Financial Data and Key Metrics Changes - In 2025, the company achieved over 4.5% growth in AFFO per share, with a total investment of $1.55 billion across its three investment platforms, marking over 60% year-over-year growth [6][8] - Core FFO per share for Q4 was $1.10, representing a 7.3% year-over-year increase, while full-year Core FFO per share was $4.28, reflecting a 5.1% increase [21] - AFFO per share for Q4 was $1.11, a 6.5% year-over-year increase, and for the full year, it was $4.33, indicating 4.6% year-over-year growth [21][22] Business Line Data and Key Metrics Changes - In Q4, the company invested approximately $377 million in 94 high-quality retail net lease properties, with notable transactions including ground leases to Lowe's and Home Depot [11][12] - For the full year 2025, nearly $1.6 billion was invested in 338 retail net lease properties, with over $1.4 billion originating from the acquisition platform at a weighted average cap rate of 7.2% [12][13] - The development and DFP platforms had a record year with 34 projects completed or under construction, representing approximately $225 million of committed capital [13][14] Market Data and Key Metrics Changes - The company's investment-grade exposure at year-end stood at nearly 67%, with occupancy increasing to 99.7%, reflecting a 50 basis point improvement since the first quarter [16] - The weighted average cap rate for acquired properties was 7.1%, with a weighted average lease term of 9.6 years [12] Company Strategy and Development Direction - The company aims to increase its 2026 investment guidance to a range of $1.4 billion to $1.6 billion, representing a 10% increase from the prior range [9] - The company is focused on maintaining a fortress balance sheet and executing on its investment guidance without raising additional equity capital [20] - The company is enhancing operational efficiencies through IT improvements and anticipates a material reduction in G&A as a percentage of revenue [8][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals supporting the company's outlook, citing a strong portfolio and exceptional team depth [6] - The management noted that the current economic environment is challenging for middle-income consumers, which may impact retail trends [101] - The company expects to maintain a growth trajectory with a goal of delivering 10% operational returns and achieving two-year stacked AFFO growth [108] Other Important Information - The company raised approximately $1.5 billion in capital during the year, including a $400 million bond offering and a $350 million term loan [17][18] - The company achieved an A- rating from Fitch, which is expected to deliver long-term benefits to its cost of capital [16][20] Q&A Session Summary Question: Increase in 2026 investment guidance - Management indicated that the increase is due to secured transactions, including sale-leaseback deals and increased confidence in development projects [26] Question: Non-core asset sales - Management explained that capital recycling focuses on opportunistic sales of non-core assets, driven by valuations in the market [27] Question: Cap rate trends - Management noted no material changes in cap rates and that rent escalators have been stable, reflecting historical inflation [31][32] Question: Construction costs - Management confirmed that construction costs are not decreasing and are in line with last year's levels, with efforts to find efficiencies [33][34] Question: Sale-leaseback interest - Management stated that while there is no increase in sale-leaseback velocity, they have specific transactions lined up with existing tenants [40] Question: Development investment commitments - Management expressed optimism about growth in development investments but noted that timing is often subject to third-party approvals [69] Question: Credit loss assumptions - Management indicated that credit loss assumptions for 2026 are in line with 2025, with a focus on maintaining a strong portfolio [70]