Jenny Li

Jenny Li noted the weighted average lease term on Q4 acquisitions was 9.6 years, down from 10.7 years in Q3, and asked how Agree Realty balances lease duration with returns when underwriting acquisitions. Li also inquired about the expected releasing spread for investment-grade tenants, particularly for the 1.5% of ABR maturing next year.

Answer

President and CEO Joey Agree explained that lease terms are project and opportunity-specific, with the company willing to acquire shorter-term leases for strong real estate fundamentals, mark-to-market potential, or robust performance. He emphasized that lease term is just one input among many, including store performance, access, visibility, and fungibility. Mr. Agree and CFO Peter Coughenour stated that the recapture rate has been consistently static at 103% or 104% over the past few years, and they anticipate similar blended outcomes for upcoming expirations, as few tenants are expected to leave.

Jenny Li observed a decrease in the weighted average lease term for Q4 acquisitions (9.6 years) compared to Q3 (10.7 years) and asked about the company's approach to balancing lease duration and returns in underwriting. She also inquired about expectations for re-leasing spreads for investment-grade tenants, given only 1.5% of ABR maturing next year.

Answer

President and CEO Joey Agree stated that lease terms are project-specific, with a willingness to acquire shorter-term leases for strong real estate fundamentals or mark-to-market opportunities, viewing lease term as one input among many. Regarding re-leasing spreads, Mr. Agree and CFO Peter Coughenour noted a consistent recapture rate of 103-104% over recent years, anticipating similar favorable outcomes for upcoming expirations.

Jenny Li from Morgan Stanley, on behalf of Ronald Kamdem, asked for an update on constructive markets influencing capital allocation and inquired about the potential for further operational automation and margin expansion.

Answer

CEO Joseph Russell noted continued progression across most markets, with capital allocation decisions driven by submarket-level data rather than broad market trends. He confirmed there is significant room for more operational optimization through technology like analytics and solar investments, which enhances customer satisfaction, employee engagement, and profitability.

Jenny Li of Morgan Stanley inquired about VICI's latest thoughts on its call option for the Caesars Forum Convention Center and its plans for the undeveloped land it owns on the Las Vegas Strip.

Answer

EVP & CFO David Kieske described the Caesars Forum as a very attractive asset given its location and VICI's conviction in Las Vegas, noting the company has a multi-year window to assess the option. CEO Edward Pitoniak characterized the undeveloped land as a 'land bank' with no current development plans, but which holds significant long-term value as Las Vegas continues to grow.

Jenny Li of Morgan Stanley inquired about the four-wall coverage of the two properties transferred to the Bally's Master Lease 2 and asked about the potential size and priority of GLPI's financial commitment to New York's downstate casino projects.

Answer

CFO & Treasurer Desiree Burke stated that GLPI does not receive individual property coverage data, only lease-level data. On New York, Senior VP & Chief Development Officer Steven Ladany said GLPI would consider any project that meets its underwriting criteria (well north of 2.0x coverage) but noted there's a long process before any financing is finalized, and GLPI may or may not be the ultimate funding partner.

Jenny, on for Ronald Kamdem, asked about the magnitude of existing customer rate increases (ECRIs) for both pools and whether the company's focus will remain on occupancy over pricing.

Answer

CEO Joseph Margolis confirmed that both the LSI and EXR pools are now on the same ECRI program, with no difference in pace or amount. He reiterated that the company's primary goal is optimizing long-term revenue, and while current data supports leaning into occupancy, this strategy is dynamic and will be adjusted as market conditions change.