Oct 29, 2026 earnings call — Share repurchase and record acquisitions drive strategy
Company launched a $100 million share repurchase program and reported Q3 cash rental income of $75.2 million.
Revenue $0.1B (est $0.1B) · EPS $0.26 (est $0.29)
Key quotes
"Year-to-date, we have acquired a record volume of $410 million of properties at a blended 6.6% cash cap rate and 7.2% GAAP cap rate."
"As such, our Board has authorized a $100 million share repurchase program."
"Occupancy remains well over 99% and our rent coverage in Q3 was 5.3x for the majority of our portfolio that reports this figure."
Analyst Q&A 8
Darden leases and leverage choices
Q (James Feldman · Wells Fargo): He asked what negotiating points were for the executed Darden leases and whether future tranches will be smooth. He also asked how they might lower leverage — asset sales, joint ventures, timing and patience.
A: Management said the Darden leases were mostly paperwork and extensions, not contentious negotiations, and they are similar to the rest of the portfolio. They said they have liquid assets and many options to raise cash — including joint ventures, building sales, or buybacks — and that buybacks could happen in the near term.
"We have -- we could do a joint venture, free up capital, incremental free cash flow is substantial at the scale of our business." — William Lenehan
Market deals and cap-rate moves
Q (Spenser Glimcher · Green Street): He asked what types of deals and tenants they are seeing in the transaction market and whether sellers are capitulating to raise cap rates. He also asked what assets they'd sell and whether sales would be opportunistic.
A: They said buyers are actively retrading and cap rates are rising, but not enough to offset higher capital costs, so many deals are unattractive. They added there are selective opportunities, and divestments would be driven by whether proceeds are better used for share repurchases.
"We are seeing in the market that buyers are actively retrading in a substantial way." — William Lenehan
How they will use available capital
Q (Michael Goldsmith · UBS): He asked at what price levels they would prefer share repurchases, debt paydown, or acquisitions. He also asked what a joint venture would look like and what they would get from it.
A: They said some acquisitions remain strategic but, by and large, their focus going forward will be share repurchase because they view the current stock price as attractive. On joint ventures, they said partnering can free up capital and their platform is attractive to private partners, making JVs an efficient way to fund buybacks.
"But by and large, our focus going forward is going to be share repurchase." — William Lenehan
Timing mismatch when buying shares
Q (Wesley Golladay · Baird): He asked if they are comfortable buying shares now even if it temporarily pushes leverage above their target.
A: Management declined to comment on taking that timing risk.
"I don't think -- I'd rather not comment on that, Wes." — William Lenehan
Reverse inquiries and one-time costs
Q (Eric Borden · BMO): He asked where reverse-inquiry bids stand versus their view of asset value and whether buyers are financing at those levels. He also asked Patrick to quantify the state tax catch-up and other nonrecurring items affecting the quarter.
A: They said many reverse inquiries come from local buyers and there is activity tied to bonus depreciation for certain asset types like gas stations and car washes, though those are limited in their portfolio. Patrick said the state tax item was small and nonrecurring — approximately $100,000 — and William added there were some credit-facility related costs that made the quarter noisier.
"It wasn't a huge number, call it, approximately $100,000." — Patrick Wernig (CFO)
$100 million buyback math and JV scope
Q (Richard Hightower · Barclays): He asked how they arrived at the $100 million buyback authorization and whether a joint-venture equity program would be one-off or programmatic.
A: They said not to overthink the $100 million figure — it is self-determined and can be reauthorized easily with a simple email to the Board. They also said private-market demand for net lease is strong and that having flexibility to invest both public and private capital can free up capital to buy back stock.
"I wouldn't overthink it. It's a number that is self-determined when used, we can reauthorize it with a simple e-mail to our Board." — William Lenehan
Wendy's exposure and growth outlook
Q (Mitch Germain · Citizens Bank): He asked whether they have exposure to Wendy's and then about growth prospects after the Mission Pet Health deal and other moves this year.
A: They said Wendy's exposure is not meaningful and they only have a handful of locations; they pointed investors to the published property list on their website for detail. For growth, they said they are focused on 2027 and 2028 and believe their balance sheet actions, the Mission Pet Health transaction, and lower overhead position them well going forward, with buybacks creating additional value if the stock stays low.
"I'd point out that to the extent it's useful to you, Mitch, we do have on our website a list of all the properties that we own in the portfolio published." — Patrick Wernig (CFO)
More detail on potential JV
Q (James Feldman · Wells Fargo): He asked for more color on potential JV size, types of assets or tenants to include, and whether Darden properties could be part of it.
A: They declined to negotiate JV terms on the call and said there is strong demand for their high-quality portfolio and platform in private markets. They said discussions are not advanced and that they will announce any JV when and if it is finalized.
"We will announce it when it's finalized, when and if it's finalized." — William Lenehan