NTST - Earnings call 1 2021

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

Operator

Greetings, and welcome to the NETSTREIT Corp.

First Quarter 2021 Earnings Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the call over to Amy An. Please go ahead.

Amy An

joining NETSTREIT's for Earnings Quarter you Call. Conference thank us First for XXXX We

the distributed updated press close, to company's the addition In release of section a can found the package Investor Both Relations we at yesterday supplemental and presentation. an www.NETSTREIT.com. investor website be in posted market after

as of remarks Private Securities the management's call, your XXXX. today's in answers to questions Reform defined Act may On and contain forward-looking statements Litigation

cause actual risks Forward-looking may statements and are discussed those to matters to address uncertainties results today. that subject from differ that

For you more XX, XX-K year we information about filings. these December risk for to factors, encourage XXXX, ended SEC Form review other and our the

the are no future. and made statements the of NETSTREIT forward-looking obligation date any assumes update hereof, in All to as statements forward-looking

on for investors. useful definition, we reconciliation of financial includes to believe financial In call such refer Please explanation are presented non-GAAP GAAP package earnings to measures. addition, release supplemental non-GAAP why our certain this and an and financial information measures

by and Today's remarks, and They prepared conference some your call is call open will make for Andy NETSTREIT's Chief Financial the Officer, Chief questions. Officer, we Blocher. will Manheimer; then Mark Executive hosted

turn will I Mark. call over Now to the

Mark Manheimer

First joining thank XXXX and morning, for Good Call. everyone, us today Earnings NETSTREIT's you for Quarter

be to today. here pleased are We you with

raise. recent I'll growth sheet. external in a and with will our start and first balance our then provide continued portfolio recent quarter then on focus on our light equity acquisitions take pipeline transformative and activity, Andy metrics more moment results our and to detail discuss of

expanded update AFFO also for including XXXX. will on our outlook, We you guidance

remarks. our the at questions for of call the open then will prepared We end

XX XX XXX roster feet million with XX of a diversified in March in contained of leases, of comprising X.X XX, industries. square As our XXXX, States tenant tenants portfolio

Our weighted XX.X average term is years. lease

until expirations than are of before and lease less occupied no with X% ABR We expiring XXXX, XXXX. XXX%

we investment of is refer additional industry exposure grade, ABR, with and what XX% XX% is on defensive. our investment-grade as XX% profile, our an to tenancy as Based classified

We and focus cash well-positioned who on ability integral have to sheets flow. tenants, physical capital strong that on tenant's to are balance access generate the continue locations to and great to

you as childhood Finally, typically intend health tenants that or let credit have theater, tenants, estate other early education prohibitive club to and weaker that not often me own these use. or to is efficiently real to we do remind cost adapt own profiles

rents to construction collections portfolio Our months. past through we resulted April, X the us to of performance approach strong on allowed steady growth this This strategic our of external plan. COVID. has in for has have focus collected Through each XXX% operational

increased quarter X going X.X end, an to to Subsequent only all $XX.X with In term rate of of of that either of with years. quarter's leases cash the profiles. of first the quarter, X.X% impact investment-grade weighted we years, weighted our million We with investment-grade average these with average from the X completed initial an cash lease or term at X.X acquisitions a points acquisitions extended rate. to years were lease basis cap in capitalization and tenants tenants of X.X

provided investment-grade of few $X.X for million is project towards tenant development million an an also next quarters. be We to funding $X.X the in expected completed that estimated

portfolio cap more rate a an New auto at stores done X add-on lease XX.X England XXXX. O'Reilly's as years acquired part transaction term in also We more in X.X% of with a than to

of ability grow examples our development as providing to acquisitions extend part through our tenants. opportunity our good capital are target our of leases These for and set

tenants throughout through opportunity us to allows returns the in retail the approach where with set and risk-adjusted shift acquisitions country. multipronged a see the Our quality we pursue broad best highest all

to several add Ross Grocers, Stores Natural to us our allowed have portfolio, and Wawa. Marshalls, approaches different new The tenants including

ability in our to size, look pipeline we external our strategy. about growth to grow our execute ahead, we on excited continues As and are

Earlier completed sheet million. subsequently our oversubscribed $XXX effort, transformational And in raised $XXX dry million fund equity we well to the with guidance we approximately additional that from reload us acquisitions a balance to million pattern. of our $XXX offering to month, that allowed

this for future NETSTREIT, on offering given milestone our view a its We impact as expected growth.

We continue a in review investments breadth and of blended opportunities, to including transactions projects. extend and stabilized opportunities, sale-leaseback wide assets, development

similar portfolio, are We industries well continue as the focused will and enhancing same do on also our to portfolio. of diversification make overall expect portfolio. target high-quality the tenants investment-grade We to to our up but a and we mix currently that continue as the quality of grow

you've will lease be Finally, terms what that us rates expect over few quarters. with generally from consistent cap seen we and past the

We external growth excited that size. given our per extremely opportunity in the on ahead share by are us effort know of growth execution our earnings we truly result attractive should as

workouts As have with and focused XXX% months but X a problem strong remain that past collections I We mentioned pipeline repeating, bears previously, or means rents track tenants. diligently record chasing of have our the of for not been by rent acquisitions. built distracted we

the our Over our follow-on. XX separate equity have XXXA most in with million recent $XXX X capital our over offering, of we months, past transactions raised IPO and

historically have efficiently raise capital and deployed each accretively. We

With on the offering, completion of laser-focused we our follow-on growth. recent remain

We to our will keep updated continue you on progress.

capital balance to our the the call turn to I'll over sheet activities. Andy markets and now Andy? discuss

Andrew Blocher

you your thank morning. this time us Thanks, Mark, for with and

with the our XXXX. quarter results first begin Let me for

of XX in release, Please share reflect an for the the per we Yesterday quarter. the press share and diluted recorded these $X.XX the during net of in note -- income the first quarter per during acquisitions of only results days for $X.XX, our $X.XX average AFFO that quarter. completed core first FFO

acquisitions of ABR, in which base the million portfolio the completed reflects effect As first $XX XXXX, XX, rent is of quarter. of annualized , generating the in-place or March

activity. sheet Turning to balance our and capital markets

cash of As $XXX our line we and of revolving $XX.X of $XX drawn March million million XX, million had credit. on

drawn option, a loan. term would the no until revolver fully maturity in maturity which extension $XXX December maturities subject match which million December X-year debt have is XXXX We the our of of our XXXX, to

debt ratio EBITDA to X.Xx net was annualized quarter. that adjusted Our

including in to first upsizing net the completed offering. operating follow-on end, by Subsequent the We which of proceeds quarter offering significant $XXX.X investors, of offering in we saw raised resulted oversubscription our million The XX%. in of by this expenses, to a additional the raise We growth. company underwriters as fund moment as purchase full view the will for to pivotal the equity our option shares. further exercise this serve

further and repay In at our available capital last through we since to addition, will to the revolver. we us choices acquisitions proceeds IPO us. expand expect utilize We which anniversary to take our our this to August, will for X-year intend point, the

very million offering. offering undrawn $XXX their fully thank would revolver. and $XXX bank of their entire for Pro execution. a We're for milestone for for work group forma We the of we cash at XX, and March hard team like our million to would XXXX, that this entire proud also positioned support have our us

$X.XX this dividend With reflecting week, June per payable declared a regular rate of XX share. of Board June record on the quarterly to to an on dividends, dividend respect earlier be annualized $X.XX X, cash to shareholders

Now me outlook. few our let a take minutes discuss to

We recent our complete $X.XX. net impact year previously expect this guidance guidance we are guidance as This XXXX from offering $XXX the a follow-on disposition, of to to million. of range $X.XX in now disclosed, introducing and of up reflects of the original AFFO million of full acquisitions year $XXX

our weighted rates consistent each recent activity. cap as quarter this back-end We in still with see and

We in with range $X $XX expense $X to $XX continue additional our million. compensation to the million be noncash G&A of to of million expect to million

of We expect $XXX,XXX million noncash deferred line of $X amortization. million and an fee $X.X including additional our to interest cash expense, unused of credit fees financing

to $XXX,XXX for to average We range the range expect year. million And expect shares state we diluted and XX million be to franchise incur of fully in to in $XXX,XXX. the taxes lastly, outstanding XX the weighted of

progress we're achieve our that, pleased important milestones, public as was our that our a key impact activity. But cost step strong as will very ratings To capital. and recent very in equity up, with we seek to wrap meaningful index investment-grade company quarter have a on of we certain such believe offering first beyond our

focused as our and role our on take shareholders of very seriously, their thank We for capital execution. equity We investors' support. we our are stewards

concludes remarks. prepared This our

We will line questions. open the Operator? now for

Operator

from Nate [Operator first Crossett with question Instructions] comes Our Berenberg.

Nathan Crossett

I on you could was so activity QX. in the far comment wondering if

perspective notable the think and weeks from terms I there? ago LOI. stuff different anything on a highlighted under of that's contract Is was there in what operating you what few some you disclosed

Mark Manheimer

end the I don't the to think that but I disclosed, at difference about quarter. we're there's guidance on I too pipeline. the good quarter. than about first our No. pretty increased to of add pretty -- what be we are to the to much year. the for have that able good for we track feel feel feel continued Obviously, where we like I we

maybe to XX Our sight, line kind out. of obviously, only is days of XX

but so in the even with just seeing that what we're with portfolio, types opportunities not of seeing. we're what's And now, the

we As take little have a whether and of extends multi-pronged we some bit be that those and development, mentioned sale-leaseback time. or got more or remarks, a blend in the prepared approach,

a those The public of repeat transactions companies you few of done -- types have of of kind a lot that are really get business.

and little as side. on bit a development more seeing on well the of So extend kind blend the as side

volume the good seeing So second quarter. quality for that the pretty and feeling pricing and about we're

Nathan Crossett

Okay.

some a you of the pricing to on over your questions so guys maybe little bit can get to us little may different months. you to that as And you last peers than that achieve I guys that be to fact higher And higher tend able is a what yield yields competitors? closest we bit consistent X get doing a of than remind mean, pretty of are the kind just bit acquisitions? kind are

Mark Manheimer

bell with criteria bit lot try -- Yes. and question inefficiently the public has only we to side out off build good and the every get REIT, with priced portfolio. of opportunities the the bell that of buy what are curve a allows size investors. most needing priced million of to that out to acquire assets. a of hundred year go single of to to a left to And want $XXX and it little think out We and assets in fit asked -- go out really that dispositions of then being And buy question. portfolio per into build what and inefficiently try the million net that not curve chop and our really We several No, kind dollars really surgical by kind us we a that needing the I quarter. there are bell it's bit take smaller do curve, assets we most more properties the a quite be a our

Nathan Crossett

kind view just if I'm versus Okay. for we ask in put do the probably you'll And kind of like year? how into place follow-ons? just about funding one appreciate sounds year, ATM then I curious of heading And should I how It that. you next and ATM this could Andy. that think later overnight

Andrew Blocher

the Yes. that think we're Thanks, I ATM, average that that mean, be we volumes to Nate. as on daily be we the current I would -- going on Yes. time. not look acquisitions be our we're over trading solely relying would level of executing, not able out ATM. on based seeing liquidity, certainly, based look, to

So do. we I think it's just like everything that else

be balance. will it think I a

a To on I that it going me But what trying of to NETSTREIT, the million with is right? yes, sitting cash be provides similar So benefits to just are we're we're match do it's right better just we sheet. to at everything now, as that funding, $XXX not balance balance. think the worth

Operator

question is with Next McGinnis Greg Scotiabank.

Greg McGinniss

expect Biden of be your business? over category, fall your going $XXX,XXX into now property that exchanges how and appears that gains the actually seems rollback comments on that impact the tax given of that XXXX competition you perk to to most after potential do So to

Mark Manheimer

Yes. Most still right. It's said, XXXX I become for being competition smaller of And a law. to of a to But and wood are good our individuals. think lot type that buyers, chop that there's question. offices family you're

much with not So institutions. larger we're the really competing

different think you all think get So start to they're I big the loopholes think do it through loophole, going this get that that that that a could and lobbyist to I pretty you various they increase. to expect remove if becomes have to get to of see from before pricing fight I to would law. the [indiscernible] assume will be reasonable

really bit portfolio with with fortunately, the this But acquisition aren't yes, we a deeper the competition. think and knife before selling private then took less little I assets, didn't anything us many we it mean, selling side I money pricing And a in quarter a as helps raised company. on to

into helpful a assets, So we to to of to of is market. don't deeper XXXX the and -- you private it be want and call out portfolio sell assets a out able certainly need sell the sell into the some in really avenue that go many to but event

Greg McGinniss

of And sellers? acquisitions how XXXX from your are much sourced

Mark Manheimer

When many. there's of developers. we deals a a a working what a kind a piece acquiring, buyer. we're really kind where with we're very at Not we're shopping with of lot center shopping of partner look of you taking and center There's of lot that

So to those more are going institutional-type mostly sellers. be

small a But percentage getting numbers there I think in think of a true. I we're if kind volume in what of is really just pretty it's acquiring. So is at could which total what be decrease -- of transactions, you're

is than into really if of our market. you more only listen certainly But do, what XX%, sell XXXX of lot that peers some that about XX% a assets the that's to and sell and certainly they we

impact think volume, on we'll our be transaction have little bit some So total maybe than of an I maybe peers. a it less I think but will impacted

Greg McGinniss

impacts last just cap to And any you the in in from know see desirability to mentioned changes or past expect or restrictions of make the one may the move as volumes that you you? I certain same to But you rates of to that Okay. more kind -- that tenants remain pandemic, me. we start or acquisition you pipeline. make and rates may sectors attractive started less on have the cap

Mark Manheimer

that No. are in happen We more a less transactions definitely focused. seeing lot areas we're

that's market. overall I think healthy So the for

bit. loosen not I a sectors some we're to think starting there and on little casual up is dining that focused

transactions seeing those some happen. you're of So

access But and -- are is balance strong retailers has are retail. have been also strong before sectors company of pandemic, this working even we the really in and that focusing the always on to were the in essential-type strategy that retailers sheets, capital very very

post-pandemic, retail. that lot think was in a going expedited a to There that there's of of be was change bit. to a change continue Obviously, We quite lot pre-pandemic.

that there only is And able be evolve change that your I what's it's that think when change. to the are to really e-commerce, continues retail to not capital then to retail from and cushioned important to but business reinvest somewhat sectors as in to in adapt in happening also inevitable have in be in

into to really very really of And flows long-term through going a to -- so on company change very company was that And really going We're to to positioned we that be comes. change. private XXXX, go to raising be chase and thesis not adapt change want and We're going be back the investors. be the starting yield going going try as pandemic. cyclicality to did the a as investment thesis to to for We want capital our cash for cyclical. these based And and source not that there's changes very that to it well investments. be are when going there's viewing consistent

Operator

Next question, with Todd Thomas Keybanc.

Unknown Analyst

markets Todd for the there position ask, into? migration certain strengthen in is you're or expand recent that Thomas. to of on are I result trends, [indiscernible] to a to your trying as line This wanted trying

Mark Manheimer

I that are more you we think seeing mean, there do growth. where opportunity is I really. population -- Not

a sunbelt also then in back. various in or healthy we're property sunbelt think at event the I more only just the how the us Southwest over and areas into, we you'll likely So basis viewing they're in have the take that a growing of time, the market-by-market use the other not the really real that a jumping area. markets Southeast -- but see But support, are we're demographics uses and concentration And look do estate country. the pretty of on it retailers to the similar more

over very margin, on there. all exposure the time, you'll increase likely in I we're underwriting. But on think be specific I So XX lower think market-by-market to a see us the

Unknown Analyst

development comment you in can And opportunities, and expect more Okay. and to more on see sale-leaseback there opportunity development whether the opportunities you future? see

Mark Manheimer

No. Yes.

We That for are a our team. development. real opportunities more in seeing was focus acquisition

trying of to of types out going I opportunities. great those job think done a and they've source

and then they a And now sellers. lot once get a those going. really take lot traction of more a were to nurturing to repeat When publicly starting get few. we really relationships a them you initially you those those few getting lot with of of a lot do had a going opportunities, business get And first of do we're repeat

encouraged that. very we're So by

a an So I of do uptick as think to you'll bit on relates it little see the margin development.

as there's We've sale-leaseback, have a -- to always a out we retailer the you but might a to us lot buying as and probably not have look a area Usually, we're estate and they checks. that great a of be credit. equity of not been are thinking to success. that's corporate an private events, write cash-driven That's equity going trying for somewhat can that those not cash pull going at real a much and a equation smaller firm how where

really So we more there. we but that, are not focused have seeing too opportunity on even much

part have investment-grade fact, of pipeline there looking an retailer In to a with grow. that's sale-leaseback really in our does

are high-quality you are their for avenue with the seeing some bit and that them mainly estate more and ones little growing a use think growth. of like an to they're I investment-grade So funding the opportunity as real because retailers,

Operator

Tsai Linda question, Next Jefferies. with

Linda Yu Tsai

from how plan What yes. going drivers? And are on are I'm the higher you anything level? managing What -- remind current Can operating on there is sorry, at forward? preventing leverage you a us you

Andrew Blocher

X. Mark draw yes, tried building right when our the I were But Well, experience. really now, we're we mean to and I out at look, story, on

believe our we think company. X.X certainly our company perspective, leverage. is leverage -- leverage could higher But right? we X.Xx could that public X.X within level, to is from range We an the that the for So space, appropriate portfolio support targeted to X.Xx. reasonable Our that's a

Linda Yu Tsai

out? XX% Does is to those And categories? I'm ratio mirror in your Got then source you broken just order XX% have IG to wondering IG, loosely a how pipeline it your it. if there's investment like? how much of sourcing execute in

Mark Manheimer

types to consistent not going of a for little the focus bucket on what be profile and we're much remarkably through investment continue investment-grade we'll a a gets quarters maybe certainly with risk of been couple X/X, the more, of with as to doing more looking we're X/X view the bit would between past similar beholding No, forward bit that assets really more pipeline. been of that We're little of little -- bit the investment-grade to our There's to bucket. that grow to We committee. Yes. and that those think that, although over We very like we've be acquiring. more returns. it's and

So we'd to certainly like grow that.

operator the types on then bucket at in margin, But without of those we'll investment-grade sub the are where BB+, look of X non-investment-grade or doing like There there. profile, of in rating. we of fourth really really a not operator. the much BB- to smaller opportunities one your And kind bucket

Now one and I various those incredibly think different may just that been because that have in economic assets we of has the really incredibly sector a cycles on past think out fundable, to being the service said, bit little we are maybe over cycles. resilient couple quick where push restaurants look proven

the a you we over see little opportunity more So now, but time. as really there see of that in There's may not that pipeline think I much to well. starting are bit of right some

Linda Yu Tsai

last And just one. one

of over has terms discuss of Given deliver acquisition the volume, evolved how can net are they team And volume? in actually you in year? raised of do how you can investment terms much capable think they recently what past your

Mark Manheimer

pricing of Right bell really focused off Yes. of that and think, the inefficiently than we're cut side what's now, doing. No, priced we're to very trying on what most assets. the curve significantly more I

eat maybe little can curve. a that bell we into think bit more I

see cap points you'd maybe I bit the XX, most. of little a degradation rate, basis at XX on think

the has done a we gotten earlier, If retailers of how mentioned now pretty the lease couple, a to that some of to and and everyone and and of in kind I lot is of the extend. if like front a a has really amount into the it's really the think what creative like I some lot process blend very acquisitions that we've double need were And doing opportunities. of then, we're of development in bought amendments we've with blend side look team our with comfortable been terms doing, and extends approach

achievable. starting I think, the so And get have, I we with should currently pipeline. volume that doubling easier I time see the But in to think, our team pretty business repeat there, certainly the think acquisitions over that and is

If we side help to we think little side. may asset add closing maybe were double, and a management more on bit I the look to

side able really acquisitions we senior levels on there. But scale without really So think the the maybe person much G&A. we're scale built the I to the be and one business each team for -- at business adding to

that's with that the and the be portfolio. grow relationships really more into important in business more I more more made happy to has as really repeat and because we acquisitions getting going So the progress developing think team and

Operator

Ki with Bin Kim Truist. question, Next

Ki Bin Kim

can might you do benefits doing and curious visibility? what long company, think have you as of kind guys a of what know in you or of size deal of see? I history the the you see a So become but regardless just of you kind bigger this company access of acquirer, anyway, terms benefits

Mark Manheimer

something And It's we build a looking that's little you more to bit reputation we more bit out gradually No, than little thought. a that sell bit build out really good question. have I probably come the something. you relationships of a people if happening think maybe a anticipated time Yes. they're little and as quickly and it's would over more

be to situations. going broadly not of there pricing still just all We've we're larger of competitive, in come to going competitive be and are and those much very But for opportunities those get way. portfolio. very number a typically not almost seen We're our to those types of marketed the very in going

of long business, the we're relationships change and to So competing ways I other I But build feeds on from kind think out much don't -- to think going larger that on really get -- will and away transactions. we're a than repeat as I more I itself. think continue don't more we

Ki Bin Kim

at how much So pricing the the how describe broadly that directly brokered benefit? actually that of looking Like with is more of would tenants done type And are is deals kind you're you business the deals? today? versus there repeat

Mark Manheimer

what's -- I what's certainly we've seen No, a Yes. not of brokered, into mean, brokered. lot it's get peers

of All of element kind gray in an of it being have ours the area.

So well for that's have opportunity, a we're and if it's we take, instance, that find lease lease, shorter-term blend then marketed, -- buying doesn't a interest a and we back shorter-term widely up right extend from much lease as a we and that relationship get before lot close of close. then buyers. that but and extended We'll tie we retail after our go to or

deal. so to own situation created me is we've where that a our And those --

So a technically, involve. I guess there's broker

so some repeat almost buying, there's don't of think what business said, of that that XX% really element that the But we're we're we buying it second of way. in maybe And quarter. being everything in

Operator

Next question, with Citi. McConnell Katy

Kathleen McConnell

you in point double So future, versus some what mix at you volumes do debt acquisitions equity acquisition be would your for were forward? able to the anticipate of funding going if the

Andrew Blocher

Katy. sorry, that you I'm again? say Can

Kathleen McConnell

Sure. Can hear you me?

Andrew Blocher

I hear you. Yes, can

Kathleen McConnell

Okay.

volumes able funding of going if So versus what would double equity be your you just asked, acquisition I you do the mix forward? the future, to anticipate debt were in

Andrew Blocher

like potential kind something like from math what NOI look, that think X/X EBITDA on an probably I mean, looks the debt. do in means X/X and Rough equity, associated you impact assume if perspective, you numbers. G&A, rough math, of Yes. I that it increase the

Kathleen McConnell

of about timing how update thinking in you sense of the then throughout the Great. potential Okay. the year? throughout year us to can on this you're AFFO And ramp acquisitions get a the remainder for just

Mark Manheimer

consistent. a few Yes. dispositions. we're first pretty have a with here quarter second more no dispositions the bit million $XX did be Sure. with in may I to going think I about mean the We acquisitions. We in little quarter

net So likely quarter. consistent I be $XX each we'll million around pretty of dispositions with think

Andrew Blocher

balance But And on just for first we only XX Katy, right? you. we to in quarter when that back-end we're AFFO company, loading, one a one So have size average, working were days in acquisitions given those absolute about on in while impact any meaningful based that, certainly have -- quarter, sheet year. that. quarter the try to Yes. talk Katy, We could that note did the of the thing acquisitions, on that thing, for and to the the improve

Operator

comes Todd Stender Wells question from with next Our Fargo.

Todd Stender

sticking expectation has the the equity offering, that your at from the just did how Maybe When for question. layer pricing, debt your oversubscribed last I you're Andy, transform that the where debt that leave probably how really a pricing, You're just funding? size, changed? looking on you sourcing bigger with does guess, you, company, that side? in now

Andrew Blocher

mean, -- I it don't Todd. had impact. a a Yes, debt from the from side, I know material that

through Obviously, talked its right drawn December like loan in date XXXX. previously fully the we've of we of is As million credit we about loan as term the fully hedged this have outstanding maturity facility. on moment, got $XXX X balance term the $XXX million

a forth. kind it before so so bit So and significant term can debt will of out think start on I through private generating we placements, we that be

months think into I the that's probably XX to future. XX

both Based players the think we tenants. would agencies that focus investment placement do, principal the banks, the in market the we on or and obviously, are of on number insurance things grade investment-grade there positive that private a which also profile our companies high-quality be rating the about and conversations is, what with our

positives. that think are those net we So

that Xs of kind right? were talked, as of to -- pretty low time negatives, think been know bigger, I the people diversification a and we -- in to it bit continue need improve we high and good we there's So last But Xs. placements to I that we continue about. and were for the change. get of don't see X-year diversification our are talking, thinking improve to still in We is material our think, be private And kind we I continue points the to those

Todd Stender

go for you're X/X below cap for what X when And for? or you not rated? probably bifurcate, properties the a it. collectively? other on investment-grade rate either was with cap is If the went looking Mark, had you quarter, Got that rate, investment-grade at the And the the guess, I investment-grade can, X, you average then, can if

Mark Manheimer

Yes. the a difference. were that maybe acquired basis XX in difference. there's quarter I or point There's mean not either we The huge only investment-grade a profile. or assets XX investment-grade

So between there's XX those a X point difference on buckets. XX, basis maybe average

Todd Stender

Last it. but average anything not on maybe the years you average, to medium-term for lease you're go it's category? Got speak just when short that X term, kind one, to your did inside look far your How at from Okay. off any appetite now. short of leases, of in you the

Mark Manheimer

did couple we of extend April. And a sure. leases in Yes, here

up shorter-term that X.X. fact, like we in or X. about look more in we particular, X that leases being -- have So being was said, one, years is than ended where X.X some at there that will But

was they one a committed we where the rents long It to They're that with reports a are below site the term. sales market. tenant. well perform where had so And conversation very and

we not feel taking like So we're much very risk there. really

cases, early. and reposition driven dont', to the and they in there able have comfortable be tenant extend B, bit likely was are a were do off box That that will, us that. we'd we're even stay to So they wanting But conversation to that long -- and bit of increase we go to more that little A, that able particular if we term; to the some doesn't that: get potentially rent. term more low, lease prefer a that little just the

shorter leases. term situations those we'll where do So are

then yes, quarter. for you can little little mean, to what typically probably that bit only can -- X.X, quarter. on I think expect average do expect I than I we like. the a would the -- second I speak to And do longer-term shorter bit a be so

Operator

Gorman Michael with Next BTIG. question,

Michael Gorman

your acquisition of owners centers? unlocking visible pretty for quarter increased ago. the potentially some I shopping Obviously, for strategy their center it we breakup about interest about transactions you value, a don't center potential seeing to working I -- in some at look know properties potential centers. talked parcels from look value space want to saw shopping public of at call you in with but their owners Are to Mark, their if

Mark Manheimer

Yes.

seeing more interest And interest buyers retail. sellers. from from I think quite little of we're the bit multi-tenant seen we've more the frankly, a

those to rate So back. you're you've of buyers a and lot seen some compression see starting come there, cap

those more situations, bit gotten So little have frankly, some a of quite competitive.

that, although looking little of But strategy in less quarter, do. is higher. our a I makes that that's the So sense. of that a think little volume less bit to There's that second yes, bit a we're there's

Fortunately, for that approach us, different we've with. got X groups a look or different they're all They to for. X have looking what to we partner

think coupon more keeping money add Some to just to the get of that on, with sometimes focused in a we a want a term. little otherwise hands going good is a, retailer getting bit that in property a the with location a strong want they're we're and some cash our a coming, reposition put where to flow on long it and into difficult lease clip or and to satisfied value lot stay

be in think But to and long-term traffic But I to needs coming a then be yes, much that the talk that there. we was also the you other tenants driver healthy don't rest in aggressively is group those for needs very continue the about locations. key of center one our to more there I mentioned, like -- mean, was particular there at piece

on and really approach. centers are marketed. that got take -- get There trade a specific they've of is that My lot shopping one that's

going competition think that's are as sense bit unlikely that buyer. I lease the retail into to we I you And as more they're are So that that for to yesterday. assets, more but a buyer. net much yes, that strategy using seeing a think think makes I little attractive saw more an for multi-tenant and with in the some news it's But us, run that bring avenue which we're obviously particular

making little In buy in continue lot bit allows get swift and best and through risk-adjusted returns. acquisitions. at other or of areas rate accretive maybe for little think, us see some less bit for a that and to that we've difficult to got in is which continue and it a we're different approaches is machine more a particular -- the particular lot we're area to a I X the our to strategy, us opportunities do in we're going So for volume is, fuel us where to compression benefit situations, going cap how looking that with to X one

Michael Gorman

a maybe increased at in do That's it, Okay. tenants when an location? are job flowing at specific look volume And of getting what you you tenants, helpful. are doing with change underwriting is are omnichannel more how who through you're acquisitions good with or then you looking that of your terms but as space the of in visibility kind e-commerce

it's clear that whether see Are as are strategy? their to a a things there like like you caps? you're critical So maybe, to different tenant is attributes, an Walmart, if it's looking at or how heights for looking location omnichannel real example, end specific estate

Mark Manheimer

of where more buy and example. good need really sure in Yes. store, pick And is some online piece market good even of making to focusing evolution in than it that it's understanding on kind more a retail and it's Each speaks for critical Walmart in that that's it to of I them, different No, it. and and is a up And -- they question. the to a the have very others. think we're is for and markets me,

as a matter back, but kind as reconfiguring load they the Best Buy really are stores bit like heights they've particular. to they of little the Buy, I they're certainly changed need in much they about the that one is things way their that and have think footprint, Best bit, And less a how ability clear in quite the thinking that their distribution. is long

Best they've our So they've that of that footprint to very trying Buy, been from was went small. very too large kind small,

the don't So a they've really want bit, location. have to kind but moved of they big little back up

that important making we to so products feet think people understanding just the up XX blanket a have it that do as pick approach is really height sure particular need so of it the is they of saying, to can as store. can tenant, in to that it store clear talking they okay, location, in back lot the have we're about to not So one how

are areas approach. where the some Sometimes, of hub-and-spoke kind they There strategy. that isn't focus on having the

going sure then what making is understanding really So probably also the we're change. and understanding that's that to that, strategy

And is of can a box piece with run the back that in event our do so get what it critical we we rate. the

Michael Gorman

one if payout thinking the about it. missed I you just one. I apologize looking about think range, dividend Andy, Okay. obviously, is here talk I then last at the But Board maybe with And guidance current how track policy just for or could will the you're as of will Should kind AFFO expands? from growth the kind XXs. the think as kind payout growth with of the company is pace that, keep in phase low trend growth its major down dividend about, of that here company the we on

Andrew Blocher

Yes.

We that's the that was [ IPO obligations, just I that the X/X sure shareholders, we've AFFO free ] kind dividends XXXA and to X/X cash of to So retaining stated think right that, returning retax during are right? the balance of whether of flow. process, throughout follow-on, satisfying think also our we it but making the our payout,

dividend a to I based in go something. position you We would potentially I the over the about right? out XXXX. be probably to certainly you But if the course with increasing boards, starting of able dividend year, So where think on the thinking respect we'd the is about, -- we're ultimate the propose start numbers should that think that talked be the we decision in

Operator

the turn floor to Mark like to closing over would I remarks. for

Mark Manheimer

everyone, joining to Well, our care. for look in today. the We to us forward continuing you, Take discuss progress thank future.

Operator

teleconference. concludes This today's

your and lines disconnect for time, your at thank participation. You may this you

NETSTREIT (NTST) 30 Apr 212021 Q1 Earnings call transcript