Q2 2021 National Retail Properties Inc Earnings Call
Please standby were about to begin.
Good day, ladies and gentlemen, and welcome to the National retail properties second quarter 2021 operating results call after.
After the presentation there'll be a question and answer session. If you should require assistance during the call. Please press star zero and an operator will assist you.
At this time, it's my pleasure to turn the floor over to Mr. Jay Whitehurst CEO, Sir the floor is yours.
Thank you Tom Good morning, and welcome to the National retail properties second quarter of 2021 earnings call.
Joining me on this call as Chief Financial Officer, Kevin <unk>, and Chief operating Officer, Steve for.
As this mornings press release for Flash National retail properties performance in 2021 continues to produce strong results, including the continued high occupancy impressive rent collections, a solid acquisition is driven by our proprietary tenant relationships.
We're well positioned to continue enhancing shareholder value as we look ahead to the balance of 2021 and beyond.
In July we announced a roughly 2% increase in our common stock dividend effective later this month, thus, making 2021 hour 32nd consecutive year of annual dividend increases.
National retail properties is in the select the company of only 85 U S public companies.
The only 2 other Reits, which have achieved this impressive track record.
Based on our strong performance, we announced today of further increase in our 2021 guidance for core <unk> per share to a range of $2.75 to $2.80 per share.
Our longstanding strategy is designed and executed to generate consistent per share growth on a multiyear basis.
And that's the disruption caused by the pandemic and related store closures is easing the.
Value of this long term approach is reflected in our second guidance increase this year.
Turning to the highlights of National retail properties second quarter financial results, our portfolio of 3173 free standing single tenant retail properties continued to perform exceedingly well.
Occupancy was consistent with the prior quarter at 98, 3%, which remains above our long term average of 98 per cent.
We also announced collection of 99% of rents due for the second quarter.
Collection of previously deferred rent remained at an equally high percentage and we forgave almost no rent during the quarter.
These impressive collection results compare very favorably to other retail real estate companies, including those with a significantly higher percentage of investment grade tenants.
Moreover, we believe that these results validate our strategy of doing direct sale leaseback transactions with large regional and national operators for well located real estate parcels at low cost per property and reasonable range.
And while we're on the topic of large tenants I am pleased to report that 1 of our top tenants Mister Carwash recently completed its initial public offering.
Congratulations to John lie and the entire management team at this impressive companies Mitch.
Mister car wash resort was 1 of our first relationship tenants 15 years ago, and we're very proud of the role that national retail properties has played in net company's growth and success.
Turning to acquisitions during the quarter, we invested just under $103 million in 29, new properties at an initial cash cap rate of 6.7% and with an average lease duration of over 17 years.
Almost all of our acquisitions were for from relationship tenants with which we do repeat programmatic business.
Year to date, we've invested over $208 million in 58, new properties leased to 10 different relationship tenants at an initial cash cap rate of 6.5% and an average lease duration of 17 in the half years.
And in the environment, where cap rates remain near all time lows, we will continue to be very thoughtful on our underwriting and primarily pursue sale leaseback transactions with our portfolio of relationship tenants.
Based on our pipeline and conversations with those relationship tenants, we remain comfortable with our ability to meet and hopefully exceed our 2021 acquisition guidance of $400 million to $500 million for.
I'm merely via direct sale leaseback transactions with long duration leases.
During the second quarter. We also sold 15 properties raising almost $23 million of proceeds to be reinvested in new acquisitions and year to date, we've now raised over $40 million from the sale of 26 properties, including 15 vacant properties.
Although job 1 as always to re lease vacancies and our leasing team doesn't excellent job of it we will continue to sell.
Non performing assets, if we don't see a clear path to generating rental income within a reasonable time period.
Our balance sheet remains 1 of the strongest in our sector in.
In June Kevin led the recast of our unsecured line of credit increasing the capacity of our facility from $900 million to $1.1 billion.
Although our credit line has been Upsized the balance outstanding remains the same zero and we ended the quarter with approximately $250 million of cash on hand.
With no material debt maturities until 2024, we remain well positioned to fund our 2021 acquisition guidance without needing to tap the capital markets and with that intro, Let me turn the call over to Kevin for more color on our quarterly numbers and updated guidance.
Thanks, Jay and as usual I'll start with the cautionary statement that we will make certain statements that may be considered to be forward looking statements under federal securities laws.
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 these forward looking statements to reflect changes after the statements were made for.
<unk> and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail.
Company's filings with the SEC.
Mornings press release.
With that headlines from.
This morning's press release reported quarterly core <unk> results of <unk> 70 per share for the second quarter of 2021 as of.
<unk> from the preceding first quarter <unk> 69 per share and is up 5 from the prior year to 65.
Today, we also reported that <unk> per share was <unk> 77 per share for the second quarter and Thats also up 1% from the preceding first quarter 76.
We did footnote this amount includes $8.3 million of deferred rent repayments.
And our accrued rental income adjustment in the second quarter.
<unk> number so without that we would have produced <unk> of 72 per share.
So excluding those deferral of repayments, our <unk> dividend payout ratio for the first 6 months was 72, 7% that's fairly consistent with prior years levels.
Occupancy as Jay mentioned was 98, 3% at quarter end thats been fairly flat compared to recent quarters G&A.
G&A expense was $11.9 million for the second quarter of the increase for the quarter end of the 6 months is largely driven by incentive compensation.
Rent collections continue to remain strong in the second quarter as Jay mentioned today, we reported rent collections of approximately 99% for the second quarter rent.
Collections from our cash basis tenants, which represent about 7% of our total annual base rent improved to approximately 92% for the second quarter and that's up from 80%.
Previously reported for that cohort in the first quarter of 2021.
As Jay noted, we increased our 2021 core <unk> per share guidance from a range of $2.70 to $2.75 per share to a new range of $2.75 to $2.80 per share.
This incorporates the better than expected rent collections and the actual results from the first half of 2021 some of.
Of the assumptions supporting this guidance are noted on page 7 of today's press release, which are largely unchanged from last quarter's guidance. The driver for the increase of our full year guidance.
The assumed higher rent collection rate more in line with our current collection rates the.
While we previously assumed 80% rent collection from the $50 million of cash basis tenant annual base rent.
Now assuming 90% rent collections.
The incremental 10% amounts to about $5 million of an annual basis.
And for the remainder of our tenants, we continue to assume 1% of potential rent loss and again thats consistent with our prior guidance.
We ended the quarter of $250 million of cash on hand, and no amounts outstanding on our newly recast $1.1 billion Bank credit facility.
This bank line as Jay noted the increase from $900 million in size to $1.1 billion. The interest rate was reduced 10 basis points for the LIBOR plus 77 basis points.
The maturity.
Was extended to June of 2025.
Our liquidity is in excellent shape, our weighted average debt maturity is now 13 years with of 33, 7% weighted average fixed interest rate.
Our next debt maturity of $350 million with the 3.9% coupon in mid 2020 for the very.
The good liquidity and leverage position have no real need to raise any additional capital to meet 2021 acquisition guidance and we're well positioned as we look forward to 2022.
A couple of numbers net debt to gross book assets was 35%.
At quarter end net debt to EBITDA was 5.0 times at June 30.
Interest coverage for 7 times in the fixed charge coverage for 2 times for the second quarter.
Only 5 of our 3000 plus properties are encumbered by mortgages.
So 2021 is shaping up to be.
A very solid year for us as the economy and retailers capture the.
The government stimulus, which feels like it will have some tailwind into 2022.
Our focus remains on the long term as we continue to endeavor to give <unk> the best opportunity to succeed in the coming years.
Importantly, growing per share results and with that Tom We will open it up for any questions.
Thank you, Sir and ladies and gentlemen, if you'd like to ask a question at this time of the star 1 on your Touchtone telephone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again that star 1 on your Touchtone telephone at this time, if you'd like to ask the question.
We'll take our first question from Katy Mcconnell with Citi.
Hi, Good morning, guys. This is marketing trainee actually on for Katy.
Yes, I guess I noticed that you guys thought of theater assets during the quarter and I was just wondering if you guys given the improved rent collection.
The more long term basis, how you think about the industry and sort of the changing dynamics.
Right.
Let me clarify something there we did not by the theater AMC had been a guarantor of a.
Of another figure they spun off from theaters, but remained a guarantor of the lease and and so AMC took over.
The theater as part of a <unk>.
Restructuring of workout with with the other tenant that was struggling so we did not we didnt buy another theater. It just became an AMC in our portfolio.
That is the line of trade that we've certainly still continue to have the most concern about coming out of the pandemic.
Sure.
Happy with the we're comfortable I should say with the theater exposure that we have we acquired our theaters of number of years ago at lower price per property and more reasonable rents than some of the theater transactions that have traded in the last few years.
We passed on but that said that business has been challenged for quite a period of time and so we have not been looking to expand our theater exposure.
For a number of years.
Now and Bill is going to continue to be very thoughtful.
About.
Any any theater.
Transactions that are out there in the world that we might be looking at it. It's unlikely you would see us buy any movie theaters anytime soon.
Got it yeah, that's what I figured I. Thank you for the clarification there.
And then just my second question is just on our rent collections for the full service restaurants, I think they lagged the debt.
That just tied to specific tenants.
Just sort of what's the sort.
Sort of color there.
Kevin you may have a little bit of color, but I think for full service tenants and for our movie theaters are both below kind of everybody else is running 98% or higher and for those 2 categories. It's both continuing rent deferrals for tenants, where the the second quarter of rents were.
Deferred to be repaid later as opposed to.
Rent forgiveness or even disputes with the tenants. It's just rent that we expect to get later down the road.
Okay got it thank you guys.
We'll take our next question from Elvis Rodriguez with Bank of America.
Good morning, and thank you for taking the questions can you share an update on your acquisition pipeline and I know you commented on the call, having an opportunity to exceed that how's it looking today and what's the likelihood that you will exceed the high end of your range.
Yes, the LSA.
Welcome to the call of nice to talk to you.
Yes.
Let Steve Horn talk about the pipeline of little bit, but just at the macro level.
Let me kind of put.
To remind folks about the way we look at this hour.
Strategic goal is to generate consistent mid single digits per share growth.
On a multi year basis, and there's a lot of inputs that go into achieving that goal acquisitions is certainly the most impactful, but it really is just an input into the.
The calculation of achieving that long term strategic goal of the consistent mid single digits per share growth.
And our strategy.
As it relates to acquisitions is to do repeat programmatic business with portfolio of large regional and national operators with whom we can build these relationships and do this repeat business. If we do that we get slightly better real estate because of the.
Retailer doesn't sell offs of property debt the retailers worried about we get of lease document that is tailored to the to our needs to what we think is important and we get a long duration of 15 to 20 year lease and those are all advantages to us over.
Going out into the open market the 1 off market. The 10, 31 exchange market and acquiring properties in a 1 off basis.
And we get a slightly better cap rate with our relationship tenants than you would get in the open market. So that's that's the strategy behind what the the.
Of the strategy that drives our acquisition efforts and so Steve with that kind of macro and show you want to talk about the pipeline and how that all spans yet.
The year makes a difference as far as the pipeline as I sat here last year at this time, we didn't have the pipeline.
But our relationship tenants have started growing and their continued growth through 2021. So our pipeline is pretty solid right now year to day closed a little bit over $200 million.
Guidance for your question was for the $500 million. So as I sit here today I'm very comfortable with that guidance are.
Pipeline is very robust.
Keep in mind, we could always hit the number of <unk> by whatever we want it for.
If we just throw out the window of lease duration and cap rate.
But we're still looking for that low the 6 cap rate with long lease term for relying on our relationships.
As far as the industry sectors that would be what you would expect COVID-19.
Convenience stores auto service and <unk> of our restaurants.
The significant amount of volume in those industries. Currently so yes, the only get about the pipeline as we sit here today.
Great and just to follow up on that some of your peers have mentioned an increase in the sale leaseback activity I'm, assuming you're seeing the same but just.
Not chasing the lower quality sale leaseback opportunities is that the right way to categorize it as having.
2021.
And our peers and the volume that's being done there has been definitely increase from the sale leaseback market, but keep in mind of lot of our peers by just assets in the open market and don't focus completely on the sale leaseback, but yes, theres a lot of private equity activity in the <unk> space at auto service space. So there has been an increase from.
The sale leaseback market.
All of US our relationship tenants kind of took a pause in the middle of last year, while they got their own businesses kind of sorted out and figure out how the new business through the pandemic and they didn't figure that out and you can see how that's all been reflected in both our occupancy rate in our collections right.
<unk> all bounce back across every sector and.
And so the conversations that we're having with the now they are.
They are in growth mode, and they're looking to expand their businesses and I think for a lot of the lines of trade theres. Good M&A opportunities in their particular lines of trade for our tenants to pick up some of the smaller companies.
That's struggled more in the pandemic.
The pipeline feels good in the longer future the wide end of the pipeline and the more distant future feels good to us as well.
Thank you.
And we'll take our next question from Spencer all the way with.
Green Street.
Yeah, I don't think you guys touched on this but can you just provide a little color on the industry mix overall for your acquisitions late in the quarter.
Spencer can you say that 1 more time, we didn't quite hear it yeah can you provide a little color on the industry Max for the acquisitions made in the quarter.
Hi, Steve.
Yes, the industry mix kind of looks like our current portfolio.
But for the most part of.
A little bit of heavier and auto services.
The sector, but kind.
Kind of as your typical <unk>, we did at the general retail the best buy in there and some.
The equipment rental.
But for the most of ours out of services, a little bit heavier than historical.
The second quarter of Spencer the second quarter was kind of of the quarter of the car wash.
Okay.
And then just as the true.
Transaction market has opened up more than you guys have become a little bit more active again is anything either surprise positively the surprises the upside or downside in terms of.
Cap rate movements or is there anything really shocked CEO in terms of just transaction activity.
I'll take the first stab at this I would say nothing really shocked us.
Cap rates remain very low, but that's driven in our minds to a large degree by just the a lot of.
People say cash sloshing around in the market. It's just a lot of capital out there chasing transactions and.
What we've found all through the years is that cap rates cap rates tend to not move up even in situations when 1 thinks they might.
We otherwise we felt like going into the pandemic, we felt like our retailers where the right.
They were there <unk>.
Experienced and had their own.
<unk> is in good shape, and we felt like they would get through and out the other side.
And.
And they have and our real estate, we felt was well located and was.
In high demand prior to the pandemic and we expected that it would be in high demand. After the pandemic and again I think our numbers indicate that thats validated itself too so to a large degree what we've seen it felt like is that this pandemic just like the great financial crisis of O 8.
9.
Has validated our strategy of dealing with larger operators.
And focusing on good locations at reasonable prices and low rents.
Okay, great. Thanks for that color and then maybe just 1 more if I may on the disposition front and how many of these assets sold in the quarter were Bacon and then more of any of the divestment cash basis tenants.
The yes, I think the GAAP.
The split.
Any 1 quarter, it's a little bit of.
It's a small sample size I think in general our dispositions are going to be kind of 50% leased and 50% vacant get give or take 5% to 10% Kevin would you agree.
Great.
And the proceeds are.
Running in that kind of ballpark 2 so year to date, it's about 50.50 on vacant versus the occupied.
I don't.
Of note or the data in front of me at the non adjusted.
The response.
Of.
Of the occupier of how many of our cash basis I don't think theres very many of the that's not a driver it might be zero.
Not a driver of our decision process the beyond it.
We don't actually while we'd like everybody to the accrual basis strong credit.
Feel comfortable about future lease collection.
Being labeled cash basis is not the biggest stigma of airline.
Okay. Thank you guys.
We'll take our next question from Wes Golladay with Baird.
Hey, Good morning, guys. Just a question on the sale leaseback activity do you think we'll get back to 2019 levels for the industry and with your tenants and do you expect to maintain your share with the existing relationships.
West of the.
Short answer to that question is yes, and yes.
I do think that as.
As our tenants continue to get back into growth mode. We'll we'll have the same level of volume more additional volume opportunities from each of them and the acquisitions group.
Debt that works for Steve is out building new relationships every day and and we will continue to grow the overall pool of tenants with whom we do.
<unk> programmatic business with and overall in the overall marketplace I think it is going to be.
Equal or greater volume as to what we were look what the entire universe for us looking at pre pandemic.
Okay. Thanks for that and then when we look at the the back half of the year, you did kind of call out M&A activity would that be a big part of the second half story and would you guide us to or maybe not guidance, but I guess how.
How should we think about the split between <unk> and <unk>.
I wouldn't.
I wouldn't.
1 of the gaps if that at this point of view.
We know that there is debt our tenants are looking at growing their business and we know there's going to be opportunities out there but.
Never makes a lot of sense to us to try to predict timing too precisely.
Our guidance is generally kind of backend loaded so we feel good about where we are right now in case it turns out that this year, it's not back end loaded.
But.
I wouldn't want to get too granular on predicting when transactions might occur and theres a lot of things that might make things either speed up or slow down Steve.
Steve did you have anything more on that day, the folks youre talking to.
Thanks.
As we say internally a lot of where a couple of phone calls away from the pipeline not being as strong. So we don't try to focus on the timing, we kind of focus on debt given the.
The deals done as fast as we can but as far as kind of our outlook.
Can imagine our industry 3 months out for months out.
Don't have a pipeline for December quite yet.
The pipeline that we talk about it is the little bit more short sighted.
Yes.
The third quarter and then some.
It will slide into the fourth quarter.
Got it thanks, a lot guys.
And we will take our next question from Ronald Camden with Morgan Stanley.
Congrats on a good quarter, just 2 quick ones from me 1 on the cash basis tenants collection of the 92%.
Is it fair to say that 8%.
And that is lagging is that still just movie theaters and so forth or is there any other sort of notable bucket to call out.
Not really.
<unk>.
We had the for big lines of trade that had some impact from the pandemic and so.
It's.
Our primary cash basis tenants are.
C. Fresh is Chuck E cheese at Ruby Tuesday for probably make up 90% of our cash basis tenants bucket. So it's the mix in that arena, but clearly as we've talked about the theaters in the most challenged impressed and you can see that in our collection numbers to some degree.
So but.
I call for years casual volume primarily.
Got it that's helpful and then I.
This was asked earlier it was just making sure I understand so on the disposition side.
Was any of the assets cash basis tenants, sorry, I don't think I.
I missed the answer to that yes, no I think we concluded that we really sell any cash basis tenants.
The second quarter and like I said, we're not.
It's not a particular driving factor of factor to us.
Taking.
Hold ourselves kind of as of yet.
Got it and then sorry last question if I may.
When youre thinking about sort of the industry mix.
And so far I think you talked about that sort of this quarter was big for the car washes.
Is there any sort of other sort of sub sector of sub segments that.
You know over the last 3 to 6 months that that you've gotten more constructive on the more attractive and is there any other that you probably want it sort of.
Sort of get away from.
Thanks.
The what we tried to do is build relationships with retailers in all of the different lines of trade where youll find.
The retail type properties, located along high traffic roads and.
What history has taught us is debt transaction volume among industries.
We will kind of ebb and flow due to 1 reason or another so we don't.
Spend too much time trying to project ahead about what particular lines of trade are going to be active or anything like that it's it's very.
We want to build relationships with lots of operators and then after that the whole process is very bottoms up.
The real estate or the acquiring and do they want to do a sale leaseback and if so what's the right terms for that and and then to get on on down the road I think if you look at what we've done recently.
The.
Steve's group has done a great job of building relationships with different tire store operators.
Not just.
And we've done some carwash deals with other with the number of different operators and equipment rental at.
And we have deep relationships across all of the fast food concepts.
Really looking down the road I think what you will see with US is the portfolio down the road, we will look a whole lot like the portfolio that day.
It is right now.
And and.
We will continue to be pretty thoughtful and pretty prudent about doing bigger boxes bigger and more special purpose boxes. I think every REIT is going to be kind of cautious about those kind of properties for the time being and those were the ones that gave people the most heartburn during the pandemic.
Super helpful. Thank you.
And we'll take our next question from John Masako with Lundberg Thalmann.
Good morning.
Good morning.
So I think you got asked about this.
On the last earnings call, but obviously with the kind of collection moving up to 92% I don't know how has your outlook changed at all for moving some of these cash basis tenants to accrual accounting again.
And I guess, if seller of non I mean, how many months of quarters of kind of consistent payment do you want to see before making those changes.
Consistent with our delivered.
Sometimes slow moving.
The process.
We just.
Again, I don't view of it is the big stigma as having a tenant label as cash basis I don't think its bad accounting, meaning you would report what you'd collect.
And so all of that to say it.
We're not in a particular hurry to get folks back to accrual basis.
We said really at the time, we moved from the cash basis, certainly wasn't going to be 1 year.
It would be more than a year before we.
But that it might be worthwhile to move them back to accrual book.
We're going to want to see some.
<unk> the performance from those tenants.
Before we get too too interested in making that change.
Like I say in the meantime, we don't view it as the big negative to have them.
Labeled cash basis in our minds, it's not terrible accounting so.
Well.
All of that to say is it'll probably the next year some time before we.
Start with the possibly drift of some of those tenants from cash basis the accrual.
Okay understood.
And then speaking of kind of tenant health now that youre collecting close to 100% of Brent I mean broad brush strokes. What are you seeing in terms of kind of coverages.
Have that data, yet, but kind of like.
Maybe what it was looking like historically pre pandemic just any color there would be helpful.
I mean, the data is still kind of coming in so there is somewhat of a lag from some tenants we get quarterly data some annual but.
Yes.
It feels to us that the <unk>.
Vast majority of our portfolio they are at.
Kind of prior coverage levels that were very strong and so we feel pretty good on that front.
The 1.
Question for always lingers in my mind anyway, how much of it is the stimulus related and so how lasting and long term will be once we get to of post stimulus environment.
But it feels very good right now in terms of coverages.
And what we've seen in a number of our tenants not only.
Is that their profitability is approved for this pandemic is the rethought processes of cost structures and all kinds of things.
Margins have held up.
Well and so they.
They have actually done well in terms of the profitability and therefore the rent coverage.
Okay, and then 1 last quick 1.
What drove the impairment in the quarter just thinking.
It's pretty high rent collections.
Any color there would be helpful.
On the impairments for the quarter.
As the number of properties I mean, it was primarily.
2 or 3 larger.
Dispositions that ended up.
Getting impaired.
I would say.
3 of the top for were vacant properties that were.
So they are going to be sold and so that was really the driver of that.
Okay that makes perfect sense.
And that's it for me thank you very much.
Once again, ladies and gentlemen, if you'd like to ask the question at this time. It is star 1 on your Touchtone telephone Star 1 to ask the question. We'll go next to Linda Tsai with Jefferies.
Hi, it looks like guidance on your real estate expenses net of reimbursements went down a little and then G&A went up can you just give us some more color on the ship.
Yes fair comment.
They didn't move a whole lot, but they did move a little on.
On the property expenses.
We generally model of the property expenses the somewhat mirror.
The vacancy or of rent loss, if you will and so the the extent rent loss.
The projections improve we kind of also tends to improve our property expense projections. So at the margin of that.
Primary difference there and on G&A.
Largely of just a function of incentive comp, which was down notably last year, and we will get back to more normal levels. This year, hopefully and so just accruals related to that.
Thanks.
Then you talked about some of the challenges of the movie theaters and full service restaurants.
What are your thoughts on fitness as an industry right now is the scenario you would invest in further.
Yes.
And at the edge when the pandemic struck we were it was that was 1 of the lines of trade that we were concerned about.
The primary fitness exposure is with la fitness and lifetime fitness and both of those companies have gotten through the pandemic in in pretty good pretty good shape.
And.
Anecdotally, what we hear and feel as debt that customers do want to get back to working out at the gym. The folks that were using the gym before want to get back to using the fitness facilities again.
And and so over the long haul, we think that debt industry will will rebound.
I mentioned in answer to 1 of the previous questions debt that we're going to be very thoughtful about bigger boxes that are more special purpose and to some degree of the fitness center properties fall into that cash.
<unk> and so we'll be we'll be thoughtful about debt, but to the extent of a portfolio of fitness centers was out there or our relationship tenants, where it had some transactions that they that they wanted to do those are things that we would look at we would focus on the cost per property and the rent.
But it would be.
That would be something we would look at.
Got it.
1 last 1 as you look out over the next 6 to 12 months what's your.
The source of financing.
Tough 1 for us so I was going to say stock at $60 a share of course there Ya.
Count.
Yes.
We are constantly kind of evaluating what's the best opportunity in the marketplace for us. The good news is we don't need any capital.
Frankly for much of that time period.
Laid out there.
So it will be a variety of the usual mix of our of our capital structure, we are not looking to change that notably in flow.
It'll be a blend of debt and equity as usual both are relatively well price but.
But we try to pivot.
<unk> capital.
At good opportunities when the time's appropriate.
And capitals available and well priced and so.
And we take a very long term view to that we don't.
I think about.
<unk>.
We need to get more debt or more equity today or tomorrow.
We know we're thinking about 2 years out and how the positioning the balance sheet and for the.
Liquidity that we have so.
No.
Im being a little bit of elusive what's the 1 reason, we don't give guidance on our capital raises because we.
We tend to be fairly opportunistic on that front.
We'll see what the market.
The up for us.
2 other sources of capital that people forget about sometimes 1 is dispositions.
We have historically been able to sell $100 million of ours.
So of properties per year at cap rates below what we are reinvesting at so we've been able to accretively recycle capital through our disposition business and we have hundreds if not thousands of properties in the portfolio that would sell for very low cap rates and the other is just.
Yeah.
Free cash flow after payment of dividends, we have Kevin what around $120 million and of normal years, maybe around 120 of this year because of the rent deferral of repayments the actually of that number is notably higher and so.
We're looking at total rent deferral of repayments of.
Around.
$30.30 million, so it will be closer to $150 million this year.
All of which positions us really well too.
Not try to be in a position, where we don't need capital.
In order to fund our guidance.
Deal with whatever opportunities are out there.
Thank you.
Mr. Whitehurst, there appears to be no further questions at this time I'd like to turn the call back over to you for any closing remarks.
Alright, Thank you Tom and thank you all for joining US. This morning, we look forward to hopefully seeing many of you in person during the fall conference season have a good day.
And ladies and gentlemen, this does conclude today's conference. We appreciate your participation you may disconnect at this time and have a great day.
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