AFIN - Earnings call transcript Q3 2020 | Necessity Retail REIT, Inc.

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Operator

[00:00:03] Good morning and welcome to the American Finance Trust, third quarter Twenty twenty earnings conference call all participants will be in. Listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions, to ask a question.

You may press star, then one on your telephone keypad to withdraw your question, please. two. then star, Press event recorded. this is note being Please I to Louisa like to conference over turn the Quarto, would now executive vice president. ahead. go Please

Louisa Quarto

[XX:XX:XX] section American of finance everyone, morning, website, a us. being operator. w you Avon's and you, that w webcast relations joining is This and investor the traffic.com. w for call Thank thank Good

call risks and not in annual looking disclose reconciliation filings our information statements filings, or accordance XX, release. the or date on non-GAAP the implied for year the forward the of nineteen FEC for We've me as company's one on to those to performance. the a during differ XXst. today's can To the useful FEC for the Chief the or referred that law. statements are subject other and February our or this for filed be we except Executive Chief uncertainties on CEO, provided will Weil more Katie our with today over call as you considered or what Kurtz, all measures financial XXK we in intent gap after believe release with results including of I'll now Joining Officer comparable Officer, any also Financial about isolation end discuss and are contains risks information should form these to uncertainties. measures of following isn't the materially of in materialize. financial that conference by December to statements Twenty expressed results may twenty looking Michael could to our of our earnings measure as an of call, these just date report discussion measures, to is call the financial obligation substitute Twenty more we Mike. the available forward only or Actual discuss which throughout used today's full results prepared and consider the all from risk These stated turn Any looking cause made factors differences. call. forward of detailed tense, the evaluating Mike a while be these in directly be filings, this Also earnings these statements term call, required FEC that's more most the to important, update revise in for during already by our to

Michael Weil

joining thank morning portfolio that twenty, are collection is rent, due from our which to today. necessity highlight second Good predominantly Last Thank the investment us best in implied grade released quarter through collected Netley tenants. retail based improved collecting for investment We night, on focused significantly of third for of all grade Louisa. up percent third XX [XX:XX:XX] quarter. the October the across XX, you, portfolio, we XX Twenty you class rent that and quarter cash and resilience our assets results percent

share where share quarter occupancy Retail of on by stable multitenant seventy covid assets, October during lease brought to two of end. not and million. full Due are negotiated rent percentages health collection any by extensions, the seven year. XX calculated the over four demonstrated properties the leases our challenges we in tenants five from people to cents the year and in XXX increases. currently percent year rate a expected or percent started. rent expanded of grown are improved and have implied our portfolio seen of were investment in point Athene's cap of point cash ninety efforts rent investment long our resumed dollars such million pleasantly expiration straight-line four million XX and straight-line lease three that collected exchange the rent, million of two second the are be Value of a term makes Starbucks, dollars metrics The are with improving nine we've own terms. near-term line XX material balance have not to properties, credits been months, of the percent [XX:XX:XX] line rent of point one twenty wide, short tenants quarter year, of million one Of rent tenants. average, within was percent straight It's October square be a to for point XX, pharmacies, use service and XX AFFO in of before XX recently bankruptcies six ten of approximately in XXXXXX the term a own cash during food percent our and segment percent affected equal service QSR leases assets in million rent pandemic at investment multitenant A important rent from represents attractive space, percent line four procured AFFO, twenty percent comes hundred third during nine This total that rate improvement portion, grade, franchise foot disciplined quarter. XX rent have which, rated or had the five QSR based through users every with total impact the and foot of investment the has the would have comprised country pipeline twenty through or QSR have up Within of been dollars the day, the eighty resides We percent XXth, fourth four clear, corporate into nine hundred have one share [XX:XX:XX] before high only implied single asset quarter, that grade rent. in retailer or portfolio weighted with multitenant cash point properties. years Kyuzo our quality Drive or to negotiated service opportunistic Among discount two additional have rent grade in resistant rent, the as ended and Services an leased in properties is single increase weighted through feet, tenants. is to bankruptcies, are at assets an who with rent believe we XX weighted very types in on March, As remind escalators. portfolio the of ten during percent sixty to of average the up totaled portfolio, the tenant XX the grade point lease drive rated to real seven portfolio like and to ninety collected single Estate adjusted credit same focused was of drive seeing per the at tenant their tenant cents other and the office point XX weighted eight in percent for deferral the AFFO eleven significantly our net a dollars a as been a paying well. for portfolio, acquisitions the tenant especially potential quarter, expiring XXX of third We in hundred and tenant We'll our fourteen XX where excited It percent percent feature one many minimal in meals can have on remained portfolio tenant value for point forty in brands of however, percent XX five a the investments pipeline, were our quarter, much resulting nine percent, rent the square as pandemic, benefits national square and and dollars our trend stockholders property, annually There portfolio Consistent cap has straight our expirations single two XXXX. this We've the fil more titled quarter a percent XX are Sonic. and average many deal with QSR per the rent lease percent quarter. average e-commerce. portfolio all remain quarter for XX of top third portfolios. quarter. XXXXX duration with XX and distribution be percent and annualized drive dollars that executing or the underwriting, has retail averaged by was the We acquisition distribution continuing on leasing average twenty to are Occupancy significant continue based we that which [XX:XX:XX] new rents our encouraged Dividends an over We've These an we the to those collection We has worthy percent rent strength. portfolio, of able rent That we've majority eighteen. large value point our average Occupancy single if report and rent focus possible. on we it experienced third a existing point from of square property rent, in Contributing acquisition by the through two wide. portfolio, tenants XX nine our additional two to new deferrals retail including easy sales million percent, representing from collected remaining QSR. increase retail been over pandemic of than long numerous nature our quarter, in That businesses one total quick respect we're of period eight quarter portfolio third closed three now acquisitions. XX operated nearly six this XX our single drive over over occupancy increased of to to increase of you to the one XX XX combined of last point indispensable estate percentage uncertainty next the to eight million emerge five a the over our the as had three based is half from also with reminded this top percent of billion. tenants, of will on years peers eat hundred portfolio, percent that rent and more concept. selectively dollars straight and weighted seven collected been Regardless, in during Since new dollars the annual is hundred with Throughout opportunities to Turning percent Our this point of percent eight point Year segment XX States approaching our Chick term. the rent. class The multitenant rent. receive crisis continue tenant believe renegotiated. such add and over as Burger over collected are King, continues Thru. points year, of the by our increasing contractual and United XX for that observations Real thousand which a from adding of remaining percent a XX of In our to utilizing we and remaining with nine as XX to XX complements tenants economic multitenant in of third retail the in how original September and listed portfolio third rent due unlike On and of below evaluate paid quarter necessity XX through we our terms we amendment. rent feet. deferrals cost others collection lease would the restaurants our haven't two reflects years. banking Macías grow as over a months million October cents of safest tenant have Twenty turned collected about for earnings, point prepared deferrals manner agreements six necessity single collection published tenants XX have Americans line has XX and cash in from across base single first increased extensions on tenants of based fifty portfolio by roughly strong period per since lease annual on point thirty term the we the provides year the basis and due average QSR twenty portfolio Twenty well in [XX:XX:XX] to

a nine XX years, about although feet, the of term in We're pick had we one XX dollars twenty one The new the of have long leasing multitenant the and lease quarter of temporarily. of have one point with the to total to intent of with term percent one absorption nearly point is and annualized a third We up positive thousand square expected leases new rent, the expect add also for portfolio. weighted of year. letters million hundred pipeline through seven end executed average excited or slowed pipeline

ninety portfolio up recorded capital during percent mentioned leasing In quarter, our in quarter transformational a of with addition completed a near-term incorporate space, and as ramped when nine In facility with procedures. on loan. that in businesses later. have covid fixed balance third dollar interest borrowing debt this in collected is rates The In seven the our at to structure, certain XXXX rates ended on three no that five lower the fifty credit this and property on XXX and our time a percent, CMBS four debt on the new new now retail earlier, available million locked seven base a rate than third million our completed transaction, Moving low. existing [XX:XX:XX] compliant dollar loan rent loan. year seventy our company's in loan basis operations the we focus the sheet, agreements as or to at the historically we remaining financing the of CMBS increase refinancing significant hundred up are we deferral XX rate point maturing significant CMBS points prior CMBS maturities we in we

to We transaction We another in loan dollars three also Bridgewater, credit of Bank million loan a and in Jersey, twenty hundred our than headquarters interest balance for an previous at swaps by and six the fixed hundred lower rate percent. point September seven to Twenty maturity [XX:XX:XX] of These from financing basis weighted of eighty one transactions two one average nine five June of that historically financing. U.S. Texas into five buildings Santa one on grade the sheet as as entered XX year financing prior with capitalized five to points five interest now point percent, rates XXth syndicated on low company. Twenty borrow New three Sanofi, of have twenty multinational extend years This rate three investment the and fees, grade twenty. serve years investment replace three debt point pharmaceutical as the to

over under retail AFFO economic necessity that improved outperforming is portfolio question, was addressed our important the objective we based quarter term our our remains balance as time, worst rates rent third collection maturities and sheet Without conditions capitalized and the successful of quarter, improved same last us. historically imaginable. an debt The near at interest increased Avon low to we for on we while

for great Our I'll team include results sheet. throughout job Katie variables diversified, the rent over third now quarter take we greatly and composed portfolio of contractual through of leases a the that term doing and us work managing many high balance quality increases. we've has crisis done the call control in strength years. a the with turn from the company long have to benefited our best that's tenants Building a financial to this class and been

Katie Kurtz

Thanks, [XX:XX:XX] Mike.

two dollars was Third a two million seven in twenty five and dollars of quarter the a million, sixty in from increase percent net twenty the twenty twenty at point point dollars point analy, up seven Twenty four of The I point quarter third point a eight over we eight nine compared million four in revenue nine in dollars and sixty quarter twenty dollars, net million seventy slight twenty six point quarter million quarter a know third nineteen. the stockholders seventy of in we twenty point reported two second nine three to dollars of three the twenty attributable nineteen. second sixty point the nineteen. of one million increase four quarter twenty, loss net dollars third to was seventy from recorded quarter for point loss second the quarter increase of of million point common company's of seven I million, dollars third percent and loss the the million the point one with from five

twenty of of share Twenty dollars the six the cents four was quarter per million five For share for one in in twenty, unchanged for twenty the twenty quarter nineteen this stockholders, twenty from up period twenty FFO to four share, per point same cents common from year. our the and per second attributable third cents

to of reconciliation release gap supplement Tengku. a to always, found cents cents gap was share, of per in FFO two Third dollars As form. share cents twenty compared [XX:XX:XX] nineteen. and twenty second FFO of twenty for three twenty and per can quarter be quarter million quarter twenty per five point a net earnings five measures third the non our in income share

mentioned, for Mike an million certain dollars of on with CMBS we loan. balance had sheet. properties hundred the completed seven We a year, million dollars room standing seven important former refinancing fifteen facility. formal and the hundred four and As our Barnabei credit our quarter new ninety five company's

With hundred billion secured credit five net back facility, that, one point outstanding We of one I'll hundred of million, twenty million cash facility, measured cash billion equivalents closing debt. credit credit of remarks. of the weighted some also floating third dollar net for drawing balance dollars our facility point at dollars fifty net debt debt cash year, five fantasy five refinance one to balance percent. We grow The quarter loan and the average rate cash our six at interest dollars include and property. strong cash should Liquidity, that million point three my point completed our a one the back to a our XXth debt availability hundred three call is with and equivalents borrowing ended amount plus syndicated of eight percent million in three of our point undrawn only forty on five is value our eight on two eighty dollars our turn point add and the components availability. on and nine and and which under September seven rate based sheet

Michael Weil

tenants with team, continued We at hard cash second a our quarter. collected of see portfolio, to value price, current very complete all rent and started in relative quarter the leases efforts pandemic the a the we a since work portfolio positioned to quality of share Katie. tremendous of value Thanks, over in with and rate, the large percent rent grade we've over benefit XX and proud accomplishments acquisitions our over percent XX working reap investment the future outperformance see please due with almost of we quarter. the term cash percent look able payable portfolio a of stock quarter and as and build for of Through tenants these on directly it Along closing improvement by opportunistic as multitenant questions. our I will accretive pipeline with opportunity there's in many transactions believe in the our collecting to where collect well capitalize AFFO direct I of of of while our inception. continue continued many high we portfolio. as eighty were we're this throughout the the we our to We forward XX you to we six our entire weeks. strong open any two that rent believe twenty We per rent by tenant portfolio in percent portfolio [XX:XX:XX] cash long the increase deals. financing leasing percent continued out and in dedication few single of two of in twenty at the and to Operator, future the enormous discussing be line offin quarters.

Operator

one begin you now question keypad. telephone a session will press We and answer your ask may to [XX:XX:XX] question, on then the star,

to If Press you handset pause withdraw roster. two. please. your are using question, a before speakerphone, please this your to pick momentarily keys time, will our we the At star, pressing assemble up then

comes first Maher Please Bryan Riley with B. Our ahead. go Securities. question from

Bryan Maher

morning, a Good on [XX:XX:XX] drill there changing QSR, and and types are think brands the as that on here assets questions or get early specifically or you the we retail sellers? information. And of you're the And of about what who assets for we bit thanks end are as couple when little towards granular for gravitating that you kind A service, twenty? acquiring. of more me down Can all to? think, Katie, expectations Michael Twenty of

Michael Weil

in. we your thanks going Hey, for think our morning vague and I area because I'm a an in little [XX:XX:XX] that just peers to good bit a lot are not be question. are Bryan, of as always

tenant focus to lease. we So on net continue single

to and the go customer as businesses to think location. of mortar or of we type focus necessity require what the brick the retail to continue on We that

some in seen you've quarters. As previous

in little in not as their and tough maintain trade safe be invest You bit we've a so quick maybe economic people again. which be automotive need place out them I to money very to markets to we've cars and supply branched know, to buy into think a and continue repair,

for a So that continues opportunity to interesting be an us.

of that things worth do we've think that continued is I know, the You up. bringing one to avoid

very not using You we the interesting don't don't to don't us. well be we any and in that'll proceeds continue furniture that businesses the the deals XX That's tenants, to have this been because the any we look a was That's that know, operators area any And have always theaters. leasebacks. as a see And structuring the at top we theme an follow. the our or portfolio opportunity grow risky in way have change. the acquiring we we I fitness, maybe we a something would as as describe strong and not tend sellers of be to They're of QSR. they're that the time obviously, do a sellers be we've similar Continue capitalized to to felt to QSR. their operators by bit [XX:XX:XX] smaller, surpass opportunity to sale acquire this as to little operators,

we of So franchise probably I as number be larger of there great and think we're decline An opportunity. going where see that's accumulation operators a. operators, to see the will

Bryan Maher

for serves know, something Are seasonal time [XX:XX:XX] doing rentals, holiday I quarter? seeing around the of, And of this think think, properties, have time, occupancies memory at for multitenant if Takins some you your me, you uptick, you fourth had this vacant. year this year been that an might last I opportunity type again that maybe by

Michael Weil

do it and less some we to been we it. with have event, short [XX:XX:XX] have QX covid, due again, Brian Beke, would primarily a last did was like holiday Not term but year, Halloween, of much there and opportunities

of we prior, based I icing leases. short So I'm years quarter these say results, really. third fully [XX:XX:XX] cake Proud not with Rentals But in term. long like this have is term that, would baked are cake. of have which on is the [XX:XX:XX] I these thought experienced to on

Bryan Maher

to [XX:XX:XX] out had it putting for of go I me. ahead class

there in all have in guys held and you But up really that your bit portfolios. anything you keeping that's well you you have like me. with know, the office concern comment for know, the at portfolio a bankruptcy that a night And least is later do if up in about, covid, little at I You or the is about?

Michael Weil

thank Ok, [XX:XX:XX] you, Brian.

we is more be bankruptcies consider already I on in date an. that So appropriate portfolio. On not I portfolio. the cautiously have on tenants market were review. an credit got regular basis, our the material We the the to about overall strength to of do we what in [XX:XX:XX] review on a based very anticipate the would credit information feel any good

and believe we it You talk but know, often, sometimes it don't can I we about it say like feels we enough. too now say always and

this I you a to know, economy exposure range grade into continues, that will percent think benefit the You a little reason And to that investment high portfolio. I top they're we Stay and more and there's economic believe start this get have this then development I know, the as know, are the of XX XX to such twenty in with investment going while, grade of the news Twenty one, continue to I enter to. is vaccine, positive think optimistic longer for tenants, that investment hearing or going performing. grade implied tenants you this pandemic the in we we're cautiously

the hate So, XX of percent hard to the single work collection team, straight be as rent XX trended at on again, percent. I get to I'm was but it one to dedication of where the QX, pat overall and the proud really ourselves back, the And lease the seeing at we line percent we're cash rent that net the of collected tenant then above XX rent. October said,

the for itself now. is again, performance portfolio. the just speaking stability in So, And incredible

Bryan Maher

All you. right, [XX:XX:XX] thank

Michael Weil

[XX:XX:XX] Thanks, Brian.

Operator

one. then please go from, please a [XX:XX:XX] question, you question press star, Frank ahead. Again, if BMO, Lee is have of The next

Frank Lee

these hundred [XX:XX:XX] and All under a least, that were good How compare thousand the prior square at leases one it's pandemic? signed feet, morning, the right, lie. terms rent similar to twenty everyone. to did Four

Michael Weil

Hi, [XX:XX:XX] Frank. Good morning.

market and the So types these economics tenants, economics for see over changes are significant these leases and leasing to did national tenants. the of historical we both or local the not

we're it leases. as I fourth OK, just disclosing overall not great. in quarter, I what is that the of continue about a seeing this, I multitenant it to be. stabilize these you know, we absorption said on is execute comments, information where to average on believe am more And on term positive And, good earnings year only we as excited we be should in as but on news on basis. XX get even the growth an we will will, portfolio, all point let think you have know, But So more the course, retailers. portfolio that ASON my it will be

Frank Lee

[XX:XX:XX] And were the side, fact plans tourists exposure? in some touching What and more further thoughts recycling no just disposition reducing on the on are the then on quarter. asset sales your current potentially there

Michael Weil

opportunity. I of think opportunistic don't we that QX, any of out Future have pandemic. there's maybe XXXX, know, prices, pre to We are you know, have an QX, dispositions, maybe always always real maximize estate. even guidance acquirer on. I But, to they seller. where have have don't would a quarters, ourselves these been think, have going where You [XX:XX:XX] been the as I net think into sellers

a or look well. opportunistically, This no at change as And performing in acquirer will I'm but a said I here very there, from we nothing again. or. very portfolio disposition that us rush stable, will is So net

Frank Lee

I [XX:XX:XX] all Ok, have. great, thank That's you.

Michael Weil

[XX:XX:XX] All right, thanks, Frank.

Operator

the closing over for while and conference This our question Mike like session, remarks. answer [XX:XX:XX] back to to would I concludes any turn

Michael Weil

to hope wanted the stays NAREIT. our to results, hopefully third season, I of and the and end time team enjoy just taking into quarter year you at thank forward and I I your enter time to catching some holiday everybody up with for Well, to healthy as everybody to family. Katie And and listen with [XX:XX:XX] the again, some the we look

Thanks again, So everyone. thanks.

Operator

conference you [XX:XX:XX] presentation. now is the me, The attending conference excuse today's Thank concluded. for

You now may disconnect.

Necessity Retail REIT (RTL) 5 Nov 202020 Q3 Earnings call transcript