STORE Capital Announces Third Quarter 2020 Operating Results
STORE Capital Corporation (NYSE: STOR) reported Q3 2020 revenues of $175.2 million, a 2% increase year-over-year. Net income was $54.6 million ($0.21/share), down from $111.6 million in Q3 2019. Adjusted Funds from Operations (AFFO) rose to $119.1 million ($0.47/share). The company declared a dividend of $0.36 per share, a 2.9% increase. Investments totaled $250.9 million across 52 properties. Despite challenges from COVID-19, monthly rent collections improved from 70% in May to 90% in October 2020.
- Total revenues increased 2% year-over-year to $175.2 million.
- AFFO rose 2.6% to $119.1 million ($0.47/share).
- Regular cash dividend increased by 2.9% to $0.36/share.
- Invested $250.9 million in 52 properties at an 8.3% cap rate.
- Monthly rent collections improved from 70% in May to 90% in October.
- Net income decreased to $54.6 million ($0.21/share) from $111.6 million ($0.48/share) in Q3 2019.
- Net gain on real estate dispositions fell from $59.3 million in Q3 2019 to $3.5 million in Q3 2020.
SCOTTSDALE, Ariz.--(BUSINESS WIRE)--STORE Capital Corporation (NYSE: STOR, “STORE Capital” or the “Company”), an internally managed net-lease real estate investment trust (REIT) that invests in Single Tenant Operational Real Estate, today announced operating results for the third quarter ended September 30, 2020.
Highlights
For the quarter ended September 30, 2020:
-
Total revenues of
$175.2 million -
Net income of
$54.6 million , or$0.21 per basic and diluted share, including an aggregate net gain of$3.5 million on dispositions of real estate -
AFFO of
$119.1 million , or$0.47 per basic and$0.46 per diluted share -
Declared a regular quarterly cash dividend per common share of
$0.36 -
Invested
$250.9 million in 52 properties at a weighted average initial cap rate of8.3% -
Raised
$215.0 million in net proceeds from the sale of an aggregate of approximately 8.0 million common shares under the Company’s at-the-market equity program
For the nine months ended September 30, 2020:
-
Total revenues of
$521.4 million -
Net income of
$157.9 million , or$0.63 per basic and diluted share, including an aggregate net gain of$6.8 million on dispositions of real estate -
AFFO of
$347.8 million , or$1.39 per basic and diluted share -
Declared regular cash dividends per common share aggregating
$1.06 -
Invested
$650.4 million in 130 properties at a weighted average initial cap rate of8.1% -
Raised
$540.5 million in net proceeds from the sale of an aggregate of approximately 20.9 million common shares under the Company’s at-the-market equity program
Management Commentary
“Our third quarter performance reflects the strength of our investment strategy, with a highly diverse net lease contract portfolio backed by well-positioned, strong regional and national tenants,” said Christopher Volk, Chief Executive Officer of STORE Capital. “With virtually all our portfolio properties now open for business, our collections accelerated. More importantly, the relative high yield on our portfolio investment demonstrated our ability to realize superior risk-adjusted performance. Given this achievement, we were proud to raise our dividend by
Financial Results
COVID-19 Update
The pandemic has impacted the Company through government mandated limits imposed on tenant businesses and continuing public perceptions regarding safety, which impacted its tenants’ ability to pay rent. In response to tenant requests, the Company provided rent relief, primarily through short-term rent deferrals or lease modifications. To date, the Company has increased its monthly rent and interest collections from
Total Revenues
Total revenues were
Total revenues for the first nine months of 2020 were
Net Income
Net income was
Net income includes such items as gain or loss on dispositions of real estate and provisions for impairment, which can vary from quarter to quarter and impact net income and period-to-period comparisons.
Net income for the nine months ended September 30, 2020 was
Adjusted Funds from Operations (AFFO)
AFFO increased
AFFO for the nine months ended September 30, 2020 was
AFFO for the three and nine months ended September 30, 2020, included approximately
Dividend Information
As previously announced, STORE Capital declared a regular quarterly cash dividend per common share of
Real Estate Portfolio Highlights
Investment Activity
The Company originated
Disposition Activity
During the nine months ended September 30, 2020, the Company sold 43 properties and recognized an aggregate net gain on the dispositions of real estate of
Portfolio
At September 30, 2020, STORE Capital’s real estate portfolio totaled
The Company’s portfolio of real estate investments is highly diversified across customers, brand names or business concepts, industries and geography. The following table presents a summary of the portfolio.
Portfolio At A Glance - As of September 30, 2020 |
|||
Investment property locations |
|
2,587 |
|
States |
|
49 |
|
Customers |
|
511 |
|
Industries in which customers operate |
|
114 |
|
Proportion of portfolio from direct origination |
|
~80 |
% |
Contracts with STORE-preferred terms*(1) |
|
96 |
% |
Weighted average annual lease escalation(2) |
|
1.9 |
% |
Weighted average remaining lease contract term |
|
~14 years |
|
Occupancy(3) |
|
99.6 |
% |
Properties not operating but subject to a lease(4) |
|
50 |
|
Investment locations subject to a ground lease |
|
22 |
|
Investment portfolio subject to NNN leases* |
|
99 |
% |
Investment portfolio subject to Master Leases*(5) |
|
93 |
% |
Average investment amount/replacement cost (new)(6) |
|
80 |
% |
Locations subject to unit-level financial reporting |
|
98 |
% |
Median unit fixed charge coverage ratio (FCCR)/4‑Wall coverage ratio(7) |
|
2.0x/2.5x |
|
Contracts rated investment grade(8) |
|
~74 |
% |
| ________________ | ||
| * Based on base rent and interest. | ||
(1) |
Represents the percentage of lease contracts that were created by STORE or contain preferred contract terms such as unit-level financial reporting, triple-net lease provisions and, when applicable, master lease provisions. |
|
(2) |
Represents the weighted average annual escalation rate of the entire portfolio as if all escalations occurred annually. For escalations based on a formula including CPI, assumes the stated fixed percentage in the contract or assumes |
|
(3) |
The Company defines occupancy as a property being subject to a lease or loan contract. As of September 30, 2020, eleven of the Company’s properties were vacant and not subject to a contract. |
|
(4) |
Represents the number of the Company’s investment locations that have been closed by the tenant but remain subject to a lease. |
|
(5) |
Percentage of investment portfolio in multiple properties with a single customer subject to master leases. Approximately |
|
(6) |
Represents the ratio of purchase price to replacement cost (new) at acquisition. |
|
(7) |
STORE Capital calculates a unit’s FCCR generally as the ratio of (i) the unit’s EBITDAR, less a standardized corporate overhead expense based on estimated industry standards, to (ii) the unit’s total fixed charges, which are its lease expense, interest expense and scheduled principal payments on indebtedness (if applicable). The 4‑Wall coverage ratio refers to a unit’s FCCR before taking into account standardized corporate overhead expense. The weighted average unit FCCR and 4‑Wall coverage ratios were 2.8x and 3.7x, respectively. |
|
(8) |
Represents the percentage of the Company’s contracts that have a STORE Score that is investment grade. The Company measures the credit quality of its portfolio on a contract-by-contract basis using the STORE Score, which is a proprietary risk measure reflective of both the credit risk of the Company’s tenants and the profitability of the operations at the properties. As of September 30, 2020, STORE Capital’s tenants had a median tenant credit profile of approximately ‘Ba3’ as measured by Moody’s Analytics RiskCalc rating scale. Considering the profitability of the operations at each of its properties and STORE’s assessment of the likelihood that each of the tenants will choose to continue to operate at the properties in the event of their insolvency, the credit quality of its contracts, or STORE Score, is enhanced to a median of ‘Baa3.’ |
|
Capital Transactions
The Company established a
In March 2020, the Company extended the maturity of one of its
Also in late March, in response to the COVID-19 pandemic, the Company borrowed
Conference Call and Webcast
A conference call and audio webcast with analysts and investors will be held later today at 12:00 p.m. Eastern Time / 10:00 a.m. Scottsdale, Arizona Time, to discuss third quarter ended September 30, 2020 operating results and answer questions.
- Live conference call: 855-656-0920 (domestic) or 412-542-4168 (international)
- Conference call replay available through November 19, 2020: 877-344-7529 (domestic) or 412-317-0088 (international)
- Replay access code: 10148343
-
Live and archived webcast: http://ir.storecapital.com/CustomPage/Index?KeyGenPage=350222
About STORE Capital
STORE Capital Corporation is an internally managed net-lease real estate investment trust, or REIT, that is the leader in the acquisition, investment and management of Single Tenant Operational Real Estate, which is its target market and the inspiration for its name. STORE Capital is one of the largest and fastest growing net-lease REITs and owns a large, well-diversified portfolio that consists of investments in more than 2,500 property locations across the United States, substantially all of which are profit centers. Additional information about STORE Capital can be found on its website at www.storecapital.com.
Forward-Looking Statements
Certain statements contained in this press release that are not historical facts contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to the “safe harbor” created by those sections. Forward-looking statements can be identified by the use of words such as “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximate” or “plan,” or the negative of these words and phrases or similar words or phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. For more information on risk factors for STORE Capital’s business, please refer to the periodic reports the Company files with the Securities and Exchange Commission from time to time. Many of the risks identified in the periodic reports have been and will continue to be heightened as a result of the ongoing and numerous adverse effects arising from the COVID-19 pandemic. These forward-looking statements herein speak only as of the date of this press release and should not be relied upon as predictions of future events. STORE Capital expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein, to reflect any change in STORE Capital’s expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except as required by law.
Non-GAAP Financial Measures
FFO and AFFO
STORE Capital’s reported results are presented in accordance with U.S. generally accepted accounting principles, or GAAP. The Company also discloses Funds from Operations, or FFO, and Adjusted Funds from Operations, or AFFO, both of which are non-GAAP measures. Management believes these two non‑GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO and AFFO do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or to cash flows from operations as reported on a statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
The Company computes FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income, excluding gains (or losses) from extraordinary items and sales of depreciable property, real estate impairment losses, and depreciation and amortization expense from real estate assets, including the pro rata share of such adjustments of unconsolidated subsidiaries.
To derive AFFO, the Company modifies the NAREIT computation of FFO to include other adjustments to GAAP net income related to certain revenues and expenses that have no impact on the Company’s long-term operating performance, such as straight-line rents, amortization of deferred financing costs and stock-based compensation. In addition, in deriving AFFO, the Company excludes certain other costs not related to its ongoing operations, such as the amortization of lease-related intangibles.
FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among the Company’s peers primarily because it excludes the effect of real estate depreciation and amortization and net gains (or losses) on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. Management believes that AFFO provides more useful information to investors and analysts because it modifies FFO to exclude certain additional revenues and expenses such as straight-line rents, including construction period rent deferrals, and the amortization of deferred financing costs, stock-based compensation and lease-related intangibles as such items have no impact on long-term operating performance. As a result, the Company believes AFFO to be a more meaningful measurement of ongoing performance that allows for greater performance comparability. Therefore, the Company discloses both FFO and AFFO and reconciles them to the most appropriate GAAP performance metric, which is net income. STORE Capital’s FFO and AFFO may not be comparable to similarly titled measures employed by other companies.
STORE Capital Corporation |
||||||||||||
Condensed Consolidated Statements of Income |
||||||||||||
(In thousands, except share and per share data) |
||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||
|
|
(unaudited) |
|
(unaudited) |
||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
|
$ |
163,325 |
|
$ |
157,965 |
|
$ |
482,669 |
|
$ |
462,920 |
Interest income on loans and financing receivables |
|
|
11,021 |
|
|
9,594 |
|
|
34,374 |
|
|
24,066 |
Other income |
|
|
877 |
|
|
4,275 |
|
|
4,357 |
|
|
5,273 |
Total revenues |
|
|
175,223 |
|
|
171,834 |
|
|
521,400 |
|
|
492,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
42,090 |
|
|
39,325 |
|
|
127,816 |
|
|
116,822 |
Property costs |
|
|
3,309 |
|
|
3,162 |
|
|
14,603 |
|
|
7,760 |
General and administrative |
|
|
14,729 |
|
|
13,566 |
|
|
35,742 |
|
|
39,815 |
Depreciation and amortization |
|
|
61,119 |
|
|
55,919 |
|
|
180,753 |
|
|
164,635 |
Provisions for impairment |
|
|
2,772 |
|
|
7,341 |
|
|
10,972 |
|
|
9,951 |
Total expenses |
|
|
124,019 |
|
|
119,313 |
|
|
369,886 |
|
|
338,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on dispositions of real estate |
|
|
3,537 |
|
|
59,290 |
|
|
6,814 |
|
|
72,395 |
Income from operations before income taxes |
|
|
54,741 |
|
|
111,811 |
|
|
158,328 |
|
|
225,671 |
Income tax expense |
|
|
111 |
|
|
193 |
|
|
438 |
|
|
533 |
Net income |
|
$ |
54,630 |
|
$ |
111,618 |
|
$ |
157,890 |
|
$ |
225,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share of common stock - basic and diluted: |
|
$ |
0.21 |
|
$ |
0.48 |
|
$ |
0.63 |
|
$ |
0.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
255,308,189 |
|
|
232,052,007 |
|
|
248,999,635 |
|
|
227,349,158 |
Diluted |
|
|
255,610,628 |
|
|
232,645,531 |
|
|
248,999,635 |
|
|
227,882,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
|
$ |
0.36 |
|
$ |
0.35 |
|
$ |
1.06 |
|
$ |
1.01 |
STORE Capital Corporation |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(In thousands, except share and per share data) |
||||||||
|
||||||||
|
|
September 30,
|
|
December 31,
|
||||
|
|
(unaudited) |
|
(audited) |
||||
Assets |
|
|
|
|
|
|
||
Investments: |
|
|
|
|
|
|
||
Real estate investments: |
|
|
|
|
|
|
||
Land and improvements |
|
$ |
2,757,893 |
|
|
$ |
2,634,285 |
|
Buildings and improvements |
|
|
5,905,626 |
|
|
|
5,540,749 |
|
Intangible lease assets |
|
|
63,628 |
|
|
|
73,366 |
|
Total real estate investments |
|
|
8,727,147 |
|
|
|
8,248,400 |
|
Less accumulated depreciation and amortization |
|
|
(901,714 |
) |
|
|
(740,124 |
) |
|
|
|
7,825,433 |
|
|
|
7,508,276 |
|
Operating ground lease assets |
|
|
23,820 |
|
|
|
24,254 |
|
Loans and financing receivables, net |
|
|
591,414 |
|
|
|
582,267 |
|
Net investments |
|
|
8,440,667 |
|
|
|
8,114,797 |
|
Cash and cash equivalents |
|
|
144,478 |
|
|
|
99,753 |
|
Other assets, net |
|
|
135,293 |
|
|
|
81,976 |
|
Total assets |
|
$ |
8,720,438 |
|
|
$ |
8,296,526 |
|
|
|
|
|
|
|
|
||
Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
||
Credit facility |
|
$ |
— |
|
|
$ |
— |
|
Unsecured notes and term loans payable, net |
|
|
1,263,905 |
|
|
|
1,262,553 |
|
Non-recourse debt obligations of consolidated special purpose entities, net |
|
|
2,305,642 |
|
|
|
2,328,489 |
|
Dividends payable |
|
|
94,085 |
|
|
|
83,938 |
|
Operating lease liabilities |
|
|
29,016 |
|
|
|
29,347 |
|
Accrued expenses, deferred revenue and other liabilities |
|
|
119,066 |
|
|
|
106,814 |
|
Total liabilities |
|
|
3,811,714 |
|
|
|
3,811,141 |
|
|
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Common stock, |
|
|
2,613 |
|
|
|
2,398 |
|
Capital in excess of par value |
|
|
5,327,124 |
|
|
|
4,787,932 |
|
Distributions in excess of retained earnings |
|
|
(417,862 |
) |
|
|
(302,609 |
) |
Accumulated other comprehensive loss |
|
|
(3,151 |
) |
|
|
(2,336 |
) |
Total stockholders’ equity |
|
|
4,908,724 |
|
|
|
4,485,385 |
|
Total liabilities and stockholders’ equity |
|
$ |
8,720,438 |
|
|
$ |
8,296,526 |
|
STORE Capital Corporation |
||||||||||||||||
Reconciliations of Non-GAAP Financial Measures |
||||||||||||||||
(In thousands, except per share data) |
||||||||||||||||
|
||||||||||||||||
Funds from Operations and Adjusted Funds from Operations |
||||||||||||||||
|
||||||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
September 30, |
|
September 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
|
(unaudited) |
|
(unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
54,630 |
|
|
$ |
111,618 |
|
|
$ |
157,890 |
|
|
$ |
225,138 |
|
Depreciation and amortization of real estate assets |
|
|
61,051 |
|
|
|
55,840 |
|
|
|
180,528 |
|
|
|
164,400 |
|
Provision for impairment of real estate |
|
|
2,000 |
|
|
|
7,341 |
|
|
|
10,200 |
|
|
|
9,951 |
|
Net gain on dispositions of real estate |
|
|
(3,537 |
) |
|
|
(59,290 |
) |
|
|
(6,814 |
) |
|
|
(72,395 |
) |
Funds from Operations (1) |
|
|
114,144 |
|
|
|
115,509 |
|
|
|
341,804 |
|
|
|
327,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Straight-line rental revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed rent escalations accrued |
|
|
(3,354 |
) |
|
|
(1,319 |
) |
|
|
(7,278 |
) |
|
|
(4,194 |
) |
Construction period rent deferrals |
|
|
466 |
|
|
|
(144 |
) |
|
|
1,402 |
|
|
|
853 |
|
Amortization of: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity-based compensation |
|
|
2,744 |
|
|
|
3,326 |
|
|
|
1,645 |
|
|
|
8,083 |
|
Deferred financing costs and other |
|
|
2,082 |
|
|
|
2,199 |
|
|
|
6,310 |
|
|
|
6,452 |
|
Lease-related intangibles and costs |
|
|
769 |
|
|
|
762 |
|
|
|
2,298 |
|
|
|
2,119 |
|
Provision for loan losses |
|
|
772 |
|
|
|
— |
|
|
|
772 |
|
|
|
— |
|
Lease termination fees |
|
|
(350 |
) |
|
|
(3,775 |
) |
|
|
(587 |
) |
|
|
(3,775 |
) |
Capitalized interest |
|
|
(175 |
) |
|
|
(480 |
) |
|
|
(500 |
) |
|
|
(1,234 |
) |
Executive severance costs |
|
|
1,980 |
|
|
|
— |
|
|
|
1,980 |
|
|
|
1,956 |
|
Loss on defeasance of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
735 |
|
Adjusted Funds from Operations (1) |
|
$ |
119,078 |
|
|
$ |
116,078 |
|
|
$ |
347,846 |
|
|
$ |
338,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dividends declared to common stockholders |
|
$ |
94,085 |
|
|
$ |
82,181 |
|
|
$ |
268,195 |
|
|
$ |
232,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per share of common stock: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and Diluted |
|
$ |
0.21 |
|
|
$ |
0.48 |
|
|
$ |
0.63 |
|
|
$ |
0.99 |
|
FFO per share of common stock: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.45 |
|
|
$ |
0.50 |
|
|
$ |
1.37 |
|
|
$ |
1.44 |
|
Diluted |
|
$ |
0.45 |
|
|
$ |
0.50 |
|
|
$ |
1.37 |
|
|
$ |
1.43 |
|
AFFO per share of common stock: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.47 |
|
|
$ |
0.50 |
|
|
$ |
1.39 |
|
|
$ |
1.49 |
|
Diluted |
|
$ |
0.46 |
|
|
$ |
0.50 |
|
|
$ |
1.39 |
|
|
$ |
1.48 |
|
| ________________ | ||
(1) |
FFO and AFFO for the three and nine months ended September 30, 2020, include approximately |
|
(2) |
Under the two-class method, earnings attributable to unvested restricted stock are deducted from earnings in the computation of per share amounts where applicable. |
|
Real Estate Portfolio Information
As of September 30, 2020, STORE Capital’s total investment in real estate and loans approximated
Diversification by Customer
STORE Capital has a diverse customer base. At September 30, 2020, the Company’s property locations were operated by 511 customers. The largest single customer represented
The following table identifies STORE Capital’s ten largest customers as of September 30, 2020:
|
|
% of |
|
|
|
|
|
Base Rent and |
|
Number of |
|
Customer |
|
Interest |
|
Properties |
|
Fleet Farm Group LLC |
|
2.7 |
% |
|
10 |
Bass Pro Group, LLC (Cabela’s) |
|
1.8 |
|
|
10 |
Cadence Education, Inc. (Early childhood/elementary education) |
|
1.8 |
|
|
49 |
Loves Furniture, Inc. |
|
1.8 |
|
|
23 |
CWGS Group, LLC (Camping World/Gander Outdoors) |
|
1.7 |
|
|
20 |
Spring Education Group Inc. (Stratford School/Nobel Learning Communities) |
|
1.5 |
|
|
19 |
American Multi-Cinema, Inc. (AMC/Carmike/Starplex) |
|
1.5 |
|
|
14 |
US LBM Holdings, LLC (Building materials distribution) |
|
1.4 |
|
|
51 |
Dufresne Spencer Group Holdings, LLC (Ashley Furniture HomeStore) |
|
1.3 |
|
|
21 |
Zips Holdings, LLC |
|
1.3 |
|
|
41 |
All other (501 customers) |
|
83.2 |
|
|
2,329 |
Total |
|
100.0 |
% |
|
2,587 |
Diversification by Industry
The business concepts of STORE Capital’s customers are diversified across more than 100 industries within the service, retail and manufacturing sectors of the U.S. economy. The following table summarizes these industries, by sector, into 75 industry groups as of September 30, 2020:
|
|
|
|
|
|
Building |
|
|
|
% of |
|
|
|
Square |
|
|
|
Base Rent and |
|
Number of |
|
Footage |
|
Customer Industry Group |
|
Interest |
|
Properties |
|
(in thousands) |
|
Service: |
|
|
|
|
|
|
|
Restaurants – full service |
|
8.5 |
% |
|
385 |
|
2,644 |
Restaurants – limited service |
|
5.0 |
|
|
392 |
|
1,062 |
Early childhood education |
|
5.9 |
|
|
240 |
|
2,518 |
Health clubs |
|
5.2 |
|
|
88 |
|
3,130 |
Automotive repair and maintenance |
|
4.7 |
|
|
172 |
|
905 |
Movie theaters |
|
3.9 |
|
|
37 |
|
1,881 |
Family entertainment |
|
3.7 |
|
|
40 |
|
1,625 |
Pet care |
|
3.5 |
|
|
177 |
|
1,640 |
Behavioral Health |
|
3.1 |
|
|
68 |
|
1,224 |
Lumber and construction materials wholesalers |
|
2.8 |
|
|
118 |
|
5,122 |
Medical and dental |
|
2.6 |
|
|
101 |
|
1,097 |
Equipment sales and leasing |
|
2.0 |
|
|
47 |
|
1,206 |
Elementary and secondary schools |
|
1.4 |
|
|
9 |
|
351 |
Wholesale automobile auction |
|
1.3 |
|
|
8 |
|
428 |
Logistics |
|
1.2 |
|
|
23 |
|
1,792 |
Metal and mineral merchant wholesalers |
|
1.0 |
|
|
24 |
|
2,010 |
All other service (18 industry groups) |
|
7.6 |
|
|
169 |
|
10,567 |
Total service |
|
63.4 |
|
|
2,098 |
|
39,202 |
Retail: |
|
|
|
|
|
|
|
Furniture |
|
5.0 |
|
|
70 |
|
4,145 |
Farm and ranch supply |
|
4.5 |
|
|
43 |
|
4,399 |
Recreational vehicle dealers |
|
2.0 |
|
|
25 |
|
1,146 |
Used car dealers |
|
1.9 |
|
|
29 |
|
312 |
Hunting and fishing |
|
1.8 |
|
|
9 |
|
758 |
Home furnishings |
|
1.3 |
|
|
11 |
|
1,262 |
New car dealers |
|
0.6 |
|
|
9 |
|
273 |
All other retail (11 industry groups) |
|
1.8 |
|
|
46 |
|
1,788 |
Total retail |
|
18.9 |
|
|
242 |
|
14,083 |
Manufacturing: |
|
|
|
|
|
|
|
Metal fabrication |
|
4.8 |
|
|
88 |
|
10,289 |
Food processing |
|
2.1 |
|
|
19 |
|
2,649 |
Plastic and rubber products |
|
1.6 |
|
|
18 |
|
2,961 |
Furniture manufacturing |
|
1.4 |
|
|
12 |
|
2,980 |
Electronics equipment |
|
1.3 |
|
|
10 |
|
1,024 |
Automotive parts and accessories |
|
1.1 |
|
|
17 |
|
2,483 |
Chemical products |
|
0.8 |
|
|
9 |
|
1,066 |
All other manufacturing (16 industry groups) |
|
4.6 |
|
|
74 |
|
7,686 |
Total manufacturing |
|
17.7 |
|
|
247 |
|
31,138 |
Total |
|
100.0 |
% |
|
2,587 |
|
84,423 |
Diversification by Geography
STORE Capital’s portfolio is also highly diversified by geography, as the Company’s property locations can be found in every state except Hawaii. The following table details the top ten geographical locations of the properties as of September 30, 2020:
|
|
% of |
|
|
|
|
|
Base Rent and |
|
Number of |
|
State |
|
Interest |
|
Properties |
|
Texas |
|
10.7 |
% |
|
266 |
Illinois |
|
6.1 |
|
|
154 |
California |
|
5.9 |
|
|
70 |
Florida |
|
5.4 |
|
|
156 |
Ohio |
|
5.2 |
|
|
141 |
Georgia |
|
5.1 |
|
|
143 |
Wisconsin |
|
4.9 |
|
|
61 |
Arizona |
|
4.5 |
|
|
85 |
Tennessee |
|
3.8 |
|
|
117 |
Minnesota |
|
3.7 |
|
|
90 |
All other (39 states) (1) |
|
44.7 |
|
|
1,304 |
Total |
|
100.0 |
% |
|
2,587 |
| ________________ | ||
(1) |
Includes one property in Ontario, Canada which represents |
|
Contracts and Expirations
The Company focuses on long-term, triple-net leases with built-in lease escalators and uses master leases, where appropriate. As of September 30, 2020,
|
|
% of |
|
|
|
|
|
Base Rent and |
|
Number of |
|
Year of Lease Expiration or Loan Maturity (1) |
|
Interest |
|
Properties (2) |
|
Remainder of 2020 |
|
0.2 |
% |
|
12 |
2021 |
|
0.6 |
|
|
9 |
2022 |
|
0.4 |
|
|
10 |
2023 |
|
0.6 |
|
|
18 |
2024 |
|
0.7 |
|
|
18 |
2025 |
|
1.3 |
|
|
27 |
2026 |
|
1.5 |
|
|
48 |
2027 |
|
2.0 |
|
|
55 |
2028 |
|
3.4 |
|
|
67 |
2029 |
|
6.2 |
|
|
173 |
Thereafter |
|
83.1 |
|
|
2,139 |
Total |
|
100.0 |
% |
|
2,576 |
| ________________ | ||
(1) |
Expiration year of contracts in place as of September 30, 2020, excluding any tenant renewal option periods. |
|
(2) |
Excludes 11 properties that were vacant and not subject to a lease as of September 30, 2020. |
|
