Jim Kammert

Jim Kammert asked about the percentage of direct deals with developers over the past couple of years where no broker was involved, and if these direct deals typically yield a better return.

Answer

CEO Bill Lenehan clarified that he doesn't view direct deals as necessarily providing a better yield compared to brokered deals. He noted that returns are generally similar, but repeat transactions in sale-leasebacks can offer ease of use due to existing documents and established relationships, improving the cadence of information flow.

Jim Kammert asked about the percentage of FCPT's deals over the past couple of years that were direct with developers, and whether these direct deals typically yielded better returns compared to brokered transactions.

Answer

Bill Lenehan (CEO) clarified that he doesn't perceive a significant difference in returns between direct and brokered deals. He noted that sophisticated brands have market information, and while repeat sale-leaseback transactions offer operational ease due to existing documents and relationships, there isn't a meaningful yield advantage for originated sale-leasebacks.

Jim Kammert asked about W. P. Carey's capacity for additional Euro debt exposure, given it currently constitutes about two-thirds of the overall debt, and how the company views its future debt composition. He also questioned whether W. P. Carey can achieve industrial-like escalators on retail assets such as C-stores in Europe or fitness centers in the U.S., and how this blend is incorporated into their financial projections.

Answer

CFO Toni Sanzone confirmed that W. P. Carey still has room in its capital structure for incremental Euro-denominated debt, especially with a Eurobond maturing and a significant pipeline in Euros, noting it continues to provide an effective hedge and lower borrowing costs. CEO Jason Fox explained that European retail, like industrial, typically features inflation-based increases. However, U.S. retail bump structures tend to be 50-100 basis points lower than industrial's 2.5%-3% range. He emphasized that the overall average yields, combining mid-7% cap rates with mid- to high-2% bumps, remain attractive in the 9s, despite the retail mix.

Jim Kammert asked about W. P. Carey's remaining capacity for issuing Euro-denominated debt, given its current composition, and whether the company can achieve industrial-like escalators on retail assets such as C-stores in Europe or fitness centers in the U.S., and how this blend impacts overall numbers.

Answer

Toni Sanzone, Managing Director and CFO, confirmed that W. P. Carey still has room in its capital structure for incremental Euro-denominated debt, noting its effectiveness as a hedge and lower borrowing cost, and expects continued access to those markets. Jason Fox, CEO, explained that European retail, like industrial, typically features inflation-based increases. In the U.S., retail bump structures tend to be 50-100 basis points lower than industrial (2.5%-3% range), but he emphasized that the combination of going-in cap rates (mid-7s) and average bumps (mid-to-high 2s) still results in attractive average yields in the 9s, with the retail mix not expected to be overall impactful.

Jim Kammert asked for visibility into the 2026 and 2027 lease expirations, specifically what percentage is actively being discussed with tenants versus those left until the last moment. He also inquired about any organic tilting towards industrial or retail across those two years.

Answer

Head of Asset Management Brooks Gordon confirmed that virtually all 2026 and 2027 expiring ABR is actively being worked on, as the company engages with tenants three to five years out. He noted that both years have a similar property type breakdown, with approximately 60% warehouse and industrial. Mr. Gordon highlighted opportunities in 2026 to re-lease high-quality warehouses in the Lehigh Valley at significantly higher rents, while other leases may have renewal options at continuing rents.

Jim Kammert asked about the representative average lease escalator in NNN REIT's portfolio after the significant acquisition activity in 2025. He also inquired about the drivers behind the higher-than-anticipated 7.6% cap rate on the 18 occupied assets disposed of in Q4, specifically if it was due to tenant concentration or other factors.

Answer

CEO Stephen A. Horn Jr. stated that the portfolio's average lease escalator remains 1.5% for modeling purposes, as even $1 billion in acquisitions would not significantly alter it. Regarding the Q4 dispositions, Mr. Horn explained that the higher cap rate was due to proactive portfolio pruning, driven by discussions with tenants indicating plans to exit markets or not renew leases with 4-5 years remaining. He clarified it was not tied to one particular tenant or industry, but rather a mix of dark but paying rent assets and income-producing assets where tenants were relocating.

Jim Kammert asked NNN REIT to confirm the representative average lease escalator in the portfolio after the significant acquisition activity in 2025. He also inquired about the factors driving the higher-than-anticipated 7.6 cap rate on the 18 occupied assets disposed of in Q4, asking if it was due to a particular tenant concentration or other reasons.

Answer

CEO Stephen A. Horn Jr. stated that despite $1 billion in acquisitions, the portfolio's average lease escalator remains consistent at 1.5% for modeling purposes. Regarding the Q4 dispositions, he explained that the higher cap rate was due to proactive portfolio pruning, often involving assets where tenants had indicated they would not renew leases with 4-5 years remaining. He clarified that it was not tied to one particular tenant or industry but rather an overall strategy to sell shorter-term or dark-but-paying leases, noting the average lease duration of income-producing assets sold was 6.1 years.

Jim Kammert asked if Welltower observes a customer preference for larger residential units in independent living and assisted living, and how the company's portfolio is positioned to address the shifting tastes of the incoming boomer generation.

Answer

Shankh Mitra (CEO, Welltower) emphasized the critical importance of optimizing location, product (including unit size), price point, and operating overlay. He noted that many developers have built an excessive number of studios, which can render buildings functionally obsolete, and Welltower's strategy focuses on this comprehensive optimization.

Jim Kammert asked for clarification on the accounting mechanics and calculation of the $1.1 billion non-cash charge related to the new compensation plan.

Answer

Co-President and CFO Tim McHugh explained that the $1.1 billion charge is an upfront expense piece of the plan, as detailed in the 10-Q, with an additional $200 million to be amortized over the subsequent 10 years of the plan.

Jim Kammert inquired about the prospective growth rate for Ventas's triple-net business following the Brookdale reset and sought clarification on the implied year-end share count within the 2026 guidance.

Answer

Robert F. Probst, EVP and CFO, clarified that the average escalator for triple-net leases is expected to be around 3% outside of the outsized January Brookdale increase. He noted that the 503 million average shares for 2026 are a function of equity-funded investments, with $1.2 billion already secured, but did not provide a specific year-end share count.

Jim Kammert inquired about the prospective growth rate for the triple-net business following the Brookdale reset, and sought clarification on the implied year-end share count within the 2026 guidance, particularly regarding equity funding for investments.

Answer

Robert F. Probst, EVP and CFO, clarified that a 3% average escalator is a reasonable run rate assumption for triple-net outside of the outsized January Brookdale increase. He also explained that the 503 million average shares for 2026 are a function of equity-funded investments, with $1.2 billion already secured.

Jim Kammert asked about Healthpeak's appetite for additional opportunistic lab acquisitions in 2026, given the Gateway transaction and the $1 billion acquisition guidance. He also inquired if most of the Physicians Realty Trust merger synergies on the outpatient medical side were already in the run rate by late 2025.

Answer

President and CEO Scott Brinker noted that $800 million of the $1 billion acquisition/stock buyback guidance is already closed or under contract, leaving limited dry powder. He added that a large asset recycling pipeline could generate additional capital for opportunistic, disciplined life science investments in core markets. Mr. Brinker confirmed that most of the $70+ million in Physicians Realty Trust merger synergies were included in the Q4 2025 run rate and 2026 guidance, with only a small, immaterial portion remaining for future internalization.

Jim Kammert asked about Healthpeak's appetite for additional opportunistic lab acquisitions following the Gateway transaction, given the $1 billion acquisition guidance for 2026. He also inquired about the status of synergies from the Physicians Realty merger, specifically if they are already in the run rate or if further margin implications are expected for Outpatient Medical in 2026.

Answer

President and CEO Scott Brinker stated that with $800 million of the $1 billion acquisition/stock buyback guidance already closed or under contract, there is limited dry powder. However, a large pipeline of asset recycling could provide additional capital for opportunistic, disciplined Life Science investments in core markets, similar to Gateway. Brinker confirmed that most of the $70+ million in synergies from the Physicians Realty merger are already included in the Q4 2025 run rate and 2026 guidance, with only a small, immaterial opportunity remaining for property management internalization.

Jim Kammert sought clarification on Peter Moglia's comment about potentially seeing a 'five handle' on some core asset capital recycling in 2026, asking if this would apply to a joint venture (JV) or an outright sale.

Answer

Peter Moglia, CEO and CIO, clarified that such a transaction would 'very likely' be a joint venture. He stated that Alexandria Real Estate Equities is not planning on selling any core assets outright unless a special situation arises.

Jim Kammert questioned whether public biotechs, even with increased capital, might already have sufficient space, or if Alexandria Real Estate Equities anticipates a need for expansion space from this critical segment to kickstart demand. He also sought clarification on Peter Moglia's comment about potentially seeing a 'five-handle' cap rate on core asset capital recycling in 2026, asking if this would apply to a joint venture (JV) or an outright sale.

Answer

Joel Marcus, Executive Chairman and Founder, and Hallie Kuhn, SVP of Life Science and Capital Markets, emphasized that public biotech has historically been the industry's mainstay, but recent financings primarily benefited commercial-stage companies, not driving R&D expansion. They stressed the need for earlier-stage venture companies to go public to fuel R&D space needs. Peter Moglia, CEO and CIO, clarified that any core asset capital recycling at a 'five-handle' cap rate would 'very likely' be a joint venture, as outright sales of core assets are not planned unless under special circumstances.