Financial Data and Key Metrics Changes - The company reported an AFFO per share of $0.46, representing a 7% increase compared to Q2 2024 [18] - Total AFFO for the quarter was $93 million, up 21% from the same period in 2024 [18] - General and administrative expenses increased to $10.7 million from $8.7 million year-over-year, primarily due to increased compensation expenses [19] - The company declared a cash dividend of $0.30, resulting in an AFFO payout ratio of 65% [19] - Income-producing gross assets reached $6.6 billion at quarter end [20] Business Line Data and Key Metrics Changes - The company invested $334 million in the second quarter at a weighted average cash yield of 7.9% [11] - The investment activity was broad-based across most top industries, with a weighted average initial lease term of 19.5 years and a weighted average annual rent escalation of 2.2% [11] - Same store rent growth was reported at 1.4% with an occupancy rate of 99.6% [14] Market Data and Key Metrics Changes - The company closed $642 million of investments in the first half of the year and increased its full-year investment guidance range to $1 billion to $1.2 billion [8] - The weighted average lease term remained at 14 years, with 4.9% of annual base rent expiring over the next five years [8] Company Strategy and Development Direction - The company focuses on middle market sale leasebacks with growing operators in targeted industries, emphasizing the importance of recurring business with its tenant base [6] - The company expects investment cap rates to trend lower in 2025 due to anticipated competition as capital markets normalize [7] - The company aims to maintain a well-capitalized balance sheet with low leverage and significant liquidity to support external growth [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operating environment, noting strong tenant credit trends and healthy same store rent performance [6] - The company remains optimistic about its investment pipeline and the overall performance of its portfolio [24] - Management indicated that while competition may increase, the company continues to have ample opportunities and a strong capital position [36] Other Important Information - The company sold 23 properties for $46.2 million in net proceeds during the quarter, highlighting the importance of owning liquid properties [16] - The company has a weighted average unit level coverage ratio of 3.4 times, indicating strong profitability and cash flow generation by its tenants [9] Q&A Session Summary Question: What is preventing the company from leaning more into acquisitions? - The company is leaning strongly into acquisitions but maintains conservative guidance due to limited visibility on the pipeline [26][28] Question: Can you provide an update on occupancy and the quantum of assets in the vacancy bucket? - The company has nine properties out of 2,190 that are vacant, with an average property value of $3 million [29][30] Question: What are the expectations for competition impacting cap rates? - The company expects competition to eventually impact the transaction market, but currently has a strong opportunity set [36][37] Question: Can you elaborate on the acquisition of the Whistle car washes portfolio? - The company managed its car wash exposure while acquiring well-established sites with strong lease coverage [54][56] Question: How does the company view the credit side of its portfolio? - The company sees stability in cash flows and no major concerns emerging from its operators [64] Question: What are the characteristics the company looks for in convenience store investments? - The company seeks well-positioned convenience stores with strong inside store sales and stable corporate credit [102][103]