O - Earnings call transcript Q4 2021 | Realty Income Corporation

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Operator

Good morning. My name is Chris, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Realty Income's Fourth Quarter and Year-end 2021 Operating [Technical Difficulty]. [Operator Instructions]. Thank you. Investor Realty Manager, Senior Hasselwander, Relations Income. at Julie

may begin. You

Julie Hasselwander

our for Thank Operating for Discussing Christie Sumit Kelly, joining Financial Officer; Realty President, and Chief all President Results will and Roy, Income's Call. Executive Year-End today and XXXX Treasurer. us you Executive be and Fourth Conference Chief Vice results Officer Quarter

results from securities During considered forward-looking be matters this that laws. company's any statements The may forward-looking conference significantly call, certain we may actual in discussed future under the will federal differ make statements. statements

greater will disclose XX-K. the We now to cause may such I Sumit Instructions].. in in turn Form detail company's CEO, factors call over our that the the will differences Roy. [Operator

Sumit Roy

Thanks, Julie. Welcome, everyone.

Realty dedication pursue to by Income, I reflect for I while growth of As remain acquisitions of to company. relentlessly colleagues our at the who numerous continue profitable record year contributing initiatives on the a year our inspired past

with we goals welcoming During while quarter, ambitious the the competitive that talented amplifying our new industry. VEREIT, many our fourth position closed further drive colleagues in the will help on merger

We our are and April X team, seamless last committed of XX% We as in of successful G&A achieve merger, synergies our post systems. we year. to on over one remain track processes announcing as merger to the work annualized to we collectively year upon transition cost a integrate and in outlined

journey of $XX.X team in I representing impressed million Specifically, X, new synergies we X, to synergies XXXX. in G&A our $XX full over and of to the year talent Also, targeted with expected to of our and achieved our while full to and integration completed our scale our over year in date dedication efforts productively work by our be million VEREIT integrate team. our have million practices Realty $XX operations, members together representing bring year continue further XXXX, as year by ahead. I'm And strengthen the with Income integration and platforms best work our we we creatively one X encouraged

business the fourth quarter. quarterly merger, for the a investment our record Beyond set volume in

During high-quality acquisitions, acquisition grocery our in the to world's the through leased a of quarter, in one Spain Carrefour, second partner retailers. key strengthened leading foothold we additional of our including properties

Our Europe increases as we the total strategic be addressable trillion, in our nearly expansion addressable into the double Europe of Continental meaningfully market that universe, $X estimate total to U.S.

of meaningfully in our look expect cost currency in Europe continue the our than We to hedge to risk activity lower capital yields contributing U.S. we at priced investment debt to further our as competitive with

less than we and less acquisition investment for East creating represents $X.X advantages on at The Looking downtown shareholders. our positioned a consummated annual XX-year to well our previously with X.X% continue disclosed lease favorable forward, are to property value our integrated risk-adjusted casino deliver the located than industry Boston Encore Coast's a the acquire competitive in to Harbor, we billion Boston. and recent to our would returns leading cash gaming is developments, intent X as rate X.X% from regards represent The capitalizing the first forma our this initial resort month, cap term. miles rent. pro of With being by announced globally portable

the not. new, use is the is type merits pursue property the of transaction While the lens we to

leaseback XXXX high-quality vertical is business real when with particularly centers estate entering with into leaseback the first the in transaction Diageo strategy the new and Vineyard locations, this with space, important leaseback we a which XXXX best-in-class around strategy with geography. sale sale followed We investment our Our partnership occupying in operators Carrefour entered last more business the in when sale year. And internationally. Sainsbury's executing when Spain our recently, when expanding

to become commitment client to further Encore to the top add our acquisition of same our gaming the in respective industry will XX premier Wynn and Resorts together will X represents strategy. a in the roster. leaders industry Wynn partnering transaction investment Harbor transaction, our After industries commitment Boston debut with Our clients. The overall diversification with the with we closing expect this Resorts

a estate. in We're Our prudent by Mystic that high-quality metrics. annual not capacity of property absorb XXXX, the square rent resulting merger. the a ramping to $XXX a first, on opportunity Boston X.X with we feet million merits transaction EBITDAR, this and The transaction constrained coverage already supported X.Xx without large-scale to located was generates real transaction our impacting River. of investment strategically are is this testament of pursue estate in transactions Harbor it investment size acquiring complete that meets size the The ability our opening million particular gained by and property Encore After is our the portfolio through type. single still initially. the diversification illustrates but enhanced significantly to and a our VEREIT criteria real client is set scale banks the in key And of

Second, client the lease.

net annual a years the billion. into rent the the liquidity. $XX of with and greater thereafter of sheet, and balance Wynn value one maintain XX-year at gaming Resorts capped of X.XX% attractive XX approximately entering triple significant lease first healthy or X.XX% at are with for largest in an is escalators X.X%. the premier They We a CPI leverage U.S. moderate operators enterprise annually

team XXXX, are U.S. gaming Third, in in fourth been close new universe the Craig we procedures, with, Resorts X% regulatory across have we XXXX. transaction expand with expect XX% and our pre-COVID lease quarter in recovered of grew aggregate frame. investments of Pending Massachusetts, in his the the and relationship during revenues work industries. the pleased the of the to gaming that performance. this pleasure industry the levels. cultivate a to to XXXX time industry to as net Wynn many we grew same quarter as to compared fourth market And quarter the regional gaming has The of outperforming fourth

the turning for the quarter. Now results to

we with count. inherent the operations. our pleased with by of leases management we of recapture rent based quality portfolio our proactive over real executed and core re-leases of of sales full experienced year quarter, expiring the recapturing re-leased leases, or Since quarter re-leased talented our those continued our enhanced expiring by the XXX have XXXX, XXX.X% on are to asset bringing contracts. at team, Bolstered public XXXX of the in ended rent over strength estate efforts XXX.X%. rate recapturing our on this occupancy and XX.X% XXX% We our We listing X,XXX on and property

properties of portfolio quality in recapture the believe to look net ways merger, forward underlying now the the a competitive report billion, to continue and team. key XX,XXX includes lease industries. $XX our of an rates across over closing X,XXX VEREIT to measure objective than the our our diversified size to of with Europe clients We quarterly asset of most After and advantage a scale. enhanced more and distinct and the in United XX portfolio merit management of we is approximately an is With industry value this one leased testament set enterprise States

net rent greater industry large our further to we XX% the year and billion. of Since by portfolio or end the XX and contractual the a ending the our third quarter, concentration client annualized XX.X%, expanded over fragmented quality portfolio With be net portfolios solution over lease diversification, have end the one-stop total our pursue at improves which $X.X the and quarter, multibillion-dollar lease sale-leaseback since and to the highest competitive for industry of in in has Our represents increased size third XX.X% the client we of scale, believe transactions decreased positioning it from opportunities. top one industry.

our investment top has creating decreased, Additionally, capacity. concentration industry additional

annualized industries X and compared of over stores the declined a the third top industry grocery which convenience XX% contractual to stores at end of XX% have Our now meaningfully. top exposure, rent and comprise includes our quarter

and in industry growth concentration and fitness industries, targeted our the of theater naturally declined. have concentrations With health

the financial Thai terms the sponsor. performance with their majority Lobster is dining that by our has now In merger, concentration contribution owned improved Union of of an experienced is Red operating established strong casual from VEREIT

pursuant concentration further to VEREIT also beyond. Our transaction, our international profitable achieve to Europe geographic and declined growth in room providing

XX% represented the market strong X.X% acquisitions approximately increased see average or Of property our the to year. of cash of on billion Accordingly, fourth quarter end in we're and our and industries $X leased was opportunities $X.X high-quality cycles, approximately our We reflected rate volume. term grocery The approximately our retail total for approximately over platform experiencing perform from in assets for international opportunities, invested fourth to industries in initial acquisition average quarter. already the lease bringing started nearly in and XX.X consumers. during $X.X The international portfolio our we environment the European the and our the have given were investment is $X.X We of portfolio was our which our to the for competitive invested at record through year. XXXX, variety billion markets. necessity-based remaining of closed in of Over the billion, $XX.X automotive quality X% an positioned the and acquisition fourth fourth billion sourced result capital its assets largest stores sourced a was to during operators. billion of was of acquisition is acquisition believe a well quarter investments, during total efficient, criteria, to years. the the added cap X.X% XXXX, invested we the economic XX% of billion U.S. of the continued quarter expanded a XXXX services, company. to of in international proposition represent annual In quarter investment for benefits weighted total Reflecting sourcing of our level stringent our bringing volume $X.X

value in investment year, with continue view, highest points schedule more been XXX quarter spreads basis having from while business risk rising and that drive XXXX, environment. in approximately an to proven is, during shareholder by climate. expiring last And maturities points product in has few marketplace. our well-staggered fixed-rate a XXX expiration our refinancing a the the in limits to historical ability average, we lease emphasize given the this to generate our design, the recapture potentially and important debt our We inflationary perspective, to believe corporate schedule actually want balance than quality bond healthy in the our until I during our value we re-leasing. rent sheet a maturity well Inflation acquiring, rate basis topic benefit upon of to we of From months. believe with environment the no an debt investors positioned consistent

sectors periods, is the realty as flow vehicle, of cash our recurring as the other quarter. the business to makes income is over tied Finally, inflationary of owning in this time, attractive who years. largely further comparatively will future which to more a whose value proposition current pass compared income value during to value growth from At Christie, in I'll discuss marketplace it high the to results

Christie Kelly

you, Thank Sumit.

We prioritize structure conservative continue to sheet priced while procuring capital. attractively a balance

was of the equity, our billion During to the the quarter, issuance of primarily through enabled record complete program, leverage capital for our the and which finishing simultaneously $X.X a activity us highlighted finance while targeted markets VEREIT parameters. year ATM within over merger quarter by acquisitions our

to we we we in accomplished. have level, in April, intended to which the leverage to a emphasized our close relative target pleased leverage-neutral As manner merger the when transaction announced are we

ability size provides equity One enhanced manner price trading disrupting our of the daily cost-efficient in issue us and significant of to is that stock amounts in of ATM through the our a without stock. liquidity market scale the of the our with benefits

XX.X of support the debt of from years. appreciative was have yield we strength investor X.Xx. XXXX unsecured of priced of fixed forma position sterling-denominated third and X-year income months, we pricing we could received Sterling of a not and at As X.XX%, a we result, pro million we with a adjusted the Subsequent weighted with This a have debt XX-year issued blended sterling-denominated entered all-in a senior annualized $XXX notes the EBITDAR average last offering XX to in to the net base. term in year-end, notes, more from be

closing results XXX% contractual the In VEREIT quarter. portfolio, to during collection the pace healthy financial on the of Moving fourth share, acquisition generated of by $X.XX of and for almost AFFO strong quarter. fourth rent quarter, our the of merger, per business supported our

terms generated near be COVID-XX business forward, we portfolio XXXX, of has we longer levels $X.XX providing AFFO will in finishing end believe to guidance no performance growth. collection. disclosures of Going In the operating representing returned annual high overall as and per pre-pandemic of X.X% share, our

the committed comfortable with part was and of capital at annual that increased the representing income attractive pipeline, over principles X.X% portfolio on to to time total to accretion we global proposition. our Realty business. year intended share the December, VEREIT our remain have per were return The by to previously Income monthly We announced last the accretion of remain founded delivering guidance earnings as to continued our to same dividend AFFO growth our the our shareholder with period from closed health compared share consistently shareholders, we of our the in dividend together a investment from Given midpoint. the increase were and merger, of active $X.XX pleased preservation. $X.XX, X.X% In dividends generation as able with generate throughout was the year. recently we that XXXX increase

of listing S&P REITs remain Aristocrats consecutive least for Index since X years. XXXx our only for We Dividend to proud our XXX at have X dividend XX the dividend now having the be XXXX in increased and raised

Now Sumit. call I the back hand like would to to

Sumit Roy

platform Income humbled forward turns Thank to to including forward. of collective we opportunities in that beyond, resilient full XXXX We the to continuing build for as results the has year also with of a ahead. the but lie Christie. our attention Realty strong you, path outlook and completion remain accomplishments bright a now our by the embrace look strength our we and merger, the and and XXXX,

attractive enter financial questions. over provide open remain risk-adjusted our possibilities, relentlessly of new in with the it At a ways building steadfast As returns while time, of to any we long year to relationships like we and shareholders pursuing this run. enduring brighter for up futures, I'd purpose

Operator

[Operator Instructions].

Our first Brad question Heffern Capital with is from Markets. RBC

Bradley Heffern

talk Wynn involved. regulatory some the asset. the you are very Can quickly how profile it's risk with Obviously, of a large different comfortable acquisition? about got There you single risks

the that escalators? see by as compensated higher higher cap So the and you fully do for being rate

Sumit Roy

yes, answer, The we short Yes. Brad, do. is

try For operators with us, premier quite thesis assets our to best-in-class is partner they operate. want the that simple. to get the We and

the look you in asset, is Boston asset If United the at the States. it Harbor premier superregional

at If still you at an stabilized. the X.Xx. It's is look asset coverage, fully this and is that not

operator think best about S&P is arguably they company the you in an that space. XXX Wynn, If the are

the compare if If you the almost more compared volatility look Massachusetts it a which you look it of strip, at and to average with the at on side, to that. almost market, quarter to the tends national regional Even Xx less gaming has be specifically, associated And fourth lot the in the volatile. at XXXX. gaming grown was XX% it

itself what paid completely desire real If and and these and one very in asset, trying operators compare add very about invested with to that in to the asset you that the are trying asset that fits to our all was terms what portfolio. of partner the you'll fact we've estate of is explore comfortable our at look been public the feel open very respect to numbers, you comfortable continue of see for market actual start with cost. to actually get replacement we've growth we best-in-class and paid what the And and to avenues best-in-class new to with we've this the to with it profile

on opportunity those look at sort as the of right structure, enter generate with what the partner the that for a the lease the we you And to was of a it's gaming the right space, into this felt we able operator are with If of with why reasons the us asset. and are portfolio. is to right rest excess in the XX-year lease growth

Bradley Heffern

likely of if that Okay. size, them you same would client. another the the transaction them make And #X obviously, Wynn, did sticking with with

it of see gaming? we'll with Is transaction do So that likely that it with about think you Is Wynn? another another one the see likely we'll another future how operator?

Sumit Roy

Look, we in first transaction particular did space. this our

for is are right to open very within playing like we operators, proxy able with it. So grow for basis, we're the as continue feel grow business. risk regards a to area. with we to risk-adjusted We've across are yield And if so. area happy the associated on we very portfolio us hopeful our And we can the to been of structure like do that with we happy the gaming, be properties long this as right this can very we'll we for to market about and our a even the very yield, feel risk spectrum grow with transactions

would We and and continue the there our to in like how important to our they is us gaming be in talk Wynn. to long-term they partner. a exposure decide that. exposure them about other partnerships that for It's for continue to we transactions, And to are and pursue to Wynn like particular, grow event would

Operator

is Crossett with question Nate next from Berenberg. The

Nathan Crossett

a I'm Maybe pipeline How no just the about way Can right And gaming but those many this assuming questions there could confirm following process? now, competitive rounds? bidders? -- us anything bit. deny there's up bid or that? assets a many was How on you you a is tell then other in

Sumit Roy

But to second we through that a all process. -- was the towards above we to I'm end answer not last this This question. one, of is there first with And started going wanted year. partner about else. your we emphasize conversation relationship Wynn. said, came And the like no

And purely was other a folks. transaction. were so It no There relationship-driven were rounds. no there

Nathan Crossett

come down. a just more Maybe broadly. Cap continue question Interesting. Okay. pricing on rates to

think across funding pressure of remains with up. is the I going even commentary of kind space that there, the costs lot there a

I year? numerator what's I the pipeline kind guess, And in this So your of what right of your equation are expectation, the guess, seeing, side you kind now? of for

Sumit Roy

Yes. Nate. very That's interesting question, a

that are we seen this pursuing. -- we've higher to rate type of We to haven't the that products We that cap would we start of especially would rate aggressive sort interest see into higher a expectation rest the of market, environment very acquisitions in percolate that thought inflation, that fact have the continue given of the been for yet. market,

to the that of Now increases especially going we cetera, the seeing cap where history us and And expectation. cap relationships, that allow continue I tend interest current And do just market suit. rate, if when months is do an rates phenomenon downward are But seen XX, not some these out, a will above potentially situation that X, than able lean hope. that stabilization where have partner to next even suggest of is see more think is would the one we being is that et that But on at cap adjust, get to to rates XX pressure. rates to become X the least to the there it's that that currently. no played months X follow market. points This a basis is expectation and but see rise, we we in is past, out to not going don't do in play this

for underwriting of rest terms hope year, are it we but ended In the can't slightly where above the we that. is guarantee of Our what is we year? last that up

is at do yielding of we what to above market, team current already that with, the focusing I very one a covered premerger. again, fact that are I market. we my rates remarks to inherited And able were in that incredibly seeing least I team particular and will to robust started is have produce beyond our in the the has think cap we used I point results, opportunities And and we not part love. business. that of that side the like pipeline And that's being on was Our prepared said, higher add, move. The

on that rates? higher of able but have still hit the is But and tell. ground that to running see so as is we -- cap that them expected, a being we is us has team to it's to it's performing team. early And slightly broader the Potentially, as great achieve and had too help could part

Operator

The is Scotiabank. next question from McGinniss Greg with

Greg McGinniss

hear you to Encore You're more mind. here. going Hope don't a bit

on about the team the this in underwriting necessary the from gaming licensed Massachusetts? space to that how then was for who acquisition you allow Just is curious expertise new went And vertical? getting getting for

Sumit Roy

things. of lot a like Greg,

of of come previous understanding the of to capable blessed associated on where lot doing also that underwriting the across opportunity that that particular itself associated a continues a we new have very that refine with to that have industry comfortable set to the and our new Craig long allows that we so very in work what than more us we have lends And And industry. that with Income are how are lot that needed are to tool obviously be And focus around continue fact with of risks greater who to experts were from with here street. colleagues own fact have backgrounds wider with leaned business. term. to that's at a much appropriately. a And industry, the of are comfortable research We this this pursuing the particular thesis that also we team, capable and partnered his operator and we we we we leaned confidence. allowed best-in-class Wynn underwritten risk have realm opinion, a got are partnered us us Realty vertical on specifically this the with my and over the with department our The

the to working Counsel a your answer to closely tell. have the questions. to I Legal and go second know In figure question early and who's Officer, yet. precise for licensing through don't regards going to you is is Too that to But the on I Chief of our trying with process? those General very terms MCG with Michelle, answers

Greg McGinniss

why you Craig the the And typically where the are minimum CapEx of one? not to REITs gaming Billings only being the requiring Realty then to are that then comfortable comment? do able on you way structured, And further in deal terms Okay. elaborate unique mentioned the also, achievable require due that

Sumit Roy

and for important us to lease fact and both very create we bespoke a going out to leases The Craig and space. there copying habit try this we approach works his this able were our this to to important us, Yes. Again, was we are that partners. precedents as team. very that them a And try entire to works that was and in for address for partner what therefore, lease Wynn us. our works pressure at With we their causes understand bespoke respect words cetera, And Wynn And points is like were. came up investments their to with a it. that associated of the with feel for to pressure take and minimum you their capital those works what for brand of points. not relationship, requirements, very We essentially within et have in the properties. for my We don't

can were just I is through the for -- that. us see to the the that you You gaming visit don't the Plus the protections specifically we when you licenses lease yourself go and I supported in Massachusetts. get that and what other fact property are in with. there outlined mean have that And we one very say actually comfortable that that

And and their partner certain above feel Partnering plus on invests who holistically, protected. most we that that with so like provisions what point gave do in beyond like other looking we us properties comfort for them. somebody we think, was a us I pressure to it other them allowed and very at the with lean Wynn well because operators could are

team with Craig so glad very moving and And So could comfortable that it forward. very where we his and we we we are comfortable do up. ended very, it were were structure

Operator

is The with Burrows Sachs. Goldman Caitlin next from question

Caitlin Burrows

helps European in debt lower-cost Maybe Sumit, moving mentioned different Europe. support that to activity to earlier investment a topic. you

another consider. do taxes to seem be However, piece to

update decision how give you acquire on in wondering consider the to So an versus on could you tax U.S. your the abroad? if just impact

Sumit Roy

of business of long-term And acquisitions, we Yes, when are is at to portfolio essentially not Europe it, ways that funding of compromising we underwriting that to doing account more have currency Caitlin. into the profile up international of why you one on will with business the by that basis, match a the in end looking opportunities certainly That the denominated protect lot leverage protection finance effective interest try return our you consolidated assets and the raised look associated ultimately we pursuing. rate is we while up debt a end which paying. a stand-alone obviously, tax that overall basis, we debt hedge is expense and business. fully And ourselves natural if is cost one a we natural minimize at and local a a find on take to with these profiles that that

our less get here XX-year U.S. if to So and we grow probably in can a this capital the probably debt for say, X.X%, of what true we Today, even bond. be Whereas in I in is our terms how X.X-ish X.X%, cost code the of continues less X.X% it's would than said Europe a XX-year to we in percent in the want very continue point you environment, business. unsecured slightly in even unsecured, important Mainland that's were increasing strategy look can us. of in at European that it ZIP rate to in Europe, the to U.K. X.X%, Having that, achieve potentially

very are such markets I capital to our and advantages the as cost said of I that ratings inflated cost So gets is when what us of to essentially, when able advantage we that to accrue portable that's meant and capital Mainland this the due Europe our and take U.K. of

So with. that's the strategy, and comfortable what we that's most feel

Caitlin Burrows

Got it.

guidance And ended the the Okay. on at XX.X% for quarter this is fourth XX% with side, about tenant you occupancy maybe year. then guys

small I days. but shift, realize tenants that's healthy a are these we do So how hear potential

or it's buffer, maybe the then you watch a could more you're there's that more So just wondering general of expecting list particular something which if on in comment if broadly?

Sumit Roy

we've XX%. around it's right is that you Yes. feel assets comfortable last around statement how it's made, roughly That's which Keep a occupancy. we merger good X,XXX question, think through And it's the have we that inherited that digested just and we say also We the about saying in Caitlin. very mind, XX%.

if rents the or to we that XX% want we pressure to maximize invest it of and we how were go look what sort to you a figure and assets makes and will economic vacant a could the is return table, elements year, was to about hold that is so a the flex to put reposition total does Caitlin, the we be you completely it few where because we through and take that number. sharing us. bit little last what the business, outcome. figure and sell reason asset. gave and/or return But maximize and to market. our number, vacant are we the to those we selling I'm of look we capture the and And try our at profile, higher try optimize year before there about And Look, And to assets be to occupancy is on a one profile. superior to we trying that that, balance whether find of are we all sense just repositioned right at to we have that out capital could time on that the is And on that that us. coming to each outcome If these occupancy total try or the target say to number. even why for out tenant that create tends profile to We think our guidance best try the downward trying a that on it the is through

beaten the the to have asset see what can we to So you management side. give have, when do on not they've us to tracked And do flexibility talk probably often about we more that this, that. you approximately XX%, we want it's

regards trying it mindset So maximize occupancy need outcome. give more precise a is to we very point are to we this flexibility rather with to is economic that that us than really to strike a

Operator

next with Green is Spenser question from Street. Allaway The

Spenser Allaway

the you Given tenant credit the within gaming, attractive strength levels, the coverage terms. mentioned of lease

consider argue deals, concentration on you tenant As your to tenants? you traditional change? additional you retail any one differently, a does gaming gaming would view credit allow some high it tenant given superior go is Or to other relative how said could

Sumit Roy

concentration. we certain have part imposes that Look, That's a certain as well great question, as bumps our on that's Spenser. policy restrictions industry of obviously tenant concentration investment speed

X%. it's regards policy. it, concentration, to And with it's XX% regards Just so with investment concentration, as you our per client have industry to

those transaction. we've announced we diversified Having sort have represent $X.X going that, well, be but we sure executed to if yet, than less it's very billion And X.X% a closed a just on will, yet, overall you -- to said speed of it's make our bumps, to a not concentration. that continue So you portfolio. client of

So industry as side specific we to well business. client grow on this both the the room more side clearly have on here, as

of growth. basically the entered haven't new does say done. is transaction gaming and become We we to this avenue are one into industry This a

would side But compromise business. to willing side. our the we to as have client like we more the some area. the remain However, as on how grow these this right opportunity, limits through selective investment on certainly policy. well that of And to to decide in us to those are concentrating, to of we industry you continue metrics grow terms this But look both of sort for in will than help are particular that can we we very the the

we've it that course, approval, in past. but require the Of will Board done

you be recall, X% Walgreens one If point. of north to at used

merger, on both today. the happy compromises them are than make X% dropped below to right And of right and So the post clients have But more those for we limits. opportunity, was X-Eleven. the

Spenser Allaway

but That actually maybe follow-up my one answered all questions. so -- more. Okay. And

curious explored leases ground into what identify you of the you've expanding external new do? possibility As continue if to similar ABC seen of lanes we've to growth, just

Sumit Roy

come market there's let think don't a into really I from revenues i.e., ground about marketed asked building, this building. being me a when before. particular ground a want as our leases. the Spenser, you to but X.X% you opportunity a you been I own today question is Yes, But say this lease, and that go is that's tell of

of If at at the going for the paying pricing, the the is the to you expectation expiration of building seller the with because is look the the building that you're term. as well come ground the as lease ground both

but proceeds And the so a is those opportunities. essentially for actual being paid that are simple purchasing, a you yes, fee that ground -- it's can this are opportunities, you claim lease

that we about we ground a often than leases, certain for not, don't talk of recognize rent comes as building we are the well. our that fact So concentration paying primarily the portion from more because

fee is talking ground base to to to so about the on I'd we able cost And be ground have, transactions. love but simple leases, be that yes, leases start those you recognize

Operator

Stanley. Kamdem with Ronald Morgan from is question next The

Ronald Kamdem

Just a quick question.

sort up of Following opportunities. on sale-leaseback the

to sort merger a the post of want Just get sense of closing.

structure in Just personnel been or of opportunities of and terms allocated what resources these sort has to going after forth? so

Sumit Roy

Well, but Shannon think I don't if posting you those, track and our I know. personnel count, started

a team You will our quite see bit. that have we grown

a it's in has ended you more where at of up of people. And sort G&A And into we normalized XXX if at translated some look number. XXXX, that

end were If folks. at closer where you XXXX, it we was the to XXX-odd compare that to of

in avenues side, asset the management grown. And through we it team team continue and obviously et VEREIT side, on organically of expand merger, Part acquisition management cetera, et but the have so side, both on the cetera. on also has to growth, side, the research the rightsized order to the on came pursue property the the of

a continuing grow reflection only I of a in grow increase growth. of routes, think also avenues is traditional and new is continue its so to And this business to but that not

that And broader as can a translate numbers. personnel so going seen into is base by these to be

Ronald Kamdem

And just of is question your external second on my sort about growth opportunities. Great. thinking then

structures higher-yielding forth. about You've looking sort of and talked so at

thought structures transaction the Just curious potentially at of into how looking much to through? escalator went similar higher that goes sort

Sumit Roy

short A lot is the answer.

think quarter, for If the there's you but X straight fourth look X number line. at basis was cap our headline of for XXXX, straight-line points XX the I rate

X.X% quarter. a straight-line for really it's rate cap So fourth the

only is growth through generate the the way annual on imagine rates in embedded an XX can leases. higher you to these basis basis straight-line so points And of rent

generate going conscious profile Neil's is to number forward. on make that that continue have higher that much inherent effort so who Mark part a And of we traditionally a that the teams growth and and

And spaces. consideration into certainly so deciding part that is before new take an within that of profile we market at are to is that of existing in the how to see the leases percolating about And opportunities, the element those new we think looking verticals, pursue routes.

Operator

from with McConnell The Katy next question Citigroup. is

Mary McConnell

targeted Just wanted your taxes. factoring mix the acquisition international tax is year question on this in of just for guidance expense what year? U.S. up higher I'm on the terms for versus in, follow earlier to an wondering

Sumit Roy

take you that? want to do Christie,

Christie Kelly

well, Thanks, which what as Katy, are international we the Sumit. experienced higher team taxes growth, Yes, to Thanks, are as our making this Katy. similar the year Sure. and some Neil is incorporating very great progress.

Mary McConnell

mix versus So should about to thinking terms U.S. this of last? just in international, targeted for be we year what relative a

Christie Kelly

international, be at XX%, think international. I U.S. XX-XX looking you could XX%, that

Mary McConnell

other the then investment that still new regarding categories on? are or speak Great. there us Where similarly opportunities today? pipeline, investment can exploring actively outside to just update acquisition any you're And that you're That's gaming helpful. of you or attractive finding

Sumit Roy

We through in the multiple into to area. into it. then we get growth. to new a go question won't that consummate of right? why Katy, the our path because as are are internally I are go avenues constant rationale Katy, that becomes of we exploring, finish say, discussing, line We'd exercise every materialize, they it about down entering don't the go becomes and subsequent transaction, avenues But certain to we in chose we much call rather it when areas futility, underwriting, a an going suffice Yes, and to talk as exploring then and that over discuss to

had Katy, this want our And what into into just never consider because that materialize. would an some conversation much driving on a details some new now, call going don't is respect on to should we've in with process we I that too of avenues insight those may around to the to discussions thought give you forward. what going engage But are like right

I there you, to bear to the areas able you And we chose finish talk and are just grill us looking we are want we routes. get very over to can we on And that absolutely and the will why as with clear, line, pursue details us, constantly at. new and to are if to when those the so be something

Operator

with of question is The America. next from Bank Joshua Dennerlein

Joshua Dennerlein

what on then rent accounting question the is amounts? A cash of on repay color got you some in the on XQ previously And basis? uncollected percent your provide that could you on ABR

Sumit Roy

that? Christie, to want you take

Christie Kelly

course. of Yes, Sure.

The deferred exceedingly taking impact of So of we're amount strong. essentially, at is strong look XX/XX/XX at a rents a very have been overall of when end deferral -- in million, we're collections collections about as regard. total that essentially, year. And million the achieving $XXX the the $XXX and

theater As we the clients current. of noted fourth all in are quarter also our

entire theater less million than you And less debt because for those of actually of because recorded we strong fact we so of fourth terms have collections, the that and year great total what $X progress. seen the in $XX And would then strong than quarter, those had in of the expense million bad collections.

Joshua Dennerlein

Okay.

is what basis And sorry, on or... of miss your ABR accounting percent did I cash

Christie Kelly

to basis have cash We modest ABR, less overall accounting I X%. say. on Yes, want than it's

Joshua Dennerlein

acquisition, expansion would the sorry if in us economics came opening Could offer? Okay. and walk opportunity Perfect. it opportunity. missed And an this the Encore additional but with then I remarks, the it through maybe this you

Sumit Roy

Joshua. Sure,

talk is required is the if given of the parking traffic. actually Today, accommodate lack that is to located. is patrons lot building of there the having that pass to a in from street team, this some So on to you across parking where Craig they're main and the space his increase

going below is to aboveground, of to areas Boston tunnel Encore the is even the an that right into other in it's building up So pathway in seats, aboveground the Harbor across from And that a them to goal develop enclosed have also right lot, to tunnel, building. building leads casino the be parking into it's entertainment a the -- multistoried a venue going ground just potentially going that to Plus get is XXX street. this but going that parking constructed it's same for maybe X,XXX an have seats. few to not entertainment

years building. parking the the lot, pathway clearly, And that to this is going the add couple this X next enclosed performance of that's connect And built will overall of actually between is this relationship this is symbiotic expectation buildings. a get the so and the over to going very to

plans. this, them -- current we be able the a they ability they X-year and so to have And once their frame to gives consummate time which there's which plenty have time of -- to within constructed, do

that translate answer question? this Josh, building there Josh, better referencing the this did is muted. particular building. coverages And that's think, at at we buy the I yield. a lease. you're X% will even We into that your you're the obviously, currently that should have in option But than

Operator

His line is Massocca Thalmann. Ladenburg with now next closed. question from John And the is

John Massocca

expected a question. quick guidance? First, I kind of but it kind the was be contemplated detailed just really given there in just acquisition change transaction your per notable timing, wasn't that results heavily prior Was think, the obviously, in of won't the share impacted a Wynn outlook. just

Sumit Roy

opportunities a John, when about think a level, that talk laid a we or feel $X of acquisitions, know we underlying that probably guidance when seeing. visibility. big makeup because guidance years, composition have the billion you out the many the of some was asset. talk $X that announced. what of you've a to not very for and we have there's opportunities I We for don't There's worth guidance, market. it And asset good earnings But that like above the does transactions really about perfectly of a many, the very that is going gaming assets we we the which be that's for based reason on have look why There's just don't feel acquisitions are understanding out, underlying confidence been the came the us could like, covering the billion. are

even north the But say confidence the this number to now you it -- in inclusive of allow an fourth stand should us completely a the feel confident of for number do feel front billion very oh, billion and of does billion $X year high to was number, level is more achieving in to what with is a we But of billion, this. level quarter. assuming very achievable given of is, is much about. we able confidence a from sheer transaction size something difficult it of by that today $X.X you that $X that fact, close we just that higher good it this So very this entire exclude say, are or $X above on the

that's that question. I So how would answer

John Massocca

you've period space thinking for bigger maybe Understood. long lease then net picture, And obviously of time. Okay. been a in the

where times kind today environment, similar rising the you rising will, sensitive for competitive time in factors, kind look to lease kind rate rates? rate drive kind current set the been periods to if other do kind And environment you you be that they kind we're of will maybe I of how it to and interest guess you As reflective more you in, versus compete at in think of interest with are to today? of cap what a look periods back that of the of rates of compare you you've maybe set as net of these are of the the investments, one other kind in competitive we're of

Sumit Roy

up. we That's cap what rates, rising Rising internal Yes. between then. correlation there rate based there to happens I our environments a very that rate we is interest to positive found obviously that what cycle a on the question, cap tends before. be environments, you seen John. a you have And debt and it it fundamentally, rates that is tell interest rates if X own is. analysis, but can And good now. leans in the XX private X think especially that code, bit more, It's on the about going are somewhere environment a cap Is a ZIP debt lag lot the that months? of obviously, months, but if markets there of is rising, months, cost in

between And particular a at that opportunity. the cost there's mismatch of financing rates some existing so cap and point,

course, with more have come seen wealth we we've that And one sort companies the a today's of lease as side There private of net capital do of tend seen difference is an space past. floor. equilibrium what plethora in those And the recently That's in much, much and, sovereign into years our into on lease on net that and environment, the side, is equity and product the public reach a that point. institutional. balance so to have has coming of become out preponderance

put less -- impact than once gone fact more I private to the are are who quickly will not think leverage our But go should debt that transactions ours, therefore, in cost lean tend this is a will of us to think lease I A-, equilibrium folks of AX-rated is step get as again, of a net forward. that as and of up. yes, higher company. going And their and think from. away lot rated on much we of certainly markets, curve up perhaps lot a also competitors in interested that others go do to to now to we And environment, the the highly. an that capital up potentially to there to this cost I has might And wall to point than will that the our sort have the So is continue on in going how capital advantage allow be an impact that it

not I of us our Income longer environment, that as So allow bit in others and embrace. the that will I favor quickly. sort I point to out more today's little might believe is be think able the that, that get play even able though might to in as equilibrium to to do of take to that believe a a achieve. advantages things will that platform do some Realty

Operator

with Linda from Tsai next Jefferies. is question The

Linda Tsai

later portfolios a but date targets, advantages to thoughts to high-value see of general I do or what believe terms regulatory given investment and buying close Wynn at you in around visibility of the typical is later for closing XQ more considerations, are the transaction this the industry, your hitting assets approach? create funding that

Sumit Roy

quarter in side in How Yes. good quarter, the it?" that in more around, by through the going is to did unprecedented. of on billion and -- the equity our I able of you just that some $X.X $X.X the fourth acquisitions billion single fund And the We it's large -- And raising that obviously, equity, ATM. very quarter post our I've we're last quarter. us, the question. fourth year. transaction, $X.X match debt is this transaction we fourth unsecured size to received just of finance questions Linda, a did very "Hey, but are yes, that's a it's transaction, not And think it's a billion. For

have liquidity So I big the stock advantages us. is the of we for one that affords again, that us, think, our

being able are able We number, $XXX are are it a what very raise trading close as might nominally large this to and easily overhang fund, situation. match very in to capital daily stock basis fund million to on a we to without match seem

So feel we or because quarter -- if it much doesn't closes quarter, in it the be matter And it third really to fourth better for the internally. closes us it accordingly. to a have whether match we'll we'll in fund able

we So see this us. overhang single any cause yes, overhang issues should any for don't number on causing it's asset, or I a as a not think necessarily but big

Linda Tsai

And be you've between strategy then vacated how boxes, maybe and to amenable you the some the capital maybe some and in give Could what talked terms maximize value. us decision weighing currently? you to boxes the of about selling examples putting type repositioned of past more in in back might

Sumit Roy

talking willing rents Pizza expiring and examples XX,XXX be or XXX% Starbucks box were the and of are are X-tenant their actually had that we than coffee places. are et that of generates the rents turned store convenience more Yes, into repositioning remain a square converted box are willing are pay a than Hut could be to more about, et have there Pizza Hut lot that We've been aggressively or excess life. convenience Linda, previous chains type much store. in us very that function what location, cetera given A could QSRs And cetera, for is a of car could to of converted or previous growing X XXX%, a that of that either pay portfolio a foot expiring rents. into the of box in wash multiple a into of in are their

the So what goal. our grow because is yes, be do positive But going those perspective and are of to to a the business to that to so foot per so some these repositionings date and square forward, that be we of part quite from far, accomplished we can have hope good. that rent able is

Operator

from is question Capital with One Chris Securities. next Lucas The

Christopher Lucas

the a XX-year pricing capacity question additional for may. out have debt and/or sterling-denominated you the as on there. point? sheet, on you Sumit, just I you bonds quick of this sort to today is thank the the you given what see curious if Just at guess for current think I that portfolio euro-denominated balance And

Sumit Roy

do Christie, you to? want

Christie Kelly

on Chris, able but in we've for order alignment we're it -- strategy. Sumit. think further the our from plenty be of looking capital to to realize execute got to I of perspective, Yes Yes, also market, euro wasn't that runway to your executing sure, in question, too. And part this, forward XXXX with

Christopher Lucas

guess but they're what a above question coming the of term, I to got terms market of They're sort point near you really due you've could do today. the Okay. that gets number bonds. not at -- of think of relative are sort you to intermediate

you refinance terms looking think Just that how curious to essentially about aggressive in as debt? be to how you'll of

Christie Kelly

what a VEREIT we And years, it in example, XXXX, to modest on of I the as be aggressive that's in -- focused here that we very think we Yes. we're very transaction, terms in for relates maturities. Chris that in will have And regard. the and coming debt articulated

Sumit Roy

year, we've the Chris, ahead out. the done liability thing paid XXXXs is we other only Even I'll throughout and and last management The years. the add, we went 'XXs

bonds So take advantage find that of it are interest this more prepay monitor. will is ourselves rate happy if our environments than makes unsecured that we in. we to we and continue to sense, And something

with appropriate and us, times. So certainly a to will tool is we that, available I leave it to of just but you at that avail wanted the

Operator

the This portion remarks. of call. turn concluding I'll conference concludes call now to for over Income's question-and-answer Realty Roy the Sumit

Sumit Roy

joining for you, soon we upcoming with investor to Bye-bye. Thank today, you Thanks, many forward speaking Chris. Take the conferences. and everyone, us of look at care.

Operator

you participating. Thank today's gentlemen, and this Ladies for call. concludes conference

may now You disconnect.

Realty Income (O) 24 Feb 222021 Q4 Earnings call transcript