STOR - Earnings call transcript Q3 2017

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Operator

Good morning, and welcome to the STORE Capital Third Quarter 2017 Earnings Conference Call. All participants will be in listen only mode [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Moira Conlon, Investor Relations for STORE Capital. ahead. go Please

Moira Conlon

quarterly call Long, Fedewa, Financial will today’s Results. are available and of Operating call. today observing and Carey, then will financial all our joining with questions. call have Volk, release, order I'm section here STORE; Mary investor Q&A in News under hour, Chief participation then Participants Chief for the during This remarks, includes your prepared documents at On you while Thank Officer President we website discuss a limit management and thank call, to STORE Cathy of the for today and earnings to our our ir.storecapital.com open to be we These the portion Executive XXXX call. & follow-up presentation re-enter Capital's the for us In which morning up can supplemental Chief today's you, keeping issued we you investor will the relations third one if information results. two-question of and Results, Officer queue Quarterly Officer. questions. Chris provide to quarter maximize

comments Before laws. under like remind we on forward-looking to begin, include today's the you I will that call securities would statements federal

expected also such AFFO our and XXXX Forward-looking that about XXXX are Statements phrases. will, forward-looking per statements facts anticipate be, as share identified statements. comparable by statements words and as our or for not are or words intend, other are AFFO guidance believe, expect, such acquisitions historical and

factors Volk. that, could SEC to statements Chris those filings, contemplated reports of With operations call please Form in Discussion cause like are our go XX-K would results over our now to from vary by and to the Chris, ahead. of forward-looking XX-Q. including I turn on contained our differ financial these materially from statements. results condition materially actual and Our actual such forward-looking that the may

Chris Volk

$X And quarter Fedewa, Moira. Chief morning, With to Capital's welcome and third are you, Mary we Officer. divested time, million Chief over Financial Thank estate invested Cathy of our million $XXX our have quarter. $XXX in acquisitions, STORE Officer profitably call. earnings today good investments XXXX Operating same in and we've Today At third this everyone, billion me than the approximately Long, with the more real during happening in activity second quarter. including most the

of investment million So million with quarter track activity as the for the $XXX combined we right of to investment guidance year. just of end the $XXX net stated net our of are on below third meet

reflect accretive divest Our and consistently our of net today year-to-date portfolio sales ways remains investments property to vacancy properties invest to requiring our STORE that quality investment contracts weighted upon based in lease resolution. assets approximately grade the same methodology are our time, and the our At ability eight healthy scores with shareholders. just to XX% up in a in

and You'll more from about sales and later investment Mary. our portfolio activity hear help property

well funds our increases the protected internal operations, long shareholders of our positioned the for to upon dividend serving Our cash our ratio quarter and a approximated surplus flows. reinvestment payout a rent for tenant well provide adjusted with based of dividend that's anticipated and Company XX% growth from term

our where a will Cathy in discuss which based increased a ratio it during While in upon increase, our approximately dividend then as minutes. preliminary remain it payout the guidance heads XXXX of result with quarter X.X% a few line will

investment our Now, third do statistics some activity. quarter relative I to each are quarter as here

initial, the approximated XX made term escalations median escalators you return, rate adding us to the quarter. the be the of X.XX%, Our lease annual average investments during of rate was RiskCalc median AX. that from growth weighted average coverage continues STORE approximately was which unchanged lease quarter rate X.X% average at fixed long weighted is for get slightly to new was lease rating charge ratio for the to primary quarter. compared rating was post-overhead up new which to new last the was with unit-level median The corporate approximately investment by tenant very favorable X.X:X; last BaX; the investments credit providing years; X.XX% virtually investments a contract contractual our profile Score The and Moody's or lease at

of of of the to new as from reporting the required unit-level subject average net-lease quarter at acquired made the statements, during financial all during our of we was leases. that the assets Our XX% XX are new the properties made giving quarter acquired investments replacement investment portfolio. XX% deliver were unit-level XX% financial of master approximately within cost, the And to us

top our continued was the rents represented our separate rents transaction XX customers realized investment to activity further, of highly interest and granular to average of with million. At end completed interest. customer of and transactions Our diverse quarter, largest and $XX.X our an annualized top be highly single XX XX of X.X% size a the customers and proportion XX.X% revenues be annualized at just from continue of the

to original our business. And combination during this quarter, vacancies I number sold is Mary part for a the itself profits portfolio will our the of of of approximately as activities the offset with $XX call real half stated, customary cost the with the deeper our million, of represented Finally, an direct to net produce $XX our generate ability And Mary. sales assets million. of from but the acquisition which we initial which first property asset over to strategy. like sporadic which properties, XX nearly over gains, for this, or you, performance, which dive turn that, I’ll to cost origination management gain have under long owes year, in sales economic into serve

Mary Fedewa

our quarter X.XX%. acquisitions cap to was good Thank Net of we and over track billion. funded This of the we target. dispositions, meet acquisition at to $X second of brings $XXX morning, our XXXX rate highest everyone. you, acquisitions Chris, In it are on quarter and third net year-to-date our million a ever

taking continued year of we actively of our manage opportunities to properties quarter We This third sell the properties. to advantage a $XX total to cost dispositions for XX acquisition million. $XXX our the million. portfolio an During which brings total had sold of

As in a approximately gains gains year-to-date, we result opportunistic of sold one. our direct with over the properties from place embedded our over original we day XX origination strategy, cost has were have or XX%. $XX had built XX sales which been million market of Of the portfolio

over million and sold resulted XX that properties original sales XX more of or our gain a modest The ongoing recovery remaining year-to-date in property approximately were In our loss. management part cost. the of sold offset combined a resulted X% than or also in more gains the activities, as million million properties $XX strategic summary, of approximately We $X million loss. $X which XX% $X

some to highlights. turning Now portfolio

the are portfolio of and have Our in as properties added with the X% to of to than quarter strong. In Simultaneous top design excited is interest. remaining be diverse September Pro in and Cabela’s we performance Bass and manufacturing. tenants XX.X% The rent second Bass our Pro acquisition new to XX. two acquired largest with XX.X% extremely of less our continues third an remains we our nine in experiential portfolio tenant. is portfolio tenant retail largest XX% sector, the representing the is service our by

and retail camping the like directly to experiential continue and We that into fishing, sector category. fit hunting, boarding

distributors We XX of largest also U.S. than material states. the XXX one added in with U.S. LBM, building in more the locations

our result relationship transaction built of and fourth this have our a they them overtime as We in are now top XX. with

third we sold resolution properties, Gander one. the those the we the had And of have XX Since vacant two quarter, released quarter eight have of end of we end and of Mountain which assets. properties. XX the more are Gander of of pending on As the third

eight opportunities. we and cap set X,XXX As resolution remain these actively origination we in a already. market, and turning have today overall now only platform result, generate properties broad to of of stable vacant our to seeking a the over of diverse rates and are direct properties many out continues interest And on

has value talk value. and getting Our the call that, to With turn our financial this acquisition allows the grown be This in results and highly XX% selective of since about beginning for us to to Cathy paid for I’ll our customers creating while over pipeline the year. investments guidance.

Cathy Long

XXXX. activity review you, with markets capital I'll by capital performance otherwise for and Please followed Thank that remainder introduce year-over-year, sheet, unless structure. guidance comparisons note our by guidance Beginning and all XXXX our for discussing I’ll our financial balance the Then of our Mary. start noted. third our quarter. are for the

our scheduled XXXX-X reduced We equity. of ample activity percentage paid interest of rate weighted and principal our prepayment timing our of secured quarter Following months Master we the Hathaway any the well the the into carried great them XX%. and by the end, without of a strong the third of that to of for balance reduced to debt, prepay full $XXX under the just notes planned prepayment without additional debt, and our of refinancing. average funds flexibility quarter gives both within To million our had Berkshire pay-offs any one assets long X.XX% of prepayment a our respect the debt a A This to million investment to going maturity nearly With window quarter us also in paying prior funding third ability credit we quarter for These million series us rate third August to long to facility $XXX as master giving is gross note XXXX. penalty. features positions term the during acquisition quarter and a on or as of on third June, liquidity us availability of and our early which plan of program acquisition an execute notes the interest Funding with cash our notes debt. $XXX Class XX under the off maturity ended off

stood X.X% a billion of weighted XX term rate As a maturity at at with and weighted under a result of outstanding average interest our average XX, $X.X long years. September debt just

have no long fixed quarter maturities rate with All borrowings secured totalled been until gross for well as debt financing million billion giving XXXX. debt laddered investments approximately substantial billion pledged The collateral intentionally term annual $X.X At and which our of median billion us assets and estate debt. remaining maturities are real estate the are near meaningful our of maturities our portfolio approximately real in flexibility. term end, $X unencumbered debt $XXX our of are of $X.X

the to to basis. cost ratio end roughly EBITDA was quarter on leverage times XX% equates the run net This of rate a X.X debt third to at basis. net a Our debt on

million September borrowing of of have of capacity XX, million we on $XXX As and credit our $XX cash facility.

quarter of access attractive remains healthy of fourth into sheet opportunities. to debt variety balance head a conservative XXXX our leverage So and large fund pipeline and liquidity options we to as position with of investment the equity

quarter Now funded quarter third proceeds asset a our activity performance. was credit cash Acquisition on of million on approximately turning financial of during $XX $XX to hand, from the and cash dispositions. borrowings facility by

quarter until Acquisition quarter, activity portion September occur a base million realized rent by that the XX% and of to quarter at third at As as properties X,XXX stood $XXX properties September the late of $X.X won’t the third quarter. real the in to until year-over-year X,XXX representing at and increased XXXX. in XX, compared September interest be estate representing generated impact billion XX% $XXX to portfolio volume good million. $X.X annualized over ago. acquisition our XX, fourth A increased volume the million billion the revenue $XXX full didn’t XXth revenue of year growth, and portfolios drives compared to revenues The

revenues XXXX quarter. that a with charge to quarter lease incentives the amortization accelerated terminated million include during Third $X.X associated related were of non-cash leases the

Excluding approximately charge, revenues were this year-over-year. XX% up

for the capital reflects demand our real estate growth revenue solutions. strong consistently Our based broad

vacant quarter, million charge to For to non-cash the $XX related to total to large became ago. higher of are relates depreciation million half of Mountain expense, increased A remaining the third attributable growth a increase to which the to impairment the million in $X.X portion expenses $XX simply year expenses properties and XX% compared of that Gander Approximately this increase portfolio. of is CMDS the quarter. amortization two reflecting during the subject financing the

expense up were the a to for quarter continued of acquisition increased non-cash our such and XXXX Property million long of a charge the increase ago. long investments estate a from costs on therefore million real the in expenses associated severance fixed year expenses portion financing costs. bonds quarter the President over $X the term a insurance as triple $XXX,XXX Vice of $X.X finance are third Since Executive are with accelerated the August. tenants in with resigned Our to million in were much expense year-over-year an property of net spreads quarter related of costs, property increase maintenance, Interest includes priced third expenses. third we in STORE for earned activity interest G&A the we $XX.X and annual for a of taxes, our level subject as $X.X prepaid the locking-in Master leases, costs year compared includes significant XX% for costs Property healthy amortization to for quarter, G&A responsibility in million the XXX,XXX ago. September. of property Funding debt who expense vacancies drove our tax deferred year rate about portion XX% our the attractively the term. prior to of

The $X.X to per Excluding diluted as $X.XX a share period of XXXX, gains discussed. with million the annualized charges or tax, the the was the quarter on a to of [Net of decrease total a generated last severance share mainly of basic the is and G&A $X.XX of year. assets basis same charge decrease XX non-cash our million $X.X and diluted estate which basis for $XX was between or net from an XXXX. years third related per third during year three for the income] percentage portfolio the points closely consistent quarter which ago. Real quarter $XX million I’ve million compares in sales basic just

quarter. made last of million, the $XX the end quarter, $XX $X.XX On a per from per reflects share a For the of year. per diluted share or $X.XX basis, increased XX% basic and basic investment to AFFO per the the quarter impact and share AFFO million Berkshire $X.XX second third XXXX at diluted

board $X.XX As cash common dividend our increased expected, share in to our quarter. third per the

low important ratio return our our an increased leverage. is component a of our by XXXX dividend while payout stockholder dividend IPO our overall XX% dividend we’ve reducing Our in per share and maintaining since and

we our $X.XX turning are of year. a guidance Hathaway This the assumptions for target acquisition Based which of decision previously net Year-to-date leverage net to XXXX. share. reduced million to are we to of reflects EBTIDA. the guidance expect on to $X.XX the ratio share X.X on guidance in for $XXX per affirming with guidance impact property in range both Now AFFO of per to our XXXX XXXX range estimated debt volume million stated times for maintain these the we track to to our the This of XXXX. be $XXX sales million net is range in of June Berkshire a $XXX X investment and our

for weighted Our AFFO X.XX% a year. average on the guidance of of cap based new is acquisitions on rate remainder the

property share plus sales, of real rent. guidance assumes from $X.XX to losses equity depreciation excluding share amortization of the and for of such straight-line related compensation, cost $X.XX $X.XX about share share deferred financing and amortization plus and per income as items Our estate AFFO per XXXX per $X.XX gains to net per

million in projected net that XXXX timing markets sensitive any for to for Finally, current currently of capital as initial $XXX our plus acquisitions Based of per approximately acquisition the real the during of of XXXX, always AFFO I’ll guidance a projections XXXX in estimated XXXX. of well to per sales. $X.XX in acquisitions expect dispositions for share turn volume AFFO the estate our as range to which is activities. share period on is period $X.XX. remainder for We

X.XX% times debt Our rate on the a EBTIDA. range and cap guidance target in acquisitions a net new to of ratio rate weighted average X.X of based run leverage X on is AFFO to

to $X.XX Our AFFO and straight-line share equates and per to call as items deferred cost And for comps to related expected back turn per estate Chris. $X.XX net to $X.XX per plus XXXX income share financing $X.XX anticipated per share plus such to amortization, guidance of amortization. approximately share rents, of I’ll $X.XX the equity now real depreciation

Chris Volk

Cathy. much, so you Thank

board XXXX our when Tuesday America. understanding the the of of Cathy make announced of other we Chief having current directors do call our Financial as which We directors, finance highly corporation Exchange Investment drawing our her investment nine, a make and our our to net first going for number which to franchise York to to the a together managed few with usual a public Officer make I'm want seven are and before start very turning raises I Banker know worked Her off first Stock is your her to of attention relevant to valued for public as addition portfolios her operator regarded of independent. welcome past Many and possible listening company, to listing added New questions, activities, by two of me historic highly latest of the the comments. lease. As right from to experience lease whom a over you met and to and a of built with companies addition she board. work

financial Now like enhancements that mention incorporated have also presentation last quarterly to instead final we investor do We this this some our disclosure I’d with telegraphed disclosure quarter. morning. to into which elected supplement and is away the disclosure

considerable was both redundancy we combined them. information Given that there in documents

general pertains And growth averaged and particular. We XX, Most which and a items. added expansion first the XX, is dynamism activity our corporate evidence realized to of revenue acquisition also and in the XXXX and June our between from disclosure by this in XXXX these middle XX%. was also growth near the some customers new tenants markets June of of

existing always create sort a appendix of to important in In pertaining net serve jobs also well XX% would to communities our solutions our Given for overall real Providing creation. to customers, to repeat to STORE customers, our estate is have and new our this role novel has we some is contribute economy of us. disclosure create in business shareholder some been our growth. proud that business with value approximately provided lease played

at As of leadership growth equity places in added raw take September yet. annual on deliver compound illustrate trading a our to actual is pride This estimate And this market not Driving not made this, rates we MVA most but in, something XXXX to in provided value done in we cost highly XX, sector added every equity of we on additionally To our by have or our we returns our quarter. meaningful least while return companies exceeded our has XX%. number equity ability activity. market that create the evaluation the leadership approximately investments investment valued of that position. delivering we’ve number but on the just rate STORE’s returns equity us been data historic, have wealth

we with September. We the rates always in have believe vacant of said at just Or eight X,XXX lies do fewest our there as of maintaining that the held administering unresolved tenants. success although the end in are assets success measure of properties we just non-performing about the not our occupancy out highest our

public more equity by-product can equity market a the to of on rates that’s having return measure done over exceed we is consistent the our market went Our a three a nearly years realizing can we cost. our which to success create we XX%, for great believe basis, ratios our ago, value proven only will ability business. the is performance added to by X all Since itself and last have we MVA this MVA basis term dividend the long Store of create its held endeavour MVA grown presently and pipeline, be and valuation that low relative ability should in net end be level than six times. be in we amongst consistent our by within become to we net dividend mark rated the that and should sector remark internal yield to after we it here unrivalled today credit questions. highly a but and we in historic as multiple call the approximates companies bench to over its amongst But higher. your valued protection, of factor engine than rank about RMC create And we our more. outperformed sectors. a public X% to MVA position our in that growth, with approximates factor better dividend most XXXX. our current more a doubled On upon lease are for the investment the had you, talk maintained at our an proven lease companies another turn created multiple net of and most quality believe comparative have that now deserving I based the we and the returns, sector of factor, REIT And not store value we operator lease with highly our shop went the

Operator

Instructions] question begin from comes now KeyBanc ahead. first will answer The go and the Capital We [Operator question session. Mammon Please Markets. of Craig

Craig Mammon

could or give breakout guidance Hey, disposition come guys. versus year? in next to the the you just investment in XXXX could guys think between of you Cathy, for kind what net gross

Cathy Long

Craig. Hey,

are acquisition time we and you at further accomplish. this really much is just breakout this to idea But We be an much think on and sales not any can how point how to give initial prepared where our would we’re guidance giving we at guidance of would volume. what head at be give

Craig Mammon

guess I Okay. one...

Chris Volk

that you’d years you you you our month, million then so, asset so this you’d it Craig, then $XXX to is don’t estimate if hard, in or three million. Its $XXX and over average we’re around in is looking us a two have little wanted million sales which rate but also have assume flow and last exact Well, a we a $XXX that if Chris. point bit get at and this visibility, investment makes at the to could and assume assume something our you’re business somewhere

Craig Mammon

trying have guys the Kind are have up guys I with level here Got you. guys you you is criteria you guys unit like asset call sounds to thresholds sales. degradation issues? dark in process that know mean, These Or curious financing. you with get and you’re of sort a anything of other to that? be or ahead preemptive if to what’s there just look I it any call? you going to see going the the to guys what’s when tenant of of the portfolio? it thought as you revenue kind to problematic goes get terms of I’m leg here property rid like of than the it

Mary Fedewa

Craig, Hey, this Mary. is

in So sell of sort bucket. we properties three

one is is first bucket these customers. going with our that and an start The opportunistic more active are with, business portfolio do and we we generally to

We’re third relationships very our centric customer have is business and long-term we and of repeat.

lot So, embedded look back. and the thing and and years anymore, we so run there’s two an this units the that first more kind in nice six now done nice and it’s cash we’re do to I portfolio a We lease that just of so a old did it’s algorithm probably games. with flowing, through says, not has a at guy gain nice in not I'm I'm its area, XXXX. do let’s go going business them, the with we’ll of

helpful. this correct, and and can XX% just the on we we is trying in to might that did front look do we don’t or payments like portfolio things line were some we bucket you’re it’s our financial trends talking is lot super of out of periodically. we of the at portfolio, because so get strategic So what with about. This see more in second you where And we it’s

again the is is bucket more of strategic a vacant bucket So which property the and then And that’s bucket. or paying last vacant properties. management a the

are determined that’s and bucketed. our So how sales

Chris Volk

Mary is as sort Mary basically and the want I have sort Craig, It just add of day impact with some portfolio what it book [Indiscernible]. on we originating. the financial our One lot we in stuff earlier, we said how remarks that of games is you’re to do to has of the embedded translate to color saying her that, that. have

some so and time the going your to make you’re that ability Mary talking And your gives – to pick just from the to going it some based time, to spots about. pick you gains you’re money print upon absolute was almost relationship

make a you’re So, number two to number where potentially there. The future your avoiding going problems. to point one, is you’re peace money strategic some

also are is diversity front diversity you’re correlated and risk. in which level of about tenant that All you’re to maintain having also potential thinking here and important so to and a is lot the us to bending getting And not what future You trying diversity also risk sort curve. high problem. doing portfolio sector relate of of

have. more can when the the risk the basis curve we sort think it you you job static then a assets. non-performing So on all participate we this proactive final curve is realize not is about which of more in, - about part can think which the risk that then, you bend And and its the its of part dealing with

of the net three in these together year generated plus $XX all income. of this pieces all activities we’ve put of we if those So, million

what number? number, million. GAAP GAAP the $XX That think the was I is

people So, And somewhere to million. about GAAP it is what’s and $XX talk over the get about mean, the cost? gain a cost talk realistic close number, lot the but of over let’s gain so

you’re vacancy what give is activities portfolio million of synthetic doing that $XX help really even you and further the you skew against cushion to sort cushion, management So have. through any a property

of So, let’s and a you increase can just Mountain period have you that’s we’ll over this you the and have a Mountain and know important on you to business Gander Gander as start look that long properties recovery you. and by recovery at that think cushion for I certain really report time, take to you properties, XX%

a you're you’ll for you’re exactly on a at a prior birth the it so you going going so have So create to to to to the in end time, end, see its run from what out, assets then of this growth. year have happens to rate on very time-to-time through from time dent make you’re internal gains when we’re and which losses to net only going you these our and from going assets looking

lease net or growth inclusive basically those high activities. as still space have anybody So than to as going internal entire anybody the higher all we’re of in

Craig Mammon

Helpful. Okay.

Operator

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

Unidentified Analyst

is just Malhotra. This of questions. Kevin couple I Hi. had on

within like at, terms or In quarter any pricing? of you the versus in of change particularly last skewing that in look in terms pricing of say transactions market just are sub you of sectors terms velocity terms the how seeing different in

Mary Fedewa

pipeline Cap the it about trends terms been looking rates But little in retail from seen we’ve of there. have that stable, maybe our I away industrial is so people we’ve that’s pricing and This opportunity perspective. velocity at seen some biggest say some think stuff, really would I out a Mary. and harder trends and from

Unidentified Analyst

Okay. more, of your And been team, going acquisition in any there just retail on in there, with your of environment terms strategy not? then strategy any is given your what been has and kind just recently basically and just in of shift terms – what’s one change

Mary Fedewa

the on for been Mary. the same. has have our – we’ve so we No, is creating for This No. is always change database, us. team we us retail we’re own mean, prospect has front and changed value since the Strategy retail, experiential have adding in contracts to XX% started on customer and focused its end. all I a large we nothing

Operator

go Bin the of question from Kim Please And next comes SunTrust. ahead. Ki

Ki Bin Kim

I some the quality there Thank any have know describe you that market is you. XXXX? of tenants Could been and And quarter? target for fluid of buying you this you it just type but

Chris Volk

talk quarter names. a about aggregate, and we about lot of the do tenants Well, we this Ki, we don’t talk in every single specific

the look much overall would You added Bass which we that can mid around of when company, sort to so included BaaX few BB the be sort tense that credit Pro, consistent type way company. in the to been the that [BB] XX certainly dealing by everything has on profile with But they you’re and a had with of is numbers. media I pretty is tenant and what Top in work

BBB guys. and your So, a then become as becoming your BB guys guys your stalls license non-performing underperforming guys – BB

with was overhead is ratio The what So X.X:X. of the we’ve BaaX been. median sort coverage fixed charge consistent

we this is have. overall were tenant a than X:X Our more coverage kind bit of median the ratio of basically so fixed that around overall mix charge quarter little better that

to master heavily devoted We’re still leases.

So you that. got

in little where it’s far leases on for [AX] median high or Score been actually have we The is got which which too everybody. for and the quarter the And this and is portfolio. median STORE last few cost financial us. whole ballpark contract almost replacement on of kind after of XX% we the not statements new we’re credit So of the quarters master from everybody ratings

want. So I portfolio talk structure with any very and perspective, it’s you perspective, the consistent sort if that you of out basically we’ve rate been we’re from cap so mean where about credit -- on overall statistics. deal perspective perspective, color in Mary, acquisitions where

Mary Fedewa

it’s much I think for think, much pretty the way consistent and go we have to you will described question it, very that I as Chris, forward. so continue be Chris, as it

have mentioned XXXX you we the plans change no to think I strategy.

Ki Bin Kim

Am ask I so?

Mary Fedewa

Yes.

Ki Bin Kim

know any And Gander sure I Sorry. portfolio, lastly wasn’t new eight kind I for or released you through aware that kind tenants recap just of were on remarks. that off. it’s And you on of? you about I to small us? cut of stores, said, a went the opening you thought that? the part I had You pretty but should quickly just Can Gander. timing of XX disruption? to

Mary Fedewa

Yes. is This Mary.

XX have properties. we So

We have resolution on those. XX of

So And of those we the those. other CMBS there on and discussions release out those. the two we’re to one. are new of We entity marketing in sold we’re Gander and in eight two

to we’re two. market with So out

assets pleased performing these the into the we’ve so again in One been we now actually right two quickly on, have assets. of how eye] do with turn able I was [an market really to

Operator

comes question go Todd from next The Fargo. ahead. of Please Wells Stender

Todd Stender

details Can footprints how in size? vary big of Pro then can your Thanks. know are Hi. hear maybe Bass I the properties? pricing and the purchase, on we that further

Mary Fedewa

we’ll the boating so Todd, we is program the strong, between shooting. we Pro. do. Cabela makes and think I’ll details I Hey, the think acquired same efficient about start that. – together Cap with on very I The in some We’d two sevens as credit been Bass Pro company the a like fishing, synergies in nice and like of has and like is Bass We efficient companies. hunting Cabela And and help the here of get and nine card then being very as we acquisition. that for high we them. something properties master there million the But amount from $XXX So do that leases, structures it. acquired in

competitive pleased a think lot very we’re they’re Bass we have in is more to like Top stout them well. course marketplace be going to that So as of the really and so XX Pro we credit, in our

Todd Stender

And foot square size wise, the XXX,XXX just looking at fungibility, are they size?

Mary Fedewa

they’re square footage within XX,XXX. average pretty of no. diversified No, about

Operator

from ahead. of go Ladenburg Dan The Thalman. next Donlan comes Please question

Dan Donlan

here, what retailers fishing Pro up space, sticking was Did the you remaining of or go there’s going process given kind good, Bass hunting to believe three one just just to just sporting back curious in of with the in Mountain, Gander? with into Gander one happen sector. your exposure hereafter Pro perhaps the be Bass Just that thought what two of and

Chris Volk

off, First Chris. is Dan, this

tenants problem in And scared different I for away As that as or that Gander not say learn the my from get issues. of reflective years, space one problem just I’ve whole. market would a don't become away prior in overly to and becomes a and I having banker the hunting you because for of case dynamism the life tenant and a don't number the scared a just done get of reasons. this of and really are there react fishing really I have never

Pro So there including affected by way the are issues competition that Cabela. and from them, enhance Bass

many market their to a had that We services, business a and say the and Cabela’s attended the establishments. resulted having fishing component Bass attendance would premier are customers to service incursions the how issues from some of and and Cabela’s. locations -- and experiential probably up of of by experiment So ended are is are we Bass from very that bank. card locations Pro that There actually had credit Cabela's the -- hunting of both operator Pro

service do think component to space So important towards tours So a a and a retail to have fishing there’s guided really in do and off whatnot, to business. the with from and the experiential I that’s component anything they just hunting huge very strong and

the while – market. force. fishing them. would still highly formable entire a of hunting Bass are also are Cabela’s of and that I think We XX% Pro say and about There we together,

camping, So are all think to boating offering buying is have their well. for fishing, There fishing take on recreational there Camping this that players moms-and-pops they’re fragmented. experiential and a vehicle, play we the going there’s own number business. hunting, in the to that piece do and hunting, we’re of market the sites out market room still World And and of is somewhat Gander of course, Mountain

Dan Donlan

on of just released, outcome able of percentage could you rent ones your curious the then Gander Okay. you prior And were Mountain that from what disclose maybe your recapture? to

Chris Volk

carrying are, of World first a we’re Yes. with in at but the the a good point. those I would we’ve going expecting fair new lender on of Camping sales that process, two terms our CMBS I properties early of all, the between properties. our given we’re XX%. recovery of range and with we amount terms would that upon -- locations based this will Mountain, of XX% and cutting numbers no disclosure the we’re that you we’re to two, a little And then costs and somewhere there’s that, also and with having getting other so fairly where they're say the what’s in Gander the both company, with surviving vacant in transactions those happen discussions say in associated idea

this to the been we’ve been use that we’ve but be less than of it ballpark. will kind to the at us, look be you for so will prior close little recoveries getting, what historic in If XXs,

Operator

question will of next Mings James. from Please come Raymond Collin go The ahead.

Collin Mings

to update relative out growth the reviewed Thanks. presentations, in the specifically morning just deals ask and to investment continued pipeline? to new there. pipeline that I I want in wanted about provided understand drop-off Good the that

Mary Fedewa

Yes.

So Mary. it’s Collin, hey,

Collin Mings

Mary. Hi,

Mary Fedewa

deal a it really or So, – hasn’t reviewed. growing. – the it are off of that’s And deal its closed then either How after or the the is And Hi. when been on. takes passed been pipeline you?

you As quarter pretty last good had some this can see, we growth. in

just right reviewing done just we’re – of deals So now. we lot a

So yet to on the decisions them. or fund made pass to haven’t

it’s little a bit So of…

Collin Mings

There’s lag some time…

Mary Fedewa

well, as little little all. Well, that’s lumpy. lumpy, lag some there’s flow time That’s

a growth in just it So part pipeline. of the

Collin Mings

Okay. That’s helpful.

to that turning I’m pretty of process, are guidance maybe it necessarily of like I distribution, that what on but And understand like how entertainment percentage is far overall, make Any that. was does be that comparing what just Just in color overall should the classified. restaurant, aspect things just looks pipeline on slide would pipeline. steep it but in maybe seem recognizing kind that as not against there like this just the being changes timing as we drop-off some the XXXX? And uptick that the still just but your pipeline, it as of of into and helpful? looks a then But

Chris Volk

the stuff. desirable some this time in play The So, with cap and just is Chris, fact restaurants in to not are popular to us is restaurants off for I’ll on often start the that get rates be in. this part transactions to drop-off just that

them. entertainment? and And see lot hunting, is fishing the then the and to we’ll So of think but we in do entertainment a them hunting not as tend I – far piece, as

Mary Fedewa

own it gap. it has Well, category

Collin Mings

its hunting own and got category. So fishing has

Okay.

Mary Fedewa

or of like events golf, things I think sort just I’ll main space. of more in that bowling, like seeing wedding say of I water little looking more example. that at for is, Yes. opportunities that, around, sort we’re just seeing top some opportunities bit when family some entertainment are We're like there in venues a parks,

probably more family away little a from bit So entertainment retail. little shift the bit and

Operator

The ahead. Please question follow-up from a Bin next Ki Kim go is of SunTrust.

Ki Bin Kim

NOI does like? look you or what Just one. about out that a And results like same-store thought guidance going forward? quick Have putting

Chris Volk

increases, And start we a for the mean, mean, then rent we away increases, escalators so that of stuff of to we’ve cap same-store point which the made to numbers also building get don’t, slide we’re escalators I giving going The single across the give the have portfolio. booking just when NOI I rate rent you we it. the are once every our timing sort mirror not quarter into we’re you a

of X.X% six about a that our have but year for number third your sense So going increases hold and just but and on kick overall our from that’s a lease or same-store five-year to what kick in, portfolio us in be for be there being can months, to lumpiness year, two. escalators investors are hold some are. you’re escalators giving that guidance to to assuming you year going it that basis, that in could of to – not the us is they lease end The that’s the

Ki Bin Kim

Thank All Okay. right. you.

Operator

And our from comes Haendel St. question next

Mizuho. at go Please Juste ahead.

Haendel St. Juste

Hey, good out morning there.

to trading debt lack X.X], [around at think the I at fourth curious talk the million what’s why debt maybe in Maybe in term your looking that’s quarter we’re dispositions, a certainly is the balance EBITDA, near at stock Looking can liquidity, net and term premium sheet I’m terms near that maybe XXX but not don’t maturing NAV. you your of a here. more capital to headwind, bit access of little guess issue acquisitions? to

recently your enough financial raised with have clearly Buffett. You with mid-year

positive got curious of towards lots availability on capital so guess, I’m You’ve or just view variability not with the out there, more proactive acquisitions? I why

Cathy Long

XXX and update to million. We to if million start done the wants. I’ll I of Hey, Haendel, through this jump is guidance for XXXX million Cathy. XXX had in gave and she can Mary September about XXX dispositions was

sales planned come of next quarter volume that you to But or and that is a have are fall we’re Mary, net that that the they into what could some still first there’s giving quarter potentially of is add. anything you either dispositions part if you’re year. acquisition seeing number. So that this is are

Mary Fedewa

add. would in no is No. I expectations. acquisition – we’re is falling behind I don’t the no our it or Haendel, in about certainly below means excited pipeline and it and means

sale flow out what the considering on looking we can the do so So business, about side. we’re the best want timing, its property excited we we’re

there. you Absolutely slowing don’t acquisition the impression is get I to not. that So, want

Chris Volk

being say, And then, we’re doing of this. measured terms in we’re would this is just how Chris. I

that’s you the kind us. consistent and basically looking keep of we’re at kind So diversity kind that for to from basically of that’s us of to expect grow allow a predictable pace you

Haendel St. Juste

Appreciate Curious if I a by than spike cost is And reset levels. the bit very specific tenant. thoughts. quick the higher replacement on guess that one driven being

should expect going provide curious what any there’s maybe Just you thoughts that we forward? on if and that

Chris Volk

not that’s XXX%. I but we as basis are. I mean, [Indiscernible] nothing its of say number would – a disclose sometimes they this are where quarter, to we over kind And individual on others, than higher tend there’s

Operator

today’s this back Volk answer for concludes question any to over turn now and conference Chris the to like And I remarks. closing would session.

Chris Volk

content, Yes. everybody I invite video for not a I cleaner look tie, week, website navigation, off, which, brand first on bow and comments. be to one may added put you have has and just pure actually see obviously last the I the call. We attending It also want it. so thanks look a of to able And can the videos new to me couple at launch live you down. take

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a So if seeing you're great day. us know. have in And there, let interested us

Operator

concluded. presentation. The for you now attending today conference is Thank

may now a lines. your You great Have day. disconnect

Store Capital (STOR) 2 Nov 172017 Q3 Earnings call transcript