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 raised its full year AFFO growth outlook to 4.5% at the midpoint of the revised guidance range, driven by strong first half results [5][15] - AFFO per share for the second quarter was $1.28, representing a 9.4% increase year-over-year [15] - The company lowered its potential rent loss estimate to between $10 million and $15 million, down from $15 million to $20 million [18] Business Line Data and Key Metrics Changes - Year-to-date investments exceeded $1 billion, with $550 million closed in the second quarter at an initial weighted average cap rate of 7.5% [7][15] - The average yield on investments, factoring in rent escalations, is in the mid-nine percent range, one of the highest in the net lease sector [7][10] - Contractual same store rent growth for the second quarter was 2.3% year-over-year, with comprehensive same store rent growth at 4% [16][17] Market Data and Key Metrics Changes - The majority of second quarter investments were in warehouse and industrial properties, with a strong focus on the U.S. market [10] - Investment spreads in Europe have generally remained wider, contributing to a significant portion of the near-term pipeline [10] Company Strategy and Development Direction - The company is focused on accretive sales of non-core assets to fund new investments, with a goal of achieving over 100 basis points of spread between asset sales and new investments [12] - The company plans to ramp up its retail vertical while continuing to find better risk-adjusted returns in the industrial sector [71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum despite broader economic uncertainties, with no unforeseen disruptions in business to date [6][26] - The company anticipates a strong second half of the year, with potential to achieve high-end revised guidance ranges for both investments and earnings [26] Other Important Information - The company issued $400 million in bonds to enhance liquidity and strengthen its balance sheet, maintaining a low overall weighted average cost of debt at 3.1% [22][23] - The dividend was increased to $0.90 per share, representing a 3.4% increase over the prior year, with a payout ratio of approximately 73% of AFFO per share [24][25] 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][30] Question: Transitioning self-storage assets to net lease structure - The company has flexibility with the remaining self-storage portfolio and may lean into more sales or convert some to net lease [32][34] Question: AFFO guidance and potential headwinds - Management highlighted that the second quarter's elevated other lease-related income is a timing issue, and they expect to grow AFFO despite potential rent reserve impacts [44][46] Question: Credit quality of tenants and market conditions - The company targets sub-investment grade tenants and has seen improved credit quality among its tenant base [48][80] Question: Impact of trade discussions on business - Management noted no significant impacts from trade discussions to date, but they continue to monitor the situation [58][60] Question: Opportunities in Europe and the U.S. - The company sees good opportunities in both regions, with a balanced pipeline expected for the second half of the year [67][68] Question: Acquisition and disposition cap rates - Year-to-date acquisition cap rates are around 7.5%, while disposition cap rates are expected to approach 6% for the full year [96][98]