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 of 8.3%
- 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 of 8.1%
- 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 2.9%, while
accelerating our investment activity, which we expect to carry into
2021.”
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 70% in May to 90% in October, repaid
in full the balance of its revolving credit facility, and increased
its quarterly cash dividend. Further, nearly all the Company’s
properties are currently open for business with two industries –
movie theaters and early childhood education – remaining most
impacted. The Company continues to closely monitor unpredictable
factors that could impact its business going forward, including the
duration and scope of the pandemic; governmental, business, and
individuals' actions in response to the pandemic; and the overall
impact on economic activity.
Total Revenues
Total revenues were $175.2 million for the third quarter of
2020, an increase of 2.0% from $171.8 million for the third quarter
of 2019.
Total revenues for the first nine months of 2020 were $521.4
million, an increase of 5.9% from $492.3 million for the first nine
months of 2019. The increase was driven primarily by the growth in
the size of STORE Capital’s real estate investment portfolio, which
grew from $8.4 billion in gross investment amount representing
2,417 property locations and 464 customers at September 30, 2019 to
$9.3 billion in gross investment amount representing 2,587 property
locations and 511 customers at September 30, 2020. Partially
offsetting the revenue increases generated by the growth in the
Company’s portfolio was the financial impact of the COVID-19
pandemic as previously noted.
Net Income
Net income was $54.6 million, or $0.21 per basic and diluted
share, for the third quarter of 2020, as compared to $111.6
million, or $0.48 per basic and diluted share, for the third
quarter of 2019. Net income for the third quarter of 2020 included
an aggregate net gain on dispositions of real estate of $3.5
million, as compared to an aggregate net gain on dispositions of
real estate of $59.3 million for the same period in 2019.
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
$157.9 million, or $0.63 per basic and diluted share, compared to
$225.1 million, or $0.99 per basic and diluted share, for the nine
months ended September 30, 2019. Net income for the first nine
months of 2020 included an aggregate net gain on dispositions of
real estate of $6.8 million as compared to $72.4 million for the
same period in 2019.
Adjusted Funds from Operations
(AFFO)
AFFO increased 2.6% to $119.1 million, or $0.47 per basic and
$0.46 per diluted share, for the third quarter of 2020, compared to
AFFO of $116.1 million, or $0.50 per basic and diluted share, for
the third quarter of 2019.
AFFO for the nine months ended September 30, 2020 was $347.8
million, or $1.39 per basic and diluted share, an increase of 2.9%
from $338.1 million, or $1.49 per basic share and $1.48 per diluted
share, for the nine months ended September 30, 2019. AFFO for the
three- and nine-month periods in 2020 rose on additional rental
revenues and interest income generated by the growth in the
Company’s real estate investment portfolio.
AFFO for the three and nine months ended September 30, 2020,
included approximately $13.0 million and $51.2 million,
respectively, of net revenue that is subject to temporary deferral
arrangements with tenants primarily operating in industries most
impacted by government shelter-in-place and social distancing
orders in response to the COVID-19 pandemic. The Company accounts
for these deferral arrangements as rental revenue and a
corresponding increase in lease receivables as tenant payments are
accrued. For both the three and nine months ended September 30,
2020, AFFO excluded $1.3 million collected under these temporary
deferral arrangements.
Dividend Information
As previously announced, STORE Capital declared a regular
quarterly cash dividend per common share of $0.36 for the third
quarter ended September 30, 2020, representing a 2.9% increase over
the quarterly cash dividend per common share declared for the prior
quarter. This dividend, totaling $94.1 million, was paid on October
15, 2020 to stockholders of record on September 30, 2020.
Real Estate Portfolio
Highlights
Investment Activity
The Company originated $250.9 million of gross investments
representing 52 property locations during the third quarter of
2020. These origination and other activities resulted in the
creation of 13 new customer relationships. The investments had a
weighted average initial cap rate of 8.3%. Total investment
activity for the first nine months of 2020 was $650.4 million
representing 130 property locations with a weighted average initial
cap rate of 8.1%. The Company defines “initial cap rate” for
property acquisitions as the initial annual cash rent divided by
the purchase price of the property. STORE’s leases customarily have
lease escalations, most of which are tied to the consumer price
index and subject to a cap. For acquisitions made during the third
quarter of 2020, the weighted average stated lease escalation cap
was 1.9%.
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 $6.8 million; 18 of these 43
properties were sold in the third quarter for an aggregate net gain
of $3.5 million. For the nine months ended September 30, 2020,
proceeds from the dispositions of real estate aggregated $104.1
million as compared to an aggregate original investment amount of
$124.4 million.
Portfolio
At September 30, 2020, STORE Capital’s real estate portfolio
totaled $9.3 billion. Approximately 94% of the portfolio represents
commercial real estate properties subject to long-term leases, 6%
represents mortgage loans and financing receivables on commercial
real estate properties and a nominal amount represents loans
receivable secured by the tenants’ other assets. The weighted
average non-cancelable remaining term of the leases at September
30, 2020 was approximately 14 years with leases representing less
than 4% of the portfolio scheduled to expire in the next five
years.
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 1.5% if no fixed percentage is in the contract. For
contracts with no escalations remaining in the current lease term,
assumes the escalation in the extension term. Calculation excludes
contracts representing less than 0.1% of base rent and interest
where there are no further escalations remaining in the current
lease term and there are no extension options.
(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 86% of the investment portfolio
involves multiple properties with a single customer, whether or not
subject to a master lease.
(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 $900 million “at the market” equity
distribution program, or ATM Program, in November 2019 and
terminated its previous program. During the third quarter of 2020,
the Company sold an aggregate of approximately 8.0 million common
shares at a weighted average share price of $27.19 and raised
approximately $215.0 million in net proceeds after the payment of
sales agents’ commissions and offering expenses. For the nine
months ended September 30, 2020, the Company sold an aggregate of
approximately 20.9 million common shares at a weighted average
share price of $26.17 and raised approximately $540.5 million in
net proceeds after the payment of sales agents’ commissions and
offering expenses.
In March 2020, the Company extended the maturity of one of its
$100 million bank term loans from March 2020 to March 2021.
Also in late March, in response to the COVID-19 pandemic, the
Company borrowed $450 million on its unsecured revolving credit
facility as a precautionary measure to increase its cash position
and preserve financial flexibility as a result of the uncertainty
in the financial markets at the time. By the end of September 2020,
the Company had fully repaid all amounts outstanding under its
revolving credit facility.
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, 2020
December 31, 2019
(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, $0.01 par value per share,
375,000,000 shares authorized, 261,348,454 and 239,822,900 shares
issued and outstanding, respectively
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 $13.0
million and $51.2 million, respectively, of net revenue that is
subject to the short-term deferral arrangements entered into in
response to the COVID-19 pandemic; the Company accounts for these
deferral arrangements as rental revenue and a corresponding
increase in receivables. For both the three and nine months ended
September 30, 2020, FFO and AFFO exclude $1.3 million collected
under these short-term deferral arrangements.
(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 $9.3 billion, representing
investments in 2,587 property locations, substantially all of which
are profit centers for its customers. The Company’s real estate
portfolio is highly diversified. The following tables summarize the
diversification of the real estate portfolio based on the
percentage of base rent and interest, annualized based on rates in
effect on September 30, 2020, for all leases, loans and financing
receivables in place as of that date.
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 2.7% of base
rent and interest and the top ten customers totaled 16.8% of base
rent and interest. STORE Capital’s customers operate their
businesses under a wide range of brand names or business concepts.
Of the more than 735 concepts represented in the Company’s
investment portfolio as of September 30, 2020, the largest single
concept represented 2.7% of base rent and interest; more than 80%
of base rent and interest consists of concepts each representing
less than 1% of base rent and interest.
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 0.3% of base rent and interest.
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, 99% of the Company’s
investment portfolio was subject to triple-net leases. Where the
Company owns multiple properties leased to a single customer, 93%
of this portion of the investment portfolio was subject to master
leases. Leases and loans representing approximately 3.8% of the
base rent and interest will expire in the next five years (before
2026). The following table sets forth the schedule of lease, loan
and financing receivable expirations 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105005248/en/
Financial Profiles, Inc. STORECapital@finprofiles.com Investors
or Media: Moira Conlon, 310‑622‑8220 Lisa Mueller, 310-622-8231
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