

like or large reasonable. there to really But Tony, there's as make that. feasible transactions good it out dose And a as would we like of

big So I'm hesitant could be. to how tell it you,

Anthony Paolone

sounds the fast Okay. investor these are nature just how quicker like product I of it the turns type see. But and billed? gets the given

Glenn Rufrano

That's correct.

Anthony Paolone

question. or as called of part Do point have guidance? the minor you small being prefs additional just then And any

Glenn Rufrano

We In on billion property the are $X don't billion Tony. those acquisitions. to sheet, $X.X the balance

billion in We are there as know But So an started pref we no being million. -- started $X.X and prefs differences. are it in decision the as have are guidance paid. at this $XXX now we allocation you and look with there of that out

out who prefs in and a reduced our You portfolio, could more create and the is investors of included debt take from rate create many debt at X refresh high which you X, walls growth. could and buy assets or

now. we're them as are bad free want. portfolio billion. so Mike's time any But the We tell We out not latter I the you sneaking we to them those with $X.XX investments. going of And option. it could been will pay that billion see And from a $X.X

and wake they'll Tony, And you'll be gone. someday, up

Anthony Paolone

All right.

Sounds good. Thank you.

Operator

comes question of go Spenser Street from Allaway Green next Advisors. Please ahead. The

Spenser Allaway

on release this morning, you. Can year XXXX for was X% just a next cash it maybe for looks kind NOI, NOI I Thank should down this what year-over-year on guys like for expecting basis. cash or are say? year about full you year on comment in Based of the you

Glenn Rufrano

to Sure. over Mike, that you? can I turn

Mike Bartolotta

one give second. Just me

in I basically head. -- anticipating just my on. think hang have we're number don't the I

Let's see.

Glenn Rufrano

if we'll to Spenser you Mike, don't have on that, get that. you back

Spenser Allaway

I'll that. capture, Yes, some with I'm deferral on be assuming year I'm I was -- of agreements -- expecting sort of your assuming that's this no on onetime the down length kind just XXXX. problem. should But, was yes, depending connect Okay. offline it in of you

Mike Bartolotta

are there be what well. tell piece be there in clearly a deferral bigger may in will you pieces the big mean, I is gone which from major some XXXX. I which can -- abatements there's as XXXX, And a

primarily it's I'll related. to so COVID say going again be point, Your

Spenser Allaway

more. maybe Okay. And just then one

So you disclosure. best-in-class guys have

around there's we you retail types? coverage. color provide a I the restaurant you robust just other and But any metrics. any then moving and industries rent could if get could more information color do basis. know curious, the forward on chance quarterly all for share on we So chance see moving just But forward curious, if retail there's just you currently, thank property

Glenn Rufrano

Well, we four-wall as coverage do give well.

In occupancy addition what other be you to stat looking relationships, cost would for?

Spenser Allaway

but realize mistaken, the rent provide I'm I different didn't you Maybe on industries? retail guys coverage

Glenn Rufrano

also to Occupancy four-wall if go occupancy. investor retail present on we we present we coverage -- relationships. our the you and Well present cost presentation,

Spenser Allaway

Okay.

Glenn Rufrano

Yes.

So page? if what on Page Paul they're -- -- you

Paul McDowell

XX. Page

Glenn Rufrano

information. that investor night our of all we have XX out Page presentation last would that put

year. format a this have We new

for there. to information believe different it's you find, little may is on I it XX. but So been Page have And a that

Spenser Allaway

Thank you. Okay.

Operator

of Lee next question Frank from The go BMO. Please comes ahead.

Frank Lee

the just Glenn, the the prefunding quarter. some pipeline acquisition your everyone. on follow-up on afternoon Good in comments Hi. from a ATM fourth of

want of does acquisitions? half the curious of be this the towards quarterly suggest year. Just could I sense get timing of the weighted to first that just a the volumes

Glenn Rufrano

We -- would guidance. as again it's running a you Frank our sensitivity AFFO range the item for as expect we're

year about We think have likely first of of the second different half most But timing. the timing XX% half XX% in is the I the the year. and in

Frank Lee

you're this for sell that And Thanks. pool? changes the how competitive you can market to looking you talk is office the properties the buyer year, any seen office And Okay. your about on then in have assets?

Glenn Rufrano

it to hand then Tom. and over start I'll Yes.

close just mentioned, -- last as we Paul two did year. after And As we sold Xst we a on at X.X% $XX at about properties million January X.X%.

tenancy. So why properties turn with I very don't competitive for it good to office good over you? Tom,

Tom Roberts

investment-grade credits. obviously Yes, of agree. most I these would are And

very caps very, cases and and low other credit lesser markets mid-Xs. strong to in markets in -- in some where mid-size we've good quality seen the very maybe So

most as the industrial. it's Industrial attractive obviously type. is would I as product attractive So say, not

similar was industrial. So in credit similar lease term available and

We have XX bidders. good getting activity. But we're

I lot think properties, a foreign go type XX bidders these typically to money money of offices. after family five institutional

a buyers. good of well-rounded roster potential So acquisition

Glenn Rufrano

investment-grade term active it's we noticed more pretty that's right investor And If now. office about in market those with get the get we a well Frank, tenants And presentation, Tom. to them. if little have a you and very what's XX.X% our Paul in for worked we can

Frank Lee

there then guidance? XXXX factored Are quick additional last into any Okay. guidance. on the opportunities refinancing Thanks. sort of And one one

Glenn Rufrano

paid about had some million million? but $XXX $XXX mortgages. off million we We Mike odd in and

Mike Bartolotta

as $XXX today. Paid of million

Glenn Rufrano

year And about leaves left we million for the $XXX mortgages another that that X% at off. pay sure will probably those Mike? so And were I'm

Mike Bartolotta

A little over X.X%.

Glenn Rufrano

Yes.

Frank Lee

Okay guys. Thank you.

Glenn Rufrano

you. Thank

Operator

St. The next question from comes Haendel

Please Juste go Mizuho. of ahead.

Haendel St. Juste

Hey, guys? are you how

Glenn Rufrano

Good. Hi, Haendel.

Haendel St. Juste

perspective out So question, what I from I'm guess curious your a first of seeing what there may be? you're portfolio level and interest

Glenn Rufrano

mean? you are to the what Haendel. In That's portfolios on that market acquire

Haendel St. Juste

interest? Yes. your potential And

Glenn Rufrano

don't that Sure. Tom, over I throw you? why to

Tom Roberts

Yes. it define to sale-leaseback million. are Obviously, $XX how $XXX portfolios. It call on there's that depends opportunities you million large

portfolios billion there's are been about that's play has $X portfolio. which Coast. in. big a X-Eleven talking market deals in the Obviously, grocery the those coming West to everybody actively So Bigger portfolio we that

on term So, certainly ones larger it And the were dictate credit and depending interest active. think portfolios. in smaller any would I very pricing, our

Haendel St. Juste

potential counterparties about how horizon? transact guess the they're that. they I'm to for willing Got interest or that And sense you your sellers. rates those it. curious in with rising often I on Are repeal? are How Thanks asset threats conversations now XXXX more concerned or perhaps potential given getting a

Glenn Rufrano

We're affected it, -- it to you're over I to to hard of XXXX I'm Tom. From to But I'm policy our There's us hasn't on much. that a hand go may win certainly fighting Committee keep could going right. discussion sure ICSC. at we're this trying fight. not Again, standpoint, we're try the at lot but away.

We buying have compete We against seller big a into a standpoint that XXXX don't been from market. primarily.

year. you're is some trying of underneath great probably to Now of worried your about change around point, it get it cover extent? Tom to any But if more the this there's those a to

Tom Roberts

you it's which the did obviously the years. market But most market. mean of in very is four a or disposition We in is more impact mentioned talk on in institutional our effort over as major lot I of Lobsters three little But disposition. the nature. our last office sell Red XXXX the

So generally, not XXXX guys.

may from if a don't compete competitive if the where market competition currently. would possibility major our clearly impact transactions than we less If and sooner I situation in XXXX be something were that particularly Glenn a the smaller mentioned law of be it on you to As it in QSRs try market. get with really smaller is standpoint the later could happens acquisition deals, positive And there's a done I that changing. certainly

Haendel St. Juste

to is But Is Got tax it. on curious strategy. And repealed units of issuing OP I guess it. sellers for a your say Got that's and sellers in or all? willingness maybe transacting with? see at some do as And of to cons you're that the you up what conversations pros the do now. view it on coming perhaps I'm of with something assets mitigation that

Glenn Rufrano

the for deals it's you a but doing issue it's structure it makes perfect equity. XXXX love we always do we'd deals to goes And And of away. not my Well gets been units that we Basically been many it lot that talk about if so lot Maybe unit deals. done. as a experience there's units, can as with have It of better sense. know.

down As It long as at it's priced right brings assets equity. you're your leverage. buying XXX%

a characteristics a those necessary it's But So deals usually negotiating transaction. is never it's are that family. easy. good The

the they make wants who take sure family And have the to no a problem. one over to in need tax there's business. You

term help characteristics You seller that, you if to put the those recapture. units. a you against together and find And perfect that's have that's negotiate then of providing for great could just

XX on could instance, XX-year we those Otherwise they buy a lockup of to they'll recapture. if to have For -- it properties one want sale.

negotiations we love So a do more. we all there's to a there'll But those If on don't that that go could flood. think I expectation would. do there's be big We'd hand. more

Haendel St. Juste

Got it. Thank you, Glenn.

Operator

from Lucas One. The next ahead. Please question comes Chris Capital go of

Chris Lucas

component afternoon, largest Paul the bucket. is office lease expiration your year, the Hey everybody. in Good schedule this

renewals of it of at back-end that those sprinkled how And this point throughout I Or guess off, do look in loaded sort First the are? your terms is year? outlook? terms when expirations the in of is

Paul McDowell

lot couple a Chris. did Hey, year. managed a office last exposure of We of there. things our -- we leasing Well

during of to XXXX. of and end is have that Almost So We wood still of X.X to loaded renewals in or by did back-end down percentage point remarks. all prepared chop very able majority of it course the my the early some it we I year. pull mentioned we're as towards year, the this the or so vast some

those through So we're right now. working renewals

keep. we'll Some

past lose. we'll sort over think our we'll average had that of the couple levels Some still maintain we've we But retention of years.

Chris Lucas

renewals duration? guess think to if deals, are they do solve And the the Or that. potential you becomes those for Okay. source shorter funds? in for renewals, be these I really likely about those question a become on Thanks when you of

Paul McDowell

always a fight important on Term the it's us. Well, to very renewal. is

high And early ordinary early a renewals remarks, in that in rent sometimes as we our perspective recapture renewals. my levels when you'll renewals mentioned from prepared and just as are I do note as not have we

a trade particularly any to often in when of or upfront we sometimes markets very for tenant, their improve terms shorter have to we'll So with bit the flexibility. in exchange office little negotiate like Tenants term. typically, rent tenants office

sale respect had And for portfolio the category. that. conclude to least strong always once it's we've from the past then a the negotiation. has doing with year us So recently those to negotiations over office But view some the move then success at we been those the pretty into

Glenn Rufrano

we $XXX And equity X% internal see could X.XX from think we to which where to invest you million have Chris your sell can $XXX guidance and million will %, at a point between provide those we spread. does that

Chris Lucas

that Okay. one. with I And Thanks Glenn. for guess then maybe sticking you

of roll sort conditions some being go goods year of been thinking advantage your we pass of that through then relative that's look from elevated the on you at another the if certainly least pandemic working -- relative sort were of credits see an the that got a the So maybe take you and benefited and clock that have pandemic looking they've that they were sort lines on grocery operating back or is they to of sort of some business free basis sort one and that's where would of at you under. Are to Sporting and there of areas you before? elevated. through

Glenn Rufrano

wouldn't and stores. I think wanted have third, to club really found and And call Home Garden. mentioned home have would -- or have as clubs, you'd certainly improvement A home to from their was has I call beneficiary of part their all three era a Tom people stay-at-home of furnishings, a which but clearly be warehouse would well. access & room those has certainly they Walmart, flow well. people were done the the -- clearly Target done well. also having home. Chris, improve have Those say Warehouse pharmacy through we really benefited to but done people

it So And there in where areas. a collections. see are is of number really we our

furnishings our XX% ARI. necessity of it We those it's XXX% tenants our from represented have groups we industry January And types from restaurants, categories and retail, from casual page; collections improving And and that increased in we this is categories XX, highlighted, you pandemic. a we or right the beginning have can sporting home have we happen to that how -- the collection have have call goods. where that one through of QX retail, then collected Page four high those property we see from year. presentation And virtually on entertainment, page either call same of the

winners some through the real pandemic. are So there

pandemic and Some upfront through to learn for have revenue to create work how been and the that others able themselves.

Chris Lucas

so some And disparities have they basis they valuation that done because of because come that of have -- sort through that well? see on you have do

Glenn Rufrano

Yes sporting we Tom mentioned, we've and expanded more of already think advantage furnishings, in. have. expected And we in goods and Yes. home the as than where coming some taken fact rates we cap would have dramatically

So there hope have the that can some of and we will we advantage some of dislocation here continue taken be to.

Chris Lucas

Okay. Thank you. Appreciate it.

Operator

Malhotra next Morgan Vikram from go ahead. The of comes Please question Stanley.

Vikram Malhotra

in you to was prior relative give I the in so more if if year. this. on the apologies pipeline late, pipeline. you've dialed a Thanks. obviously we've what I'm curious of large bit I But a sorry It's outlined sort could just color seen

on you us the on on wondering sort just pricing you're I color helpful. focused a I'm more pipeline can you give of expectations. be the talked bit just little if would about but more sub-sectors know So color timing, any

Glenn Rufrano

sheet, Tom. I'll interested to But in industrial. discount retail, and to for the quick-service start hand this restaurants we're off. I'm going non-investment-grade Sure. most balance

the the types for. industrial investment-grade product long-term are -- to for industrial the of with those So product And the breadth partnership. for those position leases looking the then potential there. positions that's and we're And partnerships, the it's mezz

AFFO. acquisitions our fingers the create into have portfolio to and number a we more come of to So produce areas in back out

over itself, that three elements think your which don't that sheet Tom? question be I And would then the primary balance the I first I hand to on of. spoke is Vikram why

Tom Roberts

Yes.

leaseback. comments our my of half in noted about I pipeline is As sale

we've the C-store So transactions there. A deals with currently couple on QSRs, sheet of of that we're obviously, got operator we a have sale-leaseback relationship an automotive, group. doing couple a a balance with that

very active well. active So are that be washes to very a as also product seems Car cut.

So we'll look at those.

In addition, rental year. last we group did an equipment

As quasi I its of industrial. kind mentioned

able We're lease business. into some their management the So with obligations provisions and those more get tenant insight very are master reporting, negotiate well, obviously annual as obviously of and sense leases to long-term and a reporting increases. really

So looking a I range. mentioned year for strong similar And did probably at we're and X%, X% pipeline shooting well. think metrics last high as rate high-teen that what walls as to you we cap

Vikram Malhotra

That terms underlying makes higher-level of maybe is tenant interaction from just one sense. Thanks and question for base interested just and sort in communication with lessons that. on the of the And I'm then pandemic Glenn just a what in most monitoring.

for lot I remember You just management the have been the and -- quarters the of the given the But teams on a previously. coverages, they side. than management talked of to a of obviously about just tenants asset of given you've talked have communication? many think, in I terms last few detail. forward sort did wondering I'm like comment changing lot I sort asked Anything more of going

wondering if are going just changes any I'm So forward? there

Glenn Rufrano

of but certainly have Well, I'm lot going to let Paul this, been there answer changes. some a

being not charge Tom would Mike, in Paul and being every myself For with started, was had they talking talk rent to to those and pandemic that And in every and meetings we when day others constantly, instance, the relief meetings. our tenants team day.

happy June. May, now to meetings. April, would intense, rent the absolutely March, say, relief So was communication I in fewer And say far have we I'm

probably a which as our to We is to talk talking canceled they we people tenants as they good. used which about. are means our lot and much get not like, have to, on all schedule there's Paul's which them nothing

a change through March going there? about from what's been today. on there's Paul So big And how

Paul McDowell

time rent as a us some connect opportunistic. fully for of with was XX% Yes. allow I I of relief, did at we it talking tenants which mentioned mean, think, came But the tenants, the our height with and of spend them. the of lot so looking to Glenn of pandemic kind did most

And types knows our years tenants sector leasing and retail. that restaurant XX for Sheets in their industrial, efforts and teams and dedicated all he's that inside spend he team our have been property We and different these in working office probably in Brett for out. example,

a lot we in leasing And amount already tenants. had relief can contact of Each communication of with very So every have of not that of in leasing but with that -- connections pandemic we lot the the you one large year. did leasing that tenants. discussions, and the required a activity in those -- we last only see of

tenants of renewal. franchisee close retail relationship them a very a we very keep our tenants roll course with start our then long all often And discussions of of as we have with and to and industrial restaurant very So office over many about our tenants. tenant

Glenn Rufrano

are that the micro level And very macro here Vice I of Vikram terms our of constantly what's what's meetings and talking but in business. that is at on ICSC. in trustee of are a part what's I'm the on going illuminating to I'd have property, happening the not also in level Chair the team and entire retailers tenants just much now The mention businesses. happening terms with their through ICSC a very in

Paul McDowell

their we're of tenants largest many And our landlord.

alone. there's comes relationship So, a dynamic from just that that natural

Vikram Malhotra

just just Glenn question. point sense. last makes on That And that

in hey sale and going doing newer little like You estate. of from of talked may But of a sale-leaseback come types we'd we forward? of a saying -- been here terms more to have leasebacks. how potentially of that the a real open about pandemic wider trend bit of that expectation Do as see soon to net the out tenants sort monetize what's you your of sort coming less you market

Glenn Rufrano

tenants conversation they sale-leaseback a been or term. market The on X% junk calls whether some X% these a to of I'll market call financing the the market. Well come it lack there's better not or to for or go

may and be had our Paul to past. when public. which tenants can that be went now the for used there today we not And that tenants have about opportunities private through talked his the in they he So, conversation equity

to of for sale sale-leaseback with mean us because a a about be underwriting with underwritten tenants, but lot careful real we're a our of There'll sale room various to and be going there. been any But for capital going there's concern for financing plenty be tenant could be absolutely newer tenants part it I even And So be and we're plan of credit. would out has be leasebacks. properly. market. newer more available that some that leaseback forms the to we and sale-leasebacks of to for see

Vikram Malhotra

much. Great. so Thanks

Operator

of question is from Please Caitlin a ahead. next The Sachs. Goldman burrows go follow-up

Caitlin Burrows

makes in target that not to been the But more? had past guidance I billion. through was again. like recognizing know you this right for Hi that didn't that a because could would is go amount? what giving the right acquisition that's significant limiting to wondering seem target, on this factor number want think of make. you just guidance you over you amount? you why the Or Glenn if why that do out What say you year with at $X hesitant put I give kind couldn't the is

Glenn Rufrano

already. almost guidance exactly concept. that that vu last us deja very that gave the difference is with we're start comfortable very the year more in It makes I'll last we we're was with The year. which funding with funded Well, what beginning and again. comfortable the comfortable of were Caitlin guidance We

case. of he billion they for which be Tom's to could time. and that gives wanted maybe have be. are And what has -- as little And Capital Could it last reasonable Maybe years. an based larger could We over it is have want been doing some out mentioned pessimistic. so latitude. maybe a $X we point, expand part that instance upon a or just year few a us didn't it more But group there there Cole we would your deals optimistic buying for larger been the buried which

that comfortable is that out reduce we there product we're could and So that it.

Caitlin Burrows

Okay. Thanks.

Operator

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

Glenn Rufrano

to Thank joining us. happy you. where we've dividend we look for productive everybody the a investors year. We're in year. happy Thank excited this growth We're increased about our forward and you. Thank for very we have We're you AFFO.

Operator

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

VEREIT (VER) 24 Feb 212020 Q4 Earnings call transcript