What kind of properties do we own?
- We primarily own properties that are leased to retail businesses. Examples include convenience stores, health and fitness facilities, movie theaters, and drug stores
- We also own non-retail properties, with industrial buildings comprising 13% of revenue
- Our properties are typically freestanding structures (not attached to another building as in a shopping mall or strip center)
- These properties are owned under triple-net leases where the tenant pays the property’s operating expenses including taxes, maintenance and insurance
How much does occupancy vary for the properties we own?
- As of 12/31/2016, our occupancy rate was 98.3%
- Historically, our portfolio occupancy has never been below 96.6%
- You can view our portfolio occupancy history here
How long are our leases?
- We generally look to acquire properties with 10- to 20-year initial lease agreements
- As of 12/31/2016, our leased, single-tenant properties have a weighted-average remaining lease term of approximately 10 years
How many properties do we own and where are they located?
- We owned 4,944 properties as of 12/31/2016
- The properties are located throughout 49 states and Puerto Rico
- You can view the number of properties in each state by viewing this geographic diversification map
How do we find properties to purchase?
We maintain relationships with tenants, real estate developers, owners, brokers, private equity firms and investment banks to uncover single-asset and portfolio acquisition opportunities
What is a “cap rate” and why does it matter?
“Cap rate” is short for lease capitalization rate and is the same as lease yield. This is a measure that is used to determine the annual return generated from lease payments in relation to the purchase price of a property
How do we decide which properties to purchase?
As part of our investment criteria, we focus on acquiring properties with many of the following attributes:
- Tenants with reliable and sustainable cash flow;
- Tenants with revenue and cash flow from multiple sources;
- Tenants that are willing to sign a long-term lease (10 or more years);
- Tenants that are large owners and users of real estate;
- Real estate that is critical to the tenant’s ability to generate revenue (i.e. they need the property in which they operate in order to conduct their business);
- Real estate with property valuations that approximate replacement cost; and
- Real estate with rental or lease payments that approximate market rents
How do we fund property purchases?
- To close transactions in a timely manner, we purchase properties for cash using our $2 billion acquisition credit facility, which also has a $1 billion accordion expansion feature
- We ultimately seek to permanently fund acquisitions by issuing common stock, preferred stock or long-term bonds
- The type of funding we use to permanently finance acquisitions is determined based on our targeted leverage ratios and market conditions
Do we have rental increases built into our long-term leases?
- Yes, the majority of our leases have some form of rent increases
- Rent increases are negotiated at the time the lease is agreed upon
- Rent increases can vary based on the tenant’s business and the lease agreement
Where can I find information about lease expirations?
- We disclose lease expirations by year in our financial supplements