Wesley Golladay

Wesley Golladay asked if domestic RV transient and seasonal customer demand has returned to normalized, post-COVID levels. He also inquired about the company's strategy for expansions, specifically if they are targeting higher-growth Sunbelt markets, and the typical lease-up time for new MH expansion sites.

Answer

Patrick Waite (EVP and COO) indicated that while not fully normalized, early booking pace shows positive trends for 2026. He confirmed that the significant majority of expansions are indeed in Sunbelt properties, with a small exception in Minnesota. Waite explained that a good pace for leasing up MH expansion sites involves selling 20-30 homes per year at a particular community.

Wesley Golladay asked if the domestic RV transient and seasonal customer numbers have returned to normalized, post-COVID trend lines. He also inquired about the target markets for property expansions and the typical lease-up time for new manufactured housing sites.

Answer

Patrick Waite (EVP and COO) indicated that while not fully normalized, there are 'green shoots' and positive booking trends for 2026. He confirmed that most expansions target higher-growth Sunbelt markets, with a small exception in Minnesota. For MH lease-up, he stated that filling 20-30 sites per year in an expansion is considered a good pace.

Wesley Golladay inquired about the seasonal and transient RV trends when excluding Canadian customers. He also asked about the building blocks for 2026 RV revenue growth, specifically if similar headwinds on occupancy and other items are expected as in the current year.

Answer

Paul Seavey, EVP and CFO, stated that reservation levels for non-Canadian seasonal/transient RV are similar to year-to-date 2025 trends. Patrick Waite, President and COO, expects a return to more normal trends for 2026, including improved occupancy, citing recent annual RV site growth. Marguerite Nader, CEO, highlighted the filling of 475 annual RV sites in the quarter as a positive data point.

Wesley Golladay followed up on the elevated RV turnover, asking if it was driven by Canadian residents. He also inquired about any observed impact on demand or costs from recent immigration policy changes.

Answer

CEO Marguerite Nader clarified that the elevated turnover was not due to Canadian residents and that the renewal process was consistent with prior years. Regarding immigration policy, she stated that from a Canadian customer perspective, particularly in the Phoenix MH market, demand remains strong and they have not seen an increase in home sale activity that would indicate a change in behavior.

Wesley Golladay followed up on the elevated RV turnover, asking if it was specific to Canadian residents. He also inquired about any observed impacts on demand or costs from recent immigration policy changes.

Answer

CEO Marguerite Nader confirmed that the elevated turnover was not due to Canadian residents. Regarding immigration policy, she stated that the company monitors key markets like Phoenix and has not seen any impact, such as increased home sale activity from Canadian owners, that would suggest a change in demand.

Wesley Golladay followed up on the elevated RV turnover, asking if it was driven by Canadian residents, and also inquired about any demand or cost impacts from recent immigration policy changes.

Answer

CEO Marguerite Nader clarified that the elevated turnover was not due to Canadian residents and that the renewal process was unchanged. Regarding immigration policy, she stated that they monitor the Canadian customer base and have not seen any impact on demand or an increase in home sale activity.

Wesley Golladay followed up on the elevated RV turnover, asking if it was specifically driven by Canadian residents. He also inquired about any observed impacts from recent immigration policy changes on demand or costs.

Answer

CEO Marguerite Nader stated directly that the increased turnover was not due to Canadian residents. Regarding immigration policy, she noted that they monitor the key Phoenix market for Canadian MH customers and have not seen any signs of increased home sale activity or other changes in demand.

Wesley Golladay followed up on the elevated RV annual turnover, asking if it was specific to Canadian residents. He also inquired about any observed impact from recent immigration policy changes on demand or costs.

Answer

CEO Marguerite Nader confirmed the RV annual turnover was not related to Canadian residents. Regarding immigration policy, she stated that the company monitors its key Canadian MH market in Phoenix and has not seen any change in demand or an increase in home sale activity that would suggest an impact.

Wesley Golladay asked if the company was observing an increase in Canadians listing their manufactured homes for sale and requested the company's overall MH portfolio exposure to Canadian residents.

Answer

Patrick Waite, an executive, stated that he did not have a precise exposure number but estimated it was directionally similar to the RV business. He emphasized that the company is not seeing any trend of increased listings from Canadian MH residents and that on-site feedback indicates they are happy and plan to return.

Wesley Golladay inquired about the seasonality of attrition for annual RV sites and whether guidance assumes this number will grow or shrink in 2025. He also asked for a segmentation of Thousand Trails members to better understand churn.

Answer

Executive Patrick Waite attributed recent attrition to post-COVID normalization and hurricane impacts. CEO Marguerite Nader explained that churn in lower-tier promotional memberships is linked to reduced RV dealer leads and lower transient activity at properties, which are the primary sources for new, entry-level pass sales.

Wes Golladay inquired if Regency's increased development activity near master-planned communities is driven by grocers, Regency's own emphasis, or both, and if the company still targets around a 50% pre-lease level for development starts.

Answer

Nick Wibbenmeyer, West Region President and Chief Investment Officer, confirmed that the focus on master-planned communities is a convergence of interest from Regency, grocers, and master-plan developers, creating win-win partnerships. He affirmed that Regency targets high pre-lease levels for development starts, with anchors always in place, often achieving over 90% leased even before anchor openings, significantly de-risking projects.

Wes Golladay inquired if the increased focus on master-planned communities for developments is driven by grocers or Regency Centers, and if the target pre-lease level for development starts remains around 50%.

Answer

Nick Wibbenmeyer, West Region President and Chief Investment Officer, confirmed that both grocers and Regency Centers target master-planned communities, and master-plan developers actively seek Regency as a partner due to their expertise and long-term ownership. He affirmed that development starts are 'tremendously pre-leased,' with anchors always in place, often guaranteeing a large portion of the NOI, even if not precisely 50% for every project.

Wesley Golladay from Robert W. Baird & Co. Incorporated asked for details on the tenants that commenced rent earlier than expected, wondering if they were junior anchors aiming for a specific season.

Answer

COO Alan Roth clarified that it involved a couple of anchor tenants. He attributed the accelerated openings to a highly efficient process and strong partnership with the retailers to get their stores open as soon as possible, rather than a specific seasonal driver. He emphasized that getting tenants open and generating sales is a 'win-win' for all parties.

Asked for details on the tenants that commenced rent early, questioning if they were junior anchors and if there was a seasonal motivation for the early opening.

Answer

The early commencements were for a couple of anchor tenants. The acceleration was attributed to an efficient internal process and strong partnership with the retailers, not a specific seasonal push.

Wes Golladay from Baird asked for more detail on the tenants that had earlier-than-expected rent commencements, specifically if they were junior anchors or targeting a specific season.

Answer

COO Alan Roth clarified that the accelerated commencements involved a couple of anchor tenants. He attributed the timing to an efficient operational process and strong partnership with the retailers to get their stores open sooner, rather than any specific seasonal driver.

Wes Golladay of Baird inquired about the future growth potential of the $500 million development pipeline over the next few years and what factors, such as risk or the opportunity set, might govern its size.

Answer

President and CEO Lisa Palmer stated that the primary limiting factor to expanding the pipeline has been the opportunity set, not balance sheet capacity. The current goal is to maintain a sustainable $250 million in annual starts. She affirmed that if the opportunity set grows, Regency is well-positioned to increase its development activity accordingly. CIO Nicholas Wibbenmeyer concurred with this assessment.

Wesley Golladay asked how much of the future development pipeline ($3 billion and $1.2 billion) would involve residential land plays and if the potential $685 million in impairments would primarily affect land assets. He also inquired if there were delays in leases commencing in the first half of next year.

Answer

Marc Binda, CFO and Treasurer, clarified that the $685 million in potential impairments largely relates to land-type assets. Joel Marcus, Executive Chairman and Founder, noted that the four mega campuses highlighted in the press release are intended to include substantial residential components. Marc Binda added that there wasn't a specific delay in lease commencements; rather, the bucket of commencing leases continuously evolves as some are delivered and new ones are added.

Wesley Golladay asked how much of the potential residential land plays would be derived from the $3 billion and $1.2 billion future pipeline buckets, and if the potential $685 million of impairments would primarily fall within those buckets. He also inquired if there was any delay, permitting-wise or tenant-related, for leases commencing in the first half of next year.

Answer

Marc Binda, CFO and Treasurer, clarified that the $685 million in potential impairments relates to various assets under consideration, with a significant portion being land-type assets. Joel Marcus, Executive Chairman and Founder, added that the four mega campuses highlighted in the press release are designed to include a substantial residential component. Marc Binda stated there wasn't a specific delay for leases commencing next year; rather, the bucket of spaces evolves as some are delivered and new ones are leased, which naturally extends the average delivery timeframe.

Wesley Golladay questioned the impact of "just-in-time" leasing on the 2026 development pipeline and asked about regional demand strength, including any interest from AI tenants.

Answer

Executive Peter M. Moglia noted that while just-in-time demand affects timing, the 2026 pipeline is already 70% leased or under LOI. SVP Hallie Kuhn specified this trend is concentrated in smaller biotech tenants. Executive Joel Marcus highlighted strong AI-driven demand in Mission Bay, contrasting it with a slower South San Francisco market.

Wes Golladay asked if Welltower sees similar opportunities for implementing the Welltower Business System (WBS) in the U.K. as in the U.S., and whether it is a "plug and play" solution across geographies.

Answer

CEO Shankh Mitra confirmed enormous opportunities for WBS in the U.K., emphasizing that it's about "business first, systems later" and "process first, technology later." He noted that U.K. operating partners are welcoming new ideas and technology, and the U.K. government is also supportive of bringing operational sophistication to the care sector. CIO Nikhil Chaudhri agreed that the opportunities are the same.

Wesley Golladay of Robert W. Baird & Co. requested an update on Welltower's private fund business, including its capital deployment status and the use of debt at the fund level.

Answer

CEO Shankh Mitra stated that the company will provide a comprehensive update on the fund after its closing, which is expected by the end of the year, as they cannot comment while fundraising is active. Co-President & CIO Nikhil Chaudhri confirmed that the process is on track.

Wesley Golladay asked about the development outlook in Canada following the Amica acquisition, specifically if any new construction starts are anticipated for the next year.

Answer

CEO Shankh Mitra confirmed the Amica deal includes nine development parcels. He indicated that expansion projects on existing sites are likely to proceed, while de novo projects will be evaluated based on cost certainty. He concluded that they 'certainly expect to see some starts next year' from this portfolio.

Wesley Golladay asked which segments are driving occupancy gains and if there is a potential mix headwind on rate or benefit on expenses.

Answer

Shankh Mitra (CEO & CIO) stated that since the wellness housing portfolio is already highly occupied, the majority of the growth is coming from assisted and independent living. He also noted that labor cost trends are moving in a favorable direction, which could benefit expenses.

Wesley Golladay asked whether Healthpeak sees a bigger opportunity set in outpatient medical developments or opportunistic lab properties. He also inquired if the potential change in the inpatient-only rule is leading to any uptick in leasing demand or development opportunities.

Answer

Scott Brinker, President and CEO, characterized opportunistic lab investments as 'chunky' with potentially large or zero projects, while outpatient development is a more normal, steady-state business, typically a couple hundred million dollars annually, focused on pre-leased projects with good yields in core markets. Regarding the inpatient-only rule, Mr. Brinker stated that the comment period has closed without a final rule yet. He reiterated that market forces are already driving services to an outpatient setting regardless of CMS action, and any rule change would merely accelerate this existing trend.

Wesley Golladay asked whether the company sees a greater opportunity set in outpatient medical developments or in opportunistic lab properties for future acquisitions.

Answer

President and CEO Scott Brinker characterized opportunistic lab investments as potentially chunky and variable, while outpatient development is a more consistent, normal-course business. He described outpatient development as a steady stream of projects, typically a couple hundred million dollars annually, focused on pre-leased assets with good yields and strong health system partnerships.

Wesley Golladay of Baird asked if Healthpeak is seeing significant leasing demand from AI companies that is absorbing competitive lab supply. He also inquired about the 'enormous opportunity' in lab acquisitions, asking which markets the company would target for scale and whether they would prefer newer or older assets.

Answer

Chief Development Officer Scott Bohn said that while they cast a wide net, direct leasing to AI users is low, but CEO Scott Brinker added that AI demand is absorbing competitive lab availability in markets like Mission Bay, which is a net positive for their South San Francisco portfolio. Regarding acquisitions, Mr. Brinker stated the company has a bias towards newer assets in their existing core submarkets to deepen their competitive advantage and local scale.

Wesley Golladay of Baird asked about leasing demand from AI companies in Healthpeak's submarkets and sought specifics on the target markets and asset quality for the previously mentioned 'enormous opportunity' in lab acquisitions.

Answer

Chief Development Officer Scott Bohn noted that while their focus is on lab tenants, AI demand is absorbing some competitive supply, which is a net positive. CEO Scott Brinker clarified that their acquisition strategy would target newer assets within their existing core submarkets to deepen their competitive advantage and local scale.

Wes Golladay asked if Getty Realty is seeing an uptick in requests to substitute assets in master leases and about the comfort level with increasing exposure to larger format centers (travel centers) to 5% or 10% of the portfolio.

Answer

Chris Constant, CEO, mentioned a few larger unitary leases expiring in 2027 but stated it's too early to comment, expecting most properties to remain. He views travel centers as an extension of the C-store space, noting a learning curve before significantly expanding concentration, and no specific target has been established yet.

Wes Golladay asked if Getty Realty is observing an uptick in requests from tenants to substitute assets within their master leases, and about Getty Realty's comfort level with increasing exposure to larger format centers (travel centers) to 5% or 10% of the portfolio.

Answer

Chris Constant, CEO, stated it's too early to assess specifics on master lease substitutions, but expects most profitable properties to remain. He indicated no specific target for travel center exposure yet, noting a learning curve before significantly expanding concentration.

Wes Golladay inquired about the typical closing timeline for acquisitions, the mix of new relationships in the current pipeline, and potential demand drivers from recent legislation.

Answer

EVP & COO Mark Olear estimated a 60 to 120-day timeline for acquisitions and described the pipeline as a 'healthy blend' of new and existing relationships. President & CEO Christopher Constant suggested that policy certainty and lower taxes would be beneficial for tenants, noting their low exposure to tariffs.

Wes Golladay from Baird inquired about the typical closing timeline for acquisitions, the mix of new versus existing tenants in the pipeline, and potential demand drivers from recent legislative or economic developments.

Answer

EVP & COO Mark Olear estimated a 60 to 120-day timeline for acquisitions and described the pipeline as a 'healthy blend' of new and existing relationships. President & CEO Christopher Constant added that economic certainty and lower taxes are beneficial for tenants, who have low exposure to tariffs.

Wesley Golladay of Baird inquired about the credit profile of the new tenants taking over Zips sites, the risk within the remaining low-coverage tenant bucket, the performance of top tenant Arco, and plans for terming out debt on the line of credit.

Answer

CEO Christopher Constant described the new Zips tenants as strong regional and larger operators familiar with the local markets. CFO Brian Dickman clarified that the low-coverage bucket is not a concern, as it's dominated by a C-store portfolio that has operated stably in that range for over a decade. Mr. Constant affirmed Arco's consistent performance. Mr. Dickman stated the company would be opportunistic about terming out its line of credit debt, feeling no immediate urgency.

Wesley Golladay of Baird asked about the composition of the investment pipeline, specifically if the new large transaction would involve development funding. He also followed up on the Zips situation, inquiring about Getty's basis in the properties and the company's confidence level in re-leasing them to another car wash operator.

Answer

CEO Christopher Constant and CFO Brian Dickman clarified that the overall $85 million pipeline is a mix of sale-leasebacks and development funding, with the 9-12 month deployment timeline indicating that approximately 80% is development funding. Regarding Zips, Mr. Dickman expressed confidence that the sites would be re-leased to car wash operators, noting they are new construction and that early discussions with other operators have been constructive.

Wesley Golladay of Robert W. Baird & Co. asked if Getty is currently evaluating any portfolio acquisitions beyond its typical sale-leaseback transactions. He also inquired about the company's preference for a potential buyer of Arco's C-stores, asking whether they would favor an existing tenant or a new relationship to enhance diversification.

Answer

CEO Christopher Constant clarified that Getty's sale-leaseback strategy frequently involves portfolios of assets from a single tenant, which are then placed into a unitary master lease. Regarding the potential Arco transaction, he stated that it was premature to speculate, and any preference for a buyer would depend entirely on the counterparty's financial strength and strategic view of the properties.

Wes Golladay asked if Agree Realty is willing to undertake true development projects for all its targeted tenants or if some are deemed too risky or complex.

Answer

Joey Agree, President and CEO, confirmed that complexity is generally not an issue, and they would develop for approximately 95% of their targeted tenants, focusing on traditional retail formats. He noted they avoid industrial, new prototypes, or experiential concepts, and have declined international development opportunities.

Wes Golladay asked if Agree Realty is willing to develop for all its targeted tenants or if some are considered too risky or complex for the true development platform.

Answer

President and CEO Joey Agree stated they would generally develop for 95% of targeted tenants, avoiding speculative or overly complex projects (e.g., 180,000 sq ft experiential constructs) and international development, while focusing on traditional retail formats.

Wes Golladay sought clarification on the development pipeline goals, asking if the figures included the funding platform and about ownership plans for new projects. He also inquired about the next iteration of the ARC data platform.

Answer

President and CEO Joey Agree confirmed the $100 million in upcoming starts are development projects the company intends to own. CFO Peter Coughenour detailed that the next version of ARC will feature a new backbone for more dynamic reporting. He also highlighted the company's use of AI for lease abstraction and underwriting, which is driving significant time and cost savings, with future plans to incorporate AI into decision-making processes.

Wes Golladay of Robert W. Baird & Co. asked about the evolution of the tenant 'sandbox' and the drivers behind the G&A expense trend.

Answer

CEO Joey Agree described the 'sandbox' evolution as slow and methodical, focused on portfolio balance. CFO Peter Coughenour and Agree explained that while cash G&A continues to scale efficiently, total G&A growth is driven by non-cash stock compensation due to a strategic change in vesting periods for talent retention.

Wesley Golladay of Baird asked about the evolution of the company's investment "sandbox" of target tenants and inquired about the drivers behind the flatlining G&A expense, including the cash versus non-cash components.

Answer

CEO Joey Agree explained that the sandbox evolves slowly, with a focus on maintaining a well-balanced portfolio. On G&A, CFO Peter Coughenour and Agree noted that while cash G&A continues to scale efficiently, total G&A reflects investments in personnel and systems, as well as higher non-cash stock compensation expense resulting from a change in vesting periods from five to three years to improve talent retention.

Wes Golladay from Baird asked about potential seasonality in Medicare Advantage contract renewals. He also inquired if the recent acquisition of unstabilized assets represented the last of the company's non-consolidated Trilogy properties.

Answer

COO Gabe Willhite stated there is no significant seasonality in contract renewals due to their fragmented nature, but noted that about 75% of contracts receive an annual rate increase tied to the CMS update on October 1. President and CEO Danny Prosky clarified that while a major joint venture was consolidated, a few select assets operated by Trilogy remain off-balance sheet and are targeted for future acquisition.

Wes Golladay from Baird asked about potential seasonality in Medicare Advantage contract renewals. He also sought clarification on whether the recent acquisition of unstabilized assets represented the last of the company's non-consolidated Trilogy assets.

Answer

COO Gabe Willhite explained there is no significant seasonality in contract renewals due to fragmentation, but noted that about 75% of contracts receive a fixed annual increase tied to the CMS rate update on October 1. President & CEO Danny Prosky clarified that while the recent JV buyout was completed, there are still approximately four other assets operated by Trilogy that AHR does not yet own but expects to acquire over time.

Wes Golladay from Baird asked about potential seasonality in Medicare Advantage contract renewals and whether the recent acquisition of unstabilized assets was the last of the non-consolidated Trilogy properties.

Answer

COO Gabe Willhite responded that renewals are not seasonal due to market fragmentation, but noted that about 75% of contracts have an annual rate increase tied to the October 1 CMS update. President & CEO Danny Prosky clarified that while a major JV was consolidated, a few select assets operated by Trilogy remain off-balance sheet and are expected to be acquired over time.

Wes Golladay from Baird asked about potential seasonality in Medicare Advantage contract renewals and inquired if the recent acquisition of unstabilized assets represented the last of the non-consolidated properties related to Trilogy.

Answer

COO Gabe Willhite clarified that MA contract renewals are too fragmented to have seasonality, though he noted about 75% of contracts have a fixed annual increase tied to the October 1 CMS update. President & CEO Danny Prosky confirmed that while the recent transaction consolidated the last of the joint venture assets, AHR still expects to acquire a few more select properties that Trilogy currently manages or leases over time.

Wesley Golladay of Robert W. Baird & Co. asked if the recent demand softness was a temporary patch tied to macro uncertainty and requested details on the new partnership with Orchard Securities for its managed REIT platform.

Answer

SVP David Corak acknowledged demand volatility but expressed optimism for the second half of the year. Regarding the partnership, CEO H. Michael Schwartz explained that Orchard Securities is a better fit for their current DST programs and offers a lower-cost structure. CFO James Barry confirmed this new, more efficient agreement was a key factor in raising the full-year managed REIT EBITDA guidance.

Wes Golladay of Baird asked about the primary constraints for the company's third-party private capital vehicle, given that deal sourcing is not expected to be an issue.

Answer

CEO Sumit Roy confirmed that deal sourcing is not a constraint for the new vehicle. He identified the main limiting factor as the amount of third-party capital the company successfully raises to deploy into the strategy.

Wesley Golladay from Baird asked about the strategy for seeding the new private fund and inquired about the expected unlevered return or stabilized yield on the recent European retail park acquisitions.

Answer

CEO Sumit Roy explained that the fund will be seeded with a portfolio currently 100% owned by Realty Income. The company will raise new capital, gradually diluting its ownership while remaining a significant owner. He estimated a potential 10.5-11% uplift on the European assets from mark-to-market on cap rate compression, with further upside from repositioning and marking rents to market.

Wesley Golladay of Baird asked about the development pipeline, specifically inquiring about the expected lease-up timing for the non-retail portion and whether the company anticipates achieving incremental yield on these more speculative projects.

Answer

CEO Sumit Roy noted that the non-retail portion is a small part of the development pipeline (around 15%) and that significant capital is not spent until there is clarity on leases. He expressed high confidence in leasing up these assets in the near term, supported by a strong partnership with developer Panattoni. Roy confirmed that they absolutely expect to get incremental yield on these projects and that, thus far, actual lease rates have often exceeded their underwriting expectations.

Wesley Golladay of Robert W. Baird & Co. inquired about the expected trend for unreimbursed property costs and whether the upcoming balance sheet refinancing would involve both term loans and private placements. He also asked for guidance on the G&A expense run rate.

Answer

CFO Robert Kiernan confirmed there were no unusual dynamics in reimbursed costs and that the overall NOI trend was consistent with forecasts. CEO Mark Decker stated the plan is to refinance the term loan and revolver, but the exact structure is not yet finalized. Kiernan also affirmed that the Q2 G&A, excluding one-time CEO transition costs, serves as a good run rate for the second half of the year.

Wesley Golladay asked for clarification on the timing of a $250,000 payment from Prospect, the outlook for dispositions, plans for the credit line balance, and the GAAP G&A forecast for the remainder of 2025.

Answer

Chief Financial Officer Bob Kiernan clarified the Prospect payment timing as $150,000 in Q1 and $100,000 in Q2. Chief Investment Officer Alfonzo Leon stated there are no near-term disposition plans beyond what has been announced. Kiernan explained that the company is in active discussions to extend its credit facility, with execution likely in Q3 or Q4, pending the CEO transition. He also provided a detailed G&A forecast, noting an elevated Q2 due to non-cash LTIP expense, with subsequent quarters returning to the previously guided range.

Wes Golladay asked for clarification on the components of the reported Annualized Base Rent (ABR), specifically regarding the Prospect and Steward situations. He inquired about the timing of the rent commencement for the new Beaumont tenant and the cadence of lease expirations in 2025. He also questioned the strategy behind acquiring portfolios with varied cap rates, referencing a specific property.

Answer

CFO Bob Kiernan clarified that the reported ABR excludes the cash-basis Prospect property and the yet-to-commence Beaumont rent, but includes two smaller Prospect properties. He confirmed the Beaumont rent should commence in Q2 2025. Regarding expirations, he noted they are largely ratable but flagged one 50,000 sq ft lease in May that may become vacant. CIO Alfonzo Leon explained that portfolio acquisitions are priced holistically, and individual asset cap rate allocations do not always reflect standalone value, stating there are no immediate plans to sell the referenced Slippery Rock asset.

Wesley Golladay of Robert W. Baird & Co. inquired about the rollout status of the 'MyStorage Navigator' tool and its future leasing targets, and asked if the total financial opportunity from AI could be quantified yet.

Answer

President & CEO David Cramer stated that the 'MyStorage Navigator' tool has been rolled out across the portfolio and, while in its early stages, could potentially handle 4-5% of on-site rentals in the near term. He noted that it is still too soon to quantify the full financial impact of the company's broader AI initiatives.

Wesley Golladay asked if the guided acquisition and disposition activity would be accretive or dilutive. He also inquired about the competitive landscape, specifically if new developers are becoming less aggressive with concessions.

Answer

CEO Dave Cramer suggested any impact would be marginal dilution, dependent on the timing of capital recycling, which CFO Brandon Togashi confirmed is captured in the FFO guidance. On competition, Cramer agreed that the environment has improved. He cited that developers are further along in their lease-ups and that pricing pressures from large sector mergers have moderated, leading to better pricing stability.

Wesley Golladay from Robert W. Baird & Co. asked if tenant partners are becoming more active with better visibility on tariffs and inquired about the rent commencement timing for recently resolved vacancies.

Answer

President and CEO Stephen Horn noted that while tenants have better visibility, they are not yet ramping up activity to pre-2019 levels, though M&A and new build inquiries are increasing. EVP & CFO Vincent Chao added that for resolved vacancies, most of the associated ABR has already commenced.

Wesley Golladay asked for clarification on the drivers of the accelerating RevPOR growth in the SHOP portfolio, questioning whether it was primarily due to a mix shift or higher move-in rates.

Answer

J. Justin Hutchens, EVP - CIO of Senior Housing, stated that mix shift was not a material factor. He attributed the strong RevPOR growth to successful price-volume optimization driven by the Ventas OI platform, which resulted in higher move-in rents and sustained in-place rent increases, allowing the company to effectively drive both occupancy and rate.

Wesley Golladay asked if there were any signs of cap rate compression for senior housing acquisitions and inquired if the expected performance benefits from the Lillibridge MOB portfolio were beginning to materialize.

Answer

Executive J. Hutchens and CEO Debra A. Cafaro stated they are still finding deals within their 7-8% target yield range, noting that rising interest rates are a factor and Ventas's cost of capital is an advantage. Executive Peter Bulgarelli confirmed the Lillibridge strategy is working, citing significant 2024 improvements in tenant satisfaction, retention, and occupancy.

Wesley Golladay from Baird asked about potential ROI and deferred CapEx opportunities in the Brookdale portfolio if it transitions, and requested quantification of the non-cash rent impact from the Kindred lease restructure.

Answer

J. Hutchens stated that while all options for Brookdale are on the table, the opportunity to apply the Ventas OI platform to the assets would be compelling. CFO Robert Probst noted the non-cash rent impact from the Kindred deal is in line with prior estimates and directed the analyst to the press release for details.

Wesley Golladay of Baird inquired about IRT's plans for its joint venture assets and asked for an estimate of the total potential size of the company's asset recycling program.

Answer

Chairman and CEO Scott Schaeffer explained that IRT passed on acquiring a Richmond JV asset and will be paid off on a Nashville JV asset, with decisions on two Texas JVs pending. Regarding asset recycling, he stated it's an ongoing process driven by asset age and market changes, without providing a specific total volume, emphasizing that capital allocation is a dynamic decision.

Wesley Golladay from Baird asked about the expected recovery timeline for Los Angeles County, considering lease-up pressures from new supply.

Answer

President & CEO Angela Kleiman anticipates that as new supply abates in the second half, lease-up pressure will ease, leading to an improvement in concessions. She highlighted that the announced $80 billion in infrastructure spending for the World Cup and Olympics will be a meaningful, long-term injection into the LA economy, driving future demand for housing and business activity.

Wesley Golladay asked for details on the '$44 million of other projects' in the development schedule, including their location and potential start dates. He also inquired about the debt maturity schedule for the Wesco joint venture.

Answer

Executive Rylan Burns clarified that the 'other projects' are located in Northern California and the Pacific Northwest but are still a couple of years away from starting. Executive Barb Pak confirmed that no debt from the Wesco joint venture is expected to mature in the current year, with maturities scheduled for 2026 and 2027.

Wesley Golladay from Baird asked for the timing of the $150 million in structured finance redemptions expected in 2025 and the maturity profile of the remaining book. He also inquired if the company plans to replenish these investments.

Answer

Executive Barb Pak stated that about half of the $150 million in redemptions are expected by mid-year, with the rest later in 2025, though timing could shift. She confirmed the portfolio has a short duration but some loans have extension options. Replenishing the book depends on finding attractive risk-adjusted opportunities in a competitive market, with the current focus being on acquiring hard assets, which is viewed as better for long-term shareholder value.

Wesley Golladay of Robert W. Baird & Co. asked about the performance of Alpine's At Home locations, the composition of the tenant watch list, and the financial drag from two vacant assets held for sale.

Answer

John Albright, President & CEO, stated their At Home locations are productive and not expected to be rejected, and that the tenant watch list is not deep. Philip Mays, SVP, CFO & Treasurer, confirmed the two vacant properties are held for sale and that selling them to eliminate carrying costs would be accretive.

Wesley Golladay asked for details on several transactions, including whether the 'at Home' seller financing was provided to a developer, if the vacant Reno theater has negative NOI, whether the Germ-free labs acquisition is a one-off deal, and what drove the upsizing of two construction loans.

Answer

John Albright, an executive, confirmed the 'at Home' financing was for an investor-developer and that the Reno theater does have negative NOI. He described the Germ-free deal as a unique, one-off opportunity for now, driven by a local advantage. He attributed the upsized construction loans primarily to increased development costs.

Wesley Golladay of Baird inquired about any plans to reduce exposure to dollar stores, sought background on the Tampa sale-leaseback deal, asked for clarification on the end-of-period rent figure, and questioned capital plans for the fourth quarter.

Answer

Executive John Albright confirmed that while some dollar stores are on the market, the priority has been on larger Walgreens dispositions. He detailed the long-standing relationship with the Tampa deal operator, Crabbys, and highlighted the deal's attractive structure, which includes a double-digit IRR purchase option for the tenant after six years. Executive Philip Mays clarified the reported rent was a GAAP number and stated the company is comfortable with its current floating-rate debt exposure but may utilize its ATM program depending on market conditions.

Wesley Golladay asked about the timeline for selling the $58 million in assets held for sale, whether this represents the end of heavy dispositions, the volume of loans in the investment pipeline, and for an update on leasing the company's one vacant property.

Answer

President & CEO Mark Manheimer projected that the 'lion's share' of assets held for sale should be sold by year-end, with the disposition pace moderating next year. He clarified the loan pipeline is mainly for replacing payoffs. Regarding the vacant property, he is in negotiations with two national, investment-grade tenants and expects to sign an LOI in Q3, with rent likely commencing early next year.

Wesley Golladay inquired about the timeline for selling assets currently held for sale, whether this would conclude the period of heavy dispositions, the volume of loans in the investment pipeline, and the status of re-leasing a key vacant property.

Answer

CEO Mark Manheimer expects the 'lion's share' of assets held for sale to be sold this year, with disposition activity moderating in 2026. He noted the loan pipeline is small, mainly for replacing payoffs. Regarding the vacancy, he is negotiating with two investment-grade tenants at rents above the prior lease and expects to sign an LOI in Q3.

Wesley Golladay inquired about the timeline for selling the $58 million in assets held for sale, whether this would conclude the period of heavy dispositions, the size of the loan pipeline, and the status of a key vacant lease.

Answer

President & CEO Mark Manheimer projected that the 'lion's share' of assets held for sale would be sold in 2025, with dispositions moderating in Q4 and into next year. He confirmed the loan pipeline is modest. Regarding the vacant property, he is in negotiations with two national, investment-grade tenants and expects to sign an LOI in Q3, with rent likely commencing in early 2026.

Wesley Golladay questioned whether the $58 million in assets held for sale would be fully disposed of in 2025 and if this would conclude the period of heavy dispositions. He also asked about the significance of loans in the investment pipeline and requested an update on the status of a vacant lease.

Answer

CEO Mark Manheimer responded that he expects the 'lion's share' of assets held for sale to be sold this year, with the disposition pace moderating in Q4 and into 2026. He clarified that the loan pipeline is primarily for replacing payoffs rather than significant new originations. Regarding the vacant lease, he reported progress in negotiations with two national, investment-grade tenants and anticipates signing an LOI in Q3, with rent likely commencing in early 2026.

Wesley Golladay asked if NETSTREIT could maintain its 7.7% acquisition cap rate with higher volume, whether the disposition pipeline includes opportunistic sales, and if the company would consider providing seller financing.

Answer

CEO Mark Manheimer estimated that a significant increase in acquisition volume would likely cause the cap rate to compress slightly to around 7.5%. He also confirmed the disposition pipeline contains one opportunistic sale for Q2, with the remainder focused on reducing tenant concentration, and stated they have not recently provided seller financing.

Wesley Golladay inquired if NETSTREIT expects to maintain an accretive spread on acquisitions versus dispositions and asked about the future of its Dollar General exposure and asset quality.

Answer

CEO Mark Manheimer confirmed that they expect to maintain an accretive spread, with disposition cap rates likely to be lower than in Q3. He explained the Dollar General portfolio is unique, with a nearly 15-year weighted average lease term and 1% annual rent increases, and its concentration is expected to fall below 10% in the coming quarters through loan payoffs and select dispositions.

Wesley Golladay from Baird asked about the annual RV conversion performance and guidance, the source of strong gains in the rental program, and the company's current hedging policy for its U.K. exposure.

Answer

Executive John McLaren stated that guidance includes approximately 1,500 RV conversions for the year and the company is on track, despite some Q1 impact from Canadian guests. He noted rental program gains come from both new developments and lease-ups throughout the portfolio. Regarding the U.K., McLaren explained that all GBP-denominated debt has been paid down and the company is now looking at using synthetic hedges with existing debt.

Wesley Golladay asked about Sun's capital allocation plans for the proceeds from the Safe Harbor sale, questioning if the focus would be on acquisitions or debt tenders, and specifically inquired about the treatment of UK-denominated debt.

Answer

Executive Gary Shiffman stated that the board is evaluating all priority uses for the capital, including debt reduction, shareholder distributions, and reinvestment in core MH and RV businesses. Executive Fernando Castro-Caratini added that while the credit line (partially in GBP) will be paid down, they are exploring synthetic hedges to maintain the natural hedge against currency fluctuations.

Wesley Golladay questioned the significant volatility in guidance, particularly on the expense side for a resilient business, and asked about the possibility of an internal candidate in the CEO search.

Answer

Gary Shiffman, Executive, attributed the guidance miss to underperformance in the volatile transient RV and marina segments, especially in September, and a failure to flex expenses down. John McLaren, Executive, expressed confidence in the portfolio's fundamentals. Regarding the CEO search, Shiffman stated the Board will conduct a comprehensive process considering both internal and external candidates.

Wesley Golladay from Baird inquired about Camden's acquisition pipeline, asking if the company plans a significant push into Austin and Nashville and what other markets are being targeted for increased exposure.

Answer

Chairman and CEO Ric Campo confirmed that Austin and Nashville are "on our radar screen big time" as the company seeks to increase its NOI exposure in those high-growth markets. President and CFO Alex Jessett added that Tampa and Dallas are also high on their list, and they are actively looking for quality real estate in nearly all of their operating markets.

Wesley Golladay inquired about the increased costs for shadow pipeline projects like Camden Baker and Camden Gulch, and also asked for an update on land pricing relative to its peak.

Answer

President and CFO Alexander Jessett clarified that the cost increases on the development projects are not due to market-wide inflation but are a result of substantial redesigns and enhancements to build a better product. Chairman and CEO Richard Campo addressed land pricing, stating it is likely down 15-20% from the peak. However, he noted that transaction volume is low because landowners are not forced sellers and are unwilling to sell into a weak market, making it difficult to pinpoint exact pricing.

Wesley Golladay of Baird asked about Omega's current foreign exchange (FX) exposure and inquired about plans for the credit facility, suggesting a potential upsizing.

Answer

CFO Bob Stephenson explained that the company's FX exposure is naturally hedged, as they collect rent in pound sterling and also make new investments in the U.K. in pound sterling, creating a net investment hedge. He also confirmed he would like to get a new credit facility deal done by early to mid-summer and expects its size to increase.

Wesley Golladay asked if the large UK acquisition has increased CareTrust's visibility and deal flow in that market and whether the company plans to initiate a lending program in the UK.

Answer

President and CEO Dave Sedgwick confirmed the UK deal has generated an 'overwhelming' positive response from local operators and brokers, creating significant growth opportunities. However, he stated that the company is not looking to start a lending program in the UK at this time and will focus on traditional property acquisitions and leases.

Wesley Golladay inquired about the drivers of the strong investment activity in the prior year and whether the forward-looking pipeline would broaden, particularly if larger portfolios would involve new operators.

Answer

President and CEO David Sedgwick responded that the upcoming year's activity will likely mirror the past, involving a mix of expanding with existing operators and adding new ones. He stated it was too early to provide specifics on potential large portfolio deals.

Wes Golladay inquired about the company's staffing plans for the upcoming year in light of its significant growth and asked for an estimate of the potential one-time G&A expense related to the large portfolio closing.

Answer

President and CEO David Sedgwick stated that the company anticipates continued strong growth and plans to 'get ahead of it' by 'incrementally adding to the team' in 2025. Chief Financial Officer Bill Wagner noted that he did not have an approximate estimate for the potential one-time G&A incentive compensation at this time.

Wesley Golladay asked which markets were surprising to the upside and downside versus initial expectations and inquired about the status of the upcoming insurance renewal.

Answer

EVP & COO Tim Argo highlighted Tampa, Atlanta (relative improvement), and Jacksonville as markets performing better than expected. He noted that Austin, Phoenix, and Nashville continue to lag due to significant supply. Regarding insurance, CFO Clay Holder stated that while it's still early, initial conversations for the renewal have been positive, with more details to come.

Wesley Golladay asked if there have been any changes in migration trends to the Sunbelt and inquired about the company's appetite to increase leverage early in the economic cycle.

Answer

Tim Argo, EVP and Chief Strategy Officer, reported that migration trends remain stable, with 12-13% of move-ins originating from outside the Sunbelt, primarily from California, New York, and Chicago. Clay Holder, CFO, stated that while leverage might tick up slightly to fund investments ahead of dispositions closing later in the year, the company intends to operate within its stated leverage targets.

Wesley Golladay from Baird asked how much of the company's $200 million to $365 million of apartment land is expected to be sold in the current year.

Answer

Ross Cooper, President & CIO, clarified that the planned $100 million to $150 million in dispositions for 2025 will primarily consist of long-term ground leases, not apartment land. He stated that only a small percentage of the entitled land value would be sold, as the company sees significant long-term value in retaining the majority of its land bank for future mixed-use redevelopment.

Wesley Golladay of Baird asked for clarification on the timing of G&A savings from management changes and inquired about the company's plans for bidding on vacant boxes in bankruptcy auctions.

Answer

CFO Glenn Cohen confirmed the G&A savings began at the time of the announcement in late January. CEO Conor Flynn explained that Kimco evaluates every box and is in constant discussion with retailers for package deals. He noted they will be aggressive in auctions where they can dramatically improve an asset's value, but are in a good position as any winning bidder must fulfill the lease obligations.

Wesley Golladay asked about the potential for a residential development at the new Orlando acquisition and for insight into the 2025 pipeline for other large asset acquisitions.

Answer

COO David Jamieson confirmed the team will explore residential options at the Waterford asset, though it wasn't part of the initial underwriting. CEO Conor Flynn addressed the acquisition pipeline, noting that large deals are 'lumpy' and that a key focus for 2025 will be converting existing structured investments into fee simple ownership.

Wes Golladay of Baird asked about the potential for a residential development at the new Waterford Lakes acquisition and inquired about the 2025 pipeline for other large asset acquisitions.

Answer

COO David Jamieson confirmed the team will evaluate residential opportunities at Waterford, though it was not in the initial underwriting. CEO Conor Flynn noted that future large acquisitions are 'lumpy' and pointed to the structured investment program as a key potential source for 2025.

Wesley Golladay of Baird asked about FCPT's process for underwriting smaller franchisees and inquired how much of the current deal flow stems from new relationships versus long-term tracking of assets.

Answer

CEO William Lenehan clarified that FCPT's 'small' franchisees are typically very large compared to peers, often in the 'Franchise Times 100' category, and franchisee credit is not a large part of their business. He stated that while new relationships contribute, much of the recent deal flow comes from long-tracked opportunities where sellers are now more willing to meet on price due to FCPT's advantaged cost of capital and macro uncertainty.

Wesley Golladay from Baird asked about FCPT's preference for debt financing given market conditions, the strategy of raising equity in the current window, the quality of the Bloomin' Brands assets, and the reason for a shift in WellNow's tenant ranking.

Answer

CEO William Lenehan stated that the company evaluates all debt options, including term loans and notes, on a daily basis. He pointed to their recent actions—lowering leverage and actively raising equity—as evidence of their market-dependent strategy. He described the Bloomin' Brands assets as being in the 'very tippy top' of their quality scores. Lenehan also clarified the WellNow ranking change was due to a simple rebranding of some locations, with the underlying lease guarantee remaining unchanged.

Wesley Golladay inquired about the asset size that would necessitate a JV partner, the role of market synergies in the Legacy West deal, and sought clarification on the large termination fee.

Answer

CEO John Kite noted the decision is deal-specific but an asset of Legacy West's scale felt appropriate for a partnership. CFO Heath Fear added that the GIC JV provided a competitive advantage in winning the bid. Kite also confirmed KRG's significant Dallas presence was a key factor. Regarding the termination fee, Fear clarified it was for an anchor spot with a 12-18 month backfill timeline and that no run-rate adjustment is needed.

Asked for an update on the Fallbrook redevelopment timeline, the company's strategy on recapturing space, and whether they might consider a term loan instead of bonds for refinancing.

Answer

The Fallbrook tenant is expected to open in late 2025 or early 2026 after a significant box split and build-out. The company is actively looking for recapture opportunities across the portfolio, not just for anchors. Using a term loan for refinancing is a possibility they are considering.

Asked for the identity of the recently sold asset, landlord rights related to the Kroger/Albertsons/C&S deal, updates on outparcel sales and the Crossroads development, and whether new anchor leases will include better reimbursement terms.

Answer

The sold asset was a center in Oceanside, CA. The company has termination rights on some leases involved in the C&S deal and is in discussions. The Crossroads development is permitted but on hold for better market conditions, with the city supporting increased density. New anchor leases are negotiated wholesale to improve all terms, including reimbursements.

Asked about onetime items in same-store results, current debt costs and strategic implications, and the potential impact of the Albertsons/Kroger merger.

Answer

Percentage rent is no longer significant and is rolled into rental revenue. There were no onetime drivers for the strong Q1 same-store cash NOI. Current borrowing costs would be around 6-6.5%, and the company is looking at all alternatives for financing. Regarding the Kroger/Albertsons merger, it's business as usual, and the outcome is uncertain, but a similar past situation was positive for the company.

Asked for details on a specific vacating anchor lease, the potential for higher tenant improvement costs for an entertainment concept, the company's sensitivity to its stock price for pursuing acquisitions, and the quality of the assets in the acquisition pipeline.

Answer

The vacating anchor represents a very small portion of ABR and has significant mark-to-market potential from its current $6/sqft rent. Higher tenant improvement costs for an entertainment concept are expected but would be balanced by higher rents. The company is sensitive to its stock price but feels good about the FFO yield on target assets. The assets in the pipeline are considered some of the highest quality the company has pursued in the last 10-13 years.