Good morning, ladies and gentlemen, and welcome to the National Retail Properties Third Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mr. Steve Horn, Chief Executive Officer. Sir, the floor is yours.
Thank you, Ali. Good morning, and welcome to National Retail Properties Third Quarter 2022 Earnings Call. Joining me on the call is Chief Financial Officer, Kevin Habicht. As this morning's press release reflects, National Retail Properties performance in 2022 continues to produce strong results, including continued high occupancy and trusted rent collections and a solid acquisitions driven by our tenants' relationships. We are in the position to continue the performance through the fourth quarter. Based on our year-to-date performance, we announced a further increase in our 2022 guidance of Core FFO to a range of $3.11-$3.15 per share. Also during the quarter, we announced and pleased to announce Elizabeth Castro Gulacsy has joined the board.
Her experience with SeaWorld Entertainment, Cross Country Healthcare, and Ernst & Young will bring a fresh perspective and valuable insight as we continue to grow the company. NNN's long-standing strategy of being selective while deploying capital and opportunistic raising capital over the years/decades has NNN in great shape heading into 2023. In a time of uncertainty like today's macroeconomic conditions, NNN's discipline of maintaining a solid balance sheet and reasonable acquisition volume does put NNN in good place to handle the price discovery phase the triple-net market is currently working through. At the end of the quarter, we had under $50 million drawn on our $1.1 billion line of credit after completing over $585 million of volume through the first nine months of the year. Shifting to the highlights of National Retail Properties third quarter results.
Our portfolio of 3,349 free-standing single-tenant properties continued to perform exceedingly well. We maintained high occupancy levels of 99.4%, which remains above our long-term average of ± 98% . We also collected 99.7% of rent due for the third quarter. On the COVID rent deferral front, the repayment continues to track as expected. At the end of the third quarter, 82.1% or $46.6 million of the original $56.7 million deferred rent is being paid back, which is 100% that is due at the time. Based on the current dialogue with our tenants across multiple industries, current rent collection levels and current occupancy levels, our portfolio is performing at high levels, and we expect that trend to continue.
This is a portfolio that has stood the test of time through GFC and COVID. It's been built or formed by NNN's multi-year strategy focus, the luxury of selectivity, and the conservative underwriting over decades by our professionals. Turning to acquisitions. During the quarter, we invested just north of $220 million in 52 new properties at an initial cap rate of 6.25%, with an average lease duration of 16.5 years. 19 of the 23 deals were from relationship tenants, which we do repeat programmatic business. Through the first 9 months, we've invested $585 million in 154 properties, which tops our 2021 volume of roughly $550 million.
Currently, our market is in a price discovery period, but we do see the bid-ask spread showing signs of adjusting, and we will continue our thoughtful and disciplined underwriting approach. NNN continues to emphasize acquisition volume through sale-leaseback transactions with our stable relationship tenants and with our company's long duration triple net lease form, which is more landlord-friendly than the 1031 market deals. During the quarter, we sold 8 properties, raising $21 million of proceeds to be reinvested in the new acquisitions. Year to date, we have now raised approximately $50 million of proceeds from the sale of 26 properties, including 14 vacant. Job one is always to re-lease the vacancies, but we will continue to sell non-performing assets if we do not see a clear path to generating rental income within a reasonable timeframe.
Our balance sheet remains one of the strongest in our sector. Our credit facility has plenty of capacity, as I mentioned earlier, with only a balance of under $50 million. We also have no material debt maturities until mid-2024. NNN is well positioned to fund the remaining 2022 acquisition guidance. With that, let me turn the call over to Kevin for more color and detail on our quarterly numbers and updated guidance.
All right. Thanks, Steve. 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 law. 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. Okay. With that, headlines from this morning's press release report quarterly Core FFO results of $0.79 per share for the third quarter of 2022. That's up $0.08 or 11.3% over a year ago, results of $0.71 per share.
The year-to-date nine-month Core FFO results were $2.35 per share, and that's an 11.4% increase over year-ago results. Today, we also reported that AFFO per share was $0.81 per share for the third quarter, and that's up $0.06 per share or 8% over prior year results. We did footnote third quarter AFFO included $1.7 million of deferred rent repayment and our accrued rental income adjustment for the third quarter. Without which would have produced AFFO of $0.80 per share for the quarter. Likewise, in the first nine months of 2022, AFFO included $4.7 million of deferred rent repayments in our accrued rental income adjustment, without which would have produced AFFO of $2.38 per share for the nine months of 2022.
That represents a 10.2% increase over the similarly adjusted $2.16 results for 2021. As these scheduled deferred rent repayments continue to taper off from peak levels in 2021, we're starting to see the improved results kicking in from our recent acquisitions over recent quarters and years. Excluding the deferred rent repayments, our AFFO dividend payout ratio for the first nine months of 2022 was approximately 65%, and that suggests we will create approximately $190 million of free cash flow after the payment of all expenses and dividends for the full year of 2022. As Steve mentioned, occupancy was 99.4% at quarter end. That's up 40 basis points for the year.
G&A expense we reported today was $10.1 million for the third quarter, and that's down from $11.1 million year-ago levels. We ended the quarter with $752.8 million of annual base rent in place for all leases as of September 30, 2022, and that's our first time over $750 million. Today, we did increase our 2022 Core FFO per share guidance from a range of $3.07-$3.12 per share to a new range of $3.11-$3.15 per share. Similarly, we increased the AFFO guidance to a range of $3.18-$3.22 per share.
The guidance midpoints for both the Core FFO and AFFO were increased by $0.035 or 1.1% compared to the prior quarter guidance. The supporting assumptions for our 2022 guidance are on page seven of today's press release and are modestly fine-tuned from our last quarter guidance, including $25 million increase in the acquisition volume midpoint. As usual, you know, we do not give guidance on any of our assumptions for capital markets activities, except for the general assumption that over the long term, we're gonna behave in a fairly leverage-neutral manner. Really, the most important takeaway from all this is that we expect to grow Core FFO per share results in 2022 by about 9% to the new guidance midpoint. This is a very good year for us.
What I would call above our target trend line of mid-single digits per share growth over the long term. Admittedly, 2022 was aided by some tailwinds, including some of the refinancing we did in 2021. Most notably, redeeming our 5.2% preferred stock, which saved us approximately $0.03 per share. As well as $3.3 million increase or about $0.02 a share increase in our cash basis deferred rent repayments in 2022 compared to the prior year. And additionally, we did have one less executive position, which generated some G&A savings in 2022. That all helped 2022 results, those tailwinds. Like seemingly the vast majority of REITs, we will publish our 2023 guidance in early February, when we report our year-end results.
It's always somewhat of a challenge to project acquisition volume and cap rates, but in this transition period of rising capital costs pushing up cap rates, it's more difficult to make that projection today than it has been in the past. The shifting price discovery sands of acquisition cap rates and capital costs has compelled us to wait until early February to publish our 2023 guidance.
Having said that, we are still optimistic that we will be able to continue to grow per share results next year, despite the high bar created by the 9%+ growth in our 2022 results, as well as the continuing headwind from the reduction in our cash basis tenant deferred rent repayments, which are scheduled to decline from $9.1 million in 2022 to $3.3 million in 2023, as can be seen on the schedule on page 13 of today's press release. One important element to support our expectation for continued growth in 2023 results is the position of our balance sheet and liquidity. The third quarter was fairly quiet in terms of capital markets activity.
We were fairly active and very active in the debt markets in 2021 and not unhappy with that decision. We did issue $97 million of equity in the third quarter via our ATM, executing trades around the $47 per share level. Despite acquiring $223 million of properties in the quarter and $588 million in the first nine months of the year, we ended the third quarter with only $47.5 million outstanding on our $1.1 billion unsecured bank line. That's just a small increase over the prior quarter's $40 million outstanding. Our liquidity is in excellent shape. Our weighted average debt maturity is now approximately 14 years.
Our next debt maturity is $350 million with a 3.9% coupon in mid-2024. With the exception of our small balance outstanding on our bank line, all of our debt outstanding is fixed-rate debt. A couple stats. Net book to gross book assets was 40.3%. That's been relatively flat for the year. Net debt to EBITDA was 5.3 x at September thirtieth, and that's down 10 basis points from the prior quarter. Interest coverage and fixed charge coverage, 4.7 x for the third quarter, and again, that's relatively flat with recent quarters. We are in very good shape to produce strong Core FFO per share growth.
Current 2022 Core FFO guidance is suggesting about 9% growth to the midpoint, with some tailwinds that put us above our typical growth rate. 2023 should continue that growth despite the absence of some of those tailwinds that we had in 2022. Our focus remains on growing per share results over the long term. We think the asset growth focus acquisition volume context in many sectors over recent past quarters and years has downshifted materially as the market, the marketplace seeks to adjust to the new environment and appears to be getting a little more disciplined on price. If so, we think you know, renewed investor focus on per share results and managing balance sheets will accrue to our benefit, but time will tell.
While there is currently an increased level of economic and capital market uncertainty, we think we're reasonably well-positioned for such. Ali, with that, we will open it up to any questions.
Thank you. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Thank you. Our first question is coming from Nick Joseph with Citi. Please go ahead.
Thanks. What are you seeing in terms of the movement of cap rates of sale-leasebacks versus just flow acquisitions? Trying to get a sense of kind of the expansion for each of those categories.
Yeah. Nick, congrats on the new role.
Thank you.
The cap rates, we've noticed really the last Fed hike. I've noticed kind of a little bit of a velocity of the cap rates increasing. Where our pricing early, you know, late second quarter, early third quarter, they were still fairly low to kind of the first and second quarter cap rates. Late in the third quarter pricing, we've seen a 30-40 basis point move in cap rates. What I have in the pipeline going, you know, the fourth quarter, first quarter, there's definitely a move for our acquisition kind of on a risk-adjusted basis, all being equal.
On the sale-leaseback side and the 1031 market side, I kind of feel they've moved up in step, but what we find is the sophisticated owners of the real estate understand that, you know, interest rates have moved, and they're willing to sell at the higher cap rate currently. The bid-ask isn't as tight as you like it to be, but we're definitely seeing a movement. I feel better today than I did 45 days ago, on the cap rate spread.
That's helpful. You know, I recognize guidance doesn't assume capital markets activity. You were able to issue some equity accretively in the third quarter. As you look to these acquisitions today, how are you thinking about those investment spreads, just given cost of equity and cost of debt, currently?
Yeah. As you know, Nick, you know, we think about it a little differently than kind of the typical, I think, spread discussion that goes on. You know, we wanna burden our equity. For purposes of deploying capital, we wanna burden it at a return that we think adequately compensates common shareholders, and that includes our free cash flow. Like I said, we have about $190 million of free cash flow annually at the moment. So we burden that as well. It's not free. It carries a cost. And so that creates some opportunity for us to alleviate some heavy lifting in terms of needing to issue equity.
If you have $190 million of free cash flow and call it $100 million in a given year of disposition proceeds, that goes a long way to solving the equity need, if you will, for you know, a typical acquisition volume year for us. We don't get through that. We have on the debt front, you know, we've communicated. You know, we've really not used our bank credit facility in any meaningful way for several years. I think the weighted average outstanding balance for the last five or six years has been like $55 million.
Going into 2023, we will lean more onto that debt facility and use it more than we have in the past, likely. That's the plan for the short term, meaning the next five quarters, for the debt front. Now that I've said all that, you know, the world will change, and we'll do something totally different. We do try to be opportunistic in raising capital, get it when it's available and what we think is a well-priced or reasonably priced.
We'll respond to the market as it unfolds. Our current thinking is what I've just outlined.
That's very helpful. Thank you very much.
Thank you. Our next question is coming from Spenser Allaway with Green Street. Please go ahead.
Thank you. Just one on the revised external growth add in. Even the high end of your provided range would imply about $110 million growth for the last quarter. That contrasts with about, you know, a $200 million, you know, run rate in recent quarters. Can you just walk us through your thinking on this? You know, obviously, you're being conservative, but just wondering if it's driven more by compressing spreads, a lack of sellers in particular segments that you like. Just curious what your thoughts are.
Now, if you recall in the second quarter earnings, we updated our acquisition volume slightly. The fourth quarter, you know, we're a lumpy. I mean, I wouldn't get caught up quarter-to-quarter acquisition volume. You know, we've had a fairly past few quarters of robust acquisition activity. Our pipeline feels really good right now, but as you know, in the transaction market, don't count your chickens until they're closed, especially given the capital markets and just the volatility in the equity and debt markets. Yeah, we feel good about our acquisition guidance through the remainder of 2022. It could just be timing. Until they're closed, we weren't willing to update or expand our guidance.
Okay. I believe you mentioned in your prepared remarks that if necessary you would sell some properties. I'm just wondering if you currently have any assets that are earmarked for divestment or, like what are the criteria that you're looking for when identifying disposition assets?
Yeah. I mean, I don't remember though, Spenser saying we would sell properties, but the question is, we are always looking to sell assets and strengthen the portfolio. When we sell assets, you know, it could be offensively because we've had discussions with a tenant or just the property level analysis that it's a high-risk asset upon renewal, so we'll sell it. Don't tell anybody that because otherwise we can't sell too many assets in the 1031 market. We sell vacant assets when, after we try to re-lease them, and we're just not finding it. It's taking too long. Then we also have a third of our portfolio that we sell because somebody finds the asset a lot more value than we do.
At the end of the day, year-to-date, the income producing assets that we sold, we've sold at I think a 5.9 cap. For the quarter it was a 5.8 cap. We are recycling some capital with our dispositions and strengthening the portfolio at the same time.
Thank you. That's very helpful.
Thank you. Our next question is coming from Wesley Golladay with Baird. Please go ahead.
Hey, good morning, everyone. I just wanted to get an update on your relationships that you've established this year. Are you exceeding expectations? Also, are you seeing some of your older relationships come back, people that may have left you when pricing got aggressive and now they're finding out those new partners are no longer available?
Hey. How you doing, Wes? Good question. The new relationships, no, they're right on track where we kind of task our acquisition group to develop new relationships over the year. It's no different in 2022 than 2021, but a lot better than 2020. Going forward, I expect the same cadence of what we'd call relationships falling off, meaning they outgrew us. Their cost of capital dropped lower than we're willing to provide it, and we cheer that. We like them to find cheaper costs than us because it strengthens their balance sheet. We're not finding a material amount of our relationships coming back because we're still in that price discovery mode.
I think we may find one or two will work their way back to us because we weren't. You know, they were kind of licking the plate, I would say, you know, looking for 10 or 15 basis points cheaper than we would. Because of our certainty and reliability of a landlord, they'll come back to us a little bit.
Got it. When we look out to maybe 2023 and 2024, looks like a lot of your, maybe your relationships have plans in motion. You really can't halt them at this point. Is there a natural lag between when an economy slows, cap rates expand, and when sale-leaseback transactions may moderate? Would this be more of a 2024 thing if debt yields stay elevated like they are?
Yeah. Our development pipeline is as robust today as it was last year. We're not seeing a slowdown just because it's a real estate transaction, and it does take a fair amount of time to get permitting and the process starting. We're not hearing any external growth slowdown as far as new property development. One thing I am noticing in the market is the M&A market is definitely slowing down. If it's the QSRs, there's still appetite out there, but we're not fielding as many calls on M&A activity as we were six months ago. We also don't rely on the M&A activity alone to hit our volume numbers.
Got it. If I get just one last one for Kevin, going back to that $190 million of free cash flow. Do you give that one the 8% cost of equity charge? Is that what we're looking at?
Yeah. That's what I was suggesting is that, yeah, I think sometimes companies think that's "free equity," if you will, and so anything you earn on that, you know, is accretive. I understand why they might, you know, go down that path. We really try to, for purposes of deploying all capital, no matter how we source it, including that free cash flow, we really wanna put a charge or a return on equity hurdle on that to make sure we're t aking care of shareholders that we're what we think are adequately compensating shareholders for deploying new capital.
Great. Thanks everyone.
Thanks, Wes.
Thank you. Our next question is coming from Joshua Dennerlein with Bank of America. Please go ahead.
Yeah. Hey, guys. Just a quick question on G&A. You obviously have one position not filled right now. How are you thinking about kind of G&A as you head into next year? Is that something? Do you wanna fill another executive role or kind of is this kind of the run rate we should be thinking about?
I can talk about filling another executive role. Yeah. Currently, we have four executives, and I probably, you know, not in the immediate future, of filling an executive role, but you know, kind of a low, you know, second half of the year I could foresee filling the executive role. The rest of the G&A, I can let Kevin handle. Yeah. I mean, yeah, G&A is there's nothing notable happening within that. Obviously, there's a little bit more price pressure going on, just given the inflation environment, but nothing else notable going on in our G&A line item.
Okay. Awesome. That's it for me, guys. Thank you.
Thanks.
Thanks.
Thank you. Our next question is coming from Ronald Kamdem with Morgan Stanley. Please go ahead.
Hey, a couple quick ones from me. Just starting with tenant risk, maybe can you just give us an update on what that data is looking at like, you know, what sort of what you're baking into the guidance now? Maybe in some of the more, you know, topical one, whether theaters or anybody else that you're looking at, just where do we stand there? Thanks.
Yeah. Yeah. It doesn't feel like it's changed a lot and from our mind in terms of the kind of the credit profile, if you will, or the credit watch list, if you will. You know, we've typically assumed 100 basis points of rent loss for any given year, and we did that in normal times, and that's really still where we think pencil in our minds as we think about the future is that kind of a potential rent loss. We frequently don't experience 100 basis points of rent loss. It's usually much less than that. You know, we tend to be a little conservative, and so that's what we pencil in.
At the moment, you know, we, you know, the names that are most prevalent in, you know, kind of the credit discussions, if you will. You know, the Regal Cinemas, we only have one, and I know everybody says this, but we really do like that property. It's in a good location, and the rents are low, and we kinda like our odds on that one. You know, Bed Bath & Beyond is increasingly struggling. It appears, you know, again, we only have three stores, 0.2% of our rent. So again, it's not a big number, and our rents per square foot are, you know, good. We're not worried about that. I would say generally that our feeling about the portfolio and our tenant profile has not changed, and we're not changing our kind of rent loss assumption around any concerns there.
Great. Then, you know, I think the second question is, if I just think about this environment of higher debt costs, higher financing costs, I mean, I think NNN relative to the rest of the peer set, you know, great balance sheet, a lot of the, you know, a lot of the debt or a lot of the acquisitions internally funded with free cash flow. In some ways, you guys should be positioned better than everybody else, right? As you're thinking about sort of next year in 2024. I guess the question really is, like, as you're thinking forward, do you sort of see this as a time to sort of show why your strategy is differentiated and outshining and putting up good numbers? Or, how are you guys sort of thinking about the messaging, versus the peer set?
Yeah, fair question. I mean, we don't, you know, focus too much on exactly what everybody else is doing. But yeah, no, we think that, without us changing our strategy much, that we may shine brighter, if you will, relatively, than what I, you know, sometimes refer to as the huge acquisition contest that we've had for the last seemingly two years, where I don't think we shined as bright. I think we're entering an environment where executing the way we've typically executed and driving per share results and having some dry powder and just trying to post per share growth, that focus, I think, will look relatively better potentially in the coming quarters. I mean, but time will tell, like I said.
This in some sense is a better environment if you will, and I think that's kind of relative to your question, for us relative to others. We would probably agree with that. We'll see how it plays out. I mean, I'm assuming the Fed's gonna maintain its newfound religion, but who knows? Tomorrow they may decide to, or maybe not tomorrow, later this afternoon, they may decide to totally change and go down a different track. I don't think they are, but we think we're really well positioned, I guess, is what we're saying.
Great. If I could sneak a quick one in. You guys raised the acquisition guidance. You know, where you talked about cap rates going up. You know, is there a way to sort of put some numbers around that? Like could we see 25 basis points , 50 basis points over the next 12-18 months of cap rate rising? Given the programmatic relationships, is it sort of a fair assumption that, you know, volumes will continue to be healthy for you guys, over the next 12-18 months?
Yeah. I mean, our line of sight, as you know, on acquisitions is always, you know, 60 days , 90 days out. We feel comfortable with where we're sitting with our pipeline and relationships. As I mentioned earlier, you know, 25-40 basis points, I've seen that jump in the last, you know, month or so. I feel comfortable that our cap rate has increased by that amount, going into the fourth quarter, and I see it continuing at least at that level for the first quarter, maybe the second quarter. If rates sustain, which it feels like they're going to, I think you can start seeing, you know, 50-75 basis points, in the second half of next year.
As far as acquisition volume, you know, it's that old adage, and Kevin kind of touched on it, with our focus of FFO growth, we don't focus so much on volume. We focus where we can grow our per share results. Volume's never an issue. Cap rate's the problem. If I wanted to go buy 5.75 cap, I could and do as much as we can. Yeah, overall, I feel comfortable where we're sitting as far as relationships and potential deals going into 2023.
Great. Thanks so much.
Thanks.
Thank you. Our next question is coming from John Massocca with Ladenburg Thalmann. Please go ahead.
Good morning.
Morning, John.
Sorry if I missed this in your response to Spenser's question, but it looked like disposition guidance came down quarter-over-quarter. Is there anything specific driving that, or is it just kind of the price discovery environment we're in today?
Yeah. I mean, we don't need to sell anything currently, and we had a couple deals that, you know, got a little rocky, and they wanted to retrade the price, so we weren't willing to do that. They're not gonna close here in the fourth quarter. We have another large transaction out there for timing reasons. I don't know if it's gonna hit the fourth quarter or first quarter. Not really. Really small numbers, John, as you know, so I'm not really too focused on it.
Okay, that makes sense. And then on the balance sheet side, as you think about maybe your debt funding needs going forward, how should we think about term loan debt versus kind of unsecured debt? I know historically you've been an unsecured issuer, but it seems like the pricing differential you can get on those different types of debt has widened a lot in kind of recent months. Just any thoughts there.
Yeah. I mean, we don't foreclose ourselves to doing a term loan that would, you know, in many respects, not materially different than unsecured bond deal. If that'll just be a game time decision for us as to what path is appropriate when we need it. At the moment, it doesn't feel like we need to tap either of those markets in the coming quarter. We will wait and see how things shake out over the next 6 months , 9 months , 12 months, and then make a game time decision. Both are, you know, very viable alternatives for us. We enjoy good support in the banking community.
A lot will depend on, you know, just investor appetite at the time we wanna go to market, bond market investor appetite versus bank lending appetite, and we'll make a game time decision then.
I know. Is there a specific maybe spread you have in mind between the two that would make, you know, one more attractive than the other, just given, I think the historical preference for unsecured issuance?
No. You know, we're kinda absolute rate people, you know, so what's the all-in cost of the debt, and that's what we'll evaluate one against the other. You know, as it relates to a term loan, you know, we are sensitive to variable rate debt versus fixed rate debt. If we went down on something with more of a variable rate in it, you know, we'd wanna kinda lock that and get some protection there. No, there's no magic to the. I don't have a spread in mind. Yeah.
Okay. That's it for me. Thank you very much.
Thanks, John.
Thank you. Once again, if there are any remaining questions or comments, please press star one on your phone at this time. Our next question is coming from Linda Tsai with Jefferies. Please go ahead.
Hi. Good morning. If there were a slowdown in the economy, how much would you expect occupancy to fall? I know it's never gone below 96.5%, but just wondering if a more durable tenant base would help support that higher.
Yeah. I mean, our tenant base is large regional operators. You know, they're not the mom and pops. You know, they may not be investment grade rated, but they operate thousands of retail locations. And geographically, we're highly diverse. Industry-wise, we're highly diverse. But we are, you know, in retail, so, you know, things happen within retail. But if the economy slows down, I don't see a drastic change in our occupancy level given the credit quality, creditworthiness of our tenant base. There would have to be a pretty substantial macro event.
Yeah. Linda, this is Kevin, and it's not really directly answering your question, so I'm not implying this, but you know, it's funny, over the long term, meaning over a couple of decades, which I know nobody really thinks about, you know, we've always kind of said our occupancy is 98% plus or minus one. That's just kind of the ZIP code that we've lived in for many years. We're at the top end of that range right now. We spent some time, you know, resolving some vacancies in the last couple of years, and so that's reduced the number of vacancies in the portfolio. No, we don't see anything that's pressing us.
Like I said, it goes to my comment earlier about, you know, our rent loss assumption has not changed at all, even from recent years. We don't feel like we're particularly exposed and have a material occupancy issue ahead of us.
Great. Thank you.
Thank you. As there appear to be no further questions on the queue, I will hand it back to Mr. Steve Horn for any closing comments.
No, I appreciate your time and energy you're spending on National Retail. We look forward to seeing many of you, I guess, in person in the upcoming [audio distortion] conference on the West Coast. Any questions, feel free to give Kevin or myself a call. Thank you.
Thank you, ladies and gentlemen, and this does conclude today's conference call. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.