Alpine Income Property Trust Inc (PINE) 2023 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Alpine Q3 2023 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matt Partridge, Chief Financial Officer.

美好的一天，感謝您的支持。歡迎參加阿爾派 2023 年第三季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。現在我想將會議交給今天的發言人，財務長馬特·帕特里奇。

Good morning, everyone. And thank you for joining us today for the Alpine Income Property Trust Third Quarter 2023 operating results conference call. With me today is our CEO and President, John Albright. Before we begin, I'd like to remind everyone that many of our comments today are considered forward looking statements under federal securities law.

大家，早安。感謝您今天參加我們的 Alpine Income Property Trust 2023 年第三季營運業績電話會議。今天與我在一起的是我們的執行長兼總裁約翰·奧爾布賴特 (John Albright)。在開始之前，我想提醒大家，根據聯邦證券法，我們今天的許多評論都被視為前瞻性陳述。

The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements. 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 Form 10-K, Form 10-Q and other SEC filings.

公司未來的實際結果可能與這些前瞻性陳述中討論的事項有顯著差異，我們不承擔更新這些陳述的責任。公司的 10-K 表、10-Q 表和其他 SEC 文件中會不時更詳細地揭露可能導致實際結果與預期有重大差異的因素和風險。

You can find our SEC report, earnings release and most recent investor presentation, which contain reconciliations of non-GAAP financial measures we use on our website at alpinereit.com. I'll now hand the call over to John for his prepared remarks.

您可以在我們的網站 alpinereit.com 上找到我們的 SEC 報告、收益發布和最新投資者演示，其中包含我們使用的非 GAAP 財務指標的調節表。我現在將把電話轉交給約翰，讓他準備好講話。

Thanks, Matt. And good morning, everyone. Jumping right in, investments during the quarter totalled $27.2 million made up of $19.4 million of net lease acquisitions and a $7.8 million loan investment. Dispositions during the quarter totalled $20.6 million. During the quarter, the cash cap rate on our acquisitions with 9%. The initial yield on our loan investment was 8.5%. And the exit cap rate on our disposition was 6.3%.

謝謝，馬特。大家早安。直接來看，本季的投資總額為 2,720 萬美元，其中包括 1,940 萬美元的淨租賃收購和 780 萬美元的貸款投資。該季度的處置總額為 2,060 萬美元。本季度，我們收購的現金上限為 9%。我們貸款投資的初始收益率為8.5%。我們處置的退出上限率為 6.3%。

Contributing to our outsized acquisition yield is the Kohl's we purchased in Chandler, Arizona. This property is set to have its rent rolled down 25% in the first quarter of 2024. The roll down was negotiated prior to our purchase in order to meaningfully extend the term of the property. The acquisition cap rate on our Q3 activity post rent reset is 7.5%, which is the second highest cap rate for quarterly acquisition volume in our company's history and more than 50 basis points above our historical average.

我們在亞利桑那州錢德勒購買的 Kohl's 百貨公司為我們帶來了巨大的收購收益。該房產的租金將於 2024 年第一季下調 25%。此次下調是在我們購買之前進行協商的，以便有意義地延長該房產的期限。租金重置後，我們第三季活動的收購上限率為 7.5%，這是我們公司歷史上季度收購量第二高的上限，比我們的歷史平均高出 50 個基點以上。

The mortgage we originated during the quarter is our first loan investment at the time. The project is a 33 acres development outside of Indianapolis that includes five net lease out parcels including Walmart as the anchor tenant and a multifamily development parcel. Our loan is secured by the entire land assemblage. Proceeds from our loan are for the development of the single tenant parcels. The loan has a term of two years, an initial yield of 8.5% year one, an increased rate of 9.25% year two, and we received origination fees as part of the financing. The outstanding balance of the quarter end was $6.9 million.

我們在本季發起的抵押貸款是我們當時的第一筆貸款投資。該項目是印第安納波利斯郊外的一個佔地 33 英畝的開發項目，包括五個淨出租地塊，其中沃爾瑪作為主要租戶，還有一個多戶住宅開發地塊。我們的貸款由整個土地組合作為擔保。我們的貸款收益用於開發單一租戶地塊。這筆貸款期限為兩年，第一年初始收益率為 8.5%，第二年收益率為 9.25%，我們收到了發起費作為融資的一部分。季末未清餘額為 690 萬美元。

As we discussed on our last call, we view these first mortgage investments as an opportunity to invest in properties with high-quality tenants, and strong sponsorship and outsized risk-adjusted return. These investments are going to be a minority component of our strategy, but they do provide attractive short-term yields while we seek longer-term core investment opportunities.

正如我們在上次電話會議中討論的那樣，我們將這些首次抵押貸款投資視為投資擁有優質租戶、強大贊助和巨額風險調整回報的房產的機會。這些投資將成為我們策略的少數組成部分，但在我們尋求長期核心投資機會的同時，它們確實提供了有吸引力的短期收益。

In addition to our investment activity, we continued our strategic asset recycling program during the quarter. Selling eight properties leased to non-investment-grade tenants, the majority of which were franchise restaurant operators. These asset sales generated total gains of $2.6 million. Our net investment spread during the quarter, which is the difference between the yield on our investments and less the yield on our properties sold with 266 basis points or 118 basis points when adjusted for the Kohl's rolled out.

除了投資活動外，我們在本季繼續實施戰略資產回收計劃。出售八處出租給非投資等級租戶的物業，其中大部分是特許經營餐廳經營者。這些資產出售產生的總收益為 260 萬美元。我們本季的淨投資利差，即我們的投資收益率減去我們出售的房產收益率之間的差額，為 266 個基點或 118 個基點（根據 Kohl's 推出調整後）。

The 118 basis points is more than twice our long-term average, and our highest quarterly spread since the third quarter of 2022. Overall, we're pleased with this quarter's transaction activity as we believe we have improved portfolio quality while generating attractive risk-adjusted returns.

118 個基點是我們長期平均水平的兩倍多，也是我們自2022 年第三季度以來的最高季度利差。總體而言，我們對本季度的交易活動感到滿意，因為我們相信我們提高了投資組合質量，同時產生了有吸引力的風險 -調整後的回報。

Year to date, we've invested $87 million at a 7.5% initial yield. 61% of acquired base rents come from tenants with investment-grade credit rating. And 87% of the acquired base rents come from tenants that are publicly traded or whose debt is publicly traded.

今年迄今，我們已投資 8,700 萬美元，初始收益率為 7.5%。所獲得的基本租金的 61% 來自具有投資等級信用評級的租戶。所獲得的基本租金的 87% 來自公開交易或債務公開交易的租戶。

Additionally, during the first nine months of the year, we've sold 22 properties for $100 million generating gains of sales of $7.8 million. 14 of the 22 properties sold were occupied by tenants who are not publicly traded or whose debt is not publicly rated. Today, 64% of our portfolio's base rent comes from investment-grade rated tenants. And 93% of our tenants are either publicly traded or have debt that is publicly rated.

此外，今年前 9 個月，我們以 1 億美元的價格出售了 22 處房產，創造了 780 萬美元的銷售收益。在出售的 22 處房產中，有 14 處被未公開交易或債務未公開評級的租戶佔用。如今，我們投資組合基本租金的 64% 來自投資等級租戶。我們 93% 的租戶要么是公開交易的，要么擁有公開評級的債務。

Our top tenants remain unchanged from the second quarter, which includes notable industry-leading operators such as: Walgreens, Lowe's, Dick's Sporting Goods, Dollar General, Dollar Tree, Family Dollar, Walmart, Best Buy, Hobby Lobby and Home Depot. From a portfolio management perspective, we did have seven Valero branded convenience store properties become vacant during the quarter as a result of bankruptcy and subsequent liquidation of the operator Mountain Express.

我們的頂級租戶與第二季度相比保持不變，其中包括著名的行業領先營運商，例如：沃爾格林、勞氏、迪克體育用品、Dollar General、Dollar Tree、Family Dollar、沃爾瑪、百思買、Hobby Lobby 和Home Depot。從投資組合管理的角度來看，由於營運商 Mountain Express 的破產和隨後的清算，本季我們確實有七家 Valero 品牌便利商店物業空置。

These properties are relatively small in size and the rents are modest in the context of our entire portfolio. But nevertheless the lost rent, and resulting marginal increase in our borrowing costs due to this bankruptcy, as well as projected timing of the transaction activity are all contributing factors to our revised guidance. The impact of the bankruptcy should largely be contained to our third quarter and fourth quarter operating results as we anticipate putting this issue behind us by selling the properties in the coming months and reinvesting the proceeds.

這些房產規模相對較小，在我們整個投資組合中租金也適中。但儘管如此，租金損失、因這次破產而導致的借貸成本邊際增加，以及交易活動的預期時間，都是我們修訂指導意見的因素。破產的影響應該主要包含在我們第三季和第四季的營運業績中，因為我們預計透過在未來幾個月出售房產並將收益再投資來解決這個問題。

And finally, we did buy back nearly $5 million for common stock during the third quarter. And we believe to be accretive pricing as our stock is trading near an implied 8% cap rate and well below our book value. We'll continue to be active on our $15 million buyback program as long as our stock trades at what we believe is a meaningful discount to the underlying value of our portfolio and operating platform.

最後，我們在第三季回購了近 500 萬美元的普通股。我們相信定價會增值，因為我們的股票交易價格接近隱含的 8% 上限，遠低於我們的帳面價值。只要我們的股票交易價格相對於我們的投資組合和營運平台的基本價值有有意義的折扣，我們將繼續積極實施 1500 萬美元的回購計畫。

Now I'll turn the call over to Matt to discuss our quarterly results, balance sheet and revised guidance.

現在我將把電話轉給馬特，討論我們的季度業績、資產負債表和修訂後的指導。

Thanks, John. As of the end of the quarter, our portfolio was 99% occupied and consisted of 138 properties totalling 3.9 million square feet with tenants operating in 23 sectors within 35 states. Occupancy ticked down as a result of the Mountain Express bankruptcy. But as John mentioned, our top tenants generally remain unchanged and continue to be made up of well-diversified mix of industry-leading operators. The majority of which have investment-grade credit ratings and are publicly rated or publicly traded.

謝謝，約翰。截至本季末，我們的投資組合已被佔用 99%，包括 138 處房產，總面積為 390 萬平方英尺，租戶分佈在 35 個州的 23 個部門。由於山區快車破產，入住率下降。但正如約翰所提到的，我們的頂級租戶總體上保持不變，並繼續由行業領先的運營商組成。其中大多數具有投資等級信用評級，並進行公開評級或公開交易。

Third quarter 2023 FFO was $0.37 per share, representing a 7.5% decrease compared to the third quarter of 2022. And third quarter 2023 AFFO was $0.38 per share, representing a 9.5% decrease over the third quarter of 2022. Our quarterly results were negatively impacted by the nonperforming tenant issues, timing of investments and dispositions, and higher interest expense from year over year increases in interest rates.

2023 年第三季FFO 為每股0.37 美元，較2022 年第三季下降7.5%。2023 年第三季AFFO 為每股0.38 美元，較2022 年第三季下降9.5%。我們的季度業績受到負面影響不良租戶問題、投資和處置時機以及利率逐年上升導致的利息支出增加。

These items were partially offset by regular rent increases within the owned portfolio, attractive net investment spreads from our asset recycling program, increased interest income from cash and restricted cash on balance sheet, and the benefits of an incrementally lower share count resulting from our share repurchase program. Our general and administrative expenses for the quarter totalled $1.7 million, which included the $1.1 million management fee to our external manager.

These items were partially offset by regular rent increases within the owned portfolio, attractive net investment spreads from our asset recycling program, increased interest income from cash and restricted cash on balance sheet, and the benefits of an incrementally lower share count resulting from our share repurchase程式.本季我們的一般和管理費用總計 170 萬美元，其中包括向外部經理支付的 110 萬美元管理費。

Our G&A increased 13% year over year, largely driven by increases to the management fee driven by our net equity capital markets activities over the past 12 months. The current annual run rate for the management fee before any assumed new equity issuances or repurchases is $4.3 million. And G&A as a percentage of total revenues in the third quarter was 14.3%, down from 14.6% in the second quarter of 2023.

我們的一般管理費用年增 13%，主要是因為過去 12 個月我們的淨股權資本市場活動導致管理費增加。在任何假設的新股發行或回購之前，目前管理費的年運行率為 430 萬美元。第三季 G&A 佔總營收的比例為 14.3%，低於 2023 年第二季的 14.6%。

As a result of the Mountain Express bankruptcy, we took a $2.9 million impairment during the quarter and subsequently classified the seven properties as held for sale. The impairment was largely offset by the $2.6 million gain on disposition of assets during the quarter. Both items are adjusted for as part of our FFO and AFFO calculation.

由於 Mountain Express 破產，我們在本季提列了 290 萬美元的減值，隨後將這七處房產歸類為待售房產。該減損大部分被本季資產處置收益 260 萬美元所抵銷。這兩項均作為我們的 FFO 和 AFFO 計算的一部分進行調整。

Year to date, FFO was $1.10 per share and AFFO was $1.11 per share representing year over year per share decreases of approximately 19% when compared to the first nine months of 2022. As previously announced, the company paid a third quarter cash dividend of $0.275 per share, representing a current annualized yield of approximately 6.6%. Our third quarter FFO and AFFO payout ratios remained well covered at 74% and 72% respectively.

今年迄今為止，FFO 為每股1.10 美元，AFFO 為每股1.11 美元，與2022 年前9 個月相比，每股同比下降約19%。如之前宣布的，該公司支付了第三季度現金股息0.275 美元每股，目前年化報酬率約6.6%。我們第三季的 FFO 和 AFFO 支付率仍然良好，分別為 74% 和 72%。

We anticipate announcing our regular quarterly cash common stock dividend for the fourth quarter during the end of November. As John previously referenced, we were active during the quarter on our Board approved $15 million share repurchase program. We're purchasing over 280,000 shares of our common stock for a total cost of $4.7 million at an average price of $16.78 per share.

我們預計將在 11 月底宣布第四季的常規季度現金普通股股息。正如約翰之前提到的，我們在本季積極推動董事會批准了 1500 萬美元的股票回購計畫。我們將購買超過 28 萬股普通股，總成本為 470 萬美元，平均價格為每股 16.78 美元。

Year to date, we have repurchased over 300,000 shares of our common stock for total cost of $5.1 million at an average price of $16.66 per share. We ended the quarter with net debt to total enterprise value of 48%, net debt to pro forma EBITDA of 6.9 times. And we continue to maintain a strong fixed charge coverage ratio of 3.4 times. Our balance sheet has no floating interest rate exposure, no debt maturities until 2026, and total liquidity at quarter end through cash, restricted cash and undrawn revolver commitments was more than $217 million.

今年迄今為止，我們已回購了超過 30 萬股普通股，總成本為 510 萬美元，平均價格為每股 16.66 美元。本季結束時，淨債務佔企業總價值的 48%，淨債務佔預期 EBITDA 的 6.9 倍。我們持續維持 3.4 倍的強勁固定費用覆蓋率。我們的資產負債表沒有浮動利率風險，在 2026 年之前沒有債務到期，季度末通過現金、限制性現金和未提取的左輪承諾的流動性總額超過 2.17 億美元。

And finally as we transition into the fourth quarter of 2023, we began the quarter with portfolio-wide in place, annualized straight-line and cash-based rents of approximately $39.2 million. We have updated our full year 2023 guidance to account for our third quarter performance and lost rents from Mountain Express bankruptcy, projected timing of dispositions and investments, forecasted capital markets activities, and other various assumptions.

最後，當我們進入 2023 年第四季時，本季伊始，我們的投資組合範圍內的年化直線租金和現金租金約為 3,920 萬美元。我們更新了 2023 年全年指引，以考慮我們第三季的業績和 Mountain Express 破產造成的租金損失、預計的處置和投資時間、預測的資本市場活動以及其他各種假設。

We have reduced our full year FFO and AFFO guidance ranges to $1.45 to $1.47 per share and $1.46 and $1.48 per share respectively. The forecasted weighted average share count for the year was increased by 100,000 shares at the low end and decreased by 400,000 shares at the high end to account for our third quarter and expected fourth quarter net equity capital markets activities. And we've maintained our overall dispositions and investment guidance. The latter of which does incorporate our loan investment activity.

我們將全年 FFO 和 AFFO 指導範圍分別下調至每股 1.45 美元至 1.47 美元以及每股 1.46 美元和 1.48 美元。考慮到我們第三季和預期第四季的淨股權資本市場活動，今年預測的加權平均股數低端增加了 100,000 股，高端減少了 400,000 股。我們維持了整體配置和投資指引。後者確實包含了我們的貸款投資活動。

While we do have a tenant credit issue to work through during the fourth quarter, we're confident in our portfolio will continue to perform well in any economic environment as benefits from nearly two-thirds of rents coming from investment-grade rated tenants and strong financial transparency with nearly 93% of rents coming from publicly traded and publicly rated tenants.

雖然我們在第四季度確實需要解決租戶信貸問題，但我們相信我們的投資組合將在任何經濟環境下繼續表現良好，因為近三分之二的租金來自投資級租戶和強大的租戶。財務透明度近93% 的租金來自公開交易和公開評級的租戶。

Combined with our accretive asset recycling strategy, de-risked balance sheet and opportunistic share repurchase program, we believe we're strongly positioned for 2024. With that, we'll now open the call up for questions. Operator?

結合我們的增值資產回收策略、去風險資產負債表和機會主義股票回購計劃，我們相信我們在 2024 年處於有利地位。現在，我們將開始接受提問。操作員？

(Operator Instructions) Matthew Erdner, JonesTrading.

（操作員指示）Matthew Erdner，JonesTrading。

Hey. Good morning, guys. Thanks for taking the question. So it seems like for the remainder of the year, the disposition activity is going to come from the Mountain Express, and then maybe an acquisition opportunistically somewhere if you find something that fits. But thinking ahead to 2024, are you guys expecting to be net buyers or net sellers?

嘿。早上好傢伙。感謝您提出問題。因此，在今年剩下的時間裡，處置活動似乎將來自 Mountain Express，然後如果你找到合適的東西，可能會在某個地方機會主義地進行收購。但展望 2024 年，你們希望成為淨買家還是淨賣家？

Well, we hope to be obviously net buyers for sure. It's obviously capital markets dependent and recycling dependent. But clearly, we're starting to see more interesting opportunities. And so we're obviously taking advantage of where we can continue to sell down properties and credits at good prices and kind of be in position to purchase. So we're patiently looking at opportunities. And yeah. So obviously we'd love to be a net acquirer next year.

嗯，我們肯定希望成為淨買家。它顯然依賴資本市場和回收。但顯然，我們開始看到更多有趣的機會。因此，我們顯然正在利用我們可以繼續以優惠價格出售房產和信貸的優勢，並有能力購買。所以我們正在耐心尋找機會。是的。顯然，我們希望明年成為淨收購者。

Yeah. And then as a follow-up to that, 93% is currently publicly rated or traded. Is the goal eventually to get to 100% there?

是的。後續，93% 目前已公開評級或交易。最終目標是達到 100% 嗎？

Not necessarily. But we think it's a great indication that obviously a publicly traded company has more access to capital than a private company. And so just a good data point, I think, for investors.

不必要。但我們認為這是一個很好的跡象，表明上市公司顯然比私人公司有更多的機會獲得資本。我認為，對於投資人來說，這只是一個很好的數據點。

Got you. Thank you.

明白你了。謝謝。

Thanks.

謝謝。

Rob Stevenson, Janney Montgomery Scott.

羅布史蒂文森，珍妮蒙哥馬利斯科特。

Good morning, guys. Matt, what's the monthly or quarterly revenue impact from the bankrupt tenant for you guys?

早上好傢伙。馬特，破產租戶對你們的月度或季度收入影響是什麼？

It's a little under $150,000 a quarter base rent. And then obviously, there's carrying costs related to those assets for real estate taxes and maintenance and so on and so forth. So I think what you can expect though is that we'll hopefully exit those before the end of the year.

每季基本租金略低於 15 萬美元。顯然，還有與這些資產相關的房地產稅和維護成本等等。因此，我認為您可以期待的是，我們預計在今年年底之前退出這些計劃。

Okay. And then, John, why Kohl's? I mean, non-investment grade tenant at this point having or at least had operational issues. Stocks a third of what it was 18 months ago. What's the allure there even on a longer-term lease from them given the opportunities otherwise that were out there for you during the quarter?

好的。然後，約翰，為什麼選擇科爾士？我的意思是，非投資等級租戶目前存在或至少存在營運問題。庫存只有 18 個月前的三分之一。考慮到本季為您提供的機會，即使是與他們簽訂長期租賃合同，又有什麼吸引力呢？

Chandler, Arizona; amazing infill location; very appropriately price rent -- with a rent roll down. So you got just a very strong demographics there. And in a market whereas you see all these chip manufacturers are going crazy building fabrication plants there. So very infill location. You can't build it for this, the cost basis. And so if something happens to them, I think there'll be plenty of takers for the box or a subdivided box.

亞利桑那州錢德勒；令人驚嘆的填充位置；非常適當地定價租金——租金下降。所以那裡的人口統計非常強大。在市場上，你會看到所有這些晶片製造商都在瘋狂地在那裡建造製造工廠。所以非常填滿的位置。你不能為此建構它，即成本基礎。因此，如果他們發生了什麼事，我認為會有很多人購買包廂或細分包廂。

Okay. That's helpful. And then last one for me. How are you guys thinking about capital deployment in the fourth quarter? Buy back more stock? Reduce debt? Are there more dispositions teed up and acquisitions as well given that where you are relative to the guidance? How likely is that stuff to close in the fourth quarter versus something more out into '24?

好的。這很有幫助。然後是我的最後一張。你們對第四季的資金部署有何看法？回購更多股票？減少債務？考慮到您相對於指導的位置，是否還會有更多的處置和收購？與 24 年更多的事情相比，這些事情在第四季度完成的可能性有多大？

So a little bit all of the above. Obviously we're buying stock. We think opportunistically. We're looking at some interesting investment opportunities. And we have assets on the market and in the process of selling to recycle. So we're super active on all fronts.

所以上面的所有內容都一點點。顯然我們正在買股票。我們以機會主義的方式思考。我們正在尋找一些有趣的投資機會。我們在市場上有資產，並且正在出售以進行回收。所以我們在各方面都非常活躍。

Okay. Thanks guys and have a great weekend.

好的。謝謝大家，祝週末愉快。

Thanks. You too.

謝謝。你也是。

Wesley Golladay, Baird.

韋斯利·戈拉迪，貝爾德。

Hey. Good morning, guys. Question on the 118 basis point spread maybe looking forward. Do you have a sense of what kind of spreads you can get going forward? And then maybe can you comment on the growth rate of the assets you're buying versus selling?

嘿。早上好傢伙。關於 118 個基點利差的問題也許值得期待。您是否知道未來可以獲得什麼樣的利差？然後您可以評論一下您購買的資產與出售的資產的成長率嗎？

Yeah. I mean I would say that there's definitely some interesting spread opportunities of what we can sell versus what we can buy. I don't know whether they'll come to fruition. There's also maybe a flatter trade of selling some non-investment grade properties and buying investment-grade properties where there's not as much spread there, but you're upgrading the portfolio. So it's a little bit of a combination where there is some -- definitely some spread opportunity and then some that are a little bit neutral.

是的。我的意思是，我想說，我們可以出售的產品與我們可以購買的產品之間肯定存在一些有趣的價差機會。不知道他們能否實現。出售一些非投資級房產併購買投資級房產也可能是一種較為平坦的交易，這些房產的價差沒有那麼大，但你正在升級投資組合。所以這是一種結合，其中肯定有一些利差機會，然後還有一些中性的機會。

Yeah. And on the growth, Wes, I would say about half of what we bought this year has contractual rent increases. Obviously, the Kohl's has a roll down but that notwithstanding. It's going to be investment specific because depending on what lease is available on the market at the time that we buy it, it may or may not have rent growth. And if it's a shorter-term lease, there might not be contractual increases in the existing term. But if we're buying it right, then there should be growth on the options.

是的。關於成長，韋斯，我想說我們今年購買的商品中有大約一半是合約租金上漲的。顯然，科爾的業績有所下滑，但儘管如此。這將是特定於投資的，因為根據我們購買時市場上可用的租賃類型，租金可能會也可能不會成長。如果是短期租賃，則現有期限內的合約可能不會增加。但如果我們買得對，那麼選擇權應該會增加。

Okay. Fantastic. And then can you comment on your watch list now? You definitely pared back some of your smaller tenants. And then maybe could you comment on what happened with this bankruptcy. It looks like a liquidation. It probably wouldn't have been your base case at the start of the year?

好的。極好的。那麼您現在可以對您的觀察名單發表評論嗎？你確實削減了一些較小的租戶。然後也許您可以評論一下這次破產的情況。看起來像是清算。這可能不是您年初時的基本情況？

I'll let Matt discuss some of that. But in general, on the liquidation that company, Mountain Express was teed up to be sold. There is a standoff between the private equity and the lenders. And private equity has basically decided to just liquidate the company. So a startling change. But we've had multiple parties that had followed that process that have come to us interested in these properties. So we're actively in discussion on getting those sold. On the watch list clearly as you know, Wes, we've been very active on starting the sale process over a year ago and focusing on a lot of credits that could be an issue, and we're continuing that process. But I'll let Matt discuss a little bit more granular.

我會讓馬特討論其中的一些。但總的來說，在該公司清算後，Mountain Express 準備被出售。私募股權公司和貸款機構之間存在僵局。私募股權公司基本上決定直接清算該公司。這是一個驚人的變化。但我們已經有多個遵循流程的各方對這些房產感興趣。因此，我們正在積極討論如何出售這些產品。正如你所知道的，韋斯，在觀察名單上，我們在一年前就非常積極地啟動了銷售流程，並專注於許多可能成為問題的積分，我們正在繼續這個過程。但我會讓馬特更詳細地討論一下。

Yeah. Just to expand on that if you look at what we sold in the third quarter, a lot of its franchise restaurant operators where -- while we're not trying to get to that 100% publicly traded or publicly rated route that John referenced earlier, we are focused on investing in tenants that have clear transparency when it comes to their financials. And so there are other tenants within our portfolio. A small amount that we'll look to exit opportunistically if the market gives us appropriate pricing.

是的。只是為了擴展這一點，如果你看看我們在第三季度的銷售情況，很多特許經營餐廳運營商——雖然我們並沒有試圖達到約翰之前提到的 100% 公開交易或公開評級的路線，我們專注於投資財務狀況清晰透明的租戶。因此，我們的投資組合中還有其他租戶。如果市場給我們適當的定價，我們會機會主義地退出一小部分。

Okay. And then just one final one for you, Matt, on the balance sheet. It looks like interest expense did pop for the balance of the year. Do you expect to be at the lower pricing grid at the start of next year?

好的。馬特，資產負債表上還有最後一項。看來今年剩餘時間利息支出確實出現了成長。您預計明年初會採用較低的定價嗎？

Yeah. So we're -- we'll see how dispositions materialize through the end of the year. But the goal is to reduce leverage to a point that we slide back into a lower spread on our -- on all of our debt by year end.

是的。因此，我們將在今年年底之前看到部署如何實現。但我們的目標是將槓桿率降低到年底前所有債務利差回落到較低的程度。

Great. Thanks for the time, everyone.

偉大的。謝謝大家抽出時間。

Thanks a lot.

多謝。

Thank you.

謝謝。

RJ Milligan, Raymond James.

RJ 米利根，雷蒙德詹姆斯。

Hey. Good morning, guys. Two quick follow-ups. Matt, I think you said $150,000 a quarter for the tenant bankruptcy. I'm just curious how much you got in the third quarter for modelling purposes?

嘿。早上好傢伙。兩次快速跟進。馬特，我想你說過每季 15 萬美元用於租戶破產。我只是好奇你在第三季為建模目的獲得了多少資金？

For modelling purposes, we got most of it in the third quarter.

出於建模目的，我們在第三季獲得了大部分數據。

Okay. And then with the Kohl's roll down, what's the effective cap rate on the acquisitions in the quarter?

好的。然後隨著 Kohl's 的縮減，本季收購的有效上限是多少？

Yeah. The effective cap rate once the roll-down happens is a 7.5% cash cap rate.

是的。一旦發生縮減，有效上限利率為 7.5% 的現金上限利率。

Okay. And then, John, just more broadly, you guys are the first net lease REIT to report here and provide some commentary. I'm just curious, you mentioned that you're seeing more opportunities out there. But what are you seeing in terms of pricing and then the competitive buyer pool out there just given where the cost of capital has trended?

好的。然後，約翰，更廣泛地說，你們是第一個在這裡報告並提供一些評論的淨租賃房地產投資信託基金。我只是很好奇，你提到你看到了更多的機會。但是，考慮到資本成本的趨勢，您在定價和競爭買家池方面看到了什麼？

Yeah. I would say there's still -- the market's very tepid in the standoff between buyers and sellers. So we're clearly only looking for situations where people need to sell and so trying to be patient there. But not a lot of transactions are happening for sure. We think that there's going to be more properties coming on the market that we've heard about people looking to see what kind of liquidity is out there. And so with the debt market super challenged that is obviously going to be another factor in creating some opportunities we hope. And we're seeing some of that, but it's not super interesting right now. We're waiting to see when the wildebeest try to cross the river.

是的。我想說的是，市場在買家和賣家之間的僵局中仍然非常不溫不火。因此，我們顯然只是在尋找人們需要出售的情況，因此要保持耐心。但肯定不會發生很多交易。我們認為市場上將會有更多的房產上市，我們聽說人們希望了解那裡有什麼樣的流動性。因此，隨著債務市場面臨巨大挑戰，這顯然將成為創造我們想要的一些機會的另一個因素。我們已經看到了其中的一些，但現在還不是很有趣。我們正在等著看角馬何時試圖過河。

Are you seeing a meaningful difference in cap rates from investment grade versus non-investment grade? Has that spread widened or tightened? What are you seeing in terms of --

您是否發現投資等級與非投資等級的資本化率有顯著差異？這種利差是擴大了還是收緊了？你看到了什麼——

Yeah, definitely. Everyone wants the investment grade for sure. And so the investment grade is not moving. The non-investment grade has certainly moved. Yes. It's widened quite a bit.

是的，絕對是。每個人都肯定希望獲得投資等級。因此投資評級沒有變化。非投資等級肯定已經發生了變化。是的。已經變寬不少了

Okay. Thanks guys. Appreciate it.

好的。多謝你們。欣賞它。

Yeah. Thanks.

是的。謝謝。

Thanks, RJ.

謝謝，RJ。

Thank you. And this concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。