Question · Q3 2025
John Kilichowski asked about the nature of the industrial assets (consumer-facing vs. internal supply chain) and how rent coverage is calculated for the latter. He also inquired if the size of a private equity sponsor matters in credit underwriting for PE-backed tenants, especially given current PE capital raising and liquidity uncertainty.
Answer
Peter Mavoides, President and CEO, described industrial assets as outdoor storage yards for service-based operators, with rent coverage based on site revenue/profitability. He acknowledged that revenue/profitability is less tethered than a retail box but emphasized the assets' essentiality and high switching costs. He stated they are agnostic to the equity source, focusing first on real estate, unit-level profitability, and site economics, then corporate credit. He noted that larger operators might use more leverage, which is considered in underwriting.