Shares of Store Capital are up 23% thus far in 2016, far outperforming an already hot REIT sector. The company’s CEO Christopher Volk said the good times will continue to roll as long as the market keeps demanding the capital it provides. ‘We are tapping into a need,’ said Volk. ‘There are over 70,000 middle market and larger businesses that need long-term capital and we are in a position to provide it.’ In the second quarter, Store invested $356.1 million in 115 properties at an initial weighted average cap rate of 7.8%. Store Capital is one of the largest and fastest growing net-lease REITs and owns a well-diversified portfolio that consists of investments in over 1,500 property locations in 48 states. The company primarily invests in single-tenant properties such as chain restaurants, supermarkets, drugstores and distribution facilities. Last week Store Capital declared a regular quarterly cash dividend on its common stock of $0.29 per share for the third quarter ending September 30. On an annualized basis, this dividend of $1.16 per common share represents an increase of $0.08 per share, or 7.4%, over the previous annualized dividend. ‘Since we went public in November 2014 we have raised our dividend by 16% and we’ve done it while having a better protected dividend as well,’ said Volk. Store Capital also recently received an investment-grade corporate issuer rating of BBB- with a positive outlook from Standard & Poor’s Ratings Services. Store began to issue investment-grade corporate debt almost a year ago as a complement to its investment-grade rated Master Funding debt conduit. In April 2016, the company closed an offering of investment-grade unsecured ten-year term notes in an aggregate principal amount of $200 million, plus a $100 million five-year unsecured bank term loan. It also expanded an unsecured credit facility to $500 million and raised net equity proceeds of $304.6 million in a follow-on offering of 12.4 million common shares last quarter. As for the state of the economy, Volk said the businesses Store Capital supports are generally in ‘good shape’. Nevertheless, he said ‘worries about regulations’ continue to abound.
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