Dispositions Program Impact
Q: What are details of your asset dispositions program?
A: We aim to sell $400–$500 million worth of assets this year, split roughly 50% occupied and 50% vacant properties. - This is part of our strategy to optimize our portfolio for 2025 and beyond. - We're proactively disposing of assets that aren't core to our long-term strategy, which sometimes includes assets acquired through recent M&A deals. - Some assets are being sold at a 7% cap rate and reinvested at 7.7%, making this an accretive disposition strategy. -

Tenant Credit Watchlist
Q: Which tenants are on your credit watchlist?
A: We're monitoring tenants like Rite Aid (31 basis points of rent) undergoing bankruptcy, and Joanne (4 basis points), from whom we expect full lease assumption. - Red Lobster is also on our watchlist, representing 1.07% of rent across 216 leases with 2x cash flow coverage. - We've collected 100% of rents due as of May, and we're keeping a close eye on their operational improvements. -

European Acquisitions Strategy
Q: Why are you focusing on acquisitions in Europe?
A: We're seeing better risk-adjusted returns in Europe, with 54% of our acquisition volume occurring there. - Sellers in Europe are more willing to transact due to consistent economic data and their need for capital amid redemption pressures. - Our established reputation as a reliable buyer gives us a competitive advantage in securing attractive deals with higher cap rates. -

Impact of European Cap Rates
Q: How are European cap rates affecting your development projects?
A: As older developments roll off, new projects are reflecting the current higher cost of capital, leading to higher yields. - We expect cash cap rates on developments to trend higher over the next few quarters, aligning with market conditions. -

Family Dollar Closures
Q: How will Family Dollar closures impact you?
A: Our exposure to Dollar Tree/Family Dollar is about 3% of rent, with around 60% being Family Dollar stores. - Lease expirations over the next 2.5 years represent only 9 basis points of rent, so the impact is minimal. - Our asset management team is proactive in finding resolutions, and we have received interest from alternative retailers due to the urban locations of these stores. -

AMC Credit Exposure
Q: What are your thoughts on AMC's financial position?
A: AMC accounts for about 1% of our rent across 39 assets. - While the 2024 box office may be flat or down, we expect improvement in 2025. - Even if AMC undergoes bankruptcy, our experience with Cineworld gives us confidence in achieving acceptable outcomes, as our assets are among their better-performing locations. - Historically, we've had a recapture rate of over 80% in similar situations. -

Acquisition Outlook for H2 2024
Q: Will you increase investments if opportunities arise later this year?
A: We're not targeting a specific acquisition volume but allowing the market to dictate opportunities. - We believe the second half of the year will present more opportunities, especially in the U.S., as interest rates stabilize. - We expect both U.S. and European acquisition momentum to continue and are optimistic about growth in the latter half of the year. -

Use of Free Cash Flow
Q: How does free cash flow factor into your investment strategy?
A: Our $825 million in free cash flow is a significant advantage, allowing us to invest in growth without dilution. - We evaluate the best use of this capital, whether investing accretively, buying back debt, or repurchasing stock. - All investments must meet or exceed our hurdle rate based on our long-term weighted average cost of capital. -

Data Center and Gaming Investments
Q: What's the status of your data center and gaming investments?
A: About 6% of our first-quarter investments went into a digital JV developing a data center in Northern Virginia, operational by early next year. - We're also investing in a data center project in Spain. - In gaming, we've made two investments representing over 3% of rents and are exploring additional opportunities, including potential developments in major cities. -

Credit Investment Platform
Q: Can you update us on your credit investment platform?
A: We continue to pursue credit investments to support our clients and facilitate sale-leasebacks. - This strategy serves as a natural hedge against refinancing headwinds from higher interest rates. - By lending to clients at current rates, we're mitigating the impact of higher refinancing costs and strengthening relationships with key operators. -

Predictive Analytics in Dispositions
Q: How do you use predictive analytics in asset dispositions?
A: Our proprietary analytics tool assesses variables across industries to predict renewal outcomes and leasing risks. - It's instrumental in identifying assets to dispose of, ensuring we optimize our portfolio. - This data-driven approach, combined with asset management insights, allows us to make informed decisions across our 15,400 locations. -

Core Portfolio Characteristics
Q: What defines your core portfolio strategy?
A: We aim for an optimal portfolio balance, maintaining desired exposure levels in sectors like grocery (targeting 13–14%, currently at 10%) and limiting exposure to less preferred sectors like apparel. - Over 90% of our retail portfolio comprises service-oriented, low price point, or non-discretionary businesses. - Geographical diversification is also key, as it provides advantages in finding superior return profiles across markets. -