STOR - Earnings call transcript Q4 2019

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

Operator

Good day, and welcome to the STORE Capital Fourth Quarter 2019 Earnings Webcast. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. Please note the event is being recorded.

I'd now like to turn the conference over to Ms. Conlon. Moira ahead. go Please

Moira Conlon

presentation, thank Investor Capital's for Quarterly Results. Fourth our at are News quarterly we and today's under information to These ir.storecapital.com section call. This us of discuss Results. issued documents investor and release STORE Quarter in earnings Results, includes you you, supplemental joining for the all available today morning, which Relations Thank and XXXX website Financial our

of President am Officer. Fedewa, STORE; today Officer Chris Chief I Cathy Financial Mary Volk, Operating Chief and and here Officer; Chief Executive with Long,

today's remarks, the up will the Q&A On questions. a queue call, order keeping then reenter management the questions. hour, of follow-up your portion to prepared will to call observing Participants and we the call limit participation can be then while provide if our X-question open during In call. have maximize we you for an will

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

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

forward-looking Our those cause and XX-Q. could our actual may contemplated are operations Discussion Form our XX-K financial from in the condition materially reports contained filings, factors that including results these and vary by from statements. materially statements results our of on differ of such SEC forward-looking to

Chris go Volk. now like to please With the ahead. turn over would that, to call I Chris,

Christopher Volk

Earnings With our Operating and STORE Mary today good Capital's me Officer. and morning, Long, welcome Fedewa, you, everyone, our Fourth Quarter Financial Cathy to XXXX Call. Thank Chief Chief Officer; are and

record that with run the made the and large for. say very with will adhering the For have year numbers that investment years I quarter for capped activity the address. and nearly that $XXX achieved while you, the granularity market through a to known Mary the we the over investment successful will several fourth to but million, we quarter evidences past of success volumes diversity we us of ongoing XXXX, penetrate fourth we're

invested million stability give Mary billion close occupancy and rate real At sold the estate well portfolio sales and we and an percentage time, XX.X%, XXXX, remained with activity in acquisitions upon information lease nearly continued to During investments extremely methodology. $X.X health. with our of in in accretively property same our the Score portfolio $XXX our healthy, of rated based as as net you investment-grade will quality contracts STORE in more our about investments.

so, by which, consecutive dividend fifth at in dividend Even was dividend. as in ratio serving year for the reminder, basis, provide our of share a was our protected XX% dividends meaningful our X.X% per raised operations highly adjusted our way. right of quarter to to with a payout our the a third our funds raising a shareholders from fourth We quarter, on continue

year, which the from Cathy Our discuss. AFFO will benefited for a strong timing was per activity growth X.X% share that

Such at-the-market new growth enabled leverage consistently for funded through been combined have was issuances, that conservative us a with asset benefited also XX% cash equity years maintain through past reinvested our efficient share modest the always, growth flow by contractual program. accretively The successfully our external to internal of after X.X% enabled from As proceeds have issuances reported growth growth lease sales annually We payout a was escalations our contributor. contributions strong conservative internal averaging our funded which profile. and with recycling few accretive ratio. dividends, from underlying AFFO also

of we for our our have debt-to-EBITDA assets quarter, a which year. over stood lower XX% end of basis XXXX, By was our funded or pool we which fourth at to X.Xx, guidance on run of this investments, percentage XX%, more At end our the options. anticipate range unencumbered target. XXXX, rate the billion, a than that the providing For stated us of our $X.X over of will at with our slightly maintained rise in end unprecedented has roughly the flexibility been financing

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

during lower weighted is in than rate approximately average lease quarter which slightly early XXXX. our was Our trends X.X%, the

approximate annual rate rate approximated get lease of average quarter lease you during For the with corporate by investments a escalations X.X%. providing which approximated the about investor adding costs of operating of year, the the will XX% after return, gross for range. returns leverage escalation area return contractual the lease and XX% lease our weighted in leverage the initial with average The X.X%, to in rate X.X%. made us XX%, net in our Add

post new coverage from rates essential which compute of long of returns investor charge having enable the borrowings mostly at take purchased investment cost average level our investments we XX assets you continues to operating is for assets, years. STORE and X escalations, weighted quarter companies ratio long-term during The disclose our yields, variables unit expected lease fixed to of property primary of return. favorable level investment overhead outperforming time was as The which Our term that cost our the approximately to the of return, contractual investment public lease percentage median are rates have by quarterly be and X.X:X. driven to spreads from annual why predecessor been a

and more favorable fixed The Moody's for Incorporate the charge credit contract investments median at BaaX. is investment tenant BaX. new STORE was median new rating far rating Score risk profile or the contract coverages potent level

multiunit issuance were critical unit-level properties at XX% And contract of evaluate lease the costs. during of quarter acquired recent ability the XX-year approximately financial to last notes unit-level of fact replacement real of of are capital, assets seniority our which XXX% master we us from This funding second November XXX within reporting the financial our statements, estate us to giving Our to average XX% net was during that all to new made to the AAA-rated subject investments leases. we master investment notes. made required our to new of also issuance and quarter as as the well inaugural year, folding of including our quality included is impressive portfolio. in our access deliver

And the will call turn with to that, I Mary. over

Mary Fedewa

by real total about morning, quarter, $X.X weighted at Thank you, and fourth X.X%. was for million average cap acquisitions billion, million year our a acquisitions net net our us. cap and estate nearly divested activity the estate $XXX This which than weighted with of investments rate $X.X our exceeded a for good average in profitably Chris, real rate X.X%. to guidance made of year everyone. XX%. investment another strong was XXXX we the We billion, in XXXX more billion $XXX investment of In approximately brought $X.X

at were than for quarter lease spread closed diversifying $XX.X separate transactions an XXX customers, added our customer XX We relationships million. across average investments granular of with and the size Our assets. quarter portfolio about net more further the transaction XX new of

resulting this fees few over or with about sales net original cost, and XX about portfolio over sales. million gain XX million management dispositions original a XX included part In higher Of cost remaining XXXX, in of our of as of $XX sold ongoing were properties as connection over an a activities in The lease level aggregate gain recovery a This $X we our property the properties, cost. cost, gain and part resulted of XX% the termination X% of and were X% for approximately of portfolio, a XX business. to strategic the opportunistic gain in in sales, a XX collected we sold were size over cost. year of maturity XX% and our larger our locations becomes management resulted compared reflects

service XX% Farm rent Now portfolio interest. remained in year-end customer, the our remain of sector, our experiential to properties representing portfolio base within unchanged, and The Fleet and top retail turning Group, XXXX, At remaining annualized just customers highlights. XX% XX% manufacturing. largest in with mix with XX of steady, in our X.X% the our

for accounted rent of XX.X% interest. just base Our XX and top customers

our portfolio in this year. Chris customers. detail But information terms more all these long-term rent. base like this on Art disclose call. own share In once XX X only been averages, XX Van of we have Art properties performance, would no consistent We stores, Art which in annualized of with for internal in Van and components, about movement I stores, our Van discuss some which will represent a Furniture, quarterly profitable. to average XXXX top performance our which financials of our later our is in of was We resulting X.X% growth receive

X XXXX, share part a over monitor we to company, for through business. We always and are provided XX, Working derived approximately have in have from XX and been growth with in in within dividends and has still AFFO the and continue time, top of grown XX%, strong per this to what discussions XX%, of we growth. our done we that active shareholders. our we tenant November have In returns most resolved the the years internal with IPO situation. we successfully do, our issues our this will of Since our bankruptcies successfully

diverse meaningfully also cannot Therefore, any our portfolio. have very AFFO. single built event We a impact credit

active to locations low I servicing good our highlight very remained property X,XXX opportunity think quarter to and were fourth our year-end, than is our special of portfolio XX vacant. management. tenant only At our due a partnerships also strong Vacancies this team. the in more

maintained to under have subject quarters. an well Since as not a same have we of each XX. X pain XX vacant At identified average our our during from solutions these we a public time, lease properties quarter list and first for for company, vacant of at of of XXXX, lowered list the We our properties XX already XX of to assets. these properties

and this While of believe deserving staff our of not is and we is reported, important attention. reflective is statistic it quality often

special investments We this to in have substantial servicing achieve consistency. group our made

our investments XXXX, will pipeline we to diverse, continue we the and in selective remains highly enter As make. and be robust we

that diversified continues portfolio. our identify across attractive opportunities Our variety industries new to direct will a bolster origination team of already

thrives on Our strong relationships. business customer

were and keynote Forum, capital celebrity and of to over leading Rescue, here event the to back We these in year. and forward and attendees. best to speaker, ever, Bar years Inside year's next Scottsdale. held futurist, our giving in recently customers A to actionable with Track and business a have our past by exclusive John to even provide our informative relationships we and our which a X on hand our continued customers experts was looking conference, insight experience markets reinforce biggest economist, with the another This motivational we're annual ideas customer all Taffer investing providing

the I'll to over to turn results. Cathy With financial that, call our discuss

Catherine Long

full and quarter quarter I'll for I'll by XXXX, XXXX. quarter an to Mary. begin from generated $XXX for and expenses $XXX portfolio capital in the million by Fourth year guidance million the activity revenues XX% $XXX increased to our million. quarter fourth the base performance statement. to financial Then income quarter you, for $XXX The fourth markets our XX, year-ago our Total sheet. interest Beginning balance Thank of rent on followed with annualized discussing as by increased the fourth the update XX% were XXXX. compared our place million. at December in and review

was our over estate larger due amortization X/X higher related to increase and to portfolio. the Just expense depreciation of real

were million our to $XX.X quarter to associated portfolio $XX.X investment year reflecting fund from additional ago, debt of additions. the growth and activity. due increased primarily a G&A issued by continued million, long-term staff $X.X million to up million, expenses the expense for Interest fourth $XX.X

accounting to on both lease property ground and as revenue related on payments of percentage year as the a quarter increased fourth portfolio Approximately a to Property decreased require us from our the that and by equity basis our now impounded average standards of compensation, noncash items XX costs As expenses, the was increase property assets, our assets behalf for gross impact taxes points quarter XX million the year-over-year. basis G&A excluding a to average lease basis present costs. XX% that during such portfolio the $X.X rental make points of of new ago. tenants

annualized quarter. X accounting basis points gross of excluding On the basis, totaled an year-ago the up, property average lease portfolio costs assets, about from unchanged

share, relates delivered During We and properties impairment of million $XXX $X.X an a impairment the sell. related increased to majority AFFO per growth provision to diluted likely we a real of per diluted estate share year diluted strong increasing XX% year-over-year in year $XXX quarter The million share AFFO from basic million growth This $X.XX On AFFO provision quarter, per portfolio. year ago. the another X.X% to recognized increase XXXX of to AFFO AFFO we're our to basis. $X.XX per per a from share per a or on diluted basis, a $X.XX XX% was represents Full share. ago. and million share, X.X% $XXX with

the enabling on results in Our XXXX. master capture and to estate December coupled our strengthened has heavy part recently, interest timing interest fourth revenues our November revenues revenue acquisition traditionally low normally due were the acquisition to during XXXX and to activity were activity, us fourth costs overall to the we year heavily and rate due lower-than-anticipated debt more higher in quarter were the with volume achieve earlier-than-expected to environment showed been during of our to Higher transaction. rates AFFO low funding able quarter October back-end Most weighted, which addition early activity, by year. in strong real

our funded cash to operations, volume from flow quarter, ATM revolving proceeds sales, a combination during capital issuance. master and funding property the our our acquisition markets activity credit sheet. proceeds program debt our from facility, temporary and our mid-quarter borrowings balance our on We of turning with from Now equity

markets. to of are on our STORE The of X.XX%. first on completed borrowings We strategic million $XXX fund penalty the take a million proceeds remaining our The of issuance to a accessing on X.XX% continue a funding mature of used of and to program, the weighted funding acquisitions. credit X-year under average November, We weighted for X% million In approach $XXX revolving notes X.XX% average notes our of portion master issuance the without master of and XX-year of that including to rates on we notes prepay with the the ever notes, to interest interest notes. rate and pay XXXX notes were XX-year to the debt the new blended a AAA-rated rate notes $XXX facility scheduled used in down proceeds and XXXX. were

to at December $XXX long-term decreased annual of debt just increased borrowings median result years was maturity weighted a activities, long-term debt X are and average maturities over years, about our well-laddered, these had its X.X%. As Substantially, $X.X intentionally million. rate billion, financing XX, a our are X our weighted rate average with interest to and our maturity debt slightly fixed all about of from

significant in debt due Beyond March XXXX, our have extendable originally $XXX in loan we million XXXX. issued term maturities no

which proceeds least after more cash next plus will flow, cover from years. due expect property represents We year operations any maturities that our than coming the sales free debt cash from X dividends, in at for several

leverage our ratio on At at around the or our debt-to-cost basis. debt-to-EBITDA end a at net December low on a basis, run rate XX, range was target of net XX% X.Xx

our a continues to program us given for raise capital, acquisitions. to ATM granular be Our effective very size of the way

of average our per million $XX.XX We at fourth the the the During approximately X launched we million. $XXX quarter, ATM million. issue fourth of net proceeds price quarter $XXX common to an of in during raising stock this shares program amount program of used share,

All with told, XXXX, XX we're issued approximately conservative shares per million for of financing ahead at our year opportunities. million. proceeds fund under program, leverage options over of investment of substantial access of positioned $XX.XX stock to attractive our to large the a well pipeline variety and of flexibility, price of course an we common $XXX ATM average raising share, the Over net

the $XXX million full Going facility, feature. XXXX, has under into under program our $XXX credit $XXX we capacity an which available accordion our ATM million have about of also and million

trend during was unencumbered, intend unencumbered with and we unsecured issue consistent real higher At assets year. In XXXX. approximately to our our debt December gross of primarily which the level to estate of expect XX, XX% portfolio is XXXX,

our turning XXXX. for guidance Now to

and announced range projected volume affirming $X.XX XXXX expect on the XXXX guidance to AFFO billion. of share be per October, are our We first in to net currently approximately $X.X of in based acquisition $X.XX,

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

as of anticipated $X.XX or expected to share to and amortization, share, guidance property share gains depreciation for losses $X per $X.XX plus reassess equity per the sales real per It's per rents, as $X.XX as early related share equates we AFFO progress Our line and still financing on such compensation approximately always, estate straight excluding net guidance of cost XXXX and the year. to plus amortization. in to year, deferred items we'll income, $X.XX through

now turn call And back the to Chris. I'll

Christopher Volk

Cathy. much, so you thank And

for the usual, the questions, over to As operator I'd is to call like and turning make before few a your comments.

is revenue annual cash among year-to-year what gross dividends, drag, in call through average elect which slides with a quarterly which can model. conference to our lease Chief overall the appendix the use annual of which in been volatility XX, tenant our call, average contract have presentation growth for the that reinvested certain escalations this exhibit them can lease updated. and is investor First, starts walks and growth averages means after walk We performance business Page that then components I on our results expected historic the internal mask intend because revenue off illustrated corporate basis. to rent on long-run growth are

by events from look instruments. were XX.X% average which which high better why insight this before which credit at can That Then of numbers XXXX average, average, annually, to which of the keen was with recoveries in the assets disclosure. want is net whether our resolved with have with It prior was On little which observers Drag altered, costs, comparison about par provide amounted to of averaged historic of is the contractual degree credit-based a will said, page XXXX which variables drag contract or to from other associated losses annually. changed. to worse on credit us the perspective the accretion XX points assets year a basis average to averages starts events. resolved from X% asset move sales, long-run

after to moves, from on expenditures you adds to about the which average at losses, resolved for amounts roughly basis to XX arrive basis which X.X% in that another to credit event XX refer tend tends this long gains sales as loss lease X.X% recovery accretion on To impact historic dilution. average annual basis arrive property process, track associated average, credit point points approximate work at you same-store approximately XX%, escalator, these lessen drag Our average our about and the to drag. effective point credit basis XX an point also rent historic from from and annually. high, is events, growth we XX unresolved The run, of

credit X% As to We to would X.X% Altogether, we which staff, illustrate the for an of number. STORE everything After makes of internal evaluation XX%. XXXX. assets, so, around or a and percentage to of average percent around events tend business to demonstration simpler. growth be estimated about the in approximately losses points less basis a leverage before XX growth is a impact model stock-based which revenue from leverage, compensation amount revenues, bigger to as this tends

key That property that analysis. we and is comparable annually activity 'XX. into update asset an illustrated XXXX, commissions, accretion our costs are which the Another delves walk, 'XX chart rates and just to cap making internal closing accretion accretion net on and and for sales associated is of our Page sale growth and XX, before sales

only this STORE year. sales peer illustrate Given the a companies asset and has sporadic leader elect asset in sales. once impact been sales we accretive its amongst activity, AFFO our a of public asset timing to

connect something the you STORE of for with into tomorrow, our that a the business I and presentation letter you. We performance. website quarterly and to write is XX-K that observations do quarterly can our best year's we our We have the letter through data. to presentation simply not posted intended our make contributors walk be dots a concurrent worked Then and deeper. annually, want a filing. on This distinctive to delve will our lot detractors our has to a performance model, delivers to to bit

the call I'd And to for the comments, over with operator like turn to any these questions.

Operator

Instructions]. [Operator

Berenberg. Crossett, Nate from comes question First

Nathan Crossett

assets I the X? for any coverage? Or on Is terms us stand comments give of in Can color Van. you coverage rent on appreciate you current rent those Art it over those? where on do

Christopher Volk

say Nate, in this portfolio Art the I'll our is two. median Chris, of Vans is around I'd coverage that and kind are - area.

Nathan Crossett

furniture is store is a Or And it business just an issue? like in is bought furniture X Van-specific issue? Maybe quarter? this looks mean, general, Okay. like furniture on guess? current doing, thoughts this I you Ashley's the how I Art in

Mary Fedewa

Yes.

So - systemic doing furniture this an issue is a a space. would into across actually not We box the definitely customers just to Mary. and is an hey, empty furniture the did issue space, Van this like - And Art the We furniture are fine. say furniture furniture operator. the - all a Nate, we re-let we

that the the there. you But saw are one So - space. furniture like we we still was still

Nathan Crossett

are And other some there any know there you should there tracking there the of? out out I for Okay. there have should Is aware other issues an guys? you be kind article be we else NPC that about out anything was day. Pizza of we Huts,

Mary Fedewa

Hey is Mary Yes. this again. Nate,

of a points we say So news a would NPCs, any very Pizza too, so not we, small that's XX to out And the restaurant we basis are aware there. handful few than less issues on expect a exposure All of of I do from by franchisees, XX there. that basis Hut have - less points, way, We again, what oh, master bit those, a them. to strong couple have well. see collectively, of operator little any we specific, don't as than exposure the leases. have

no So well. see the issue space as in we systemic restaurant

Operator

Deutsche question Shivani from Sood, comes Bank. Next

Shivani Sood

Van was commentary And the at quarters leases. there about Art what say I tethered. came Art untethered appreciate ago tethered Van, terms some several versus I locations think limited is can are that STORE it somewhat in of on you but up

potential if or during guess, proactively change wanted filing how process? you re-tenant does I that guys the to properties sell some So these of

Christopher Volk

Yes.

untethered, they is can thanks and central you're to especially which that franchisee, tied changes, in tethered asking, can independently, Chris. some stores you or we the have the one could because in stuff. versus So stores Burger a of well, the of XX% way close that concept they're of is for have retail The really a that concept tied they distribution with other question. to a they're can't standalone where centers, This - each and live. buying XX% don't King a the Whereas have could the franchisee case exposure Hut they go the bankrupt get but hypothetically, Pizza King, and of Burger group, kind to NPC, to, they other can down

So that's an situation. untethered

the - case a tethered a you're situation, in So are variables the of little a bit little bit greater.

an see, looking you're to So to company. reorganize entire

that equity, tell Michigan. right are cautiously the Mountain these to including were It optimistic would it at amazing through today, stores employers I is not chains that that to has in Art I'm ton great we that, Us has years, X So are We, there XX mean, brand not had. will the happen even sure were profitable you prospered and that recession. Gander a "R" of of Toys look Van. this profitable if that a blip chain stores, cease stores, you a the largest our Mountain for I exist. Gander and is having

of the fact that kind possibilities. we'll the And some of elevates so own, tell. But elevates outcome are distinctly a some tethered time and to be will bit - they've able their So through of work and the risk that it's little had those. and issues hopefully,

Shivani Sood

would And as part think, business to portfolio a the had color. mentioned Mary, the of that management greater great you scale. become portfolio I That's continues

think over to next we about I should see guess, growth item? how as the So year, expect line in we G&A this much

Mary Fedewa

Cathy will G&A. talk about the

Catherine Long

Cathy. is this Yes,

it been that it'll G&A points add trending about basis we go a assets. the as anticipate in as we slowly. up a but as to of pure staff some down trend number, And XX continue average affairs, So of has will percentage portfolio,

Christopher Volk

getting We're look in that's at that G&A, property are And in letter see then are looking of at to it, doing because But G&A is XX tend AFFO we're basically basically the will things algorithmic just creating sort and that's we're AFFO not at property the out evaluating you'll what we're our and you're points we looking out itself compensation, number noncash but business tomorrow, come And like that backing costs at things number. we're property is out the that costs, costs. reimbursable backing G&A. And - to you're looking stock-based drag. model, when of the an do unreimbursable. my basis

back stuff basis out, you So XXXX is from aggregate delta no, XXXX - like of two and basis if and me, X compare you like excuse or all between or that year-to-year, that those it's the XX - is costs something the points something points.

or not it's So points that points and less. basis X the the and basis XX like So before something, was management points it G&A is think like much, right? few basis it's I property year - the cost that, was a

related of lot comparing lease I I highest mean, estate-type any we're world, you're any So business. the has - not I profit like other margins, real scale here. it like almost end, and it's period, mean if the a in besides, mean, it's the space - net not exist. there's business the to other like that

juice X by really a the us do basis rates for as you that It's investors is you. business points. at business are more G&A expenses to to way for our So truly figure out and to basically cap not to accretive to here do lower

Operator

BMO. of Lee Frank from is question Next

Frank Lee

part reasons look It we curious close $X know due I activity to if is from this the if during if number to volume decided you by XQ, also at But in of that, any? for know deal strong pass quarter. like billion closed looks the your the pipeline investment If XQ. increased on to deals to any deals and on passed of this quarter. more

Mary Fedewa

Hey it's Yes. Frank, Mary.

or would passed You're opposed more exactly have that more good the fourth activity - new that more less opportunities quarter to attribute added I in maybe right as to on.

quarter, So things these and it's can so will bump quarter-to-quarter as a you again, around - expect.

Frank Lee

rate Okay. for has what in also just but fees to you term you AFFO, you exclude year. And XXXX models? have And fees? term of then lease if from I collected your any generally run been curious them $X know last the know million

Catherine Long

We have them don't out. Cathy. we don't part is kind it's of project sporadic, include back They're you'll really notice to AFFO, why them so in we them. which Yes, of

So I to don't fees project that are there XXXX. material be going in any

Christopher Volk

Yes.

is wanting the this property. with Frank, to tend think, be fees I associated termination a that people is walk away lease from Chris, to

they'd a go So it. they to like property, it's subject a on lease, have dark to

with we so deal them. a And cut

asset, in And sales AFFO. you'll see fees it's number lease so putting associated that taking fee because of the it and including property tends the they associated disclosure part termination sale on the of that were to gains activity and opposed be termination asset, what as of with to sale in the lease and into is with the

So like we're treating of of property, out AFFO. gain on which would back a sale sort it you of

Operator

question comes St. from Haendel Next

of Juste Mizuho.

Haendel St. Juste

first Chris, being billion of with guess, year? to in do answer first our AFFO just well, I the Or X% we that - have about we've of no you've guidance to in year, acquisitions. are we'll XXXX. But going as again, Cathy, in external to credit historically expectation quarter guide, and considering I we the the maybe growth, just given the guess, the never conservatism more of - losses? with net reconcile reading the exception never growth? So the year X% that includes all, where curious, I an able for we that? I'm Should do I'm pure together. maybe raised AFFO so growth talked this of past, how this And with think $X.X generate so of this X% I about be

a perspective. do So timing lot during of year from it. a that it's just to too early there's happened the mean, I things

that obviously is situation. do Art Van we have The second thing the

And are even to early there variety Art so. just on a to could too of So happen. Van, it's outcomes speculate what

would sort move that So a be big of as well.

had is, we year year, from say away would growth third strong of The that had year. growth quarter And stealing by little very to the away that achieved early, right, quarter because X% this the that last some the a some I is of we the we of that bit X a fourth the was way, of deals due it some year. have because north partly that growth closed took would - last happened last first also, in XXXX,

can number, to looking the our that way, based better, our where of compensation from have statement you of just you if and think or that's right? ours, stock-based at long-run like timing look kind whatever you're number. when is by Capital's the we issues at proxy good look - compensation or like I matters, it's look on sort that's, of growth focus hypothetically, important stuff. to that a that that get, And achieving So gets do a or compensation last not at affect the that to growth STORE I based mean, - company - you year, get companies upon of if like, lot and the the we X.X% So can upon, long-term is X.X% max can is at

XX% of is, you're close rates And total double-digit to so getting that of years. which consecutive for now return, do you rate take done you dividend yield, which X.X% add north of X% we've can and five return, to to

thing very a attractive that's think do. to I

Christopher Volk

you back going a ever you to sold just which I the was for level year, of And public level as company. dispositions Great. Last again. highest $XXX million-ish, think

post-IPO? that? So of X-year to just about mark of this issues? more a be should after Or that portfolio as reaching maturing it credit dispositions being reflection just year think how And the how is we of that, are Is trying bigger? thinking it we Is your some curious in front you get part the should guidance? about

Mary Fedewa

give you it's I'll comments Hey Mary, that. on some Haendel, and

we've a little on selling our portfolio. X%, our - balance about of of about beginning talking over think been I

be I'll then property dispositions think that you And X management. to remind that for done strategic briefly, just find that's I - X consistent. So opportunistic, category different are of and reasons: you'll kind -

And so we quarter, as say point. we moved may year, manufacturing past a last this you our down actually, I would recall, whole exposure

what year and opportunistic, little we about runs And a it generally so the did, XX% strategic strategic of management. piece was about property higher and XX-XX-XX for for the at

strategic we higher and across when with that those we as So little that we'll year. again, a move this be the probably But forward. X on did it's consistent categories,

Christopher Volk

X% were as of property around our portfolio... if - And beginning sales

Mary Fedewa

Correct.

Christopher Volk

was the less, kind in a slightly before of last percentage it as it's that, the of where year, - So line like around portfolio, was X%. year it

growth think be expect the course, inconsistent which the of than do higher accretion And would not adds with I that last from you point look us you that. growth, to to accretion. it's to roughly sales that. able at average if XX So is basis And year, basis the points XX

add to with detract able risk from focused credit. being pretty try internal and we're associated to also on to away growth So

Mary Fedewa

industries of between - from trying course. what is rebalancing to And we're and tenants do,

Operator

Ki of from is Bin Kim question SunTrust. Next

Ki Bin Kim

outsize Just question. Art any of Van you Did reserve FFO tenants? type AFFO put Haendel's other guidance? and to For your guidance, like in XXXX follow-up on guys

Catherine Long

- We Hi in I of Ki part this bake our is mean, business. it's Cathy. Bin, always

If bake guidance have is business. this year. something issues, the in lease net for I occasional tenant always of you every part And

Ki Bin Kim

much it was For About what year? - this XXXX? how

Catherine Long

We that. don't on give guidance specifically

Ki Bin Kim

and in you But location quality the Van. Okay. a maybe Obviously, come that And if there's a your with frame outcomes the of for of answer maybe it's outcomes view, but just of those are - following Van real more likely up quality exposure the menu point of the, that you some can you options early and Art And a estate different out. on kind of in can set for stores? the or what of have of restaurants? Art lot

Christopher Volk

that look the I about a in have the start help, I'll investments also I some at Chris. feel assets. single we've have would we and it's Mary mean, But we every Ki I'll we comments. Bin, asset have, maybe good say Well, will and taken

outcome. their of recovery strong an very any feel about virtually we to ability So in type attractive have

time recent. and like And fiscal the going thing tell. Art we're this catalyst, unfortunate a September. for is but that, name that business handicapping to survive think continues to Van. We're not prosper, happen there's Art today Beyond with Van what's the that hopeful because we viable call their year issue the is ended Art - And candidly, And the that so will Van there.

looking September company mean, you have of would the this their So at to by if have insolvent been a that you is you have, would've we - that's numbers, January. that expected wouldn't wouldn't end which company going I were the said

happen. I - and think don't that, most rational that think people would've it I was said looked So going to at

obviously what get where know something, are and obviously, there's today, feel precisely we information. as information more about not good I'm are we those you'll more So at sure as get catalysts. but exactly we this And we we'll point.

Ki Bin Kim

basis a to that you that just said are exposure that to perhaps named were thing one - to of bit - their the in trouble? right. just All little points headlines. tenants think restaurants I the said for... is Or And earlier, you tenant restaurant the you that XX exposure mentioned Is clarify in total the

Christopher Volk

think say the any so. of that I and we're basis I substantial And interruptions it, expecting - would total. points, not of XX all That's - majority of not that from rent

Operator

Please remember to a at time. to yourself two limit questions

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

Vikram Malhotra

kind the STORE chart the probably I you've back, to had were mentioned and horse, to the acted it. want I if look lesson With it was believe sooner Chris, a Art saying have think Gander dead I Van, happened, originally you when trying the it's did Score But were remember would of, kind of sooner. assets Art situation, you terms things beat just high chatting, or track selling of in us to Not when the just get NAREIT, you and coverages but and fix a I on learned, different Xs. I understand you coverage, in deal, a Van. you shown we

Now right X. coverage around is

did with you it, get of As over it? to portfolio, all trying of taking how understand, of it, I'm that comfortable the sort pieces maybe how think about happened time, of just you do sort

Christopher Volk

a Van, less X% we... assets. assets, assets. off sold of Van We actually probably Well, and over a we're the answer is had exposure Art bigger, to We Art that but - that's we number number of we well because sold did of sell which

Catherine Long

X.X% to of XX% annual and base down Vikram. Put reduction, about rent interest,

an So Art an bought Levin Van integration would deal we here. in we integration. wasn't happened 'XX, in story. acquisition And XXXX. This do Wolf that and I They that was and say big that did this the -

I But this is we - granular, important and designed pulling is were So very sort watching diverse, And they have together. what's as these of issues. we're credit were think work through designed them. STORE to to very

Christopher Volk

of the And that a say candidly, you, which - - we Vans had contract handful day I sell, mean, Art some under to we the would had I to date announced.

sometimes right? things and [Technical everything, So you - who just right? people unlucky, are a So get little these So you had statements financial and Difficulty]. bit happen

Operator

Rob Stevenson I think Janney. lost move on we to We'll have Vikram. from

Robert Stevenson

I square for days, is there demand furniture box easily that locations And these XX,XXX feet. Good smaller average to afternoon, these XX,XXX, if Mary, Van Art size guys. how multi-tenant? them be of or think the were in into to is back? divide out tenant get any much you How costly of boxes would spaces

Mary Fedewa

Yes.

So you're correct.

other furniture. And Our lot I would interest even mean, we - on go it's - we and have, that for there's the maybe we still say another of would entertainment, the estate at. mentioned out like put I XX,XXX and in about family there. furniture we as estate plenty sort there kart earlier, I space, in stores center, And be the of are, a could mean, of of places, fitness are feet. there, those. classes square large average, we a there's we're favor what Chris out like real real asset operators we good

we So to we that hard of would done. some And that. think work I think would would I that get do

do does well, cost to whether In tenants - terms put look Rob. look but Vikram up, of always to them and that We that I'm that as - at yes, in Vikram, as a can breaking we'll at of not it what we always we couple too, there. sorry,

be part of analysis, and boxes. these are the would that there So for users again,

Christopher Volk

them I they get keep have center stuff be meaning not XX,XXX freestanding you rule, mean, XX,XXX tends good up. to user. - not and to big your levels malls, square are another boxes, about like these square higher bet in news it's much your is they're just don't corners, most to shopping of whatnot. and it be that a on buried, intact power box them is of be actually The break a As visibility. general so so best foot it tends or These street foot could

street tends have want kind and profile frontage, There tenant than just in I'd same that to they that a of very of want that are have not closest. the the shopping rather big the so. box personally, center, risk. the be be to to people is So box different. This quite middle

Robert Stevenson

us XX unsecured you X walk Okay. you pricing had And funding for them And instead? funding why Was been would did to Cathy, debt? versus the can through year if difference question, non-Art debt unsecured and do it decision the a master choose you Van flexibility? and November cost, what

Catherine Long

Okay.

transactions drive kind So balances the that we we believe, side, on doing secured doing the on What's in the cost is master over that options having debt of have flexibility unsecured a to the debt market. those funding leverage master coverage funding in total and the And down about unsecured of both allows strategy is have debt. that, time, significantly balance side that the ABS metrics, debt. which cool will unencumbered higher or side the that, higher that

in had to XX-year was that notes ABS of the importance. opportunity do so market, issue having the those like we So We options.

new notes also notes rates. rate that AAA a X.XX%, the the and at to in The prepay X%s. to penalty, rate of of the blended our by the drop of funding prepaid master allowed some way, without the which the with X.XX%, notes weighted have new interest series ability that we're We notes us we average our was high included

we was find balance fall, had we unsecured we'll likely, transaction debt. done the that in the secured So decision, that since do XXXX, and most unsecured debt. And just in of that you'll

asset unencumbered that Does upward. sense? And trend tend pool make to will so our

Robert Stevenson

you pricing something do if wanted guys range? in for to notes the or and XX out where unsecured on you Yes. is XX X, go And now year

Catherine Long

X%s. X%s. the to in high high Mid- XX-year would A be

Operator

Spenser Street comes Green from Allaway, question Advisors. Next

Spenser Allaway

right competition crowded bidding specifically Just seeing in you within which seeing that can most retail times? you the some in terms the market are on of guys the color industries are now, provide

Mary Fedewa

there public classes private well. space, XXXX of Mary. opposed say, asset terms retail to competition, best and again, which hot the is industrial in manufacturing, manufacturing office family the of and one from there our as still competition space. most that pretty again, of call away is out still say leads is I service into also is as I and This And would more out would and we the

Christopher Volk

side, so think might On example, restaurants, which retail. way, service, we you the for - service of of as think as by the

something - service. not and if if like we the buy it you So think you it's for a you're of it over can't can't Internet, sandwich, as buy, making it's and physical a good, somebody's you something

restaurants always so to after. tend And be sought

Spenser Allaway

that tenants? fall And before how notable then would lose - trends much in to just run any industries? lastly, quarterly sales Or you to analysis I a across know you regards tenant assesses guys any need sensitivity changes need to here meaningful there do rent. particular would Are

Mary Fedewa

referring to is be consistent, I across this the portfolio. might it's you has about Actually very and XX% tolerable think fall Mary, been off, our No. and which

there, change that's meaningful. Spenser, no So

Operator

Our is Thalmann. Massocca, next from John question Ladenburg

John Massocca

dispositions, forward? going this that management that So was loss typical management, - I - more as total property guess, now the that Page original loss dispositions. break on mature, year-to-year? kind we tough cost just just think XXXX tell appreciate Is little the of where is the about of different of to or the bit you it's property - gain going portfolio loss buckets additional Within disclosure was out that, the kind your versus a of presentation, of it's XX to the be disposition on XX%. kind Or

Christopher Volk

in chart, - loss understand not that NOI, That's of the the in essentially losses got over it's - the all how gains chart. and you've terms mean right? XX% look upon a something all, money XXX%, a These so a cost. I cap, in of this are original other I based sell how or the for first read words, to or loss Well, at and not I you of then or to If value you've an as X money, redeploy right, that you could it lost have then XXX% property. and like XXX% X property sell in at cap a I investor.

looking you're trying recycle figure when revenue you're to revenue growth. to through And out how so growth,

number, translate percentage You cost into number, It matter really growth of an a right? AFFO back the have what doesn't everything get is. to revenue I

But what So revenue than at. probably than loss The of that. that's really look a is from perspective, cost to the want higher that. you percentage less is

people. And that's how we so very disclose is unique this, which to

And as percent it's recovery we're of to more So we're recovery, is it at for do that a percentage us, it's of basically CMBS in which not revenue, you're much, recoveries a revenues. principal they're important as conservative comparing XX% you and something, much you're very saying a that how know it. of means when looking percentage which that or and terms it doing you doing a of that,

John Massocca

it? I'm sorry. deploy measure Step then and

Christopher Volk

going no. And question is going okay, on year that the every now the you this It's is its next here that then forward? fact we what's varied. answer loss bigger year? mean, had just know the then of sold is, to a of own properties, the function happen year, X that, symptomatic And the I is it's

is X make properties last were so look we unusual. with, we the that worse. you that actually - see years, XXXX, money which can was You over on could having XXXX issues and

John Massocca

that so on just at? Okay, revenue you could number redeploy XX% is then based what loss the

Christopher Volk

right. Right,

of it's comparative a of the loss words, revenue. So it's in other loss -

by So properties. our down XX% gone rent have on those would

John Massocca

to XQ, than maybe, out, activity be in than know acquisitions parsing pretty is the December, of sounds acquisition year in a some maybe I little you kind but typical? is typical. there broke kind bit it's mean, the of there then it quarter said a bit of more acquisitions some 'XX? XQ may given more Okay, you front-end like of And way had that, on elevated understood. loaded first those I this read-through little a still robust was into the any And it slipped commentary

Catherine Long

some that that, November It back-end of the was October month. weighted months our having But is volume volume the end But that times, big our yes, lot weighted, of you middle if A the that tends in a in to is about think weighted. sort it Cathy. big And transactions that months, their are into tax need these and unusual. scheduled take them of front volume very tax to were again, heavier the December who for kind been they that people turns at of like the will looking way. sometimes customers do accelerate what is and situation, was This might almost only were early very and that them not in year. which December than out because start, January for have normal, themselves, that it but is December

that of January of had had transactions tail December. benefit of XXXX end, on, being you bleeding some XXXX, accelerated some goes and into And into XXXX. XXXX January on And some transactions the then so back in the you

in you're capturing December. revenue So more

it'll still revert to things it more And that to normal normal quarter, and second it's quarter of wouldn't But in. cycle QX being anticipate early, that being being with so our always our revert might lowest will which the quarter, unusual we highest, the QX lowest our think QX is highest. the still and be to could it come

Operator

Gorman, Next BTIG. Michael question,

Michael Gorman

from But I bit what so total private if addressed. I rental apologize had equity-backed comes to this jump on stream tenants was percentage of this your late, already point? a little at

Mary Fedewa

Mary. is This

guess that XX%, I would XX%. So that we around estimate probably

Michael Gorman

the other then any financed And your just or monitoring process the the sponsor? like private approach acquisition is differently process terms equity just you with do tenant? it in differently based tenant on of I Okay. mean, experience backers, Or

Catherine Long

we with very tenant, both financials we the relationship, looking other it with and at at. we're it's Michael, We're as look any say very get monitoring the private equity with would and I consistent, and on. that customer - quarterly so the closely entire with

So yes.

Christopher Volk

is owning and sell real bad decent private estate equity's totally a businesses all are gotten of seen if And without I've doing estate. then long their equity say that. all that, all would by talk as off like, the buy back it which funny, way, day name. and company exactly recent ever press, They're This rent people a Chris. private real growing it's thing, guys I they kind the private well, these in Right. about

that come issue, is found like private kind it's It's not don't if selling in were So in an that and capital have is, get equity had, would private added they've companies made companies us they M&A down to they've with had of we've notion And the if held. people equity that transactions, happened. M&A through, with real you estate because of a up somehow the We that private at helping companies, think situation good. have equity good. transactions. we look an you privately most most difference deals interesting stepped really which Then like

a So to transaction. tends if it's if transaction, it's sort a risk always there be - it's comparably a like M&A M&A than large mega of transaction, follow-on a if more

sort deal most - sort So and and transactions. doing of the of that of type is that's follow-on stuff up roll the transactions, mega we're

of sort that modest And so stuff. there tends risk kind more of to with be much

Michael Gorman

sponsor to sure was kind side issues? and No, my point to extent partner the thanks make business given some of of that good you for it, a color. behind for that's what that, to through That try you was the on just just look other the of other do the

Catherine Long

it. part XXX% of

bet. You

Operator

of question the a Vikram last our Morgan Malhotra from follow-up day take as of We'll Stanley.

Vikram Malhotra

happened. news hold put sort was clarify, I Sorry that. nothing were I'm the what wanted just That Chris, going market, and the hit. had mentioned you in through. that's know I to now? don't the assuming speaking day on of you was about process? I

Christopher Volk

it strong That's the a of views the there you and everybody and show has furniture that information, goes a current the just people of to health XX-X. But company that business. about are lot Yes. had

Mary Fedewa

And the brand.

Christopher Volk

you and treasuries you we're get selling fly - And sometimes - they not sometimes sometimes, you're out fall off-the-shelf they selling assets and and here.

So some unlucky get sometimes of stuff. on the you

had So So it's revenues, be we it's right was fine. - it's less exposure, a but things, X.X% a little other again, have it we'll bit exposure But few or - a than today, of modest X.X% would less revenue? of and for now.

Operator

any Volk now over our closing the conference session. back I'd for concludes question-and-answer Please remarks. Chris This Mr. turn to to like ahead. go

Christopher Volk

to thank be Operator, very and Investor call REIT upcoming you there. the much, Citigroup going And a Hollywood, and expect March Mary, the will Cathy be you Conference number X. in Florida, attending you attending X for all I thank and I of today. are

If Exchange at the hosting STORE Investor let you're going seeing know. York a Investor to New an We're us Day, us in April also interested Day XX. there, be Stock in

let for And you day. too. like We're any available, tomorrow and all so still if there for about you'd follow-up listening. great that, Thank know is around questions. this today Have space us gathering, attend to so a

Operator

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

You may now disconnect. Thank you.

Store Capital (STOR) 20 Feb 202019 Q4 Earnings call transcript