John Kilichowski

John Kilichowski asked about EPR Properties' current cost of capital and when it would be opportune to utilize the at-the-market (ATM) equity program. He also inquired about the potential impact on investment guidance if the cost of capital improved by 50 basis points.

Answer

Chairman and CEO Greg Silvers and EVP and CFO Mark Peterson estimated the cost of capital in the upper 50s/low 60s at low/mid 7s, noting a 100 basis point spread to investment yields, making it an opportune time to tap the ATM program for optionality, though not strictly necessary for the current plan. Greg Silvers clarified that investment decisions are not linear and depend on risk/reward and specific opportunities, rather than a direct sensitivity to a 50 basis point cost of capital improvement.

John Kilichowski inquired about EPR Properties' current cost of capital and the conditions under which it would make sense to utilize the at-the-market (ATM) equity program. He also asked for a sensitivity analysis, specifically how a 50 basis point improvement in the blended cost of capital might impact the high end of the investment guidance.

Answer

Chairman and CEO Greg Silvers and EVP and CIO Greg Zimmerman estimated the cost of capital in the upper 50s or early 60s, with a low to mid-7s cost of equity, indicating that a 100 basis point spread over investment returns makes tapping the ATM program sensible. They emphasized an opportunistic approach, noting that while not strictly needed for the current plan, it offers flexibility for further growth or deleveraging. Greg Silvers stated that speculating on a linear sensitivity table for cost of capital improvement would not be productive, but expressed excitement about the overall opportunity set and trending cost of equity.

John Kilichowski asked about the nearest one or two greatest threats to Skilled Nursing Facilities (SNFs) that the market might not be expecting, and whether the 14% same-store growth for SHOP assets is a sustainable multi-year run rate or if it will moderate as occupancy stabilizes.

Answer

Co-President and Co-CEO Clint Malin identified private capital driving SNF prices and 'stroke-of-the-pen risk' as key threats, emphasizing the shift to SHOP for organic growth. Executive Vice President of Asset Management Gibson Satterwhite stated that the 89.7% pro forma occupancy is near stabilized levels and that while they are comfortable with mid-teens growth for the current year, they are not providing guidance for out years.

John Kilichowski asked about the greatest threats to Skilled Nursing Facilities (SNFs) that could lead to an unexpected market rerating, and whether the 14% same-store growth for SHOP assets is sustainable for 3-4 years or will moderate as occupancy stabilizes.

Answer

Clint Malin, Co-President and Co-CEO, LTC Properties, identified private capital driving prices and 'stroke-of-the-pen risk' as key threats to SNFs, emphasizing LTC's shift to SHOP for organic growth. Gibson Satterwhite, Executive Vice President of Asset Management, LTC Properties, stated that 89.7% occupancy is near stabilized levels, and while comfortable with mid-teens growth for the current year, he refrained from projecting out years.

John Kilichowski of Wells Fargo inquired about LTC Properties' strategy for funding its significant new investments, the underwriting assumptions for NOI growth in its SHOP acquisitions, and the potential for converting additional net lease properties to the SHOP platform.

Answer

Co-CEO Pam Kessler explained that new investments will be funded long-term on a leverage-neutral basis, utilizing a mix of higher-yielding loans, debt, equity, and approximately $120 million in upcoming asset sale proceeds. EVP & Chief Investment Officer David Boitano clarified that for stabilized SHOP acquisitions, they are projecting normalized NOI growth of around 3%, not outsized growth, as they are not deep value-add plays. Co-CEO Clint Malin added that while a few more conversions are possible, the primary growth driver for the SHOP platform is intended to be external acquisitions.

John Kilichowski asked about the factors contributing to the range in FrontView REIT's AFFO per share guidance for 2026 and inquired about any inbound interest regarding the company's persistent discount to NAV.

Answer

Pierre Revol, CFO, explained that the AFFO guidance range depends on portfolio performance, the timing and cap rates of acquisitions and dispositions. Stephen Preston, Chairman & CEO, confirmed the NAV discount and noted inbound interest has been quiet. Pierre Revol, CFO, clarified a prior reference to a dark Bojangles sale, not Smokey Bones, emphasizing portfolio quality and disclosures for potential buyers.

John Kilichowski asked about the drivers behind the FrontView REIT's AFFO guidance range for 2026 and the persistent discount to NAV, inquiring about any external interest in the company.

Answer

Pierre Revol (CFO) explained that the AFFO guidance range is influenced by portfolio performance, the timing and cap rates of acquisitions and dispositions. Stephen Preston (Chairman and CEO) acknowledged the NAV discount and confirmed no inbound interest at this point. Pierre Revol (CFO) added that detailed disclosures should help the market understand the company's value and that execution will drive performance closer to NAV, correcting that a dark Bojangles, not Smokey Bones, was sold at an attractive cap rate.

Sheryl, on behalf of John Kilachowski, asked why the AFFO per share guidance midpoint was maintained despite lower net investment volume and inquired about the future bad debt outlook following the resolution of several troubled properties.

Answer

CFO Pierre Revolt explained that strong performance in the first half of the year and the successful resolution of troubled assets provide confidence in the existing guidance. He added that with the major known issues resolved, future bad debt is expected to be minimal, reflecting a healthy underlying portfolio.

John Kilichowski requested updates on the Las Vegas and New York projects, including potential capital commitments and the sizing of opportunities, and asked for a timeline on the Virginia Live! project.

Answer

Brandon Moore, President and Chief Operating Officer, updated on Las Vegas, noting the A's stadium progress and Bally's phased integrated resort plans, with GLPI's remaining $125 million commitment contingent on revenue support. Steven Ladany, Senior Vice President and Chief Development Officer, discussed New York as an attractive opportunity but deemed it unlikely GLPI would provide the majority of capital for the $4 billion project. For Virginia Live!, Mr. Moore stated the temporary facility opened in January, with permanent groundwork beginning, and GLPI's funding expected in late 2026 into 2027 after Cordish's equity.

John Kilichowski requested updates on the Las Vegas project (A's stadium progress, Bally's integrated resort plans, and GLPI's commitment) and the New York opportunity (Bally's development and potential GLPI involvement). He also asked for a timeline on the Virginia Live! project.

Answer

Brandon Moore, President, COO and Secretary, stated the A's stadium in Las Vegas is progressing rapidly and is ahead of schedule, with GLPI holding its $125 million commitment and evaluating further investment based on Bally's finalized plans and revenue support. Steven Ladany, Senior Vice President and Chief Development Officer, expressed GLPI's interest in Bally's New York development but noted it's unlikely they would provide the majority of capital for the $4 billion project. Brandon Moore added that the Virginia Live! temporary facility opened in January, with permanent site groundwork beginning, and GLPI's funding is expected in late 2026 into 2027, after Cordish's equity portion.

John Kilichowski of Wells Fargo inquired about Gaming and Leisure Properties' interest in the Bally's Lincoln call option, given Bally's recent credit downgrade and negative free cash flow projections.

Answer

President and COO Brandon Moore responded that GLPI evaluates the Lincoln property on its own merits, focusing on whether the asset is accretive to their portfolio at the negotiated price. He confirmed they are conducting fresh market research to re-evaluate the economics of the deal, separate from broader concerns about Bally's overall financial health.

John Kilichowski inquired about the sources and uses of funds from the Prospect sales, including proceeds from closed assets, expectations for assets under contract, and the allocation of funds beyond debt financing. He also asked for Q1 2026 rent expectations for legacy Steward assets.

Answer

Executive Vice President and CFO Steven Hamner detailed the pending Waterbury facility sale and expected proceeds to finalize Prospect bankruptcy and repay DIP financing. Chairman, President, and CEO Edward K. Aldag Jr. added that the next significant rent increase would be from Noor in June. Steven Hamner clarified that the company is not providing quarterly guidance due to cash-basis accounting for several tenants, but most are fully paid.

John Kilichowski inquired about the sources and uses of funds from Prospect sales, including proceeds from closed assets, expectations for assets under contract, and the allocation of proceeds beyond debt financing. He also asked for Q1 2026 expectations for the 2026 rent target and the ramp from legacy Steward assets.

Answer

Steven Hamner, EVP and CFO, stated that the Waterbury facility sale is expected to close this quarter, finalizing major Prospect bankruptcy components. Proceeds from this sale and receivables will fully pay the DIP financing, with confidence in repayment from litigation trust proceeds. Regarding rent, Mr. Hamner noted they are not yet giving quarterly guidance due to several tenants on a cash-received basis, but most are fully paid. Edward K. Aldag Jr., Chairman, President and CEO, added that the next significant rent increase will occur when Noor begins payments in June.

John Kilichowski asked about the building blocks of Sabra's 2026 same-store growth, including RevPOR, ExPOR, and occupancy, in relation to 2025 performance, and the long-term growth prospects given the supply/demand profile. He also inquired about the loans receivable book, specifically the RCA loan's upcoming maturity, its yield, and the assumptions included in the guidance regarding capital allocation.

Answer

CFO Michael Costa detailed expectations for continued occupancy growth into the low 90s, low single-digit rate growth, and muted ExPOR growth in line with or below inflation. CEO Richard K. Matros added that mid-90s occupancy is considered effectively full. Regarding the RCA loan, CEO Richard K. Matros stated that discussions are ongoing, the debt is being serviced, and 2026 guidance assumes the lease remains in place as it expires at year-end.

John Kilichowski asked about the building blocks of Sabra's 2026 same-store growth, specifically RevPOR, ExPOR, and occupancy, in relation to 2025 performance, and the long-term growth prospects given the supply/demand profile. He also inquired about the RCA loan receivable book, its upcoming maturity, yield, and how it's factored into guidance, including potential upside from capital recapture.

Answer

Michael Costa (CFO, Sabra Health Care REIT) explained that 2026 same-store guidance assumes continued occupancy growth into the low 90s, low single-digit rate growth, and muted ExPOR growth. Richard K. Matros (CEO, President and Chair, Sabra Health Care REIT) added that mid-90s occupancy is considered effectively full for a portfolio. Regarding the RCA loan, Mr. Matros stated that discussions are ongoing with Deerfield and RCA, the debt is being serviced, and guidance assumes the lease remains in place until its year-end expiration.

John Kilichowski of Wells Fargo inquired about Sabra's confidence in its $400 to $500 million investment target for the year, the potential mix of skilled nursing deals in the pipeline, and the reasoning for maintaining the same-store SHOP NOI guidance despite strong recent performance.

Answer

CEO Rick Matros confirmed confidence in the investment range, noting some deals might shift into the next year. He explained that the challenge with skilled nursing deals is finding quality assets, not pricing, and that the investment mix will likely remain weighted towards SHOP. Matros also stated the company is being moderate with its SHOP NOI guidance, hoping to outperform it.

John Kilichowski of Wells Fargo & Company inquired about Sabra's confidence in its annual investment target, the potential mix of skilled nursing deals in the pipeline, and the reasoning for maintaining the same-store SHOP NOI growth guidance despite strong recent performance.

Answer

CEO Rick Matros confirmed confidence in the $400 to $500 million investment range for the year, noting that the pipeline would likely remain weighted towards SHOP assets due to a focus on quality. He explained that the company is being 'moderate' with its SHOP NOI guidance, hoping to be in a position to outperform it. He also clarified that they are not pursuing complex JV structures or loan book deals.

John Kilichowski of Wells Fargo inquired about Sabra's confidence in its annual investment target, the mix of skilled nursing versus SHOP deals in the pipeline, and the rationale for not raising the same-store SHOP NOI guidance despite strong performance.

Answer

CEO Rick Matros confirmed the investment target is between $400 million and $500 million, noting the pipeline will likely remain weighted towards SHOP assets due to a lack of quality skilled nursing opportunities. Matros explained that the company is maintaining a moderate guidance posture for SHOP NOI with the hope of exceeding expectations.

John Kilichowski inquired about the progress made on Healthcare Realty's strategic plan, specifically how much of the projected $90 million NOI upside from redevelopment/RTO and $50 million from margin expansion has been captured, what's included in the current guidance, and what is expected longer term. He also asked if the decision for no further buybacks in guidance is purely a yield question compared to deleveraging, and if JVs are prioritized for growth based on accretion.

Answer

President and CEO Pete Scott stated they are tracking ahead of schedule, estimating about $15 million of the $50 million NOI upside has been identified through leasing since the strategic plan, putting them halfway to the $20 million-$40 million target for the first three years, with benefits building in 2027 and 2028. He explained that capital allocation decisions (redevelopments, buybacks, JVs) are a combination of factors, noting that while buybacks are stock-price dependent, JV deals are actively being pursued with partners, targeting yields greater than the implied cap rate.

John Kilichowski asked for an update on the strategic plan's projected NOI upside, specifically how much of the $90 million from the redevelopment/RTO portfolio and $50 million from margin expansion has been captured in 2025, included in 2026 guidance, and what remains as a longer-term benefit.

Answer

President and CEO Peter Scott reported that Healthcare Realty Trust is tracking ahead of schedule. He estimated that approximately $15 million of the $50 million NOI upside has been identified through leasing activity since the strategic plan's release, placing them halfway towards the $20 million-$40 million target for the first three years. He clarified that this upside is not expected to significantly benefit 2026 due to lag times for build-outs and lease commencements, but will build in 2027 and further in 2028.

John Kilichowski of Wells Fargo requested a breakdown and timeline for G&A savings, asked about the drivers of strong same-store NOI growth, and inquired about the future cadence of CapEx as a percentage of NOI given the focus on the RTO plan.

Answer

EVP & CFO Austen Helfrich detailed that $10 million in G&A savings has been actioned, with the full run-rate benefit in 2026, while another $5-10 million in property-level savings will be achieved over the next three years. He attributed strong NOI growth to a 100 bps year-over-year occupancy gain. President & CEO Peter Scott suggested modeling the $300 million in growth CapEx ratably over the next three years.

John Kilichowski inquired further about the Bahama Breeze assets, specifically asking about their performance, whether conversions would maintain the same rent, and the potential for positive mark-to-market on properties needing re-leasing. He also asked about FCPT's balance sheet management, particularly regarding leverage approaching the 5.5x to 6x upper limit and the strategy for equity raises versus acquisition cadence.

Answer

CEO Bill Lenehan clarified that Bahama Breeze's limited market expansion led to conversions, which are expected to maintain existing rental rates with higher AUV brands. He expressed confidence in re-leasing the few properties that will be returned, anticipating no losses. CFO Patrick Wernig added that Darden's conversion plans are subject to property covenants, but tenant demand is high. Bill Lenehan also stated that FCPT maintains discipline in capital allocation, has significant runway for accretive acquisitions with inexpensive financing, and has historically stayed well below its leverage ceiling.

John Kilichowski inquired further about the Bahama Breeze properties, specifically asking about their performance, whether conversions would maintain current rents, the potential for positive mark-to-market on re-leased assets, and internal loss estimates. He also questioned FCPT's strategy for managing its balance sheet, particularly regarding leverage approaching the 5.5x to 6x upper limit, equity pricing, and potential impacts on acquisition cadence.

Answer

Bill Lenehan (CEO) stated that FCPT anticipates no losses from Bahama Breeze, explaining that conversions to other Darden brands would likely occur at existing lease rates, resulting in new stores with higher AUV brands. He expressed confidence in re-leasing any returned properties. On balance sheet management, Mr. Lenehan emphasized FCPT's disciplined capital allocation, ample runway for accretive acquisitions funded by low-leverage financing, and minimal maturities, noting the stock's current value is well-supported by NAV.

John Kilichowski of Wells Fargo inquired about FCPT's acquisition capacity, asking if current deal volume is constrained by team size or market opportunities. He also requested a sensitivity analysis on how a 10-20 basis point improvement in cap rates might expand the investment pipeline.

Answer

William Lenehan, President, CEO & Director, clarified that acquisition volume is governed by the availability of well-priced assets, not team capacity, which is appropriately staffed. He estimated that a 25 basis point favorable shift in cap rates could substantially increase the opportunity set by $100 million to $200 million.

John Kilichowski of Wells Fargo inquired about FCPT's acquisition capacity, asking whether current volume is constrained by the team's size or by market opportunities, and requested a sensitivity analysis on how a 10-20 bps improvement in cap rates might impact the deal pipeline.

Answer

President, CEO & Director William Lenehan clarified that the company is appropriately staffed and the primary governor on acquisition volume is the availability of well-priced assets, not team capacity. He stated that a 25 basis point improvement in cap rates would be substantial, potentially adding $100 million to $200 million in volume, and noted the company has already raised capital at favorable prices via its forward equity program.

John Kilichowski asked about potential new entrants in the competitive landscape that Essential Properties anticipated but hasn't seen. He also inquired how the current macro environment is influencing their underwriting approach or any pivots towards or away from specific sectors.

Answer

Pete Mavoides, President and CEO, declined to name specific competitors but acknowledged being conservative about large asset managers entering the space, emphasizing their focus on fighting to win deals and protect relationships. He reiterated that their investment strategy remains consistent with their focused service and experience-based, middle-market model, and current macro trends haven't materially shifted their underwriting or sector focus.

John Kilichowski asked Pete Mavoides about new competitive entrants that the company might have expected to see but hasn't, and how the current macro environment is influencing their underwriting or causing pivots towards or away from specific sectors.

Answer

Pete Mavoides, President and Chief Executive Officer, mentioned that while many large asset managers (e.g., Apollo, TPG, Blackstone) have established platforms, the company's deliberate strategy of focusing on granular deals, follow-on transactions, and sale-leasebacks helps them maintain a competitive moat. He added that with 85% repeat business, their relationships primarily drive their opportunity set, and current market trends have not materially shifted their focused service and experience-based, middle-market model.

John Kilichowski asked about the drivers of the 2026 guidance, specifically the cap rate compression assumptions (low vs. high end) and any increased conservatism in credit loss assumptions, including specific tenants on the credit watch list. He also inquired about Essential Properties Realty Trust's outperformance on the credit side despite issues in BDCs and private credit.

Answer

Peter Mavoides, President and CEO, explained that the guide targets an AFFO per share range, with cap rate assumptions similar to last year (modest downtick, sticky on the way down, mid to low sevens by year-end). Credit loss assumptions are also similar, based on deep dives into specific assets/tenants, plus an unknown credit loss buffer. Rob Salisbury, Head of Corporate Finance and Strategy, added that the timing of investment closings and capital markets activities are major drivers of the range. Mr. Mavoides attributed credit outperformance to strong same-store rent growth (1.6%), a focused investment strategy on service/experience-based industries, conservative asset basis, and being the most secured creditor.

John Kilichowski asked about the drivers of the 2026 guidance, specifically assumptions on cap rate compression (low and high end) and credit loss conservatism, questioning if it's general or due to specific tenants. He also asked how Essential Properties Realty Trust has outperformed on credit, particularly in migrating assets out of the sub-one-time coverage bucket, despite broader private credit market issues.

Answer

President and CEO Peter Mavoides stated that guidance is built targeting an AFFO per share range, with cap rate assumptions similar to last year (modest downtick, sticky cap rates, potentially mid to low sevens by year-end). Credit loss assumptions involve deep dives into specific assets and tenants, with an added unknown credit loss assumption, also consistent with last year. Head of Corporate Finance and Strategy Rob Salisbury added that timing of investment closings and capital markets activities are key drivers for the range. Mr. Mavoides attributed credit outperformance to strong same-store rent growth (1.6%), a focused investment strategy on service/experience-based industries, conservative asset basis, granular/fungible properties, and being the most secured creditor.

John Kilichowski of Wells Fargo inquired about any potential impact from tariffs on tenant performance and asked about the rationale for raising only the low end of the AFFO guidance range.

Answer

CEO Pete Mavoides confirmed no tariff impact, as over 90% of the portfolio is service-based and not exposed to tariffs on goods. CFO Mark Patten explained the guidance update was driven by strong investment volume and better-than-expected credit performance, which supported raising the bottom of the range, but the model did not justify an increase to the high end at this time.

John Kilichowski questioned how much of the acquisition guidance is dictated by capital needs versus market opportunity, and the potential to exceed the guide given current leverage and equity capacity. He also asked about the strategic reasons behind the downward drift in Investment Grade (IG) and IG profile exposure over recent quarters, and if there's a focus on specific subsectors or unit-level coverage.

Answer

Mark Manheimer (CEO, NETSTREIT Corp.) explained that the acquisition guide includes optionality, and the team can source significantly more opportunities. Exceeding the guide would depend on a meaningfully more attractive cost of capital. Regarding IG exposure, he stated it's primarily a byproduct of pricing opportunities, with better risk-adjusted returns currently found in non-IG assets. He emphasized focusing on the quality of leases (avoiding shopping center leases) and overall risk-adjusted returns rather than being dogmatic about IG status.

John Kilichowski questioned the acquisition guidance, asking how much it is influenced by capital needs versus market opportunities, and the potential for exceeding the guide given current leverage and equity capacity.

Answer

CEO Mark Manheimer stated that the acquisition guide includes optionality, and the team can source significantly more opportunities. He indicated that increased acquisitions would depend on a more attractive cost of capital.

John Kilichowski asked about the level of conservatism in the updated investment guidance given the improved access to equity, and inquired about progress toward obtaining an investment-grade credit rating and its potential impact on the company's WACC.

Answer

CEO Mark Manheimer stated the investment opportunity set is 'massive' and they could deploy $150M-$200M net per quarter, but will remain mindful of their cost of capital. CFO Daniel Donlan added that obtaining a new investment-grade rating could lower their debt costs by about 30 basis points and that conversations with rating agencies are planned for late Q3.

John Kilichowski inquired about the level of conservatism in the updated investment guidance and how much it could increase with better access to equity capital. He also asked about discussions with rating agencies and the potential impact of a credit rating upgrade on the company's WACC.

Answer

President & CEO Mark Manheimer stated the acquisition opportunity set is 'massive,' with the potential to deploy $150-$200 million in net acquisitions quarterly, contingent on the cost of capital. CFO & Treasurer Daniel Donlan added that a potential investment-grade rating is not factored into guidance but would lower debt costs by approximately 30 basis points, with conversations with agencies planned for later in Q3.

John Kilichowski asked about the level of conservatism in the updated investment guidance, particularly concerning access to equity capital, and inquired about any discussions with rating agencies for a potential investment-grade credit rating.

Answer

President & CEO Mark Manheimer stated the investment opportunity set is 'massive' and the company could deploy $150-$200 million in net acquisitions quarterly, contingent on its cost of capital. CFO & Treasurer Daniel Donlan added that a potential credit rating is not in the guidance but would lower debt costs by approximately 30 basis points, and conversations with agencies are planned for later in Q3.

John Kilichowski asked for more detail on the increased investment guidance, questioning the level of conservatism related to equity capital access and the potential for further increases. He also inquired about any discussions with rating agencies for a potential credit rating upgrade and its prospective impact on the company's weighted average cost of capital (WACC).

Answer

CEO Mark Manheimer stated that the acquisition opportunity set is 'massive' and deploying $150-$200 million in net acquisitions quarterly is feasible, contingent on the cost of capital. CFO Daniel Donlan added that a potential investment grade credit rating is not yet factored into guidance but could reduce debt costs by approximately 30 basis points. He confirmed that conversations with rating agencies are planned for later in the third quarter.

John Kilichowski asked for details on NNN REIT's acquisition guidance funding mix for 2026, specifically the building blocks of free cash flow and dispositions, and the company's willingness to increase leverage beyond the high end of its guidance.

Answer

CEO Stephen A. Horn Jr. stated NNN REIT has no appetite to increase leverage, aiming to stay around 5.5x (currently 5.6x). The $600 million acquisition midpoint is primarily self-funded with $210 million of expected free cash flow, $130 million of dispositions, and incremental debt financing to remain leverage neutral. He added that any additional opportunities would depend on market conditions, cap rates, and cost of capital, with further dispositions being an alternative equity source if the stock price is not favorable. Mr. Horn also mentioned that defensive sales and portfolio pruning would likely result in a slightly elevated cap rate for income-producing dispositions, but the blended rate would be significantly below acquisition cap rates. CFO Vincent H. Chao noted a healthy number of vacant sales are still expected in 2026.

John Kilichowski asked NNN REIT to detail the funding mix for its acquisition guidance, specifically inquiring about the company's willingness to increase leverage beyond the high end of its range. He also asked for an expected blended cap rate for the planned dispositions.

Answer

CEO Stephen A. Horn Jr. stated that NNN REIT has no appetite to increase leverage from its current 5.6x, ideally aiming for around 5.5x. He explained that the $600 million acquisition midpoint is self-funded through $210 million of free cash flow, $130 million of dispositions, and leverage-neutral incremental debt. He added that additional opportunities would depend on market conditions and cost of capital, with increased dispositions being an alternative equity source if the stock is not favorable. Mr. Horn noted that the blended cap rate for dispositions would likely be significantly below the acquisition cap rate, with a slightly elevated cap rate for income-producing assets due to defensive sales.

John Kilichowski of Wells Fargo asked for a breakdown of the drivers behind the raised FFO guidance and inquired about the specific sectors being targeted for acquisitions and dispositions.

Answer

EVP & CFO Vincent Chao detailed that the guidance increase was driven by strong year-to-date performance and higher acquisition volume, which offset headwinds from increased net expenses and the new bond offering. President and CEO Stephen Horn identified the auto service and QSR sectors as key targets for acquisitions, while dispositions are opportunistic.

John Kilichowski asked about the current transaction market, including deal flow and competition levels compared to the prior year, and how this might impact the 2025 acquisition guidance. He also inquired about rent coverage trends, particularly in the car wash and QSR sectors.

Answer

CEO Stephen Horn described the current deal flow as elevated compared to last year but noted competition is also increasing, which could slightly compress cap rates. He affirmed that 80% of NNN's deals come from relationships, providing a moat. On rent coverage, he stated that Mister Car Wash coverage is strong at over 4x and other car washes are performing well, while QSR sales are generally flat as operators absorb labor costs.

John Kilichowski inquired about the remaining challenges for Welltower's Tech Squad in the senior housing space, given their progress with WBS and the data science platform, and whether the technology could eventually be monetized.

Answer

Shankh Mitra (CEO, Welltower) clarified that while the data science platform is mature and monetized through fund economics, the operational technology side is still developing. He stated that Welltower would not monetize its core operating software to external competitors, ensuring its capabilities remain proprietary.

John Kilichowski inquired about the remaining challenges for Welltower's Tech Squad in the senior housing space, given their progress with WBS and the data science platform, and whether their technology could eventually be monetized.

Answer

CEO Shankh Mitra distinguished between the mature data science platform (monetized through fund economics) and the operational technology side, which he rated as 'mediocre minus' with significant room for improvement. He stated that Welltower's core operating software would never be sold to third parties to avoid competition, but they are open to helping partners on the platform with real estate investments.

John Kilichowski asked for an update on how the Net Operating Income (NOI) of Welltower's 2024 vintage senior housing acquisitions is performing relative to initial underwriting expectations.

Answer

CEO Shankh Mitra stated that, with the exception of Holiday, most 2024 vintage acquisitions, both individually and in aggregate, have performed in line with or higher than underwriting expectations. CIO Nikhil Chaudhri confirmed this assessment.

John Kilichowski of Wells Fargo asked for elaboration on Welltower's evolving technology strategy, noting the shift from using data science for capital allocation to applying operating technology to enhance the customer experience.

Answer

CEO Shankh Mitra described the goal of making Welltower both 'cam rich' (physical assets) and 'tech rich.' He outlined a holistic strategy to integrate data science, operational technology (WBS), enterprise software, and site-level hardware. Mitra stated he is now personally focused on this area and expects significant changes and new leadership hires in the coming months to drive this initiative.

John Kilichowski asked for a breakdown of the FFO guidance drivers, specifically regarding higher interest expense and G&A, and sought details on the U.S. growth contribution to the 15% same-store NOI guide and the impact of Ventas OI.

Answer

Robert F. Probst, EVP and CFO, attributed the FFO growth difference to the expiration of non-cash Brookdale amortization (4 cents year-over-year) and higher net interest expense from refinancing $2.2 billion of maturing debt. He noted G&A growth is in line with enterprise expansion, in the low $150 million range. J. Justin Hutchens, EVP of Senior Housing and Chief Investment Officer, highlighted that the U.S. portfolio, with 18% NOI growth in 2025, drives outsized growth, supported by Ventas OI actions like adding operators, redevelopments, and transitions.

John Kilichowski inquired about the building blocks for the 8% FFO growth, specifically addressing higher interest expense and G&A, and asked for the implied U.S. growth within the 15% same-store SHOP guide and the contribution of Ventas OI.

Answer

Robert F. Probst, EVP and CFO, attributed the difference between 8% and 10% FFO growth to the expiration of non-cash Brookdale amortization (4 cents) and higher net interest expense from refinancing $2.2 billion of maturing debt. He also noted G&A growth in line with enterprise expansion. J. Justin Hutchens, EVP of Senior Housing and Chief Investment Officer, highlighted that while U.S. and Canada are not separated, the U.S. showed 18% growth in 2025, indicating its outsized potential. He detailed Ventas OI's impact through operator additions, redevelopments, transitions, and operational improvements in sales and pricing.

John Kilichowski asked about the medium-to-long-term growth profile of the SHOP portfolio, specifically the incremental margins and RevPOR growth potential once assets are stabilized above 90% occupancy. He also asked about the size of the addressable market for the high-quality senior housing assets Ventas targets.

Answer

J. Justin Hutchens, EVP - CIO of Senior Housing, detailed the operating leverage, explaining that incremental margins are around 50% in the 80-90% occupancy range and rise to ~70% above 90%. He also noted RevPOR growth doubles when occupancy exceeds 90%. For the addressable market, he estimated that beyond the 15% owned by REITs, another 40-50% of the market meets Ventas' investment criteria.

John Kilichowski from Wells Fargo asked about the rent growth and economic drivers within Maplewood's core portfolio, given its high occupancy. He also sought an update on Embassy Row's lease-up trajectory, the timeline for achieving yield on cost payments, and the capital availability from its JV partner.

Answer

Vikas Gupta, CIO of Omega Healthcare Investors, reported that Maplewood's Second Avenue building is 97% occupied, with the overall core portfolio at 96%. Growth is expected from high single-digit rate increases this year. Matthew Gourmand, President, noted that Embassy Row saw positive cash flow for the first month at year-end 2025 (before rent), with lease-up progressing as expected. He emphasized that the focus is on the holistic portfolio performance, and it's too early to predict the exact timeline for yield on cost payments or the consolidated impact of rate increases.

John Kilichowski inquired about the growth and economics of Maplewood's core portfolio, specifically regarding rent increases and the success in driving economic performance, given its high occupancy.

Answer

CIO Vikas Gupta provided statistics, noting the Second Avenue building is at 97% occupancy and the overall core portfolio at 96%. He explained that growth would be driven by rate increases, with Maplewood targeting a high single-digit percentage increase this year. John Kilichowski then asked about the lease-up trajectory and capital needs for Maplewood's Embassy Row facility, including any JV partner contributions. President Matthew Gourmand reported that Embassy Row saw positive cash flow for the first month at the end of last year (prior to rent payments) and its lease-up is on track with expectations. He noted that Maplewood is focused on preventing Embassy Row from creating a headwind for the overall portfolio, but it's too early to provide specific consolidated projections.

John Kolichowski of Wells Fargo & Company asked about the apparent change in balance sheet strategy, questioning the shift to debt issuance over equity. He also sought clarity on the tenants within the sub-1.0x EBITDAR coverage bucket and their prospects for improvement.

Answer

CFO Robert Stephenson explained the company opportunistically issued debt to refinance a 2026 maturity in a leverage-neutral transaction but will continue to use its equity currency for accretive acquisitions. CEO C. Taylor Pickett addressed the coverage concerns, stating he expects key tenants in the sub-1.0x bucket to improve and graduate out in the coming quarters based on recent performance trends.

An analyst from Wells Fargo inquired about regulatory risks beyond the staffing mandate, such as 'care at home' initiatives and Medicare Advantage claim denials, and their potential impact. They also asked for an update on the LaVie bankruptcy resolution.

Answer

SVP of Operations Megan Krull stated that the industry is needs-based and has already adapted to home health, so she doesn't foresee substantial changes from other regulatory items. CEO C. Pickett confirmed LaVie's plan confirmation is expected in mid-November, with the new sponsor assuming the lease at $3 million monthly rent without interruption.

John Kilichowski asked about Agree Realty's exposure to the auto sector, given recent distress in subprime lending, and whether any tenants are on a watchlist. He also inquired if the 7-Eleven developments represent a one-off or a larger, visible opportunity set.

Answer

President and CEO Joey Agree stated that subprime lending distress supports their auto parts thesis, focusing on the age of cars on the road and fungible real estate, not new car dealerships, and they partner with leading operators. He confirmed working with 7-Eleven in defined geographic territories with a pipeline of opportunities.

John Kilichowski inquired about Agree Realty's exposure to the auto sector amidst distress in subprime lending, asking if any tenants are currently on a watchlist. Kilichowski also asked about the nature of 7-Eleven developments, specifically if discussions are one-off or part of a larger opportunity set.

Answer

Joey Agree, President and CEO, explained that the subprime lending distress aligns with their thesis for auto parts retailers (O'Reilly's, AutoZone, Gerber Collision), focusing on the age of cars and real estate fungibility, not new car dealerships, confirming no tenants are on a watchlist. Agree confirmed that 7-Eleven developments are part of a larger opportunity set, working in defined geographic territories with a pipeline of future projects.

An associate for John Kilichowski at Wells Fargo asked about tenants' growth plans amid recent bankruptcies and if opportunities are arising from private capital's retreat.

Answer

CEO Joey Agree stated that the issue is a lack of available space, prompting retailers to creatively acquire leases in bankruptcies to fuel growth. He confirmed that the retreat of private and 1031 capital due to high rates is creating significant opportunities for Agree Realty across all its investment platforms.

Cheryl, on behalf of John Kilichowski at Wells Fargo, asked about emerging themes in tenants' growth plans and whether Agree Realty is seeing opportunities arise from private capital players exiting the market.

Answer

CEO Joey Agree explained that due to a lack of available space, retailers are creatively using bankruptcy auctions to acquire leases for growth. He confirmed that the retreat of private capital, driven by higher rates and a slow 1031 market, is creating significant opportunities for Agree Realty across all its platforms, highlighting the advantage of its "fortress balance sheet."

John Kilichowski of Wells Fargo inquired about the composition of CareTrust's $600 million investment pipeline, asking about the contribution from UK assets and the percentage of SHOP (Seniors Housing Operating Portfolio) deals. He also asked about the strategic criteria for potential SHOP acquisitions, such as asset class and market tier.

Answer

Chief Investment Officer James Callister explained that the pipeline is predominantly composed of U.S. skilled nursing facilities, with the remainder being a mix of U.S. seniors housing and UK care homes. He confirmed there is a SHOP component and stated that CareTrust is open to various deal types, prioritizing the right operator-manager relationship over specific asset profiles.

John Kilichowski from Wells Fargo requested an update on the NHC lease renegotiations, the current performance of the NHC portfolio, and the potential scale of asset dispositions related to the renewal.

Answer

President and CEO Eric Mendelsohn confirmed that discussions with NHC are ongoing, overseen by a special board committee, but could not share details. He noted NHC's corporate coverage has improved to over 4.1 times, demonstrating a strong ability to pay rent. Regarding dispositions, Mendelsohn described a strategy of potentially selling underperforming assets to create a stronger remaining portfolio that could command higher rent as part of a comprehensive lease renewal.

John Kilichowski of Wells Fargo inquired about the competitive landscape with private buyers and their impact on yields, and asked for details on the reiterated 75 basis point credit loss guidance.

Answer

CEO Sumit Roy positioned the increased private capital interest as a positive for the net lease sector, emphasizing Realty Income's competitive advantages in scale and underwriting. CFO Jonathan Pong clarified the 75 bp credit loss guidance is a conservative, fully-loaded figure that includes reserves and vacancy costs, noting that about 65 bps of rental revenue had been reserved year-to-date.

John Kilichowski of Wells Fargo asked if the legacy Stewart asset rent ramp was running ahead of schedule to meet the $160 million annualized target and inquired about the strategic rationale and expected return for the increased equity investment in InfraCore.

Answer

Edward Aldag, Chairman, President & CEO, responded that while the new operators' performance is ahead of projections, he does not expect them to accelerate their contractual rent ramp schedules. He added that the increased investment in InfraCore was primarily used to pay down maturing debt within the JV, which MPT considered a good return on its investment.

John Kilichowski questioned if the rent ramp-up from legacy Stewart assets was ahead of schedule to meet the $160 million annualized target by October 2026. He also asked for the strategic rationale and expected return on the increased equity investment in the InfraCore JV.

Answer

CEO Ed Aldag responded that while the new operators are performing ahead of projections, he does not expect them to accelerate their contractual rent payments. Regarding the InfraCore investment, Aldag clarified its primary purpose was to pay down maturing debt within the JV, which MPT considered a good return on its investment.

John Kilichowski of Wells Fargo & Company inquired if the rent ramp-up from legacy Steward assets was ahead of schedule, potentially exceeding the $150 million annualized target by October 2026. He also asked for more detail on the strategic rationale and return profile of the recent equity investment in the InfraCore JV.

Answer

Chairman, President & CEO Edward Aldag confirmed that while the new operators are performing ahead of schedule, he does not expect them to accelerate their contractual rent payments. He clarified the InfraCore investment was primarily to pay down the JV's maturing debt, representing a good return for MPW.

John Kilichowski of Wells Fargo inquired whether the rent ramp from former Steward assets was ahead of schedule to meet the 2026 target and asked for the strategic rationale and return profile of the increased investment in the InfraCore JV.

Answer

Edward K. Aldag Jr., CEO, confirmed that while operator performance is ahead of projections, the contractual rent ramp remains on its original schedule. He clarified that the additional investment in the InfraCore JV was primarily used to pay down maturing debt within the venture, representing a good return for MPT.

John Kilichowski from Wells Fargo requested updates on two specific operator situations: one in Colombia dealing with government reimbursement delays and another tenant (representing 1% of assets) that had a previous one-time payment. Additionally, he asked about the expected process and timing for the Prospect asset resolution following court approval.

Answer

Chairman, President and CEO Edward K. Aldag provided updates, stating the 1% tenant is now current on rent and had its best quarter in a long time. Regarding Colombia, he characterized the reimbursement issue as a temporary political maneuver related to healthcare reform, not a long-term viability concern. For the Prospect assets, he expects potential new tenants to be identified by late May or early June, with closings to follow as soon as regulatory approvals are secured.

John Kilichowski asked about any amendments to the credit agreement, particularly regarding previously waived covenants, and inquired about the expectation for collecting Quality Assurance Fee (QAF) payments.

Answer

CFO R. Hamner clarified that the prior amendment and covenant waivers were eliminated. The facility now reverts to previous terms, including a 40% limit on securing unencumbered assets and a lower rate. He added that the most significant QAF payment is expected from Prospect California in March and April.

John Kilichowski of Wells Fargo asked about the potential impact of US-EU trade discussions on WPC's tenants and whether they have provided any new feedback. He also inquired about the primary drivers for the more attractive investment spreads observed in Europe.

Answer

CEO Jason Fox responded that there have been no direct impacts from trade tariff discussions on the portfolio to date, as many proposed tariffs have not been implemented. He stated that the company's rent reserve is sufficient to cover potential future impacts. Regarding Europe, he explained that the better spreads are primarily driven by a lower cost of capital, as WPC can borrow in euros at rates 125-150 basis points below comparable US bonds, while cap rates remain similar.

John Kilichowski of Wells Fargo asked about the impact of US-EU trade discussions on tenants and whether they are providing any new feedback. He also inquired about the primary drivers behind the more attractive investment spreads in Europe.

Answer

CEO Jason Fox stated that despite ongoing discussions, there have been no discernible impacts on the portfolio or tenant behavior from trade policy. He explained that the superior investment spreads in Europe are primarily driven by a lower cost of debt, with the ability to borrow in euros at 125-150 basis points inside of US bond rates for assets with similar cap rates.

John Kilichowski of Wells Fargo & Company inquired about any new feedback from tenants regarding the potential impact of U.S.-E.U. trade discussions and tariffs. He also asked for the primary drivers behind the more attractive investment spreads observed in Europe.

Answer

CEO Jason Fox stated that while uncertainty persists, there have been no material impacts from trade discussions on the portfolio to date, as major tariffs have not been implemented. Regarding Europe, he explained that the wider investment spreads are primarily driven by a lower cost of capital, with the ability to borrow in euros at rates 125-150 basis points below comparable U.S. bonds, while acquisition cap rates remain similar.

John Kilichowski asked how increasing competition from private buyers is influencing acquisition guidance and requested a clarification on the Hearthside credit situation.

Answer

CEO Jason Fox confirmed that heightened competition, especially from private equity in the U.S., is a factor contributing to the company's conservative initial acquisition guidance. He also clarified the expectation for Hearthside is that the tenant will emerge from bankruptcy without any rent disruption to W. P. Carey, given the critical nature of the assets WPC owns.

On behalf of John Kilichowski, an analyst asked about the changes in seller expectations and investment spreads in Europe versus the U.S., and also inquired about the company's exposure to the American Tire bankruptcy.

Answer

CEO Jason Fox stated that while European investment activity is picking up after a slow summer, borrowing costs there are 100-150 basis points lower than in the U.S., creating attractive spreads as cap rates are only slightly lower. He and Head of Asset Management Brooks Gordon reiterated that exposure to American Tire is insignificant, at approximately 15 basis points of ABR, and considered a non-event for the company.

John Kilichowski asked for specifics on what types of real estate VICI might own permanently through its Cain and Eldridge partnership and inquired about changes in the competitive landscape from private capital.

Answer

CEO Ed Pitoniak clarified that VICI is not optimistic about owning real estate within the One Beverly Hills project itself, but sees opportunities in other parts of the Cain/Eldridge portfolio that resemble assets VICI already owns, like Chelsea Piers. An unnamed executive added that the competitive landscape has been consistently strong since the company's inception and that VICI relies on its deep relationships to succeed.

John Kilichowski of Wells Fargo Securities asked about the put options on the Harrah's Hoosier Park asset, their likelihood of being exercised, and if this kept capital sidelined. He also inquired about any gaming-related issues on upcoming election ballots and requested more detail on the $80 million in capital deployed during the quarter beyond the Venetian investment.

Answer

CEO Edward Pitoniak stated that Caesars has explicitly communicated it has no intention of exercising the put options, so it does not affect VICI's capital planning. President and COO John W. Payne noted a few state-level ballot measures in Missouri, Arkansas, and Virginia but characterized it as a quiet year for gaming legislation. CFO David Kieske clarified the additional $80 million in capital deployment consisted of incremental draws on previously announced loans for Great Wolf, Homefield, Cabot, and Canyon Ranch.