Please note that during this call, we'll make certain statements that may be considered forward-looking under federal securities law, including statements related to our 2026 guidance. Please see yesterday's earnings release and our SEC filings, including our latest annual report on Form 10-K, for a discussion of various risks and uncertainties underlying our forward-looking statements. In addition, we discuss non-GAAP financial measures, including core funds from operations or core FFO, adjusted funds from operations or AFFO, and net debt to recurring EBITDA. Reconciliations of our historical non-GAAP financial measures to the most directly comparable GAAP measures can be found in our earnings release, website, and SEC filings.
In a dynamic macro environment, we remained disciplined, continued investing in our future, and delivered over 4.5% AFFO per share growth. The $1.55 billion invested across our three investment platforms was the second highest total in company history, representing more than 60% year-over-year growth. As demonstrated by our 2026 guidance, the fundamentals supporting our outlook are very strong. These initiatives will support bottom line growth this year and beyond, driven by ongoing efficiency gains and a material reduction in G&A as a percentage of revenue.
During the course of the year, we once again proactively fortified our balance sheet, raising roughly $1.5 billion in capital. With no material debt maturities until 2028, our balance sheet is in tremendous position to execute on our 2026 investment guidance and provide significant flexibility. Our pipeline has expanded significantly over the past month and now represents over $0.5 billion and provides us confidence in increasing our 2026 investment guidance to a range of $1.4 billion-$1.6 billion. Our updated investment guidance represents approximately a 10% increase from our prior range, and the high end of the range is slightly above our 2025 investment activity.
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| Topic | Previous mention | Current period | Trend |
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| 2026 investment guidance | Initial 2026 investment guidance was provided about 30 days earlier at a lower range. | Guidance was raised roughly 10% to $1.4 billion-$1.6 billion, driven primarily by sale-leaseback transactions and a single-credit portfolio, with the pipeline now over $0.5 billion; the high end can be funded without incremental equity. | — |
| AFFO per share growth / earnings algorithm | 2025 delivered over 4.5% AFFO per share growth after deploying approximately $950 million in 2024 while working through the Big Lots bankruptcy. | The earnings algorithm kicks in for 2026 with initial AFFO per share guidance of $4.54-$4.58, approximately 5.4% growth at the midpoint and the highest earnings growth since 2022, targeting 10% two-year stacked growth. | — |
| Consumer environment | The theme of 2024 and 2025 was the low-income consumer and the challenges they were facing (the 'trade-down effect'). | The theme of 2026 is the middle-income consumer, with cumulative post-pandemic inflation devastating dual-income households; management favors necessity-based retailers such as Walmart, Five Below, and Dollar General that benefit from the trade-down. | — |
| Cap rates and competition | Investors had expected acquisition yields to compress more given increased private capital entering the net lease space. | Cap rates remain sticky with no material deviation; the fourth quarter acquisition cap rate was 7.1% and the full year 7.2%, and management sees no material increase in competition within its high-touch sandbox. | — |
| Balance sheet and forward equity | Entered the year having proactively raised capital, with substantial forward equity available. | Year-end pro forma net debt to recurring EBITDA of 3.8x, over $2 billion of liquidity and $1.6 billion of buying power, approximately 9.6 million forward shares ($716 million) outstanding (earliest tranche maturing June 2026, latest May 2027, most expected to settle in 2026), and no material maturities until 2028. | — |
| Development and DFP platforms | Management had set a medium-term goal of roughly $250 million in annual development investment commitments. | A record development/DFP year (34 projects, ~$225 million committed); management expects to break ground on 10-plus projects over the first and second quarters and continues to ramp the platform as high construction costs make projects hard for private developers to finance. | — |