STOR - Earnings call transcript Q1 2022

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Operator

Good day, and welcome to the STORE Capital's First Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Megan McGrath, Investor Relations for STORE Capital. Please go ahead.

Megan McGrath

Thank you, operator, and thank you all for joining us today to discuss STORE Capital's first quarter 2022 financial results. release as a after our closed earnings supplement reintroduced the our yesterday. well as quarterly issued along newly with earnings market We investor presentation website Investor are Results. Quarterly section in documents under the These of and available our at Results, ir.storecapital.com News Relations Rexroad, with Underwriting Sherry and of and Maertz, Financial I'm Portfolio of here Chief Acquisitions. Officer Barnett, EVP Fedewa, Management; Mary today Officer; and Craig President Executive STORE; Chief of EVP Tyler open remarks, On call up today's will management then call, the prepared your and provide questions. for we will In an order Q&A observing limit maximize call to participation while the hour, a our keeping during portion to call. be of the we will X-question reenter queue can you have the then follow-up questions. Participants if

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

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

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

Mary Fedewa

supplement will will joining earnings and on we management thank provide quarter light the the made an for XXXX financial on your of performance portfolio our efficient And this updated and our Thank environment. are some mention, I'd overview look our quarter acquisition our Welcome, update first to the for results. to and us which then reinstated our I'll financials. Sherry activities. market will you, hope our remarks. for first an and performance, AFFO begin current her an we our Megan. morning, of guidance have Good Sherry to will feedback. portfolio to call the release, Craig of review you In presentation we today. additions provide guidance the a financial with everyone. provide We thoughts in like quickly we forward raising year.

call will then We open questions. the to

of issuance. quarter. Cap at from cap momentum share continued the in quarter for and average in XXXX for have of highest portfolio, had line resulted first And for trend the per recent We real annual activity, $XXX were first right the quarters. with points past strong above in million has in X debt highest $XXX spread rate of consistent of XXXX. our profit Both with and our with Our X.X% a million the quarter STORE's was the AFFO performance were through of investment robust the were weighted of This basis AFFO XXX our upward approximately solid the in along $X.XX acquisitions X.X%. history an lease rates history. estate, initial our volume guidance. at quarter These acquired center escalations our

STORE's Given interest current continue recent to like in drive the to and change and the environment. spreads address ability sea I'd in inflation, attractive rate growth to

provide. in properties. These is Within X growing are estimated trillion to national over nearly vital, solutions market XXX,XXX and focused market, and and estimated an from regional long-term benefit we real addressable be companies industries. estate on we sustainable companies total that Our total $X million are financing that are the addressable that

make. opportunity, runway selective market a very have and grow, such a investments Given to large the in we very can we we long be

underwriting of dive end well both risk-adjusted allows the environment, one consistent large includes successfully current inflation reflect disciplined escalation our direct our front price and spreads, is a we resulting has the which economic This strategy through our to of new power as real interest and This accretive that to rate with origination today of process, identify been into a of rising make on from the cap transactions acquisitions approach rates. rent strategic the STORE's credit a With acquire deep both advantages the approach. and in which estate, customer of our leases are to and able volume wide pricing as One ability perspective attractive us since been value the always returns. inception. granular has

fund that We spreads. both flexibility to strong annual we decade low positions which this proceeds retained rent which flow between generate our well our dispositions. X% on and with XX.X% from dividend allow of escalations, portfolio, from to payout average have pipeline ratio, and cost to The our optimize internal our also us cash the last was acquisitions have our of financing attractive built debt growth us equity growing which capital of the options, X.X% over quarter,

sources X financing. primary have debt We of

facility, as debt investment-grade unsecured Funding well bank Master ATM through Store as market, debt program. unsecured equity the to access Our our and usually

bank week, to are of attractive While issue execute Sherry participation positioned pleased provide will year. of her X.XX%. just debt remarks, the financing our able rate broad STORE rising, feel last to XX execution we light fixed key all on details from more but interest this we extremely were are an In for objectives banks these our term with group. we and differentiators, rates well is the in in at

current market like update. provide to I'd Now a

and are solutions. activity we demand a financing of First, for our lot seeing

we see the second have We diverse points, the of half growing. are bottomed. of cap which currently benefit of we upward strong, and seeing XX year. billion have a of should over basis pipeline $XX approximately We movement in the And believe rates

escalations in X%. currently We in year, are second year. X.XX% rent the of the half negotiating the about a range fund X.X% Second, seeing new contracts opportunities we on up we this the anticipate of from in to

advantage. our execution timely track for for has Third, conditions, record become given important major STORE's financing a consideration of an the and volatility proven customers

we our and solutions the of complexity us periods have partnership and in for more believe uncertainty we than markets financing mentioned customers really capital create ever. unique can As will opportunities our as before, need

of We attractive year. reflect this are Finally, the has yield of able In and an we deliver markets believe results And annually have was more quarter, in business strength including STORE economic complex to experiencing differentiated directly historically, we an a STORE's expect on dividend we summary, currently by environments, throughout to these model, it and than was dividend momentum average. continue today. excellent the about growth of our grow X% been attractive volatile to built which the and X.X%. returns variety fundamental

Craig. call turn the over I'll Now to

Craig Barnett

Mary. you, Thank

new efficiently our master all term during their and of or invested million first of customers' through our multiunit the XXX expansions, of quarter years. fabrication financing. metal and the customers The line solutions our that restaurants, balance volume average acquired us acquisitions from property. average of new home financial be of About covered properties, a acquisition long unit-level us extraordinary $XX We variety which variety portfolio. subject improves was historical and assets the a weighted the done new invest that XX made we weighted the health to businesses. acquired of The customers The statements, XX% including coverage maintenance, to processing. capitalize acquisitions at were added the to to within and industries, X/X ratio transaction in net coverage about of unit-level average X/X financial investments an reporting are were quarter, average. their properties at our repair $X.X unit-level we lease of lease automotive provided quarter strong of quarterly new and leases, new already food new approximately size during continues acquisitions primary required approximately During with allow and customers, The portfolio transactions per customer existing million of XXX% these meet tailored of clubs, furnishings, the was needs. XXX to investments X.Xx, in giving with sheets X.Xx. remaining XX deliver construction unit-level Approximately transactions growth sale-leaseback assisted

portfolio. to turning the Now

have diverse limit and a and consistent returns shareholders. to granular volatility our portfolio and We attractive risk-adjusted built deliberately to deliver

in of Our portfolio consists industries. X,XXX XXX properties operating

with and service-oriented change XX%, was our represent was less and interest. interest, XX% of rent XX% base XX%. than remained XX retail individually About that There only our annual represented interest. X% of approximately XX of portfolio in sector representing of no Our for And comprised customer and base consistent rent top of and sector customers top service accounted XX% mix businesses base largest manufacturing and the customers. our our rent X% our

X were our a were Turning were The million strategic or to XX over properties in ongoing nonpaying our X remaining property investment. part the in first sold management of We that sold $XX.X netted sales original activities. as or properties X% gain dispositions. proceeds and vacant quarter.

our This pleased technology on XX including occupancy leverage, cost XXXX, corporate Our have that and coverages, period our portfolio for in is consistent responded data financials tenants' of have exhibits remains commodity with been and years. we and XXXX, a confidence higher with by in to on feedback during few. into business, portfolio's tenants, adapting regular in who adjustment to of environment more changing throughout many very ways, our the optimization, customers and and hedging sales XXXX. average, long-term higher who at XXXX our from customers, a unit-level trend are to liquidity. price conversations. performance was our improvements, average, a health creative Compared adaptations high our name improved automation, XX.X%. XXXX various We're less a continues and the today These receiving and macroeconomic

positive overwhelmingly consumer tenants to for next in drive products the continues Our their services. as demand and year higher for are outlook a spending increases conveying

call of as Sherry. and their them with new proud as continued are relationships. adding forward I'll look now to We turn growth over in well the resilience to their customer partnering

Sherry Rexroad

activity including Thank noted. unless financial balance I'll note for are the our and an year-over-year, all first update quarter, sheet, results you, markets on XXXX Craig. that comparisons discuss Please capital otherwise guidance. Today, our our

increased quarter net in a strong revenue contribution plus our quarter activity in a acquisition approximately acquisition our $XXX a the first million, Our Revenue the XXXX, first XX% full real large partial quarter net reflecting year-ago from activity from primarily $XX includes of to from increased which from acquisitions. revenues volume portfolio. quarter's very estate million, growth

quarter for million. volume this the were the in total our acquisitions in March, of $XXX As nice first built-in Approximately continued mentioned, half creates closed a of X/X the second which quarter. for last growth Mary base

revenues mortgage of $X loans. and of primarily sold XXXX we to early termination million include $X and lease properties repayment quarter of one million interest related First our the to of about other related income fees

a offset partially the decrease by support overall X.X% from portfolio, to a growth as X.X% we March XX quarter, now debt. year our million XXXX. interest by Property primarily was months XXXX points which from of weighted totaled the our cost $X.X lower of during $X.X ended average for Turning for XX ago. reflecting the on average a to the March ago. year-ago about expenses. XXXX first represented The of portfolio year a debt assets, expense quarter, our borrowings for Property points million XX, basis March real costs million costs, marked down were in same Interest increased rate $X.X made XX estate ended from long-term of down basis from period

property will portfolio we as through average assets, to that XXXX. of decrease a move costs, expect our percentage as We continue

of XXXX, to certain incentive awards. expenses which of $XX decreased stock-based G&A $XX from expense noncash million million related quarter million to long-term quarter the in included compensation $XX.X First first

of period gained noncash XX assets overall we XX-month rolling XX the as excluding a in expense, XXXX, ended March comparable from stock-based were scalable line continues G&A in reflects the and expected G&A as portfolio. were are as basis of XX-month our ended this for expenses the the expenses, basis, portfolio growth points XXXX, points the platform our average March Excluding to compared our XX, of portfolio our compensation, which for On impact period basis grow. to efficiencies with

loans are was to X by we a in amount million receivables. a partially estate recognized that impairment loss provision, impairment to financing we provision our on offset first the of net This provisions expected sell. likely reduction properties quarter, related real included which a $XXX,XXX of portfolio and During $XXX,XXX $X.X

lease budgeted $X.XX half from And revenue the estimate. share from from includes $XXX Mary than Approximately AFFO per approximately the to and property increased is recurring of is as higher acquisitions mentioned, This is ago. increased diluted G&A expense. half and modification, per million. and consensus $X.XX of collections. higher increase from XX% costs from and than AFFO As onetime share and $X.XX is as a the and primarily had reserve a On nonrecurring to additional fees $XXX lower timing $X.XX year basic basis, a well reversals loss we million higher contract

declared quarter share, a XX shareholders you we April dividend XXXX of As first to March paid we on know, record per of on $X.XXX XX. which

activity. revolving Now of turning borrowings with sale through our of acquisitions credit our facility capital to cash We level from the balance funded sources, ATM of our markets on our sheet and equity including operations, program. a record the and variety

we total issued net million. bringing quarter, shares stock ATM of raised equity $XXX April, the million. program our to raising our During X.X an $XX.XX additional of shares, average of proceeds under we approximately $XXX at In million common year-to-date issued per price proceeds share,

million capital, rates our and billion accretive million borrowing our spreads, credit sheet available access million long-term level. in cap as our of mindful weighted our with average make basis capacity X.Xx run is noted We fixed-rate $XXX closed we of on equity of of acquisitions of outstanding facility. available under XX% at low program of and approximately quarter average under where maturity price unsecured revolving debt with X-year $XXX XX, stock continuing under Subsequent term net attractive ATM target $XX to debt-to-EBITDA a a of rate and cash, floating we which a including $XXX debt had just on end range ample our are $X.X maturity at a a $XXX including strong At the loan, the is March We basis. And complements million quarter-end, under our are we Leverage years, balance to today. current cost and given X or and X.X%. loans, earlier, a debt-to-portfolio the interest rate a schedule. weighted cost X-year entered net loan bank rate to of million into

used effectively entered this that convert into annual from to X%, rates X.XX%. which $X.X Master Funding coupon million prepay, rate of STORE floating transaction debt $XXX a rate notes million. debt this the the interest fixed to of We attractive also savings We average swap interest an agreements, of on weighted penalty, without generating proceeds in had

We for down with the outstanding used revolving the to borrowings facility, credit our paid on remainder growth. also be

facility the X.XX%. availability As this of we a billion unsecured transaction, a currently And fund stands with debt revolving growth. our million result cost on at long-term our total debt $X.X our average have of weighted full $XXX to credit

turning guidance. Now to

acquisition of volume, billion, to to maintaining XXXX of net sales, our increasing billion $X.X are We X% anticipated to and $X.X cap guidance rate X.X%.

share to our We AFFO share. XXXX are to a AFFO of growth over X.X% per represents per range raising which XXXX $X.XX, to guidance $X.XX X.X%

we We year. outlook, the continue as to move update through we'll our appropriate as of remainder guidance and assess the

estimated our our at while of net sources debt be million current to ATM for provide our approximately needs. issuance year, fund Based billion the which $XXX midpoint, With the X/X will that, turn adhering of market XX-XX the is will flows fund like $XXX from requirements ratio. $X.X combined of equity recent Given million, retained our leverage Mary. address $XXX the dispositions I'll debt And million operations more equity to to issuance the our back to XX% call approximately with of our I'd year-to-date our capital to our acquisition environment, specifically pipeline. and updated guidance on cash of acquisition approximately

Mary Fedewa

Thank you, Sherry.

We questions. to will your now open the call

Operator

Sheila [Operator Instructions] McGrath today comes with question The from first Evercore.

Sheila McGrath

us record. First be factors quarter that you the volume What volume? can was that driving above-average a that are to might point

Mary Fedewa

Mary. This is

has we of last really the been as business AFFO. in a quarter and was of momentum XXXX. the the lot key the fact, to of to on half from really matter And our So X in that starting metrics second performance of income quarters were our a strong see continued result gross first acquisitions

quarter. And momentum into so that first just really continued

Our customers, back-in-growth mode, with advantage to and we of as able the M&A that and activity well were take them. their

So that's it. drove really what

Sheila McGrath

portfolio if view was the the portfolio. the And historic the rates, the I is, at I elevated some wondering think that through list health tenant to in is that on second there's watch now able tenant context? maybe the my credit you pandemic? investment-grade cap acquisitions, comment How you're higher question and performed And people Okay. execute your fact of can how risk.

Mary Fedewa

Sheila, to a to then just we'd I'll that, over comment, Yes, turn Craig to let do make and them. and love it quick me give

So companies, in been years, our and business to address is which the is our actually, XXX,XXX have about and XX model, business very direct knock we and go on and ability marketplace, origination and the very, customers large. out here, we've XXX doors

and on a rate, spreads. underwriting to about sure of go our from a prepared us allows talked us and then built approach business And contracts wider about very have and end. there, cap we've allows our ask the get create is bit for our these our this, actually power And on front remarks we'll destiny it current have really to ability control that more little to I'm So that own talk out sort pricing we model how the the environment spreads. and continue for really, to in our the disciplined

So -- the I'll now, to about he'll portfolio turn and talk it and Craig overall

Craig Barnett

Sure. Yes.

in in our and fringe, long have their very in And really some have we operate might make economic multiple right business to and time. environment. estate. to a very it's And demand. too, issues our sure we seeing our we that We're our in They've recessionary into have extremely are tenants. potential like financial strong well for tenants if built So of and in seeing very They operated services have there customers a in process portfolio the where ourselves, current we're and extremely withstand adapted to now. statements it's at that any that strong environment. performing confident deep is products extremely is diligent of make on in the it potential is again, collecting tenants that understand operated any process the underwriting the cycles, multiple kind offer. how by ability they're performing differentiate in demand for been portfolio. diligent now, underwriting right diverse, the have and well and businesses estate, we These their and And business our we a We're -- they've But the have portfolio through again, we're just across our And cycles. And that granular, coverages environment. issues. we the to real real we're that recessionary the economic

So we're tenants able manage monitor issues. our to proactively any to potential

Operator

The Caitlin Burrows next from question Goldman with comes Sachs.

Caitlin Burrows

on -- rate just follow-up the that Maybe a topic. cap

just is what I price like you STORE to setter it. So to going was taker. versus Could extent ask on price through go a

So that cost to increases, capital similar have extent rates cap may if or just impact a would and not your wondering what spreads? your on amount the then of rise may

Mary Fedewa

Yes. Caitlin. This touch that, Mary. on I'll is

the So higher allow to again, model the marketplace us of in origination for and here business cap ask does seeing that. very, we're the very rates, direct large

we're timing what closing of the negotiated the the was closed And second at was in quarter year. negotiated end the year. what first in -- of we beginning we're of Now last what the at quarter

or X/X equity a she towards talked second year, and through in raised also our towards the Sherry good mentioned, cost half the with we the I upward really very about debt. of capital fact that as relates you'll expecting where think, remarks, why of a our it mindful mentioned in of feel XX% that's needs we're here. it this also we're we our So dispositions trend available And very, her here. nice way, are this capital But in and the our our upward the year I ATM, -- of distribution see to of movement place

feel we really We're again, on for of knock we good very ask just rate. of us it doors So the day that And model the a allows cost being where and it. cap about every higher to watching and are on of lot capital. business single mindful

I America. market. America, vital So in industries we're these is in needed. for asking in we're mean spreads, Middle huge We're which

love about long-term and I real customers. really is these that it's a proposition value business strong, what this for is so So isn't any there estate that capital

lane. it's we million lane. continue not We million consistently -- in great rate. XX for It's wide just So to to It's size, of for and we in marketplace lane. a cap to niche been are nimble. $X this ask a model opportunity it's years, just and play $XX average our a small That's the deal have grow and a

able again, cap for have it's we and the so a only rates and ask cap customer. us higher been do spreads, win-win and the for get rates not And or to the

marketplace, as And good escalation in price a the it's all we're I also the escalations. the the So can too. is escalation in pleased is my prepared with mentioned over marketplace. remarks, team front-end And in conversation, we our but that, really coming seeing up the

how in model -- So we are one environment business really this is any -- to work and the this this designed is almost particular. in business model

Caitlin Burrows

you Yes. just partners the you're rate, maybe -- And is think potential could of alternative when has options cap of capital that changes how with working at point changed and this sources those STORE what -- with, working maybe and other attractive you that that the their how asking are versus through idea go about for

Mary Fedewa

Yes, you bet.

bet. You

is long-term So really there as no estate option. as there an really, real I capital mentioned, financing out

short-term can your get can bank, you a short-term You debt. go to some

got XX%, You've is along come with do LTV. that, bank so equity XX% up to the with XX%, going to

some -- XXX%. going with going you're equity. up And with You're going up come to we're to and come to

a debt we're So substitute. equity and an

immediately your on increase are going to we cost return your equity. capital reduce of So and

customer. the going So to together flexibility and we're has real a that lease alignment put and XX- to long-term -- with XX-year

going with fact a -- cap that do for some and rate escalation. So if to in we're

equity kind on downside. a We're So the for customer, the insurance of and there's on and upside -- big the alignment. like

you on that to doing That's one be to going you if working the flexibility that we expand store give downside. us And as is. store you need substitute to doesn't, if great, you're it. bad then long So or a here help a we're going insurance and that's allow store that to the are as have works, that

So that's equity on the upside.

So alignment long-term with it's relationship. our a a and customers real

a lot right have this now seeing real what's a repeat key for the market, advantage We here. just certainty be being execution interesting XX-year-old to proven our customers. for we're is very business. been strongly, a is they us going having And platform and know execution for big we're track record of And in of an there and of and it

Operator

question comes Capital next Thomas Markets. KeyBanc with from The Todd

Todd Thomas

as Can bit terms you talk bucket of buy little ahead, a little not cycles or either and, going of whether tightening bit look more the about how evolve in changing types your environment acquisition maybe doing, industries, effort inflection at types Fed the changes we or guess, macro all the changes deals or really perhaps the forward? points might you're of a at I that

Mary Fedewa

different in those shifts the stick and the for second to lot We're through. or able April, knitting areas Honestly, going center of XXXX, of buyers of out a big our were to any don't We're May in it's there. thanks June opportunities COVID looking really here, I'll that There's real here. a to question. and quarter, at again, manage companies XXX,XXX pools Todd, market. I we big really focused profit estate. in mention of anything on we're see

cap during rates at that it in at time, we was able right, not that quarter. much get was Our higher to share is And were price lower today. that than pretty have low -- X.X% -- time,

all destiny continuing this of talking to understands our about accretive I'm controlling acquisitions And is our and environments. So what make whole company now. in this again,

our really shareholders. and we our we exist add and aligned marketplace we understands our we together and company So address make the whole and how is how and to why value how customers money

Todd Thomas

on with it year, that like read? the yields trend regards you're acquisition and you least range, seeing. based X.X%. to to the then not it what see, the could takes assumes deals be guidance to And done really would based price at get the slight there above increase that upside sounds lag Is expect on a this and to the of X% that sort to that time right in Or starting But acquisition Okay. to yields you're so changes?

Mary Fedewa

thinking I about think you're right. Yes, it Todd,

think be of But high timing I will hopefully, negotiating you think like later the that. -- because acquisitions than of into that, XX the future. maybe end days, what the higher time today, out can and it of and we'll towards of close the we're because

have looked think -- at we we I to change -- but that's we why you didn't did that, it.

think right. thinking a place high I but So be. you're the It's possibility, it probably to about best the is end

Operator

The Harsh Hemnani Green Street. next from question comes with

Harsh Hemnani

rates there's in. on portfolio change time that seen relative in the that for capital acquisition at these portfolio, couple guidance. any portfolio Have saying guidance the view? could increased Is you cap to mentioned that this lower, you quarter last are more your these meaningfully coming and that point, times the there And were So quarter. that last competitive deals no kinds last time change we that the last the -- contemplated of baked environment there of spoke, acquisitions we And this also transactions all discussed into now? private to

Mary Fedewa

you. thank Harsh,

on of things transactions. couple the So a portfolio

And of on available perspective. quarter, term So perspective first a guidance first any was accretion never well our quarter what was in transactions. reach cap as included all, -- has or rate lease first as portfolio a of from still they out an

diverse that is and to so I seen And business not model that want anything any and of need would just granular portfolio on. our into we fit interesting. transactions mention So again, have to

has the And it And some seen report. what's there about of lot the of they've nothing we compressing. relates substantially talked the competition, so a or come little were costs is that we've bit money all a you've think happened really take because cap to and on I reliant to a money rates -- recently seen into -- so a saw sideline financing, And arise had somewhat is of asset-based to We've pause seen as that. debt the that space.

So those thin. quite were getting margins

that So the there, seeing really pause that lane to tended with. in, coming but deal not weren't But some our million we in. that's These folks just were weren't we little color that money we million on come in $XX to sizes. we've competing the space $X seen of in -- were be a money

Harsh Hemnani

And starting the escalators in go lease then prepared up both you rate That's helpful. starting is to up. mentioned to the remarks are that and go cap

So with us have give their Are estate comfortable do you higher tenants, still growth? rent enter what lower on in they higher more new are with Or to yes, that. can with? lower negotiations with if comfortable prices any they today on you want exchange for they So prices when rent color real growth?

Mary Fedewa

Okay.

So little want repeat apologize. need Harsh, to bit. I that part -- a I just I'm last you to

You're talking real them. a estate level prices about of as

Harsh Hemnani

Yes.

You and mentioned are moving moving up are escalators too. cap rates up,

what's you tenants? rate to willing they willing with And give those on? they higher interplay when or the cap What you compromise so to more are comps? Are X speak higher between rent

Mary Fedewa

both real option There's both, actually the for giving an actually actually. we're Harsh, I us. there trade-off not them, there's about and not with X. mean talking between no we're we're --

we're about what will bear and on them of both getting to So market them actually the talking both.

Operator

from comes Kamdem Stanley. Morgan next The with Ronald question

Ronald Kamdem

in bit is -- less? great. more be cap subsectors of it's higher more both on Just services sticking differently, you're ability whether on escalators that to board? color question, sort sort segments, subindustries the that of higher you Are it really seeing it color there Just manufacturing. push as Is versus terms versus across interesting would comments where there maybe or Maybe asking as provided the a rates. little of well about

Mary Fedewa

-- -- not the terms it's terms board. both movement the any rate board. We're of across Yes, in upward the seeing in the in across of

said, terms but a the -- there, you will, I still, cap industrial in -- in if is too. has Now, lower rate pressure space, there's upward of course, of still

across space, upward So seeing the movement. we're

Ronald Kamdem

the next contemplated And deal is just nothing And comment, on company about? coming off bouncing bigger But opportunities? foster the I then of the is one, know that. How still thinking how it those along? something the is Great. again, there's to guidance. that in

Mary Fedewa

we're -- news a If $XX the billion. there's good STORE is about

process that fact story diversity. enough. like business all calling bag we've engine, So well-oiled this built we about can really -- need to. But acquisition $XX talk based that And which a have and large we day I of opportunities. brick integrate grow long. And to and very, primarily. we're talk that And That on doing we is, I'd if what news shows and that having billion, we're granularity the dilute can see big very a machine the not about an to here, objectives our the brick-by-brick, in here If that. up we universe is like of done don't on of front-end is good can we we

Operator

Ladenburg Thalmann. The next John from with question Massocca comes

John Massocca

basically guidance So my a to is math little already. investment at the in guidance maybe the back end right, bit. you XX% net If volume going XQ did of new back-of-the-envelope just high

is to visibility just maybe end more the tail driving of conservatism Just year guess, the it I what the any expected into the relative of volume course Is color would year? the of be So kind performance? over helpful. XQ maybe disposition or there that's

Mary Fedewa

Mary. Yes. Okay. is This

have looking we some forward, John, definitely, we total as say into the year. but don't would know, visibility you period a short-time visibility whole I into have So

was first -- was strong. would our quarter ever It highest first quarter history. So in say highest second I that extremely and quarter quarter our our

more to stuff. that fourth -- expecting we're a normal pace a normal and probably will more second, potentially back go So and third

raise that's guidance was into kind acquisition raise. the So process thought of or how that put the the acquisition

year. really that business, a again, the we -- Just have like the you slow it's force all see way through can't and the

John Massocca

that On what I mean, the XQ disposition front, typical expecting? versus was you're

Mary Fedewa

Yes.

to -- of always at of of I be we've that kind the end that we've would guided likely X% we lower to that. dispositions, say low -- and portfolio, of the mid-range on of sort X% would So to

Operator

Ki comes with Kim question next Truist. from Bin The

Ki Bin Kim

a to bit go acquisitions. cap entire some your like prior not and to with maybe isn't this know sector, guidance of better the a doing ahead? back I going little of prospects about versus is you commentary, do want this game given around stop the but year, like maybe holding questions yours, higher How deals reset. and balance the you're rates. more your and just video start back acquisitions, expecting Just where But to implies

Mary Fedewa

Okay, Bin, Mary. Ki is this

out have today, tomorrow. go So go we accretive the you our not that tell we And model. actually, and and I'll we -- can can a that market, business can do -- a And video acquire And such playing back do like you're game. and I'll we big that correct. but to directly It's acquisitions.

So We're mindful what's mindful single accretive We're We're this making of day. our again, focused But big accretion. of and And every so cost just on. we're of we're capital. acquisitions. is there executing -- to that's on focused market is our mindful. ability get

knocking customers doors that destiny model control rate aligning further kind helps really this the our in because it's environment. and the business neat us current asking we're with So -- and we there current have market out on the that and and side, spread on as of

and market, flexibility that And to we're do that have we a wake every that going do so can of day lane, we and big today, nimble, big we up.

Ki Bin Kim

do, but the triple-net the is think that buy, increasing get make? And not the right, the decisions some your growing. move configure calculus -- that year, of that where interesting the does of does and gets does it's needle. into the when it of dynamic more How an company? in size better the that you you some the how because inflating, into that next base do tougher you you're -- tougher that you deals about it Does to Because factor earnings you asset

Mary Fedewa

have And to of and we question. is great Yes, growth true. really is the what's Very X% start I'll again, say important that. with, what internal

fact really for it, Or and are could creating to the and we're sitting not So that. thing something that we waiting get think knocking someone creating we on for not And deal of sitting, the think flow. listed. waiting the huge. our is about to We're door. about other to market is We're come sort

ability or what we way. it real repeat by model what lot have how It's do. businesses the business, too, do, about granularly to that's -- acquire we So is a it's this day designed is and what think we to our businesses, of with it's And business we do. every estate

loyalty has business. the So really consistently program our that X/X been we've of has been created business repeat Like business in neat. this

the new So we there, business too. price

So cap it's old rate. the not on

as business well. So any repeat is priced

Operator

with The next Wes Golladay Baird. question comes from

Wes Golladay

change flow slowing up year looking composition your down in about progresses on any organic expansion are tenant now? more of looking picking real so just -- as deal at of conversations, loss expect value the M&A, the maybe you they the they or Do based talking more estate

Mary Fedewa

He A no. to Tyler. really that is Yes, looking answer I'm says no. short at

words? You want say to a few

Tyler Maertz

Yes, Wes, it's Tyler.

and playing our customers and -- existing a big our with very So lane our basically, And said it's conversations earlier, Mary like market. still, we're having prospects. in

opportunities. So finding it's are customers that. a that of Like just sticking and very grow. Mary a we're we're looking market, And lot to said, -- with big

people on with So finding customers and even partnering looking the help we're as changing grow their some result existing with ones there we're seeing, if and to a of they're are that -- plans that fringes new effort. we are are that can that definitely what

Wes Golladay

set to step extra you Got the it. the year. And few another equity your private leg little bit have dispositions the from the of market and the lower, between have you stepping public kind up up equity mentioned price a extent a maybe would I just to, of perspective? to takes for dispositions funded But on lot I this differential the the then down know a up REITs guess, of pricing.

Mary Fedewa

of couple A that. thoughts on

runway So STORE long keeping focused performing in NOI is on we really doing. to here have, and again, at and we're grow assets a what

portfolio. keep market, things are rates that very strategically way have -- cap now. And higher make continue of embedded we're we strategically we keep we assets to granular, are to our going So again, do to And -- our NOI dispositions dispose the the we're the going to here improve above with acquisitions the gains.

something relates raise NOI be equity disposing doing. to of able go not equity, needed would will successful the as keep to. or and dispose a to to as we when we equity, that thinking very get use for -- we we that's we we Because been the would dispose it of sources and equity that. or we've about have So strategically acquire in substitute to that of being the need more our to and properties But not here as

Operator

Truist. The is with follow-up a next Ki question Bin from Kim

Ki Bin Kim

guidance. one A on quick

if $X.XXX, a amount about up same guidance? potential of in might any onetime just were I on is the line embedded but there And other other be that items that So drag? comment if you it items. went that items can was which onetime curious were

Sherry Rexroad

Okay.

quarter, the year. acquisitions So will the throughout considered because recurring, it's Ki We revenue so and Bin, so our the healthy quarter. really $X.XXX are is this achieved in this revenue go it

that $X.XXX some So of of revenue recurring cost savings. it's kind and

onetime have yes, guidance. And will The think the termination there predict like that are other -- the onetime time, we but are that, things recurrences you when of but through anticipate mentioned can't that things and in those we be fees those, I events. that,

Ki Bin Kim

XQ kind there period for rents prior any Is XQ? that of you're expecting to

Sherry Rexroad

the returned. of like should So should them. payments we we those. XX% and COVID all I of by have referring think you're about to this receive We estimate deferrals, XXXX, year, be And of them to are into end continuing on

Operator

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

Mary Fedewa

team support including some participating look in in interest for you today forward Thank our you conferences, their would for call over thank to if out also reach NAREIT work can months. all -- And Please we dedicated free and like of and and hard Thank if next We our STORE. great at contributions the few questions, and for answer you a additional investor you. seeing Thank to day. continued STORE. have your feel to you. any I to

Operator

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

may You disconnect. now

Store Capital (STOR) 5 May 222022 Q1 Earnings call transcript