James Kammert

James Kammert asked if VICI has had any discussions with Sphere Entertainment or their Peterson Companies partners about participating in Sphere's likely deal at National Harbor. He also inquired about the regularity of discussions with Caesars regarding the regional lease, asking if they are ongoing or sporadic, to understand the interaction frequency.

Answer

Edward Pitoniak (CEO, VICI Properties) stated that VICI does not discuss deals in progress but acknowledged having a 'rings-side seat' to Sphere's success at The Venetian, noting Sphere's compelling offering and strong management team, indicating VICI is 'paying attention.' John Payne (President and COO, VICI Properties) added that a Sphere development at National Harbor, where VICI owns the real estate, could attract new customers and benefit both VICI's and MGM's businesses. Mr. Pitoniak confirmed that discussions with Caesars are regular due to their status as the largest tenant. Mr. Payne clarified that VICI maintains frequent dialogue with all its tenants, including Caesars, to understand business trends and asset specifics. Mr. Pitoniak reiterated that the best solutions would enhance both portfolios, involving multiple levers and strategies for portfolio optimization.

James Kammert asked if VICI has had any discussions with Sphere Entertainment or Peterson Companies regarding participation in Sphere's likely deal at National Harbor. He also sought clarification on the nature of VICI's discussions with Caesars, specifically whether they are regular and calendarized or more sporadic.

Answer

Edward Pitoniak, CEO, stated that VICI does not comment on deals in progress but acknowledged Sphere's compelling offering and strong management, having witnessed its success at The Venetian. John Payne, President and COO, added that a Sphere at National Harbor could benefit VICI's and MGM's business by attracting new customers. Mr. Pitoniak confirmed that dialogue with Caesars is regular due to their status as VICI's largest tenant, covering issues beyond just the regional lease. He reiterated that ultimate solutions would aim to enhance both VICI's and Caesars' portfolios through multiple strategies.

James Kammert asked about VICI's plans for its maturing notes in Q2 2025 and whether the new relationship with Todd Boehly offers insights into attracting capital from sports consortiums.

Answer

CFO David Kieske indicated that while guidance excludes refinancing assumptions, the current market suggests a spread of 120-125 basis points over the 10-year Treasury for a new 10-year bond, implying a rate in the mid-5% range. CEO Ed Pitoniak mentioned having very preliminary chats with Todd Boehly about Chelsea F.C.'s stadium vision but noted they were not substantive at this stage.

James Kammert from Evercore ISI asked if recent rate volatility could be a net positive for VICI's Experiential Credit Solutions platform due to its ability to provide certainty of capital. He also asked where management places VICI on its 'quadrant analysis' map regarding current consumer and REIT capital market conditions.

Answer

CEO Edward Pitoniak acknowledged that while VICI has many lending opportunities, the week-to-week market uncertainty makes it challenging for both VICI and potential borrowers to commit to terms. Regarding the quadrant map, Pitoniak stated VICI is currently in the 'upper right' quadrant (good consumer conditions, good REIT capital markets), but emphasized that the company is always focused on the future trajectory and preparing for potential shifts.

James Kammert inquired about LXP Industrial Trust's planned 1 million sq ft speculative development in Phoenix, specifically asking about the market's improvement, potential prospects, and the remaining land available for future development at the Reems and Olive site.

Answer

Chairman and CEO Will Eglin highlighted the favorable supply-demand dynamics and lower construction costs in Phoenix, expressing confidence in early interest from prospects due to the lack of available large facilities. He confirmed that approximately 240 net acres remain for future development beyond the initial 65-acre project.

James Kammert inquired about LXP Industrial Trust's planned 1 million sq ft development in Phoenix, specifically regarding market conditions, potential prospects, and the remaining land available for future development.

Answer

Will Eglin, Chairman and CEO, highlighted the favorable supply-demand dynamics and lower construction costs in Phoenix, making the project compelling. He noted existing demand for large spaces and confirmed that only 65 of the 315 acres are being used, leaving significant potential for future development.

James Kammert inquired about the potential dollar volume of LXP's redevelopment pipeline beyond currently disclosed projects and whether competing landlords are aggressively cutting rents on large vacant spaces.

Answer

CIO Brendan Mullinix confirmed that while additional redevelopment opportunities exist in the portfolio, the company is not quantifying them at this time. EVP James Dudley added that while some landlords are cutting rents, it is typically for assets with functional or locational issues; for quality assets, rents are holding firm, with softness appearing in concessions like free rent and TI allowances.

James Kammert asked about the two large Nissan lease expirations in early 2027, inquiring about renewal discussions, notice periods, and the operational importance of the facilities to Nissan, including any tenant-funded investments within the buildings.

Answer

CFO Nathan Brunner noted Nissan's public commitment to its U.S. plants, which are critical to its sales. Executive Vice President James Dudley elaborated that the warehouses are directly tied to manufacturing plants, with one connected by a private road. He confirmed Nissan has co-invested millions to bring suppliers in-house at the Nashville facility and is considering similar investments in Canton. Given the low in-place rents and the facilities' integration, he believes there is a very high probability of renewal.

James Kammert sought confirmation on the leasing assumptions embedded in the 2025 FFO guidance and asked for clarification on the primary headwinds causing the potential decline from the Q4 2024 annualized FFO run rate.

Answer

Chairman and CEO T. Wilson Eglin confirmed that the low end of guidance assumes no leasing of the three large vacant boxes, while the high end assumes they are leased in the second half of 2025. CFO Beth Boulerice identified the main headwinds as higher net interest expense of over $0.01 per share due to a bond refi and a term loan swap step-up, and a reduction in capitalized interest of about $0.01 per share following the completion of development projects.

James Kammert from Evercore asked for an update on the remaining assets in the non-core bucket following recent sales and questioned what prevents the company from retiring its more expensive trust preferred securities.

Answer

Brendan Mullinix, CIO, explained that a handful of assets in markets like Kansas City, Philadelphia, and St. Louis could be monetized opportunistically, driven by attractive capital redeployment options. Regarding the trust preferreds, he noted their value comes from being long-dated and covenant-light, and that a portion was left floating due to ongoing discussions about potentially retiring them at a discount to par.

James Kammert inquired whether Welltower detects a customer preference for larger residential units in independent living and assisted living, and how their portfolio is positioned to address the shifting tastes of baby boomers.

Answer

CEO Shankh Mitra agreed that product optimization (unit size, services) is crucial, alongside location, price point, and operating overlay. He noted that many developers built too many studios, leading to functionally obsolete buildings, and emphasized Welltower's focus on this holistic optimization.

James Kammert of Evercore ISI asked if the current supply-demand imbalance creates a meaningful opportunity for redevelopment, specifically turning 'C' quality assets in 'A' locations into higher-grade properties.

Answer

Vice Chairman & COO John Burkart confirmed a 'tremendous opportunity' for redevelopment within the portfolio, focusing on improving well-located assets with good infrastructure to create 'like new' experiences. However, CEO Shankh Mitra clarified that this strategy applies to improving good assets, stating you cannot fundamentally turn a 'C' asset into an 'A' asset if the 'bones' of the property are not good.

James Kammert from Evercore ISI noted the uptick in European investment activity and asked about the scale of the opportunity set there and if it extends beyond the United Kingdom.

Answer

CEO Shankh Mitra clarified that Welltower's international focus is exclusively on the U.K. and Canada. He stated the company has 'no desire' to expand beyond its 'circle of competence,' which does not include continental Europe.

James Kammert asked about the expected cadence for the non-same-store portfolio to 'catch up' to the same-store portfolio in terms of occupancy and margin.

Answer

Shankh Mitra (CEO & CIO) explained that the non-same-store portfolio should grow faster due to its lower starting occupancy, as Welltower is acquiring assets at 40-60% occupancy. Tim McHugh (EVP & CFO) added that a heavy period of development deliveries also impacts total portfolio metrics, but margins should converge over time.

James Kammert inquired about the visibility and details regarding 2026 and 2027 lease expirations, specifically the percentage actively discussed with tenants. He also asked if there was any organic tilting towards industrial or retail across those next two years.

Answer

Brooks Gordon, Head of Asset Management, confirmed that virtually all of the 2026 and 2027 expiring ABR is actively being worked on, with the company engaging with tenants three to five years out. He noted that 2026 is a manageable year with 2.7% of ABR expiring. Both years have a reasonably similar property type breakdown, approximately 60% warehouse and industrial, with opportunities to push rents on some high-quality warehouses in 2026 where rents are significantly below market.

James Kammert of Evercore ISI asked if the US administration's focus on onshoring manufacturing is creating tangible opportunities for WPC, particularly among its manufacturing-heavy tenant base, in terms of expansions or new developments.

Answer

CEO Jason Fox responded that while anecdotal, the company has seen an increase in inbound conversations about build-to-suits and expansions from its existing tenants. He views this as a potential long-term tailwind for their industrial and manufacturing portfolio. However, he cautioned that it is still early to determine the full impact, as these are long-term corporate decisions made amidst ongoing trade policy uncertainty.

James Kammert from Evercore ISI asked if the US administration's focus on onshoring manufacturing is creating tangible expansion or build-to-suit opportunities among W. P. Carey's manufacturing-heavy tenant base.

Answer

CEO Jason Fox responded that while still anecdotal, there has been an increase in inbound conversations from tenants about build-to-suits and expansions to add capacity. He views this trend as a potential long-term tailwind for their industrial portfolio, though the ultimate impact remains to be seen given the uncertainty around long-term policy decisions.

James Kammert of Evercore ISI asked whether the U.S. administration's focus on onshoring manufacturing is creating tangible investment opportunities for W. P. Carey, particularly among its existing manufacturing tenants.

Answer

CEO Jason Fox responded that while anecdotal, there has been an increase in inbound conversations about build-to-suits and expansions to add capacity, which he views as a potential long-term tailwind. He noted that while it's too early to determine the full impact due to the long-term nature of these decisions and tariff uncertainty, he believes it will ultimately benefit their industrial and manufacturing portfolio.

James Kammert asked if W. P. Carey has been able to negotiate higher annual rent escalators in its recent sale-leaseback deals, given the current inflationary environment.

Answer

CEO Jason Fox confirmed that they have. While CPI-linked escalators are harder to secure in the U.S., the company has successfully pushed for higher fixed rent bumps. He noted that the average fixed increase on year-to-date deals is 2.8%, which is significantly higher than the historical average of around 2%.

James Kammert inquired about the extent of tenant financial reporting W. P. Carey receives and how its credit monitoring process has evolved.

Answer

Head of Asset Management Brooks Gordon confirmed that W. P. Carey receives financial reports from materially all tenants, typically on a quarterly and annual basis. He explained that while the rigorous internal credit review process has always been in place, the company has recently enhanced its public disclosures by expanding its top tenant list and providing a specific, all-inclusive credit reserve figure in its guidance.

James Kammert asked for clarification on the preliminary 2025 organic growth expectations before credit issues and inquired how rent escalators on new retail investments would compare to those on industrial assets.

Answer

CFO ToniAnn Sanzone projected that contractual same-store rent growth would stabilize in the low-to-mid 2% range. CEO Jason Fox added that rent escalators on retail deals are typically lower, around 2%, compared to the roughly 3% achieved on recent industrial deals. He emphasized that the company weighs this trade-off between initial yield and long-term growth in its underwriting.

James Kammert asked if it's too early to consider 2027 lease expirations, including tenant burn rates and intentions, and if more clarity on this would be provided at Investor Day. He also inquired about the validity of press reports suggesting a reallocation of lab space in Mission Bay to office use, particularly targeting AI, and how such a strategy would impact existing tenants.

Answer

Joel Marcus, Executive Chairman and Founder, confirmed that the company is actively focused on 2027 and beyond lease expirations, engaging with tenants on renewals and extensions to preserve its core and foster future growth. Regarding Mission Bay, Joel Marcus confirmed that they received 100% Prop M allocation approval for most buildings. Peter Moglia, CEO and CIO, explained that this provides flexibility to offer office space to existing tenants (like UCSF) whose needs fluctuate, and to serve alternative tech companies (like OpenAI) and lab users requiring more office area for computational workflows integrating AI. He emphasized that lab use remains primary, but flexibility is key.

James Kammert asked if it's too early to assess 2027 lease expirations, tenant burn rates, and intentions, and if more clarity would be provided at Investor Day. He also inquired about the validity of a press report regarding reallocating Mission Bay lab space to office use (targeting AI) and how this would impact existing tenants.

Answer

Joel Marcus, Executive Chairman and Founder, confirmed they are actively focused on 2027 rolls and beyond, working with tenants on renewals and extensions. He validated the report, stating they received 100% Prop M allocation approval for most Mission Bay buildings, providing flexibility to offer office space to existing tenants (like UCSF) and capitalize on AI demand. Peter Moglia, CEO and CIO, elaborated that this flexibility allows for pure office users and additional office area for lab users integrating AI, while lab remains the primary use.

James Kammert asked to quantify the capitalized predevelopment costs beyond interest for the $3 billion of 'go/no-go' projects and questioned if a 'no-go' decision would likely lead to an asset sale.

Answer

Marc Binda, CFO & Treasurer, pointed to 10-Q disclosures, estimating that capitalized operating expenses and overhead are approximately 3% of the asset basis being capitalized. He also confirmed that a portion of the $3 billion pipeline is already being evaluated for sale, and a 'no-go' decision could certainly result in a disposition.

James Kammert of Evercore ISI sought to clarify the annualized impact of the revised interest expense guidance and asked if the onshoring of pharma manufacturing also stimulates demand for R&D space.

Answer

CFO Marc Binda confirmed the annualized math but cautioned that it's difficult to predict for 2026 as construction could resume. SVP Hallie Kuhn explained that while some manufacturing is distinct, advanced manufacturing like cell and gene therapies requires an R&D-adjacent talent base, which can stimulate R&D demand in those clusters.

James Kammert asked if there was a thematic driver for the increased leasing of previously vacant space and questioned whether 2025 would represent a peak year for asset dispositions based on cash flow and funding needs.

Answer

Executive Joel Marcus responded that leasing activity is highly case-specific and difficult to generalize. CFO Marc Binda noted that construction spending has been declining but stated it was too early to forecast if 2025 dispositions would be a peak.

James Kammert asked which tenant segments are driving demand for new development lease-ups and sought clarification on whether AI's impact on clinical trials would help or hinder lab space demand.

Answer

Executive Joel Marcus identified demand as coming primarily from early-stage companies and clinical-stage companies with positive news. He clarified that since Alexandria does not lease clinical trial space, AI-driven efficiencies in trials would be a net positive, as it would increase the pipeline of drugs requiring R&D lab space, thereby boosting demand.

James Kammert asked if the credit loss assumptions for 2026 are more conservative given the economy or portfolio, or if they are similar to the initial 2025 outlook provided in late 2024.

Answer

Peter Mavoides, President and CEO, confirmed that the process and assumptions for 2026 credit loss are consistent with last year, based on current data and experience. He noted that portfolio risks tend to be very idiosyncratic and not primarily driven by macro trends, leading to consistent results.

James Kammert asked for clarification on the 2026 credit loss assumptions, specifically if they are more conservative given the economy or portfolio, or if they are similar to the initial 2025 outlook.

Answer

President and CEO Peter Mavoides stated that the company approaches credit loss assumptions with the same lens, team, and experience, using the most current data. He noted that the result of this consistent process is very similar to what was anticipated last year. Mr. Mavoides emphasized that risks in the portfolio tend to be idiosyncratic rather than driven by macro trends.

James Kammert of Evercore inquired about the operating history of the five acquired Dave & Buster's locations. He also asked for the percentage of ABR derived from public companies and whether this represents a strategic area for growth.

Answer

CEO Peter Mavoides stated that the locations all have operating history, varying from roughly 3 to 10 years, and are cash-flowing with master lease coverage north of 2x. He also explained that the company is agnostic to the source of a tenant's equity (public vs. private), as credit is credit. He noted that public credits can create more 'noise' that doesn't necessarily correlate to risk and it is not a major factor in their investment calculus.

James Kammert inquired if the modest decline in portfolio-level rent coverage was broad-based or industry-specific, and asked for thoughts on the 7-Eleven portfolio sale and the C-store industry's health.

Answer

CEO Peter Mavoides clarified the coverage change was industry-specific, driven by volatility in high-coverage sectors like building supply, rather than a portfolio-wide issue. He views the 7-Eleven sale as a company-specific capital allocation move, not a negative indicator for the C-store industry, where Essential Properties continues to find growth opportunities with its partners.

James Kammert sought confirmation on Agree Realty's 104% recapture rate for releasing activity during the quarter and year-to-date. Kammert also inquired about the immediate use and purpose of the funds from the new term loan, given no unsecured maturities.

Answer

Joey Agree, President and CEO, confirmed the 104% recapture rate for both Q3 and year-to-date. Peter Coughenour, CFO, explained that the new term loan has a 12-month delayed draw feature, providing flexibility, with intended uses including paying down short-term borrowings and funding incremental investment activity.

James Kammert sought confirmation on the 104% recapture rate for releasing activity during the quarter and year-to-date. He also asked about the targeted use of funds from the new term loan, given no immediate unsecured debt maturities.

Answer

President and CEO Joey Agree confirmed a 104% recapture rate for Q3 and year-to-date on 2.4 million square feet of gross leasable area. CFO Peter Coughenour explained the new term loan's delayed draw feature provides flexibility, with intended uses including paying down short-term borrowings (commercial paper) and funding incremental investment activity.

James Kammert inquired whether the company's growing development activity is supplanting third-party developers or retailers' in-house teams, and how extensively Agree has presented its full capabilities to its retail partners.

Answer

President and CEO Joey Agree stated that they are primarily taking share from third-party developers who are capital-constrained, not from retailers' internal development teams. He confirmed that the company has approached nearly all of its retail partners, and that securing these development deals is often a matter of timing and demonstrating their unique value proposition as a well-capitalized, expert partner.

James Kammert of Evercore ISI asked if the increased investment guidance was driven by expanding existing relationships or identifying new partners. He also sought clarification on whether the reported 9.5-year weighted average lease term for ground leases includes extension options.

Answer

CEO Joey Agree responded that the robust investment pipeline is a result of 'all of the above'—deepening existing relationships, forming new partnerships, and the team's extensive market coverage. He also clarified that the weighted average lease term for ground leases, like the rest of the portfolio, is calculated exclusive of any tenant renewal options.

James Kammert of Evercore asked if the increased investment volume guidance was driven by expanding existing relationships or identifying new partners. He also asked for clarification on whether the reported 9.5-year remaining term for ground leases was to the first potential extension or final expiration.

Answer

CEO Joey Agree responded that the increased investment activity is driven by 'all of the above,' including existing relationships, new partners, and the broad market coverage of the team, positioning Agree as the 'go-to buyer' for high-quality net lease retail. He also clarified that the weighted average lease term (WALT) for ground leases, like the rest of the portfolio, is calculated exclusive of tenant renewal options.

James Kammert inquired about the outpatient medical (MOB) portfolio, asking for its historical peak occupancy level and the typical annual rent escalators being achieved on current new and renewal leases.

Answer

Robert Probst, Executive VP & CFO, estimated the historical high occupancy for the MOB portfolio was around 93-94% and views the current level as an opportunity to reach a structural maximum of about 95%. He stated that annual rent escalators on new deals were approximately 3% for the quarter, with the overall portfolio average slightly lower at around 2.8% to 2.9%.

James Kammert inquired about the dynamics of margin expansion as SHOP occupancy approaches higher levels, such as 85-90%, and whether double-digit NOI growth is sustainable in highly occupied portfolios like Canada.

Answer

EVP & Chief Investment Officer J. Hutchens explained the operating leverage, noting a 50% incremental margin is typical when moving from 80% to 90% occupancy, and 70% from 90% to 100%. He confirmed Canada's portfolio is still growing occupancy and RevPOR even at 97% but will likely moderate to single-digit growth. CEO Debra A. Cafaro highlighted that two-thirds of the portfolio has significant occupancy upside.

James Kammert from Evercore ISI asked if the high-occupancy case study represented a cross-section of operators and inquired about what Ventas' data indicates regarding senior housing penetration rates.

Answer

J. Hutchens confirmed the case study included a diverse mix of operators and asset types. He noted that the sector's penetration rate is 11%, back to pre-pandemic levels, and that significant growth is achievable without a major increase in this rate due to powerful demographic tailwinds.

James Kammert of Evercore ISI asked a big-picture question about how FCPT is preparing for its next phase of growth beyond hiring, specifically inquiring about adding new capabilities or data sets, such as AI, to its underwriting process.

Answer

CEO William Lenehan responded that the company is exploring how AI can improve efficiency and has significantly built up its asset management group with new hires. He emphasized that the growing team will leverage existing technology, highlighting Dealpath as an integral tool. Lenehan noted there is still much that can be done with their current technology and offered to provide investors with a detailed walkthrough of their underwriting process within Dealpath.

James Kammert inquired about the rent recovery rates in 2024 for properties that required a replacement tenant and asked for the proportion of 2024 deals that were relationship-driven versus widely marketed.

Answer

CEO William Lenehan stated that rent recovery has been 'really positive,' with FCPT basically recovering prior rents, though he cautioned this is based on a small sample size. Regarding deal sourcing, he explained that most transactions are not part of a formal, wide bidding process. Instead, they are typically relationship-based, where a deal is agreed upon at an attractive price before any formal marketing occurs.

James Kammert of Evercore ISI inquired about the role of annual rent escalators in negotiations and whether FCPT has been able to leverage its position to secure more favorable lease terms beyond the initial cap rate.

Answer

CEO William Lenehan responded that lease terms, including escalators (typically 1.5% annually) and extension options, have remained remarkably consistent and have not become a significant point of negotiation. He noted that while it's a good question, the structure of net leases has not changed much. Lenehan added that instances of more landlord-favorable terms are often tied to tenants with credit profiles that FCPT would prefer to avoid.

James Kammert asked about the conditions under which CHCT could avoid its obligation to acquire the $169 million in its pipeline. He also inquired about the seniority of CHCT's notes relative to other creditors in a potential sale of the geriatric psychiatric tenant's assets.

Answer

Executive David Dupuy confirmed that the $169 million pipeline represents solid obligations that the company fully expects to close on over the next three years. Regarding the troubled tenant's debt structure, Dupuy explained that a commercial bank has a first priority lien on a $4 million accounts receivable line, while CHCT holds a second lien on the AR and a first lien on all other assets of the borrower, in addition to having the subsidiary stock pledged.

James Kammert sought to confirm if the spread between the company's implied equity cap rate and potential disposition cap rates was around 200-250 basis points. He also asked what attributes of CHCT's business attracted lenders to successfully upsize and extend its credit facility.

Answer

CEO David Dupuy confirmed the 200-250 basis point spread was a 'good range.' Both Dupuy and CFO William Monroe attributed the successful credit facility refinancing to the company's diversified portfolio, history of strong performance, modest leverage profile, and a track record of resolving tenant issues. Monroe also noted that favorable timing in a declining interest rate environment was beneficial.