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spk06: Please stand by. We're about to begin. Good day, ladies and gentlemen, and welcome to the National Retail Properties second quarter 2021 operating results call. After the presentation, there will be a question and answer session. If you should require assistance during the call, please press star zero and an operator will assist you. At this time, it's my pleasure to turn the floor over to Mr. Jay Whitehurst, CEO. Sir, the floor is yours.
spk04: Thank you, Tom. Good morning and welcome to the National Retail Properties second quarter 2021 earnings call. Joining me on this call is Chief Financial Officer Kevin Hobbitt and Chief Operating Officer Steve Horn. As this morning's press release reflects, National Retail Properties performance in 2021 continues to produce strong results, including continued high occupancy, impressive rent collections, and solid acquisitions driven by our proprietary tenant relationships. We're well positioned to continue enhancing shareholder value as we look ahead to the balance of 2021 and beyond. In July, we announced a roughly 2% increase in our common stock dividend effective later this month, thus making 2021 our 32nd consecutive year of annual dividend increases. National Retail Properties is in the select company of only 85 U.S. public companies, including only two other REITs, which have achieved this impressive track record. Based on our strong performance, we announced today a further increase in our 2021 guidance for core FFO per share to a range of $2.75 to $2.80 per share. Our long-standing strategy is designed and executed to generate consistent, per-share growth on a multi-year basis. And as the disruption caused by the pandemic and related store closures is easing, the value of this long-term approach is reflected in our second guidance increase this year. Turning to the highlights of National Retail Properties' second quarter financial results, our portfolio of 3,173 freestanding single-tenant retail properties continued to perform exceedingly well. Occupancy was consistent with the prior quarter at 98.3%, which remains above our long-term average of 98%. We also announced collection of 99% of rents due for the second quarter. Collection of previously deferred rent remained at an equally high percentage, and we forgave almost no rent during the quarter. These impressive collection results compare very favorably to other retail real estate companies, including those with a significantly higher percentage of investment grade tenants. Moreover, we believe that these results validate our strategy of doing direct sale leaseback transactions with large regional and national operators for well-located real estate parcels at low cost per property and reasonable rents. And while we're on the topic of large tenants, I'm pleased to report that one of our top tenants, Mr. Carwash, recently completed its initial public offering. Congratulations to John Lye and the entire management team at this impressive company. Mr. Carwash was one of our first relationship tenants 15 years ago, and we're very proud of the role that National Retail Properties has played in that company's growth and success. Turning to acquisitions, during the quarter we invested just under $103 million in 29 new properties at an initial cash cap rate of 6.7% and with an average lease duration of over 17 years. Almost all of our acquisitions were from relationship tenants with which we do repeat programmatic business. Year to date, we've invested over $208 million in 58 new properties leased to 10 different relationship tenants at an initial cash cap rate of 6.5% and an average lease duration of 17.5 years. In an environment where cap rates remain near all-time lows, we will continue to be very thoughtful in our underwriting and primarily pursue sale-leaseback transactions with our portfolio of relationship tenants. Based on our pipeline and conversations with those relationship tenants, we remain comfortable with our ability to meet and hopefully exceed our 2021 acquisition guidance of $400 to $500 million, primarily via direct sale leaseback transactions with long-duration leases. During the second quarter, we also sold 15 properties, raising almost $23 million of proceeds to be reinvested in new acquisitions. And year to date, we've now raised over $40 million from the sale of 26 properties, including 15 vacant properties. Although job one is always to release vacancies, and our leasing team does an excellent job of it, we'll continue to sell non-performing assets if we don't see a clear path to generating rental income within a reasonable time period. Our balance sheet remains one of the strongest in our sector. In June, Kevin led the recast of our unsecured line of credit, increasing the capacity of our facility from $900 million to $1.1 billion. Although our credit line has been upsized, the balance outstanding remains the same, zero, and we ended the quarter with approximately $250 million of cash on hand. With no material debt maturities until 2024, we remain well positioned to fund our 2021 acquisition guidance without needing to tap the capital markets. And with that intro, let me turn the call over to Kevin for more color on our quarterly numbers and updated guidance. Thanks, Jay.
spk08: And as usual, I'll start with a cautionary statement that we will make certain statements that may be considered to be forward-looking statements under federal securities laws. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we may not release revisions to these forward-looking statements to reflect changes after the statements were made. factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's filings with the SEC and in this morning's press release. With that, headlines from this morning's press release report quarterly core FFO results of 70 cents per share for the second quarter of 2021. That's up one cent from the preceding first quarter, 69 cents per share, and it's up five cents from The prior year, $0.65. Today, we also reported that AFFO per share was $0.77 per share for the second quarter, and that's also up $0.01 from the preceding first quarter's $0.76. We did footnote this amount includes $8.3 million of deferred rent repayments and our accrued rental income adjustment in the second quarter, AFFO number. So without that, we would have produced AFFO of 72 cents per share. Excluding those deferral repayments, our AFFO dividend payout ratio for the first six months was 72.7%. That's fairly consistent with prior years levels. Occupancy, as Jay mentioned, is 98.3% at quarter end. That's been fairly flat compared to recent quarters. G&A expense was $11.9 million for the second quarter. The increase for the quarter and the six months is largely driven by incentive compensation. Rent collections continue to remain strong in the second quarter. As Jay mentioned, today we reported rent collections of approximately 99% for the second quarter rent. Collections from our cash basis tenants, which represent about 7% of our total annual base rent, improved to approximately 92% for the second quarter rent, and that's up from 80% previously reported for that cohort in the first quarter of 2021. As Jay noted, we increased our 2021 core FFO per share guidance from a range of $2.70 to $2.75 per share to a new range of $2.75 to $2.80 per share. This incorporates the better than expected rent collections and the actual results from the first half of 2021. Some of the assumptions supporting this guidance are noted on page seven of today's press release, which are largely unchanged from last quarter's guidance. The driver for the increase in our full year guidance is the assumed higher rent collection rate, more in line with our current collection rates. So while we previously assumed 80% rent collection from the $50 million of cash basis tenant annual base rent, we are now assuming 90% rent collections. That incremental 10% amounts to about $5 million on an annual basis. And for the remainder of our tenants, we continue to assume 1% of potential rent loss. And again, that's consistent with our prior guidance. We ended the quarter with $250 million of cash on hand and no amounts outstanding on our newly recast $1.1 billion bank credit facility. This bank line, as Jay noted, increased from $900 million in size to $1.1 billion. The interest rate was reduced 10 basis points to LIBOR plus 77 basis points, and maturity was extended to June of 2025. Our liquidity is in excellent shape. Our weighted average debt maturity is now 13 years with a 3.7% weighted average fixed interest rate. Our next debt maturity is $350 million with a 3.9% coupon in mid-2024. The very good liquidity and leverage position have no real need to raise any additional capital to meet 2021 acquisition guidance. and we're well positioned as we look forward to 2022. A couple numbers, net debt to gross book assets was 35%. At quarter end, net debt to EBITDA was 5.0 times at June 30. Interest coverage, 4.7 times, and fixed charge coverage, 4.2 times for the second quarter. Only five of our 3,000-plus properties are encumbered by mortgages. So 2021 is shaping up to be a very solid year for us as the economy and retailers capture the government stimulus, which feels like it will have some tailwinds into 2022. Our focus remains on the long term as we continue to endeavor to give NNN the best opportunity to succeed in the coming years and, importantly, growing per share results. And with that, Tom, we will open it up to any questions.
spk06: Thank you, sir. And ladies and gentlemen, if you'd like to ask a question at this time, it's star 1 on your touchtone telephone. Please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that's star 1 on your touchtone telephone at this time if you'd like to ask a question. We'll take our first question from Katie McConnell with Citi.
spk09: Hi. Good morning, guys. This is Parker DeCranney actually on for Katie. Jay, I noticed that you guys bought a theater asset during the quarter, and I was just wondering if you guys, given the improved rent collections, just on a more long-term basis, how you think about the industry and sort of the changing dynamics there.
spk04: Right. Let me clarify something there. We did not buy that theater. AMC had been a guarantor of another theater. They spun off some theaters but remained a guarantor of the lease. And so AMC took over that theater as part of a restructuring a workout with the other tenant that was struggling. So we did not, we didn't buy another theater. It just became an AMC in our portfolio. That is the line of trade that we've certainly still continue to have the most concern about coming out of the pandemic. We're happy with the, or comfortable, I should say, with the theater exposure that we have. We acquired our theaters a number of years ago at lower price per property and more reasonable rents than some of the theater transactions that have traded in the last few years that we passed on. That said, that business has been challenged for quite a period of time. We have not been looking to expand our theater exposure for a number of years now. Will is going to continue to be very thoughtful about any theater transactions that are out there in the world that we might be looking at. It's unlikely you'd see us buy any movie theaters anytime soon.
spk09: Yeah, that's what I figured out. Thank you for the clarification there. And then just my second question is just on rent collections for full-service restaurants. I think they lagged a bit. Is that just tied to specific tenants or just sort of what's the sort of color there?
spk04: Kevin, you may have a little bit of color, but I think for full-service tenants and for movie theaters, they're both below kind of everybody else is running 98% or higher. And for those two categories, it's both continuing rent deferrals for tenants where the second quarter rents were deferred to be repaid later as opposed to rent forgiveness or even disputes with the tenants. It's just rent that we expect to get later down the road.
spk09: Okay. Got it. Thank you, guys.
spk06: We'll take our next question from Elvis Rodriguez with Bank of America.
spk01: Good morning and thank you for taking the questions. Can you share an update on your acquisition pipeline? I know you commented on the call having an opportunity to exceed that. How's it looking today and what's the likelihood that you will exceed the high end of your range?
spk04: Elvis, hey, welcome to the call. Nice to talk to you. I'll let Steve Horn talk about the pipeline a little bit, but just at the macro level, let me kind of remind folks about the way we look at this. Our strategic goal is to generate consistent mid-single digits per share growth on a multi-year basis. And there's a lot of inputs that go into achieving that goal. Acquisitions is certainly the most impactful, but it really is just an input into the calculation of achieving that long-term strategic goal of consistent mid-single digits per share growth. And our strategy as it relates to acquisitions is to do repeat programmatic business with portfolio of large regional and national operators with whom we can build these relationships and do this repeat business. If we do that, we get slightly better real estate because the retailer doesn't sell us a property that the retailer is worried about. We get a lease document that is tailored to our needs, to what we think is important. and we get a long duration 15 to 20 year lease. And those are all advantages to us over going out into the open market, the one-off market, the 1031 exchange market, and acquiring properties in a one-off basis. And we get a slightly better cap rate with our relationship tenants than you would get in the open market. So that's the strategy that drives our acquisition efforts. And so, Steve, with that kind of macro intro, you want to talk about the pipeline and how that all spans?
spk07: Yeah. What a year makes a difference as far as the pipeline. I sat here last year at this time. We didn't have a pipeline. But our relationship tenants have started growing and they're continuing to grow through 2021. So our pipeline is pretty solid right now. Year to day, we've closed a little bit over $200 million. Our guidance to your question was $400 to $500 million. So as I sit here today, I'm very comfortable with that guidance. Our pipeline is very robust. Keep in mind, we could always hit the number and just go buy whatever we wanted if we just threw out the window of lease duration and cap rate. We're still looking for that low to sick cap rate with long lease term. We're relying on our relationships. As far as the industry sectors, it would be what you would expect. Convenience stores, auto service, and QSR restaurants. There's a significant amount of volume in those industries currently. So, yeah, feeling good about the pipeline as we sit here today.
spk01: Great. And just to follow up on that, some of your peers have mentioned an increase in the sale leaseback activity. I'm assuming you're seeing the same, but just, you know, you're not chasing the lower quality sale leaseback opportunities. Is that the right way to categorize it?
spk07: No, I mean, 2021, you know, just based on our peers and the volume that's being done, there has been definitely an increase in the sale leaseback market. But keep in mind, a lot of our peers buy just assets in the open market and don't focus completely on the sale leaseback. But yeah, there's a lot of private equity activity in the QSR space and auto service space. So there has been an increase in the sale leaseback market.
spk04: Yeah, Elvis, our relationship tenants kind of took a pause in the middle of last year while they got their own businesses sorted out and figured out how to do business through the pandemic. And they did figure that out. And you can see how that's all been reflected in both our occupancy rate and our collections rate. They've all bounced back across every sector. And so the conversations that we're having with them, now they are They are in growth mode and they're looking to expand their businesses. And I think for a lot of the lines of trade, there's good M&A opportunities in their particular lines of trade for our tenants to pick up some of the smaller companies that struggled more in the pandemic. So the pipeline feels good, and the longer future, the wide end of the pipeline and the more distant future feels good to us as well.
spk06: Thank you. And we'll take our next question from Spencer Holloway with Green Street.
spk00: Thank you. I don't think you guys touched on this yet, but can you just provide a little color on the industry mix overall for your acquisitions made in the quarter?
spk04: Spencer, can you say that one more time? We didn't quite hear it.
spk00: Yeah, can you provide a little color on the industry mix for the acquisitions made in the quarter?
spk07: Hi, Spencer. Hey, this is Steve. The industry mix kind of looks like our current portfolio, right? For the most part, it was a little bit heavier in auto services sector, but it was kind of your typical QSRs. We did have the general retailer Best Buy in there and some equipment rental. For the most part, it was auto service. It was a little bit heavier than historical.
spk04: Spencer, the second quarter was kind of the quarter of the car wash. Okay.
spk00: And then just, you know, as the transaction market has, you know, opened up more and you guys have become a little bit more active again, is anything either surprised, you know, positively to surprise the upside or to the downside in terms of, you know, cap rate movements or is anything really shocked you in terms of, you know, just transaction activity?
spk04: You know, I'll take the first stab at this. I'd say nothing's really shocked us. We, you know, cap rates remain, you know, very low, but that's driven in our minds to a large degree by just a lot of, as people say, cash sloshing around in the market. It's just a lot of capital out there chasing transactions. And, you know, what we've found is all through the years is that cap rates tend to not move up even in situations when one thinks they might. Otherwise, going into the pandemic, we felt like our retailers were experienced and had their own businesses in good shape. And we felt like they would get through it and out the other side. And they have. And our real estate, we felt, was well located and was in high demand prior to the pandemic. And we expected that it would be in high demand after the pandemic. And again, I think our numbers indicate that that's validated itself too. So to a large degree, what we've The thing it felt like is that this pandemic, just like the great financial crisis of 08-09, has validated our strategy of dealing with larger operators and focusing on good locations at reasonable prices and low rents.
spk00: Okay, great. Thanks for that color. And then maybe just one more if I may. On the disposition front, how many of these assets sold in the quarter were vacant and then were any of the divestment cash basis tenants?
spk04: In any one quarter, it's a small sample size. I think in general, our dispositions are going to be 50% leased and 50% vacant, give or take 5% or 10%.
spk08: Kevin, would you agree? The proceeds are running in that ballpark, too. Year-to-date, it's about 50-50 on vacant versus occupied. I don't have the note or the data in front of me at the moment just to, I guess, respond to the occupy and how many are cash basis. I don't think there's very many of those. That's not a driver. It might be zero. That's not a driver of our decision process, to be honest. We don't actually, I mean, while we'd like everybody to be a cruel basis and have strong credit and feel comfortable about future lease collections, being labeled cash basis is not the biggest stigma in our mind.
spk00: Okay. Thank you, guys.
spk06: We'll take our next question from Wes Galladay with Baird.
spk05: Hey, good morning, guys. I just had a question on the sell-leaseback activity. Do you think we'll get back to 2019 levels for the industry and with your tenants? And do you expect to maintain your share with the existing relationships?
spk04: You know, Wes, I think the short answer to that question is yes and yes. I do think that as our tenants continue to get back into growth mode, we'll have the same level of volume or additional volume opportunities from each of them. And the acquisitions group that works for Steve is out building new relationships every day and will continue to grow the overall pool of tenants with whom we do repeat programmatic business with. In the overall marketplace, I think it's going to be equal or greater volume as to what the entire universe was looking at pre-pandemic.
spk05: Okay, thanks for that. And then when we look at the back half of the year, you did kind of call out M&A activity. Will that be a big part of the second half story? And would you guide us to, or maybe not guide us, but I guess, how should we think about the split between 3Q and 4Q? I wouldn't...
spk04: want to guess at that at this point. We know that our tenants are looking at growing their business, and we know there's going to be opportunities out there, but it never makes a lot of sense to us to try to predict timing too precisely. Our guidance is generally kind of back-end loaded, so we feel good about where we are right now in case it turns out that this year it's not back-end loaded. But I wouldn't want to get too granular on predicting when transactions might occur. There's a lot of things that might make things either speed up or slow down. Steve, did you have anything more on that than the folks you're talking to?
spk07: No, I think, you know, as we say internally a lot, we're a couple phone calls away from the pipeline not being as strong. So we don't try to focus on the timing. We kind of focus on getting the deals done. as fast as we can. But as far as, you know, kind of our outlook, as you can imagine, you know, our industry is, you know, three months out, four months out. Usually you don't have a pipeline for December quite yet. So, you know, the pipeline, when we talk about it, is a little bit more short-sighted. You know, third quarter, you know, some will slide into the fourth quarter.
spk06: Got it. Thanks a lot, guys. And we'll take our next question from Ronald Camden with Morgan Stanley.
spk10: Sure. Congrats on a good quarter. Just two quick ones from me. One on the cash basis tenants collection, the 92%. Is it fair to say that 8% that's lagging, is that still just movie theaters and so forth, or is there any other sort of notable bucket to call out?
spk08: Not really. No, I mean, it's, you know, it's, We had the four big lines of trade that had some impact from the pandemic. Our primary cash basis tenants are AMC, Frisch's, Chuck E. Cheese, and Ruby Tuesday. Those four probably make up 90% of our cash basis tenant bucket, so it's a mix in that arena. We've talked about the theaters are the most challenged and pressed, and you can see that in our collection numbers to some degree. But I call theaters and casual dining primarily.
spk10: Got it. That's helpful. And then I think this was asked earlier, just making sure I understand. So on the disposition side, was any of the assets cash basis tenants? Sorry, I don't think I missed the answer to that.
spk08: Yes. No, I think we concluded that we really didn't sell any cash basis tenants in the second quarter. And like I said, that's not a particular driving factor or important factor to us in making a fold or sell kind of decision, to be honest.
spk10: Got it. And then, sorry, last question, if I may. When you're thinking about sort of the industry mix, And so far, I think you talked about that sort of this quarter was big for car washes. Is there any sort of other sort of subsector or subsegments that over the last three to six months that you've gotten more constructive on or more attractive? And is there any other that you'd probably want to sort of get away from? Thanks.
spk04: What we try to do is build relationships with retailers in all the different lines of trade where you'll find retail type properties located along high traffic roads. And what history's taught us is that transaction volume among industries will kind of ebb and flow due to one reason or another. So we don't spend too much time trying to project ahead about what particular lines of trade are going to be active or anything like that. We want to build relationships with lots of operators and then after that the whole process is very bottoms up. It's what real estate are they acquiring and do they want to do a sale lease back and if so what's the right terms for that and then to get on down the road. I think if you look at what we've done recently, Steve's group has done a great job of building relationships with different tire store operators. We've done some car wash deals with a number of different operators and equipment rental We have deep relationships across all of the fast food concepts. Really looking down the road, I think what you will see with us is the portfolio down the road will look a whole lot like the portfolio that it is right now. And we will continue to be pretty thoughtful and pretty prudent about doing, you know, bigger boxes, bigger and more special purpose boxes. I think every REIT is going to be, you know, kind of cautious about those kind of properties for the time being. Those were the ones that gave people the most heartburn during the pandemic.
spk10: Super helpful. Thank you.
spk06: And we'll take our next question from John Masaka with Lennberg-Fellman.
spk03: Good morning. Morning. So I think you got asked about this on the last earnings call, but obviously with the kind of collections moving up to 92%, I don't know, has your outlook changed at all for moving some of these cash basis tenants to accrual accounting again? And I guess, if so or if not, I mean, how many months or quarters of kind of consistent payment do you want to see before making those changes?
spk08: Well, consistent with our deliberative and sometimes slow-moving thought process, we just, again, I don't view it as a big stigma as having a tenant labeled as cash basis. I don't think it's bad accounting, meaning cash. You report what you collect. All I have to say is we're not in a particular hurry to get folks back to accrual basis. We said, really, at the time we moved them to cash basis, it certainly wasn't going to be one year. It would be more than a year before we thought that it might be worthwhile to move them back to accrual. We're going to want to see some quarters of performance from those tenants before we get too interested in making that change. Like I say, in the meantime, we don't view it as a big negative to have them labeled cash basis. In our minds, it's not terrible accounting. All that to say is it'll probably be next year sometime before we've start to possibly drift some of those tenants from cash basis to accrual basis.
spk03: Okay, understood. And then, you know, speaking of kind of tenant health, you know, now that you're collecting, you know, close to 100% of rent, I mean, you know, broad brushstrokes, what are you seeing in terms of kind of coverages? Do you have that data yet? Does it look kind of like maybe what it was looking like historically pre-pandemic? Just any color there would be helpful.
spk08: I mean, the data is still, you know, kind of coming in, so there's somewhat of a lag. Sometimes we get quarterly data, some annual, but it feels to us that the vast majority of our portfolio, they're at kind of prior coverage levels that were very strong, and so we feel pretty good on that front. You know, the one, you know, question always lingers in my mind anyway is, you know, how much of it is, stimulus-related, and so how lasting and long-term will be once we get to a post-stimulus environment. But it feels very good right now in terms of coverages, and what we've seen in a number of our tenants is not only is that their profitability has improved through this pandemic as they've rethought processes and cost structures and all kinds of things. Margins have held up very well, and so they've actually done well in terms of the profitability and therefore the rent coverage.
spk03: Okay, and then one last quick one. What drove the impairment in the quarter? Just thinking specifically with the pretty high rent collection, just any color there would be helpful.
spk08: Well, the impairment for the quarter, I mean, it was a number of properties. I mean, it was primarily... two or three larger dispositions that ended up getting impaired. And I'd say three of the top four were vacant properties that were sold or going to be sold. And so that was really the driver of that.
spk03: Okay. That makes perfect sense. And that's it for me. Thank you very much.
spk06: Once again, ladies and gentlemen, if you'd like to ask a question at this time, it is Star 1 on your touchtone telephone. Star 1 to ask a question. We'll go next to Linda Tsai with Jefferies.
spk02: Hi. It looks like guidance on your real estate expenses net of reimbursements went down a little and then G&A went up. Can you just give some more color on the shifts?
spk08: Yeah, fair comment. They didn't move a whole lot, but they did move a little. You know, the property expenses just, you know, we generally model the property expenses to somewhat mere vacancy or rent loss, if you will, and so to the extent rent loss projections improve, it also tends to improve our property expenses. So at the margin, that was the primary difference there. And on G&A, that's largely just a function of incentive comp, which was down notably last year and will get back to more normal levels in this year, hopefully. And so just accruals related to that.
spk02: Thanks. And then you talked about some of the challenges of movie theaters and full-service restaurants. You know, what are your thoughts on fitness as an industry right now? Is this an area you would invest in further?
spk04: Yeah, when the pandemic struck, that was one of the lines of trade that we were concerned about. Our primary fitness exposure is with LA Fitness and Lifetime Fitness. And both of those companies have gotten through the pandemic in pretty good shape. And anecdotally, what we hear and feel is that that customers do want to get back to working out at the gym. The folks that were using the gym before want to get back to using the fitness facilities again. Over the long haul, we think that that industry will rebound. I mentioned in answer to one of the previous questions that we're going to be very thoughtful about bigger boxes that are more special purpose and to some degree the fitness center properties fall into that category. We'll be thoughtful about that. But to the extent a portfolio of fitness centers was out there or our relationship tenants had some transactions that they wanted to do, those are things that we would look at. We would focus on the cost per property and the rent, but that would be something we would look at. Got it.
spk02: Just one last one. As you look out over the next six to 12 months, what's your preferred source of financing?
spk08: A tough one for us.
spk04: So I was going to say stock at $60 a share.
spk08: Yeah, there you go. Yeah. So, I mean, we, we are constantly kind of evaluating what's the best opportunity in the marketplace for us. The good news is we don't need any capital. We, frankly, for much of that time period that you laid out there. So it'll be a variety, the usual mix of our capital structure. We're not looking to change that notably, and so it'll be a blend of debt and equity as usual. Both are relatively well priced. But we try to pivot and source capital at good opportunities when the time's appropriate. and capital is available and well-priced. We take a very long-term view to that. We don't think about we need to get more debt or more equity today or tomorrow. We know we're thinking about two years out and how to position the balance sheet and the liquidity that we have. So I'm being a little bit elusive with one reason we don't give guidance on our capital raises because we tend to be fairly opportunistic on that front and we'll see what the markets divvy up for us.
spk04: Two other sources of capital that people forget about sometimes. One is dispositions. We have historically been able to sell $100 million or so properties per year at cap rates below what we are reinvesting at. So we've been able to creatively recycle capital through our disposition business and we have hundreds if not thousands of properties in the portfolio that would sell for very low cap rates. And the other is just kind of free cash flow after payment of dividends. We have, Kevin, what, around $120 million?
spk08: In a normal year, it would be around $120 million this year because of the rent deferral repayments. Actually, that number is, you know, notably higher. And so, you know, we're looking at, you know, total rent deferral repayments of around $30 million. So it will be closer to $150 million this year.
spk04: All of which positions us really well to try to be in a position where we don't need capital in order to fund our guidance and deal with whatever opportunities are out there.
spk02: Thank you.
spk06: Mr. Whitehurst, there appears to be no further questions at this time. I'd like to turn the call back over to you for any closing remarks.
spk04: All right. Thank you, Tom, and thank you all for joining us this morning. We look forward to hopefully seeing many of you in person during the fall conference season. Have a good day.
spk06: Ladies and gentlemen, this does conclude today's conference. We appreciate your participation. You may disconnect at this time, and have a great day.
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