Financial Data and Key Metrics Changes - The company reported an AFFO per share of $1.28 for the second quarter, representing a 9.4% increase year-over-year, driven by accretive investment activity and sector-leading rent growth [16] - The full-year AFFO guidance range has been raised to between $4.87 and $4.95 per share, implying a 4.5% year-over-year growth at the midpoint [16][27] - Contractual same-store rent growth for the second quarter was 2.3% year-over-year, with comprehensive same-store rent growth at 4% [17] Business Line Data and Key Metrics Changes - The majority of second-quarter investments were in warehouse and industrial properties, which also represent the bulk of the investment pipeline [10] - The average yield on investments year-to-date is in the mid-nine percent range, one of the highest in the net lease sector [8][10] - The company has closed approximately $550 million in deals during the second quarter at an initial weighted average cap rate of 7.5% [8] Market Data and Key Metrics Changes - Investments were primarily concentrated in the U.S., with a notable increase in deal volume in Europe during the third quarter [10] - The company has identified a strong pipeline of $700 million in advanced-stage deals, with expectations for continued favorable market conditions [9] Company Strategy and Development Direction - The company is focused on maintaining strong investment volume and has raised its investment guidance for the year, expecting to complete $1.4 billion to $1.8 billion in investments [16][27] - The strategy includes accretive sales of non-core assets, with an expectation of achieving over 100 basis points of spread between asset sales and new investments [12] - The company aims to continue building its portfolio through capital projects, including build-to-suits and expansions, with nearly $300 million of projects underway [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum despite broader economic uncertainties, noting no unforeseen disruptions in business or tenant credit events [7][26] - The company is monitoring trade policy developments but has not seen direct impacts on its portfolio [14][56] - Management believes the foundation built this year positions the company well for long-term growth and value creation for shareholders [27] Other Important Information - The company declared a dividend of $0.90 per share, representing a 3.4% increase over the prior year, with a payout ratio of approximately 73% of AFFO per share [25] - The company ended the second quarter with liquidity of about $1.7 billion and a low weighted average cost of debt at 3.1% [23][24] Q&A Session Summary Question: Expectations for comprehensive income in the second half of the year - Management expects comprehensive income to normalize in the back half of the year, potentially tracking slightly above contractual levels [29][31] Question: Transition of self-storage operating portfolio to net lease structure - The company has flexibility regarding the remaining self-storage portfolio and may lean towards more sales or conversions to net lease structures [33] Question: AFFO guidance implications for the second half of the year - Management highlighted that the second quarter's elevated other lease-related income is expected to normalize, impacting AFFO guidance [42][43] Question: Credit quality of tenants and market conditions - Management noted improved credit quality among tenants and a stable transaction market, which is driving increased opportunities [78] Question: Impact of new entrants in the net lease market - Management acknowledged increased competition but remains confident in its ability to compete effectively in the market [83] Question: Acquisition and disposition cap rates for the quarter - The company reported acquisition cap rates in the mid-sevens and disposition cap rates approaching 6% for the full year [95][96]

Financial Data and Key Metrics Changes - The company generated AFFO per share of $1.17 for Q1 2025, reflecting a year-over-year increase of 2.6% [22] - The AFFO guidance range has been reaffirmed at $4.82 to $4.92 per share, indicating a cautious optimism for exceeding the 3.6% growth implied in the guidance [22][31] - Operating property NOI totaled $16.6 million, with expectations of generating between $70 million and $75 million of operating NOI during 2025, excluding expected dispositions [27][29] Business Line Data and Key Metrics Changes - The company closed approximately $450 million in investments year-to-date, with an initial weighted average cap rate of 7.4% [9] - Contractual same-store rent growth for the quarter was 2.4% year-over-year, expected to remain around that level for the full year [23] - Comprehensive same-store growth for the quarter was 4.5% year-over-year, partly benefiting from prior rent abatements [24] Market Data and Key Metrics Changes - The investment pipeline is expected to close approximately $570 million in deals for 2025, with a solid near-term pipeline [10] - The company has seen little disruption in net lease transaction activity, indicating resilience in the market for net lease real estate [10][11] - The company is currently in the market with a sizable portfolio of operating self-storage assets, representing about half of its total self-storage operating NOI [14] Company Strategy and Development Direction - The company remains focused on executing its investment strategy while navigating uncertainties related to tariffs and tenant credit [6][8] - The strategy includes funding investments primarily through non-core asset sales, with expectations of generating proceeds at cap rates that allow for accretive funding [23][29] - The company believes its investment spreads are underappreciated by the market, emphasizing the importance of rent growth over the life of leases [15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operating environment, noting that uncertainty surrounding tariffs has not yet impacted business performance [6][7] - The company remains comfortable with its guidance assumptions and sees potential for increasing AFFO growth estimates as visibility improves [19][32] - Management highlighted that the portfolio is built to withstand economic downturns, focusing on large companies with greater liquidity [16] Other Important Information - The company refinanced its euro term loan, fixing its interest rate below 3% through an interest rate swap, and has minimal additional debt maturities in 2025 [12][29] - The company declared a dividend of $0.89 per share, representing a 2.9% increase over the prior year, with an expected annual payout ratio of 73% [31] Q&A Session Summary Question: Can you provide details on cap rates and the pipeline split between retail, industrial, and US/Europe? - The company targets deals in the mid-sevens for cap rates, with the pipeline being approximately 50% weighted towards Europe [35][37] Question: Will you consider selling more self-storage assets to fund acquisitions above the current outlook? - The company has flexibility in its disposition strategy and can consider selling more self-storage assets if needed [43][45] Question: How does the company view the impact of tariffs on its European exposure? - The majority of European tenants operate domestically, making them less susceptible to tariff impacts [54][55] Question: What is the company's strategy regarding potential rent loss and tenant credit? - The company has accounted for potential rent loss in its guidance and believes its estimates are sufficient even if tariffs pressure tenants [26][62] Question: Is there any concern regarding input costs for capital projects? - Most capital investments are subject to guaranteed contracts, minimizing exposure to cost fluctuations [75][76] Question: How competitive is the net lease market currently? - The net lease market remains competitive, particularly in the US, but the company benefits from being an all-cash buyer [78][80]