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]

Financial Data and Key Metrics Changes - The company generated AFFO per share of $1.17 for the first quarter, reflecting a year-over-year increase of 2.6% [21] - The AFFO guidance range remains reaffirmed at $4.82 to $4.92 per share, with expectations for growth above the 3.6% implied in the guidance [21][30] - 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 [26][28] 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% [7] - Contractual same-store rent growth for the quarter was 2.4% year-over-year, with comprehensive same-store growth at 4.5% [22] - Leasing activity included 16 renewals or extensions, representing 1.8% of portfolio ABR, recapturing 103% of prior rents [23] Market Data and Key Metrics Changes - The investment pipeline is expected to be approximately $570 million for 2025, with a solid near-term pipeline [8] - The market for net lease real estate remains stable, with minimal disruption in transaction activity despite broader economic uncertainties [8][10] - The company anticipates that sale leaseback transactions will continue to increase, providing attractive capital sources during market volatility [9] Company Strategy and Development Direction - The company remains focused on executing its investment plan for 2025, with good visibility into additional deals closing soon [5] - The strategy includes funding investments primarily through non-core asset sales, with expectations to generate at least 100 basis points of spread between asset sales and new investments [12][14] - The company is positioned to benefit from potential tightening of mortgage lending criteria, enhancing its competitive advantage in new investments [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operating environment, noting that uncertainty from tariffs has not yet impacted business performance [5][6] - The company believes its portfolio is resilient to economic downturns, focusing on large tenants with strong liquidity [15] - Management remains comfortable with the assumptions in their guidance and sees potential for growth in AFFO as visibility improves [18][31] Other Important Information - The company refinanced its euro term loan, fixing the interest rate below 3% through an interest rate swap, with minimal near-term debt maturities [11][29] - The dividend declared was $0.89 per share, representing a 2.9% increase over the prior year, with an expected annual payout ratio of 73% [30] Q&A Session Summary Question: Can you provide details on cap rates and the split between retail, industrial, and US/Europe? - The company targets cap rates in the mid-sevens, with a pipeline that is approximately 50% weighted towards Europe [36][38] Question: Will you consider selling more self-storage assets to fund acquisitions? - The company has flexibility in its disposition strategy and can consider additional self-storage sales if needed [44][46] Question: How does the company view its European exposure in relation to tariffs? - The majority of European tenants operate domestically, reducing exposure to tariffs, and the company remains confident in its European portfolio [54][56] Question: What is the company's approach to potential rent loss and repositioning capital? - The potential rent loss estimate includes downtime and is considered conservative, with minimal capital expenditures expected for repositioning [62][65] Question: What is the outlook for occupancy and known vacates in the next 18 months? - The overall scale of lease expirations is small, with one warehouse property expected to non-renew, fully embedded in guidance [71][72] Question: How is the company managing input costs for capital projects? - Most capital investments are subject to guaranteed contracts, with large buffers built in to manage cost exposure [77] Question: How competitive is the net lease market in the US and Europe? - The US market remains competitive with new entrants, while Europe is less competitive, providing the company with an advantage as an all-cash buyer [80][81] Question: How has inflation impacted lease negotiations? - The company has been able to push through higher fixed increases in leases, particularly in Europe, while CPI-linked increases have become more challenging in the US [86][88]

Portfolio & Leasing - The portfolio is 99.7% leased, demonstrating stability[11] - Same-store rent growth has averaged 1.4% over the last four quarters, indicating consistent performance[11] - Only 5.8% of ABR is expiring through 2029, with a strong 3.8x coverage ratio, minimizing near-term risk[11] - Top 10 tenants represent just 17.6% of ABR, showcasing diversification[11, 26] - 93% of cash ABR comes from service-oriented and experience-based tenants[30] Financials & Capital - Proforma Net Debt / Annualized Adjusted EBITDAre is 3.1x at 4Q'24-end, indicating low leverage[11] - The company has ~$1.5 billion of pro forma liquidity, providing excellent financial flexibility[11] - Weighted average debt maturity is 4.2 years, and the weighted average interest rate is 4.1%, reflecting well-laddered, low-cost debt[11, 84] - The company raised ~$309 million of common equity in 1Q'25, including ~$288 million through an overnight forward offering[11] Investment Activity - The company closed investments of ~$329 million in 2025 to date at ~7.7% cash yield[11] - ~$247 million of investments are under PSA or LOI, with a 2Q'25 expected cash yield of ~7.8%[11] - ~$24 million of dispositions closed in 2025 to date at 7.0% cash yield, with ~$26 million under PSA at 7.1% yield, demonstrating accretive capital recycling[11]