Essential Properties Realty Trust Inc (EPRT) 2024 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Essential Properties Realty Trust second-quarter 2024 earnings conference call.

早安，女士們、先生們，歡迎參加 Essential Properties Realty Trust 2024 年第二季收益電話會議。

(Operator Instructions) This conference is being recorded, and a replay of the call will be available two hours after the completion of the call for the next few weeks.

（操作員說明）本次會議正在錄音，接下來幾週的通話結束後兩小時將提供通話重播。

The dial-in details for the replay can be found in yesterday's press release. Additionally, there will be an audio webcast available on the Essential Properties' website at www.essentialproperties.com, an archive of which will be available for 90 days.

重播的撥入詳細資訊可以在昨天的新聞稿中找到。此外，Essential Properties 網站 www.essentialproperties.com 上還將提供音訊網路廣播，其存檔將保留 90 天。

On the call this morning are Pete Mavoides, President and Chief Executive Officer; Mark Patten, Chief Financial Officer; Rob Salisbury, Head of Capital Markets; Max Jenkins, Head of Investments; and AJ Peil, Head of Asset Management.

今天早上接聽電話的是總裁兼執行長 Pete Mavoides；馬克‧彭定康，財務長； Rob Salisbury，資本市場主管； Max Jenkins，投資主管；和 AJ Peil，資產管理主管。

It is now my pleasure to turn the call over to Rob Salisbury.

現在我很高興將電話轉給羅布·索爾茲伯里。

Thank you, operator. Good morning, everyone, and thank you for joining us today for Essential Properties' second quarter 2024 earnings conference call. During this conference call, we will make certain statements that may be considered forward-looking statements under Federal Securities law.

謝謝你，接線生。大家早安，感謝您今天參加 Essential Properties 的 2024 年第二季財報電話會議。在本次電話會議期間，我們將做出某些根據聯邦證券法可能被視為前瞻性聲明的聲明。

The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we may not release revisions to those forward-looking statements to reflect changes after the statements were made.

本公司未來的實際業績可能與這些前瞻性陳述中討論的事項有顯著差異，我們可能不會發布對這些前瞻性陳述的修訂以反映陳述做出後的變化。

Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's filings with the SEC and in yesterday's earnings press release.

該公司向美國證券交易委員會提交的文件和昨天的收益新聞稿中不時更詳細地披露可能導致實際結果與預期存在重大差異的因素和風險。

With that, I'll turn the call over to Pete.

這樣，我就把電話轉給皮特。

Thank you, Rob, and thank you to everyone joining us today for your interest in Essential Properties. On our first quarter earnings call, we discussed how our business is well suited for the current market environment, which has been characterized by tight lending standards and volatile capital markets.

謝謝你，羅布，也感謝今天加入我們的所有人對基本地產的興趣。在第一季的財報電話會議上，我們討論了我們的業務如何適應當前的市場環境，即嚴格的貸款標準和波動的資本市場。

Our position as a reliable and consistent long-term capital provider to our middle market relationships is highly valued. Against this backdrop, our second quarter results continued to showcase the strengths of our business model with a well-capitalized balance sheet and a value proposition of providing growth capital in our targeted industries.

我們作為中間市場關係的可靠且一致的長期資本提供者的地位受到高度重視。在此背景下，我們第二季的業績繼續展示了我們業務模式的優勢，包括資本充足的資產負債表和為目標產業提供成長資本的價值主張。

This quarter's results were driven by a healthy portfolio and $334 million of investments, resulting in AFFO per share growth of 5%. In the second quarter 82% of our investments were generated from existing relationships, underscoring the value we provide to our middle market tenant base.

本季的業績得益於健康的投資組合和 3.34 億美元的投資，導致 AFFO 每股成長 5%。第二季度，我們 82% 的投資來自現有關係，這凸顯了我們為中間市場租戶群提供的價值。

With quarter end pro forma leverage of 3.8 times and liquidity of over $1.1 billion, our balance sheet positions us well to continue to grow our portfolio by investing in our core industries at attractive spreads. The business is performing well with solid tenant credit trends and strong investment volumes.

季度末預計槓桿率為 3.8 倍，流動性超過 11 億美元，我們的資產負債表使我們能夠以有吸引力的利差投資於我們的核心產業，從而繼續擴大我們的投資組合。業務表現良好，租戶信用趨勢穩定，投資量強勁。

However, these positives are offset in the short-term by the earnings per share headwinds of the conservative posture on leverage we elected to take, given the capital markets volatility discussed above. Mark will review this in more detail. But we believe our balance sheet capacity and competitive cost of capital will allow us to continue to drive strong earnings growth in 2025 and beyond.

然而，考慮到上述資本市場的波動性，這些正面因素在短期內被我們選擇採取的保守槓桿立場所帶來的每股盈餘不利因素所抵銷。馬克將對此進行更詳細的審查。但我們相信，我們的資產負債表能力和具競爭力的資本成本將使我們能夠在 2025 年及以後繼續推動強勁的獲利成長。

For 2024, we have reiterated our AFFO per share guidance range of $1.72 to $1.75. As our second quarter results indicate, our portfolio continues to operate at a strong level. We ended the quarter with investments in 2009 properties that were 99.8% leased to 395 tenants operating in 16 industries.

對於 2024 年，我們重申了每股 AFFO 指引範圍為 1.72 美元至 1.75 美元。正如我們第二季的業績所表明的那樣，我們的投資組合繼續保持強勁運行。本季結束時，我們對 2009 年物業進行了投資，其中 99.8% 出租給了 16 個行業的 395 名租戶。

Our weighted average lease term stood at 14.1 years at quarter end, which is up year-over-year with only 4.1% of annual base rent expiring through 2028. From a tenant health perspective, our weighted average unit level rent coverage ratio was 3.7 times this quarter, down slightly from last quarter.

截至季末，我們的加權平均租賃期限為 14.1 年，年成長，只有 4.1% 的年基本租金在 2028 年到期。從租戶健康角度來看，本季我們的加權平均單位水平租金覆蓋率為 3.7 倍，較上季略有下降。

Same-store rent growth in the second quarter was 1.4%, down slightly from last quarter as the portfolio absorbed a small headwind from the five properties that we own that were impacted by the Red Lobster bankruptcy. Two of these properties were rejected as part of the Chapter 11 process, while the remainder are occupied and leased.

第二季同店租金成長率為 1.4%，較上季略有下降，因為該投資組合吸收了我們擁有的五處受 Red Lobster 破產影響的房產帶來的小幅阻力。其中兩處房產在第 11 章流程中被拒絕，其餘房產已被佔用和出租。

During the second quarter, we invested $334 million through 35 separate transactions at a weighted average cash yield of 8%, relatively consistent with our last quarter and up 60 basis points from a year ago.

第二季度，我們透過 35 筆單獨交易投資了 3.34 億美元，加權平均現金收益率為 8%，與上一季相對一致，比去年同期增長了 60 個基點。

Our investment activity in the quarter was broad-based across most of our top industries with no notable departures from our investment strategy. This quarter, our investments had a weighted average initial lease term of 17.8 years, and a weighted average annual rent escalation of 1.9%, generating an average GAAP yield of 9.1%.

我們本季的投資活動廣泛涉及大多數頂級行業，沒有明顯偏離我們的投資策略。本季度，我們的投資的加權平均初始租賃期為 17.8 年，加權平均年租金上漲 1.9%，平均 GAAP 收益率為 9.1%。

Our investments this quarter had a weighted average unit level rent coverage of 3.0 times and the average investment per property was $3.4 million. The vast majority of the investments this quarter were originated through direct sale-leasebacks, which are subject to our lease form with ongoing financial reporting requirements. Additionally, 76% contained master lease provisions.

我們本季的投資的加權平均單位租金覆蓋率為 3.0 倍，每處房產的平均投資為 340 萬美元。本季的絕大多數投資都是透過直接售後回租產生的，這些投資須遵守我們的租賃形式和持續的財務報告要求。此外，76% 包含主租賃條款。

Looking ahead to the third quarter, our investment pipeline remains solid and up year-over-year in the context of what is typically a seasonally slower period in the calendar. As we have discussed in the past, we expect that the recently rejuvenated expectation of Fed easing could result in modest cap rate compression later in the year. However, we have not seen this in our current pipeline, which currently suggests a cap rate similar to the second quarter.

展望第三季度，在通常是季節性淡季的背景下，我們的投資管道仍然穩健，並且比去年同期成長。正如我們過去所討論的，我們預計最近對聯準會寬鬆政策的預期可能會導致今年稍後資本化率小幅壓縮。然而，我們在目前的管道中尚未看到這種情況，目前建議的上限利率與第二季類似。

From a tenant concentration perspective, our largest tenant represents 4.7% of ABR at quarter end and our top 10 tenants now account for only 18.6% of ABR. Tenant diversity is an important risk mitigation tool and a differentiator for us and it is a direct benefit of our focus on middle market operators, which offers an expansive opportunity set.

從租戶集中度的角度來看，截至季末，我們最大的租戶佔 ABR 的 4.7%，而我們的前 10 名租戶目前僅佔 ABR 的 18.6%。租戶多樣性是一種重要的風險緩解工具，也是我們的優勢所在，也是我們專注於中間市場營運商的直接好處，中間市場營運商提供了廣泛的機會。

Dispositions were below our trailing eight-quarter average in 2Q, reflecting a persistently wide bid-ask spread in the market. We sold six properties this quarter for $4.8 million in net proceeds. This represents an average of approximately $800,000 per property, highlighting the importance of owning fungible liquid properties which allows us to proactively manage portfolio risks.

第二季的處置量低於我們過去八個季度的平均水平，反映出市場買賣價差持續擴大。本季我們出售了六處房產，淨收益為 480 萬美元。這意味著每個房產平均約為 80 萬美元，凸顯了擁有可替代流動房產的重要性，它使我們能夠主動管理投資組合風險。

The dispositions this quarter were executed at a 7.3% weighted average cash yield, with a weighted average unit level rent coverage ratio of 0.5 times. Over the near term, we expect our disposition activity to remain relatively in line with our trailing eight quarter average, driven by opportunistic asset sales and ongoing portfolio management activities.

本季的處置執行加權平均現金收益率為 7.3%，加權平均單位水平租金覆蓋率為 0.5 倍。短期內，在機會性資產銷售和持續的投資組合管理活動的推動下，我們預計我們的處置活動將與過去八個季度的平均水準保持相對一致。

With that, I'd like to turn the call over to Mark Patten, our CFO, who will take you through the financials and the balance sheet for the second quarter. Mark?

接下來，我想將電話轉給我們的財務長馬克·帕滕（Mark Patten），他將向您介紹第二季的財務狀況和資產負債表。標記？

Thanks, Pete, and good morning, everyone. As Pete noted, we had a solid second quarter, which was highlighted by a strong level of investments at an 8% cash cap rate. Among the headlines from the quarter was our AFFO per share of $0.43, which is an increase of 5% versus Q2 2023. On a nominal basis, our AFFO totaled $77.1 million for the quarter, that's up $15.2 million over the same period in 2023, an increase of 25%.

謝謝，皮特，大家早安。正如 Pete 指出的那樣，我們第二季的業績表現強勁，現金上限為 8% 的強勁投資水平凸顯了這一點。本季的頭條新聞是我們每股 AFFO 為 0.43 美元，與 2023 年第二季相比成長了 5%。從名義上看，本季我們的 AFFO 總額為 7,710 萬美元，比 2023 年同期增加了 1,520 萬美元，增幅為 25%。

This AFFO performance was in line with our expectations, underlying the updated guidance range we provided last quarter. Stronger-than-anticipated investment volume was partially offset by later timing of closing those investments within the quarter.

AFFO 的業績符合我們的預期，是我們上季度提供的更新指導範圍的基礎。強於預期的投資量被本季內較晚完成這些投資的時間所部分抵銷。

Additionally, of note, we recognized $1.5 million of other income this quarter related to cash proceeds we received from a legal settlement. Because this settlement represents the recruitment of our legal and other expenses that negatively impacted AFFO in prior periods, we included these proceeds within AFFO this quarter. Resolution of this matter and commensurate recognition of other income was anticipated in our updated guidance range.

此外，值得注意的是，我們本季確認了 150 萬美元的其他收入，這些收入與我們從法律和解中收到的現金收益有關。由於這項和解代表了我們在前期對 AFFO 產生負面影響的法律和其他費用的招募，因此我們本季將這些收益納入 AFFO 中。我們更新的指導範圍預計會解決此問題並相應確認其他收入。

Total G&A in Q2 2024 was $8.7 million versus $7.6 million for the same period in 2023, with the majority of the increase relating to increased compensation expense as we continue to invest in our team. Our recurring cash G&A as a percentage of total revenue was 5.6% for the quarter, which compares favorably to the 6.1% in the same period a year ago. Our total G&A and recurring cash G&A were also in line with our expectations for the quarter.

2024 年第二季的一般管理費用總額為 870 萬美元，而 2023 年同期為 760 萬美元，其中大部分增長與我們繼續投資於我們的團隊而增加的薪酬費用有關。本季我們的經常性現金管理費用佔總營收的百分比為 5.6%，優於去年同期的 6.1%。我們的總管理費用和經常性現金管理費用也符合我們對本季的預期。

We continue to expect that on an annual basis, our cash G&A as a percentage of total revenue will decline as our platform generates operating leverage over a scaling asset base to enable us to manage a larger portfolio and invest at higher levels.

我們仍然預計，每年，我們的現金管理費用佔總收入的百分比將會下降，因為我們的平台在不斷擴大的資產基礎上產生營運槓桿，使我們能夠管理更大的投資組合併進行更高水平的投資。

We declared a cash dividend of $0.29 in the second quarter, which represents an AFFO payout ratio of 67%. Our retained free cash flow after dividends continues to build, reaching $26.9 million in the second quarter, equating to over $100 million per annum. We continue to view our retained free cash flow as an attractive source of capital to support our investment program.

我們宣布第二季現金股利為 0.29 美元，相當於 AFFO 股利支付率為 67%。我們保留的股息後自由現金流持續增加，第二季達到 2,690 萬美元，相當於每年超過 1 億美元。我們繼續將保留的自由現金流視為支持我們投資計畫的有吸引力的資金來源。

Turning to our balance sheet. With our $334 million in Q2 2024 investments, our income-producing gross assets reached $5.5 billion at quarter-end. The scale of our income-producing assets continues to build, and we expect to approach $6 billion by year end.

轉向我們的資產負債表。憑藉 2024 年第二季的 3.34 億美元投資，我們的創收總資產在季末達到 55 億美元。我們的創收資產規模不斷擴大，預計到年底將接近 60 億美元。

The significant diversity and increasing scale of our asset base continues to be a favorable underpinning of the reliability and durability of our cash flows and provides an increasing level of risk mitigation. On the capital markets side, it was a productive second quarter. Through our ATM program, we completed the sale of approximately $137 million of stock, all on a forward basis.

我們資產基礎的顯著多樣性和不斷擴大的規模繼續為我們現金流的可靠性和持久性提供有利的基礎，並提供不斷提高的風險緩解水準。在資本市場方面，第二季是富有成效的。透過我們的 ATM 計劃，我們完成了約 1.37 億美元的股票銷售，全部是遠期銷售。

With no settlements during the quarter, our balance of unsettled forward equity totaled $319 million at quarter end. One element of our second quarter results that's also worth highlighting is our current share price being materially above the weighted average price of our unsettled forwards which was $24.75 at quarter end.

由於本季沒有結算，截至季末我們未結算的遠端權益餘額總計 3.19 億美元。我們第二季業績中也值得強調的一個因素是，我們目前的股價大大高於未結算遠期合約的加權平均價格，即季末的 24.75 美元。

Under the treasury stock method, we account for the potential dilution from these forward shares in our diluted share count. For the second quarter, our diluted share count of 177.6 million shares included an adjustment for 904,000 shares from our unsettled forward equity related to this treasury stock calculation.

根據庫存股法，我們在稀釋股份數中考慮了這些遠期股票的潛在稀釋作用。第二季度，我們稀釋後的股數為 1.776 億股，其中包括與本次庫存股計算相關的未結算遠期股本中的 904,000 股調整。

At a high level, we view the impact of the accounting treatment for this unsettled forward equity as a matter of timing as these shares will ultimately be settled to fund the business, notably as investments are closed later this year. Therefore, while this calculation creates a near-term headwind to our current earnings per share metrics, it should have little to no impact to our AFFO per share in 2025 and beyond.

在較高層面上，我們認為對這種未結算的遠期股權的會計處理的影響只是一個時間問題，因為這些股票最終將被結算來為業務提供資金，特別是隨著投資在今年晚些時候結束。因此，雖然這項計算對我們目前的每股盈餘指標產生了短期阻力，但它對我們 2025 年及以後的每股 AFFO 幾乎沒有影響。

Our pro forma net debt to annualized adjusted EBITDAre, as adjusted for unsettled forward equity was 3.8 times at quarter end. We remain committed to maintaining a well-capitalized balance sheet with low leverage and significant liquidity to continue to fuel our external growth.

截至季末，經未結算遠期股本調整後，我們的預期淨負債與年化調整後 EBITDA 比率為 3.8 倍。我們仍然致力於維持資本充足的資產負債表、低槓桿和大量流動性，以繼續推動我們的外部成長。

With the recent backdrop of capital markets volatility, we have maintained a pro forma leverage profile substantially below our historical average of the mid 4 times range. We believe our conservative approach has been prudent, particularly in light of elevated prevailing debt costs.

在近期資本市場波動的背景下，我們的備考槓桿率遠低於 4 倍中間的歷史平均值。我們認為我們的保守做法是審慎的，特別是考慮到當前債務成本上升。

With the prospect for Central Bank easing later this year, our leverage metrics may drift higher to more normalized levels. Subsequent to quarter end, we closed on a $450 million term loan with a delayed draw feature. We are very appreciative of the continued support of our core banking relationships and we were pleased to have four new banks join our bank group as part of executing this transaction. We drew $320 million at closing, a portion of which was used to fully repay the outstanding balance on our revolving credit facility.

隨著央行今年稍晚放鬆貨幣政策的前景，我們的槓桿指標可能會上升至更正常化的水平。季度末後，我們獲得了 4.5 億美元的具有延遲提款功能的定期貸款。我們非常感謝我們的核心銀行關係的持續支持，我們很高興有四家新銀行加入我們的銀行集團，作為執行這項交易的一部分。交易結束時，我們提取了 3.2 億美元，其中一部分用於全額償還循環信貸額度的未償餘額。

Assuming we exercise the extension options available to us, the term loan would mature in January 2030. We expect to draw the remaining $130 million over the coming months as a source of funding for our investment pipeline.

假設我們行使可用的延期選擇權，定期貸款將於 2030 年 1 月到期。我們預計在未來幾個月內提取剩餘的 1.3 億美元，作為我們投資管道的資金來源。

Consistent with capital goals of -- efficiently match funding our assets, we swapped the initial $320 million draw for the fully extended term of the debt commitment at a weighted average fixed rate of 4.99%. At quarter-end, our liquidity stood at over $1.1 billion, pro forma for our net unsettled forward equity and our 2030 term loan.

根據有效匹配資產融資的資本目標，我們將最初提取的 3.2 億美元換成了加權平均固定利率為 4.99% 的完全延長期限的債務承諾。截至季末，我們的流動性超過 11 億美元，以未結算遠期淨資產和 2030 年定期貸款的預計計算。

With our equity and debt capital needs met for the year, our strong balance sheet and conservative leverage positions the company well to execute on our growth plans for 2024 and into 2025. Lastly, as we noted in the earnings press release, we have reiterated our 2024 AFFO per share guidance range of $1.72 to $1.75, which implies an over 5% growth rate at the midpoint.

隨著我們今年的股本和債務資本需求得到滿足，我們強勁的資產負債表和保守的槓桿率使公司能夠很好地執行 2024 年和 2025 年的成長計劃。最後，正如我們在收益新聞稿中指出的那樣，我們重申了 2024 年 AFFO 每股指引範圍為 1.72 美元至 1.75 美元，這意味著中點成長率超過 5%。

With that, I'll turn the call back over to Pete.

這樣，我會將電話轉回給皮特。

Thanks, Mark. In summary, we are very pleased with our second quarter results and remain optimistic about the prospects for the business. Operator, please open the call for questions.

謝謝，馬克。總而言之，我們對第二季的業績非常滿意，並對業務前景保持樂觀。接線員，請打開電話提問。

(Operator Instructions)

（操作員說明）

Haendel St. Juste, Mizuho.

亨德爾‧聖朱斯特，瑞穗。

Good morning, guys. Thanks for taking the question. First question, I guess, is on the guide. I’m curious why not raise it even a little bit at this point? It seems like everything is firing at all cylinders, strong volumes, a larger pipeline, as you noted, and improved cost of capital. So maybe you can talk through or even quantify some of the potential headwinds that are built in here?

早上好傢伙。感謝您提出問題。我想第一個問題是在指南上。我很好奇為什麼現在不提高一點點呢？正如您所指出的，似乎一切都在全力以赴，銷量強勁，管道更大，資本成本也有所提高。那麼也許您可以討論甚至量化這裡存在的一些潛在阻力？

And maybe give some color on the treasury stock method accounting dilution that it’s embedded in the guide? And any factors that perhaps we’re not aware of that might be keeping you from raising the guide. Thanks.

也許還可以對指南中嵌入的庫存股法會計稀釋進行一些說明？我們可能不知道的任何因素都可能會阻止您提高指南。謝謝。

Yes, I would say, Haendel you’re certainly right. Things are firing on all cylinders. The pipeline continues to build, and we continue to deploy capital. Clearly, as we said in the statements. Our capital position is really the majority of the headwind that we’re seeing in our earnings. And given that, it really, it just doesn’t give us the visibility to drive the guidance up. But Mark, if you want to provide some color on that, you can.

是的，我想說，亨德爾，你當然是對的。一切都在全力以赴。管道繼續建設，我們繼續部署資本。顯然，正如我們在聲明中所說。我們的資本狀況實際上是我們收益中看到的主要阻力。考慮到這一點，實際上，它並沒有給我們提供提高指導的可見性。但是馬克，如果你想對此提供一些顏色，你可以。

Yes, Haendel, basically, not to get too granular about it. But if you think about the treasury stock method, what you’re really doing is you’re assuming the execution of the settlement, which comes in at $24.75 a share, and the treasury stock as you go out and buy as many shares as you can with those proceeds that at $30 means you’re going to get fewer shares brought back into treasury. So you’ve got a net dilutive amount of shares from the issuance. And that’s really -- we tried to kind of quantify it, but if you think about the headwind, it’s probably (0.5p).

是的，亨德爾，基本上，不要太細化。但如果你考慮庫存股方法，你真正做的就是假設和解協議的執行，其價格為每股 24.75 美元，並且當你出去購買盡可能多的股票時庫存股30 美元的收益意味著您將獲得更少的股票帶回國庫。因此，您從此次發行中獲得了稀釋淨股數。這確實是——我們試圖量化它，但如果你考慮逆風，它可能是（0.5p）。

Got it. Got it. That's helpful.

知道了。知道了。這很有幫助。

By the way that's for the full year.

順便說一下，這是全年的。

Also, I guess, you guys noted, I think, in the release that this was the maybe the highest – I think is the highest acquisitions volume quarter-to-date. So maybe you could discuss some of the dynamics you’re seeing in the market. Are you seeing more sellers willing to engage? Are you just better cost of capital? And then maybe is this a run rate that we can expect to stay at going forward near-term? Thanks

另外，我想你們在新聞稿中指出，這可能是最高的——我認為是本季迄今為止最高的收購量。因此，也許您可以討論一下您在市場上看到的一些動態。您是否看到更多賣家願意參與？您只是擁有更好的資本成本嗎？那麼，也許這是我們可以預期在短期內保持不變的運行速度？謝謝

Yes, I would continue to guide you to our eight quarter average is a good indicator of the run rate. As we have said in the last couple of quarters, it’s a good market for us to invest really given the lack of capital alternatives that many of the middle market tenants we work with are facing or the cost of relative financing options, and we’re working very hard to transact and put capital to work.

是的，我會繼續指導您，我們的八個季度平均值是運行率的良好指標。正如我們在過去幾個季度所說的那樣，考慮到與我們合作的許多中間市場租戶所面臨的資本替代方案的缺乏或相關融資選擇的成本，這對我們來說確實是一個很好的投資市場，而且我們正在非常努力地進行交易並投入資本。

But the way we go to market, doing $10 million deals in $2 million to $3 million assets, it’s there’s only so much we can put through the system. And we’re fortunate this quarter to have some bigger transactions. As we said on the call, our pipeline remains full, and we continue to work hard, which may suggest a robust third quarter here, but it’s kind of too early to really tell. But we feel good about the investment market. We continue to have a relatively strong competitive advantage and we’re working hard to put capital at work.

但我們進入市場的方式是，用 200 萬至 300 萬美元的資產進行 1000 萬美元的交易，我們只能透過系統進行這麼多交易。我們很幸運本季進行了一些更大的交易。正如我們在電話會議上所說，我們的管道仍然滿員，我們將繼續努力工作，這可能表明第三季將表現強勁，但現在下結論還為時過早。但我們對投資市場感覺良好。我們仍然擁有較強的競爭優勢，並且正在努力讓資本發揮作用。

Greg McGinniss, Scotiabank.

格雷格·麥金尼斯，豐業銀行。

Hey, good morning. Just another one on the acquisition guidance. I appreciate looking at the trailing eight quarters, which following Q2, went up $30 million to around $275 million. I just want to make sure that’s kind of where you’re thinking from a target standpoint? And then, how much you have under LOI PSA today? Because I think closed to date is not too much, but it sounds like you’re confident that you’re going to get a significant amount more done this quarter. So any color would be appreciated.

嗨，早安。這只是關於收購指南的另一篇文章。我很高興看到過去八個季度，第二季度之後，該季度增長了 3000 萬美元，達到約 2.75 億美元。我只是想確定一下您是從目標角度思考的嗎？那麼，今天您的 LOI PSA 有多少？因為我認為截止日期並不算太多，但聽起來您有信心本季將完成更多工作。所以任何顏色都會受到讚賞。

Yes. Obviously, third quarter is always tough. You work hard to get your second quarter deals closed at the end of June and then people kind of go away on vacation, and it’s hard to get people on the other end of the phone, engaged and working. And then they come back in September, eager to put deals to bed.

是的。顯然，第三季總是很艱難。你努力在 6 月底完成第二季的交易，然後人們就去度假了，很難讓電話另一端的人參與並工作。然後他們在九月回來，急於達成交易。

So it’s one of the hard course to forecast. One of the reasons why it starts off seasonally slow. As we said in the call, our pipeline currently is ahead of where it was last year, roughly in the, I would say, somewhere between 2 and 2.50 range.

因此，這是最難預測的過程之一。其開始季節性緩慢的原因之一。正如我們在電話中所說，我們的管道目前領先於去年，我想說，大致在 2 到 2.50 之間的範圍內。

There's always some variability into what closes in the quarter, depending upon timing and we don't always control the timing of the transactions as we're supporting M&A transactions often. So it's early in the quarter. We got a lot of work left to do. We think the pipeline supports an active quarter, and we'll see where it shakes out.

本季的結束交易總是存在一些變化，取決於時間安排，而且我們並不總是控制交易的時間安排，因為我們經常支持併購交易。所以現在是本季初。我們還有很多工作要做。我們認為該管道支持了一個活躍的季度，我們將看看它的表現如何。

Thanks. And could you also give some details around some of the -- maybe larger portfolio transactions that you were able to get done this quarter and then also whether we can, you can, are looking to acquire more equipment shares? I know that you're kind of targeting 5% as a cap. So maybe there's a little bit more space there, but just curious if you'd go over that for that company?

謝謝。您能否也提供一些有關本季度可能完成的較大投資組合交易的詳細信息，以及我們是否可以、您可以尋求收購更多設備股份嗎？我知道您的目標是 5% 作為上限。所以也許那裡還有更多的空間，但只是好奇你是否願意為那家公司考慮一下？

When we say larger portfolio deals, it just bigger than $30 million, $50 million, $60 million sale leasebacks with in our targeted industries. So it's not a bigger, bigger portfolio of kind of existing lease assets. And so just bigger operators have more assets to sell. And we did a sizable car wash sale leaseback in the quarter as well as a sizable childcare sale leaseback in the quarter and sizable, I would say, greater than $50 million.

當我們說更大的投資組合交易時，它只是比我們目標行業中的 3000 萬美元、5000 萬美元、6000 萬美元的售後回租還要大。因此，這並不是一個更大、更大的現有租賃資產組合。因此，規模越大的業者就有越多的資產可供出售。我們在本季度進行了大規模的洗車售後回租，並在本季度進行了大規模的兒童保育售後回租，規模相當大，我想說，超過 5000 萬美元。

In terms of equipment share, we continue to have tenant diversity disciplined around not wanting to have a tenant above 5%. That company continues to grow and continues to present us opportunities. We feel very comfortable with them as our as our largest tenant, but we're unlikely to run that the above that 5% number.

在設備份額方面，我們繼續嚴格限制租戶多樣性，不希望租戶比例超過 5%。該公司不斷發展並繼續為我們提供機會。我們對他們作為我們最大的租戶感到非常滿意，但我們不太可能將其維持在 5% 以上的數字。

Eric Borden, BMO Capital Markets.

博登（Eric Borden），蒙特婁銀行資本市場部。

Good morning. I appreciate the color around being fully funded for the year and plenty of liquidity. But just given where your shares are today, would you be willing to issue forward equity here in order to just to lock in that price and kind of set yourself up for 2025? Or are you just potentially trying to mitigate any future treasury stock dilution?

早安.我很欣賞今年的充足資金和充足的流動性。但考慮到您現在的股價，您是否願意在這裡發行遠期股票，以便鎖定該價格並為 2025 年做好準備？或者您只是可能試圖減輕未來庫存股的稀釋？

Yes, and I'll let Mark and Rob take a stab at that. But certainly, we had an active quarter in the second quarter in terms of the ATM, and we've been very aggressive in terms of putting – getting our capital raised and behind us and allowing us to execute if we were willing to issue shares at $24.75. Certainly, north of $30 is pretty compelling, but there is some seller's remorse when you look back. And I clearly think as we get closer to 2025 and we get 2025 guidance out there, there's upside to our shares. So we will continue to be opportunistic on the equity side. We will continue to stay in a good capital position. But Mark, Rob, do you have anything to add to that?

是的，我會讓馬克和羅布嘗試。但當然，就 ATM 而言，我們在第二季度表現活躍，並且我們在籌集資金和支持我們並允許我們願意發行的情況下執行方面非常積極股價為 24.75 美元。當然，30 美元以上的價格相當引人注目，但當你回頭看時，你會感到一些賣家的悔恨。我顯然認為，隨著 2025 年的臨近，並且我們得到了 2025 年的指導，我們的股票還有上漲的空間。因此，我們將繼續在股票方面保持機會主義。我們將繼續保持良好的資本狀況。但是馬克、羅布，你們還有什麼要補充的嗎？

Yes. I think, what I'd say first is we've got ample liquidity to address sort of our opportunities. So if you think about it from the standpoint of the unsettled equity. We have free cash flow regenerating. And otherwise, the remainder of the term loan, we've got $700 million liquidity easily to get us to even there, you would be still pretty low levered in terms of the bottom end of our the range we've articulated.

是的。我認為，我首先要說的是，我們有充足的流動性來應對我們的各種機會。所以如果你從未結算權益的角度來考慮的話。我們的自由現金流正在再生。否則，在剩餘的定期貸款中，我們可以輕鬆獲得 7 億美元的流動性，即使到了那裡，就我們所闡明的範圍的下限而言，你的槓桿率仍然相當低。

So in one respect, we don't have to do anything as we've sort of said in the remarks. But then again, we've been opportunistic on the ATM. I certainly wouldn't, I think we would move away from that approach. And then the other thing we've been pretty consistent that if we start seeing visibility into a strong pipeline that tends to be a good indicator that we might have an opportunity there. And as Pete said, the price is in a good spot. So, but right now, the good news is we don't have things so we can be very opportunistic.

因此，從一方面來說，我們不必像我們在評論中所說的那樣做任何事情。但話又說回來，我們在 ATM 機上一直都是機會主義的。我當然不會，我認為我們會放棄這種方法。然後，我們一直非常一致的另一件事是，如果我們開始看到強大的管道的可見性，這往往是一個很好的指標，表明我們可能在那裡有機會。正如皮特所說，價格非常合適。所以，但現在，好消息是我們沒有東西，所以我們可以非常機會主義。

Yes, I'd just add with $750 million to $1 billion of leverage capacity today, there's plenty of flexibility for us to execute on the current business plan. And that being said we're always mindful of extending our equity runway and being ahead of not having to do anything defensively, but we’re in a good offensive position.

是的，我只想補充一下，今天有 7.5 億美元到 10 億美元的槓桿能力，我們有足夠的靈活性來執行目前的業務計劃。話雖這麼說，我們總是注意擴大我們的權益跑道並領先於不必採取任何防禦措施，但我們處於良好的進攻位置。

And that's helpful. And maybe just turning to the acquisition outlook now. How do you think the next six to 12 months plays out for you with rate cuts seemingly on the table? Do you think the mix will remain heavily weighted towards sale leasebacks? Or do you foresee traditional acquisitions becoming a bigger part of the picture here?

這很有幫助。也許現在只是轉向收購前景。在降息似乎已擺在桌面上的情況下，您認為未來 6 至 12 個月的情況如何？您認為該組合仍將主要偏向售後回租嗎？或者您預計傳統收購將成為這裡更重要的一部分？

Our portfolio has been 80% and 90% constructed with sale leasebacks. We believe in putting capital to work in the context of the sale-leaseback where your counterparty is and an operator filling a capital need. It’s just a higher value-added way to deploy capital. And that’s viewpoints independent of the rate environment. We prefer to structure our own leases and underwrite our own deals and not by existing lease deals. So going forward, I think you should expect us to continue to be largely focused on executing sale leaseback transactions.

我們的投資組合 80% 和 90% 是透過售後回租而建構的。我們相信，在售後回租的背景下，您的交易對手和營運商可以滿足資本需求，從而將資本投入運作。這只是一種更高附加價值的資本配置方式。這是獨立於利率環境的觀點。我們更喜歡建立自己的租賃並承保我們自己的交易，而不是透過現有的租賃交易。因此，展望未來，我認為您應該期望我們繼續主要專注於執行售後回租交易。

Caitlin Burrows, Goldman Sachs.

凱特琳·布羅斯，高盛。

Hi. Good morning, everyone. Maybe just a follow-up to that last one. And I know previously, you mentioned how it’s a good market for EPRT given the lack of alternatives for your customers, but maybe asked another way is like how do you expect your business and opportunity could change as rates come down? Maybe what could get worse for EPRT but what gets better?

你好。大家，早安。也許只是最後一個的後續。我知道之前，您提到過，鑑於您的客戶缺乏替代方案，這對於EPRT 來說是一個良好的市場，但也許會問另一種方式，例如您預計隨著費率下降，您的業務和機會會如何改變？也許 EPRT 哪些方面可能會變得更糟，但哪些方面會變得更好？

Yes, I think there’s always a value-add proposition to sale leaseback capital regardless of the capital markets condition. It just happens to be better in a tighter capital markets. As rates come down, we expect competition to normalize, and we’ve seen some of that already with the prospects of rate cuts and competitors coming back to the market, the leveraged buyers becoming more competitive and more and all that manifests itself in downward pressure on terms and cap rate in terms of being lease term and bumps and everything that goes along with that.

是的，我認為無論資本市場狀況如何，出售回租資本總是有增值主張。它恰好在資本市場趨緊的情況下表現得更好。隨著利率下降，我們預計競爭將正常化，而且我們已經看到了其中一些情況，即降息的前景和競爭對手重返市場，槓桿買家變得更具競爭力，所有這些都體現在利率下降的情況下。

And it’s imperative for us to be reliable and be a value-added capital partner to relationships to differentiate ourselves from other capital providers, and that’s what we intend to do. So over the – since bringing this company public, we’ve invested across a hyper competitive market set and there’s a little less competition today, but we’re certainly prepared to add value and continue to transact when competition normalizes.

我們必須保持可靠並成為關係中的增值資本合作夥伴，以區別於其他資本提供者，而這正是我們打算做的。因此，自該公司上市以來，我們在競爭激烈的市場環境中進行了投資，如今的競爭有所減少，但我們當然準備在競爭正常化時增加價值並繼續進行交易。

Okay. And then on the unit level rent coverage side, it looked like that declined a little bit in the quarter still 3.7 times, but the exposure to the under 1 times increased slightly, so if the 1 times to basically 1.5 times. So could you talk about who’s in that bucket? And whether there’s anything proactive you can or want to do about that?

好的。然後在單位層級的租金覆蓋率方面，看起來本季略有下降，仍然是 3.7 倍，但 1 倍以下的風險敞口略有增加，所以如果 1 倍到基本上是 1.5 倍。那麼您能談談誰在那個桶子裡嗎？您是否可以或想要為此採取積極行動？

Yes. I would start by saying coverage is one risk factor and we tend to look at coverage and couple it with credit risk because coverage alone isn’t going to result in a defaulted lease or recognition. And so as we disclose our credit watch list every quarter, which is the intersection of credit risk and coverage risk. That is actually down quarter-over-quarter, about 10 basis points from 100 basis points to 90 basis points.

是的。我首先要說的是，承保範圍是一個風險因素，我們傾向於考慮承保範圍並將其與信用風險結合起來，因為單憑承保範圍不會導致違約租賃或確認。因此，我們每季都會揭露我們的信用觀察名單，這是信用風險和覆蓋風險的交叉點。實際上，環比下降了約 10 個基點，從 100 個基點降至 90 個基點。

As we think about the under one bucket and what you see there is a lot of development sites coming online where the tenant has cash pay rent against sites that aren’t fully stabilized or even open and operating. So that’s going to make that number a little artificially high.

當我們考慮一桶之下時，您會看到，有許多開發站點上線，租戶用現金支付租金，而這些站點尚未完全穩定，甚至沒有開放和運營。所以這會讓這個數字有點人為地高。

And if we see an asset that we think is permanently impaired and there’s a credit that we don’t have confidence in being able to weather that impairment or fix the problem at the unit, we’ll look to sell it. And that’s been an active part of our business plan and our business strategy and we’ll continue to do that.

如果我們認為某項資產受到永久性損害，而我們沒有信心能夠承受這種損害或解決該部門的問題，我們就會考慮出售它。這是我們業務計劃和業務策略的積極組成部分，我們將繼續這樣做。

And so I think as we said in the call, the portfolio is in great shape, these minor tweaks at the margin really doesn’t change that macro perspective that the portfolio is performing very well, and we're operating from a strong base.

因此，我認為正如我們在電話會議中所說，投資組合狀況良好，這些邊際上的細微調整確實不會改變投資組合表現良好的宏觀視角，而且我們的營運基礎穩固。

Smedes Rose, Citi Bank.

斯梅德斯·羅斯，花旗銀行。

Hi, I think I just wanted to follow up a little bit on the last question around your tenant base because we're starting to see in other sectors some weakness not just to low-end consumers, but kind of flowing through to higher end consumers. I'm wondering if you're hearing any feedback along those lines from your tenants in general?

您好，我想我只是想對有關您的租戶群的最後一個問題進行一些跟進，因為我們開始在其他行業看到一些弱點，不僅針對低端消費者，而且還滲透到高端消費者。我想知道您是否從您的租戶那裡聽到了類似的回饋？

We aren't, Smedes. And keep in mind that we are passive landlords and we collect data on a one quarter lag. And so I think those sort of sentiments that you're hearing very real time, we wouldn't really see in our numbers for 90 days to 120 days.

我們不是，斯梅德斯。請記住，我們是被動房東，我們收集的數據有四分之一的延遲。因此，我認為您即時聽到的那種情緒，在 90 天到 120 天內我們不會真正在我們的數據中看到。

Generally, across the board are industries they're up from a coverage perspective with few exceptions and the portfolio and our tenants are operating pretty strongly. And I think that's really tied to being in largely service and experience-based industries that aren't subject to discretionary spending

一般來說，從覆蓋範圍的角度來看，所有行業都處於上升狀態，幾乎沒有例外，而且我們的投資組合和租戶的營運都相當強勁。我認為這確實與主要以服務和體驗為基礎的行業有關，這些行業不受可自由支配支出的影響

Okay. And then sorry, if you covered this if I got on the call a little bit late, but are you still sort of expecting probably a little bit of a downward drift in cap rates as we move through the year at this point? Or has that changed at all?

好的。抱歉，如果我遲到了一點，您是否已經報道了這一點，但您是否仍然預計，隨著今年的到來，資本化率可能會略有下降？或者說這一切已經改變了嗎？

I think that's right, Smedes. As competition normalizes and interest rates start coming down, we would expect to see some pressure on our initial cap rates off of these historically high levels.

我認為這是對的，斯梅德斯。隨著競爭正常化和利率開始下降，我們預期初始上限利率將面臨一些壓力，脫離歷史高點。

Ki Bin Kim, Truist Securities.

Ki Bin Kim，Truist 證券公司。

Thanks. Good morning. Just a couple of follow-ups. On the unit level coverage that decreased a little bit. I appreciate the comments around some newly developed assets that might be a drag on that as they stabilize cash flow. But maybe you can help us just break that down a little bit further, under one times coverage increase, but 50 basis points in this quarter. Was that, like how much of that was driven by development versus some tenant categories that might have seen some deterioration?

謝謝。早安.只是幾個後續行動。在單位層級的覆蓋率略有下降。我很欣賞一些新開發資產的評論，這些資產可能會拖累穩定現金流。但也許您可以幫助我們進一步細分，覆蓋範圍增加一倍，但本季增加 50 個基點。是不是，其中有多少是由開發推動的，而某些租戶類別可能會出現一些惡化？

Yes, I would say we're not going to split it that finally 50 basis points. What I would say is the guys going into that group in the non-development home sector are really situational specific to the those industries like movies or just an operator having some challenges. But there's nothing systemic or thematic about that across our industry's history. It's really operators that are struggling for whatever reason.

是的，我想說我們不會最終將其分割為 50 個基點。我想說的是，進入非開發家庭領域的該組的人確實針對電影等行業的具體情況，或者只是面臨一些挑戰的運營商。但在我們產業的歷史上，並沒有任何系統性或主題性的內容。無論出於何種原因，實際上都是營運商在苦苦掙扎。

Okay. And going back to the competitive landscape, which has been favorable for you guys. Just curious, given your long history in the sector. If rates start to decline further, -- how quickly do competitors start to rise up in your sector?

好的。回到競爭格局，這對你們來說是有利的。只是好奇，考慮到您在該領域的悠久歷史。如果利率開始進一步下降，您所在產業的競爭對手開始崛起的速度有多快？

Yes, I think it's really, when they have a cost of capital or visibility to the cost of capital, right, and I think you think of public peers, their cost of capital prices on a daily basis. And the private guys, visibility is really a bond market that supports them. So the private guys will lag a little bit until we get some more stability into the bond market. But the public guys, they'll go get right back into it and start hitting. And we've already seen some of that. And so I think it will be quick.

是的，我認為確實如此，當他們有資本成本或對資本成本的可見性時，對吧，我認為你會想到公共同行，他們每天的資本成本價格。對於私人企業來說，可見度實際上是支持他們的債券市場。因此，在債券市場變得更加穩定之前，私人投資者將會稍微落後一些。但公眾人士，他們會立即回到正軌並開始打擊。我們已經看到了其中的一些。所以我認為這會很快。

Charles Hall, Wells Fargo.

查爾斯·霍爾，富國銀行。

This is John Kilichowski. So kind of going to your portfolio breakout here. You mentioned last quarter, there was a 15% soft cap for any industry, and you're kind of hitting that with carwashes. How does that impact your ability to grow the pipeline moving forward, if you maybe get into a point where you can't really consider those deals as much?

這是約翰·基利喬夫斯基。那麼，請在這裡討論您的投資組合突破。您上個季度提到，任何行業都有 15% 的軟上限，而洗車行業就達到了這個上限。如果您可能無法真正考慮這些交易，這會對您未來發展管道的能力產生怎樣的影響？

Well, yes, we have a robust opportunity set and it's incumbent upon our investment professionals to source adequate volume to support our investment feeds. We continue to invest in carwashes and $300 million in a quarter. It gives us a $45 million incremental just to stay flat and then you price those deals accordingly. And so our opportunity set is robust and, the cap on car washes isn’t constrained in that in any way.

是的，我們擁有強大的機會，我們的投資專業人士有責任獲得足夠的資金來支持我們的投資。我們繼續投資洗車場，一個季度投資 3 億美元。它為我們帶來了 4500 萬美元的增量，只是為了保持持平，然後你可以相應地為這些交易定價。因此，我們的機會集是強大的，而且洗車的上限不會以任何方式受到限制。

Got it. And then just a follow-up to the last question on the unit-level coverage. Is there anything there that is more of like a same-store metric so that we could sort of parse out what may be development that’s kind of artificially driving those numbers lower?

知道了。然後是關於單元級別覆蓋範圍的最後一個問題的後續行動。有沒有什麼更像是同店指標，以便我們可以解析出可能是人為地降低這些數字的發展？

Not really. I mean, it's you know, and that’s why we disclosed our credit watch list. I think, disclosure around unit level coverage is informative, but that’s a leading indicator of risk and we disclosed the same-store sales number in our sub, which was up 1.4%, that’s a quarter-over-quarter number. We disclosed our watch list, and we disclosed our recoveries, and we think those are adequate kind of data points and that coverage is just one indicator and that’s going to ebb and flow over the quarters.

並不真地。我的意思是，這就是我們披露信用觀察名單的原因。我認為，有關單位層級覆蓋範圍的揭露是有資訊性的，但這是一個領先的風險指標，我們揭露了子專案的同店銷售數據，成長了 1.4%，這是一個季度環比的數字。我們揭露了我們的觀察名單，我們揭露了我們的回收率，我們認為這些都是足夠的數據點，覆蓋範圍只是一個指標，而且會在每個季度內出現起伏。

Michael Goldsmith, UBS.

麥可‧戈德史密斯，瑞銀集團。

Good morning. Thanks a lot for taking my question. It’s been touched on a couple of times on the call on the mixed data points on the consumer. Recognize you have low exposure to low-end consumer, but just given the uncertain backdrop, does that changed how you think about different tenant categories or individual tenants? Would you lean into certain categories or shy away from others in the current macro backdrop?

早安.非常感謝您提出我的問題。在關於消費者的混合數據點的電話會議中，這個問題被多次提及。認識到您對低端消費者的接觸程度較低，但考慮到不確定的背景，這是否改變了您對不同租戶類別或個人租戶的看法？在目前的宏觀背景下，您會傾向於某些類別還是迴避其他類別？

Really hasn’t. And we’ve been very focused as we’ve built this platform on service and experience-based industries that operate out of granular and fungible real estate properties, and we make 20 year investments and this investment thesis has been developed over 20 years. And so year-over-year ebbs and flows really don’t materially change our underlying long-dated investment thesis.

確實沒有。我們一直非常專注，因為我們在以服務和體驗為基礎的行業上建立了這個平台，這些行業透過細粒度和可替代的房地產進行運營，我們進行了20 年的投資，並且這個投資理論已經發展了20 多年。因此，年復一年的潮起潮落實際上並沒有實質改變我們的長期投資理論。

Thanks for that. And as a follow-up, can you talk a little bit about the time horizon for G&A, as a percentage to trend down? You’ve mentioned compensation expense as a fact there. So any sort of notable developments to your platform or anything that you can see to provide us insight into how G&A percentage kind of goes down over time?

感謝那。作為後續行動，您能談談 G&A 的時間範圍（下降趨勢的百分比）嗎？您在那裡提到了補償費用這一事實。那麼，您的平台是否有任何顯著的發展，或者您可以看到什麼可以讓我們深入了解總費用百分比如何隨著時間的推移而下降？

Yes. It’s been pretty linear as we’ve grown our assets. Our G&A as a percent of revenue has trended downward. And we think just looking at the comps in the industry can give you a pretty good picture of how to run a platform like this efficiently. And there’s data points that $2 billion, $6 billion, $9 billion and $50 billion to kind of give you a sense of what that trend might look like.

是的。隨著我們資產的成長，這是相當線性的。我們的一般行政費用佔收入的百分比呈下降趨勢。我們認為，只需查看行業中的比較就可以讓您很好地了解如何有效地運行這樣的平台。20 億美元、60 億美元、90 億美元和 500 億美元的數據點可以讓您了解這種趨勢可能會是什麼樣子。

Our ambition is to run as efficiently as possible and better than market. And as we look at our peers and the other competitors in the market. So it’s gone down. I don’t know the exact numbers, but I think when we came public, it was probably about 11, it's six seven, -- it's under six. And it's going to continue to go down and there's a very large competitors. You can assume that's a floor.

我們的目標是盡可能有效率地運作並優於市場。當我們審視我們的同行和市場上的其他競爭對手。所以它已經下降了。我不知道確切的數字，但我想當我們公開時，可能是 11 點左右，六點七分，——不到六點。而且它還會繼續下降，並且有非常大的競爭對手。你可以假設那是地板。

John Massocca, B. Riley Securities.

約翰‧馬索卡 (John Massocca)，B. 萊利證券 (Riley Securities)。

I know, you’ve already covered a lot of ground, so just kind of two quick detailed ones from me. The Red Lobsters that were handed back, was that in the quarter? And is that kind of reflected in the vacancy metrics that were reported? And I guess what else is kind of in the property similar to lease termination if it did include Red Lobster?

我知道，您已經了解了很多內容，所以我只簡單介紹兩個詳細內容。退回來的紅龍蝦，是在那個季度嗎？這是否反映在所報告的空缺指標中？我想如果該物業確實包括紅龍蝦，那麼還有什麼類似於租賃終止的財產？

Well, the Red Lobsters were fitted to the vacant bucket and part of our five vacant assets during the quarter. Anything else, AJ?

好吧，紅龍蝦被安裝到了空置桶中，並且是本季度我們五項空置資產的一部分。還有什麼嗎，阿傑？

[In the vacant bucket, in particular our properties between store]. (inaudible - microphone inaccessible)

[在空桶中，特別是我們的屬性商店之間]。 （聽不清楚 - 麥克風無法存取）

Yes. So just a couple of three other assets. So hopefully, that answers your question, John. Was there something else on it?

是的。所以只有另外三項資產。希望這能回答你的問題，約翰。上面還有別的東西嗎？

That makes sense. That was it. And I guess, because you haven't historically had a ton of this in the portfolio, but what's the look towards repositioning those properties? Are you still kind of inclined to sell them? Or are there any possibility of retenanting those assets?

這就說得通了。就是這樣。我想，因為歷史上您的投資組合中並沒有大量此類資產，但重新定位這些資產的前景如何？您還想賣掉它們嗎？或者是否有可能重新租用這些資產？

Our process is basically higher qualified and experienced local broker to find the best economic outcome for lease or sale. And we tend to be different, and we just try to find what works best for the asset. And so generally, selling to a developer who is then going to try to re-tenant is a less attractive outcome. And so we're really only selling assets after we've not been able to find a tenant to take them. So we're working hard on a dual track to find solutions for all five of those assets in our vacant bucket.

我們的流程基本上是由資質較高且經驗豐富的當地經紀人來尋找租賃或出售的最佳經濟結果。我們往往與眾不同，我們只是試著找到最適合資產的方法。因此，一般來說，出售給開發商然後試圖重新出租的結果不太有吸引力。因此，我們實際上只是在找不到租戶來承租資產後才出售資產。因此，我們正在雙軌上努力工作，為我們的空桶中的所有五種資產找到解決方案。

Okay. And then, Mark, sorry if I missed this earlier in the call, but what's the plan for swapping out or not swapping out the kind of remaining draw on the new term loan? Are you going to like swap that once drawn? Or is there any potential thoughts leaving that floating just given where the interest rate environment is today??

好的。然後，馬克，抱歉，如果我在電話會議的早些時候錯過了這一點，但是換出或不換出新定期貸款的剩餘提款的計劃是什麼？一旦抽到，你會喜歡交換嗎？或者考慮到當今的利率環境，是否有任何潛在的想法讓浮動？

Yes, I appreciate that. I think our primary intent is that we would swap it out when we drew it, haven't really looked at, thinking to leaving it floating. I just don't think there's, despite your appropriate point that there might be some reduction in rates, just our plan is to swap it.

是的，我很欣賞這一點。我認為我們的主要目的是，當我們繪製它時，我們會將它交換出來，沒有真正看過，並想讓它漂浮。我只是不認為，儘管你提出了利率可能會下降的適當觀點，但我們的計劃只是交換它。

(Operator Instructions)

（操作員說明）

Josh Dennerlein, Bank of America.

喬許‧丹納林，美國銀行。

I was curious for the deals that you're pricing today, how is spread the cost of capital compared to maybe what you're considering as normal? And how much has that changed just given kind of rally that you've seen over the past month?

我很好奇你們今天定價的交易，與你們認為的正常情況相比，資本成本的分佈如何？考慮到過去一個月的反彈，情況發生了多大變化？

Yes, I would start by saying we don't price deals based upon our cost of capital, we priced deals based upon the market dynamic and our perception of the appropriate risk-adjusted returns for each individual investment. The spread to our cost of capital is kind of an output, not an input. We've seen that spread fluctuate from as low as 150 basis points to as high as 300 basis points or plus. Currently, depending on where you make our cost of capital, it's somewhere in the 2s and certainly adequate and healthy for us to continue to invest.

是的，我首先要說的是，我們不會根據資本成本來定價交易，而是根據市場動態以及我們對每項投資的適當風險調整回報的看法來定價交易。資本成本的利差是一種產出，而不是投入。我們看到利差從低至 150 個基點到高達 300 個基點或以上波動。目前，根據我們的資本成本，它在 2 左右，對於我們繼續投資來說肯定是足夠且健康的。

We've certainly gotten the benefit from a stock price movement and then also a much more favorable spread on our current 10 year bond issuance. So to Pete's point we've probably seen a 50 basis points kind of appreciation in our in our in our net investment spread.

我們當然從股價波動中受益，而且我們目前的 10 年期債券發行也獲得了更有利的利差。因此，就皮特的觀點而言，我們的淨投資利差可能出現了 50 個基點的升值。

And also just thinking about acquisitions kind of going forward, how much can you buy before hitting your leverage target?

而且只是考慮一下未來的收購，在達到槓桿目標之前您可以購買多少？

As Rob said earlier, we have somewhere between $700 million to $1 billion in dry powder, depending on within our targeted range.

正如 Rob 之前所說，我們擁有 7 億至 10 億美元的乾粉，具體取決於我們的目標範圍。

And I guess just quickly, I know we were talking a little bit about the watch list. If there's been any updates either on individual tenants or if you can also make any comments on I think it was brought up on the list earnings call, Red Robin only just because of some credit downgrades going across.

我想很快，我知道我們正在談論觀察名單。如果有關於個別租戶的任何更新，或者您也可以發表任何評論，我認為它是在收益電話會議上提出的，紅羅賓只是因為發生了一些信用評級下調。

Yes, I go back to the commentary that the portfolio is in great shape and performing well in our Red Robin investment, back to my earlier comment of making 20-year investments. And certainly I don't think our perspective on Red Robin is going to change in a quarter. They continue to our assets continue to perform well. There may be some noise around the equity story of that company, but the restaurant assets that we own and we are doing fine.

是的，我回到我之前關於進行 20 年投資的評論，即我們的 Red Robin 投資的投資組合狀況良好且表現良好。當然，我認為我們對紅羅賓的看法不會在一個季度內改變。他們繼續讓我們的資產繼續表現良好。該公司的股權故事可能存在一些噪音，但我們擁有的餐廳資產以及我們的表現都很好。

Spenser Allaway, Green Street Advisors.

史賓塞‧阿拉維，格林街顧問公司。

Thank you. Maybe just one more on your opportunities set. Acquisitions continue to fall within your targeted industries, as you mentioned, but just curious if there's been anything you've looked at that would be an interesting new venture for EPRT.

謝謝。也許你的機會又多了一個。正如您所提到的，收購繼續屬於您的目標行業，但我只是好奇您是否看到任何對 EPRT 來說是一項有趣的新業務的項目。

Sorry to disappoint you, Spenser. But no, we're sticking to what we do. We conduct sourcing activities in our verticals to identify high-quality operators that are growing and who value us and that's really where we spend our energy and where our opportunity set comes from. So, we're fortunate we don't need to really expand the box, and we're continuing to kind of invest in our core industries with our core thesis.

抱歉讓你失望了，史賓賽。但不，我們堅持我們所做的事情。我們在垂直行業中進行採購活動，以確定正在成長的、重視我們的高品質營運商，這確實是我們花費精力的地方，也是我們機會的來源。因此，我們很幸運，我們不需要真正擴大規模，我們將繼續以我們的核心理念投資於我們的核心產業。

Okay. And then Pete, you also mentioned the persistent bid-ask spread that weighed on dispositions in 2Q. Can you just comment on how wide that spread was in the quarter? And has that changed at all thus far into 3Q?

好的。然後皮特，您還提到了持續存在的買賣價差對第二季的處置造成了壓力。您能否評論一下本季的利差有多大？到第三季為止，這種情況有什麼改變嗎？

It hasn't changed in 3Q. And I would say it's probably anywhere between 25 basis points to 75 basis points between where we would sell a well-leased performing asset and where the market would buy it. And if you think about our dispositions in the quarter, at a 7.3% of really at-risk assets. I think you see that in the coverage, high-quality, well-performing asset. I think our strike price would be in the low 6s. So I think that's kind of where the bid ask would be.

第三季沒有變化。我想說，我們出售租賃良好的績效資產與市場購買資產之間的差價可能在 25 個基點到 75 個基點之間。如果你考慮我們本季的處置情況，你會發現真正處於風險資產的比例為 7.3%。我認為您在報道中看到了高品質、表現良好的資產。我認為我們的執行價將在 6 美元以下。所以我認為這就是要價。

Thank you.

謝謝。

Greg McGinniss, Scotiabank.

格雷格·麥金尼斯，豐業銀行。

Hi, good morning again. This is Elmer Chang on with Greg. We just had a couple of follow-up questions. So most of your top tenant industry exposure seem to be highly fragmented industries, whereby you can jump in on an investment in a consolidation event. What has M&A activity been like year-to-date in your top tenant industries? And how do you see that playing out in the rest of the year?

嗨，再次早上好。這是埃爾默·張 (Elmer Chang) 和格雷格 (Greg) 的談話。我們只有幾個後續問題。因此，您的大部分頂級租戶行業似乎都是高度分散的行業，因此您可以在整合事件中進行投資。今年迄今為止，您的主要租戶產業的併購活動情況如何？您如何看待今年剩餘時間的情況？

M&A activity is generally down. And with obviously, with capital harder to come by. And so we're transacting at a higher level despite a pressed level of M&A activity, which is really an indicator of the challenging – challenges to get alternative financing.

併購活動普遍下降。顯然，資本更難取得。因此，儘管併購活動水準受到壓力，但我們的交易水準仍然較高，這實際上表明了獲得替代融資面臨的挑戰。

And so we would think M&A would pick up as capital markets normalize and rates start coming down. And multiples expand and more sellers are willing to sell, and that should create more opportunities for us. That will be offset by a broader range of capital alternatives for people transact. So on balance, we think it will be neutral, but there should be more consolidation and M&A activity in the back half of the year.

因此，我們認為，隨著資本市場正常化和利率開始下降，併購將會加速。倍數擴大，更多賣家願意出售，這應該為我們創造更多機會。這將被更廣泛的人們交易資本選擇所抵消。因此，總的來說，我們認為這將是中性的，但今年下半年應該會有更多的整合和併購活動。

Got it. That makes sense. And then similar question to those asked earlier about expectations of a rate cut increasing. I think you just mentioned it as well. But do you see with competition starting to come back to the market, do you see that impacting lease term and rent bumps in your current pipeline that is further along in negotiations or more so in your or newer negotiations?

知道了。這就說得通了。然後是與先前提出的關於降息預期增加的類似問題。我想你剛才也提到了。但是，您是否認為隨著競爭開始重返市場，您是否認為這會影響當前管道中的租賃期限和租金上漲，這些影響是在談判中進一步進行的，還是在您或新的談判中更是如此？

Yes, I would say the current pipeline is relatively consistent with what we experienced in the second quarter. And that we would expect the competition to impact cap rate and terms into probably the fourth quarter and first quarter of next year.

是的，我想說目前的管道與我們在第二季經歷的情況相對一致。我們預計競爭將影響資本化率和條款，可能會持續到明年第四季和第一季。

We have reached the end of the question-and-answer session. I would now like to turn the call back over to Pete Mavoides for closing comments.

我們的問答環節已經結束。我現在想將電話轉回給 Pete Mavoides 以徵求結束意見。

Great. Well, thank you all for your time today, and we look forward to the rest of the summer and engaging with you all in September as we're on the road with several investor conferences coming up. And so thank you for your support, and have a great day.

偉大的。好的，謝謝大家今天抽出寶貴的時間，我們期待今年夏天剩下的時間，並在 9 月與大家交流，因為我們即將召開幾場投資者會議。感謝您的支持，祝您有美好的一天。

This concludes today's conference. You may disconnect. Your lines at this time, and we thank you for your participation.

今天的會議到此結束。您可以斷開連線。此時您的台詞，我們感謝您的參與。