Realty Income Corp ($O) Q1 2026 Earnings Call

Thank you, Alex, and welcome, everyone. We entered 2026 with strong momentum, and our first quarter results demonstrate progress across the priorities that matter most for Realty Income: disciplined capital deployment, durable portfolio performance, and continued expansion of our private capital platform. In the first quarter, we delivered AFFO per share of $1.13, up 6.6% year-over-year, and invested approximately $2.8 billion, or $2.6 billion on a pro rata basis, at a 7.1% initial weighted average cash yield. Our investment activity remained balanced between North America and Europe, and we also deployed approximately $1 billion into credit and structured investments. That strong start to 2026 supports our decision to raise the midpoint of full-year AFFO per share guidance by 2.5 cents, or approximately 60 basis points at the midpoint. Jonathan will walk through the quarter and our updated guidance in more detail. Looking ahead, our 2026 outlook reflects an anticipated acceleration from 2025, as we leverage our scale, data-driven, and robust platform to strive towards consistent double-digit total operational returns for our shareholders. I'd like to briefly step back and place our recent announcements into the broader strategic context for Realty Income. Over the past several months, we've been deliberate in building a private capital ecosystem to diversify our sources of permanent equity, expand our investment opportunity set, and support long-term value creation, all while remaining anchored in the same underwriting discipline, credit standards, and focus on durable growing cash flow that have defined Realty Income since our inception. This is demonstrated through three critical achievements. First, we completed our $1.7 billion Cornerstone Capital Raise for our perpetual life US Core Plus Fund. Second, we formed a strategic partnership with GIC, focused primarily on construction financing and take out commitments for build-to-suit industrial in the US and Mexico. Lastly, we raised $1 billion in equity from Apollo as part of a programmatic venture that strives to ultimately deliver Realty Income's dependable income to the massive insurance and annuity market. Taken together, these initiatives represent what we view as a meaningful evolution of the Realty Income platform, rooted in years of intentional planning to strengthen how we fund growth and deploy capital across cycles. Several years ago, we identified a potential concentration risk in relying primarily on public equity markets where pricing at times can become disconnected from underlying operating performance and this discrepancy persists for prolonged periods. That realization led us to a fundamental question: How do we diversify capital sources to better leverage a platform designed to deploy billions of dollars annually while seeking to create long-term value for public shareholders? These partnerships represent the early stages of our private capital journey and we expect to continue adding accretive sources of permanent capital over time. Today, we view private capital not as a single strategy but as an ecosystem of distinct non-overlapping verticals tailored to different geographies, property types, and investment mandates. This approach has expanded our investor base, strengthened our return profile through asset light fee income, and meaningfully broadened our investable universe. Importantly, it allows us to deploy capital across property types and across the real estate capital structure while preserving the core DNA of Realty Income. Each vehicle is designed to be complementary to our public REIT model and accretive to long-term per share value. Alongside that backdrop, a global platform evolution drove transaction activity during the first quarter. With approximately $2.8 billion of investment volume, we delivered one of our higher levels of quarterly deployment in recent years, supported by consistent execution across geographies, property types, and investment structures. We sourced approximately $31 billion of investment opportunities during the first quarter, reflecting the depth of our global relationships and the scale of our platform. That sourcing allowed us to remain highly selective, closing on roughly 9% of what we reviewed, while maintaining discipline on yield structure and credit. Approximately 94% of opportunities were relationship driven, reinforcing the durability of our origination engine. Our European platform continues to be a key competitive advantage. Markets remain more fragmented and less crowded than in the US, allowing us to source portfolio-oriented tailored transactions with attractive duration and credit, and to flex capital toward highly compelling opportunities. In the US, transaction markets remain active and competitive, particularly for small, one-off assets. We continue to see meaningful value creation in larger and more structured investments, where our relationships, scale, and underwriting capabilities provide a competitive advantage. We deployed $1 billion into credit investments globally, including two mezzanine transactions. The first was a $375 million loan alongside a sovereign capital investment firm backed by a portfolio of high-quality logistics assets leased to a strong investment-grade e-commerce client with a right of first offer on the underlying real estate. The second was a $190 million loan supporting the development of a data center campus in Virginia pre-leased to an investment grade hyperscale tenant. Our ability to invest across owned real estate, loans, preferred equity, and structured investments gives us flexibility to remain disciplined and selective, particularly in periods of macro volatility. Our global platform, long duration leases, and conservative balance sheet position us to stay active while maintaining underwriting rigor. Our platform advantage continued to deliver strong operating results, and we ended the quarter with robust occupancy and reported recapture. Through proactive asset and property management, our teams remained focused on driving AFFO per share growth from the core portfolio. We combined deep familiarity with our assets and clients, proprietary predictive analytics, and disciplined credit underwriting to maximize risk-adjusted economics on re-leasing and renewal outcomes. That approach generated outsized lease termination income of $40.2 million during the first quarter, and based on current visibility, we've increased our full year termination income outlook range to $45 to $50 million. Overall, we believe Realty Income today is more differentiated and better positioned for long-term growth than at any point in our history. With that, I'll turn the call over to Jonathan.

Thank you, Jonathan. Our private capital initiatives represent a natural extension of Realty Income's long-standing business models. They're expected to enhance our ability to deploy capital through cycles, improve our cost of capital efficiency, and strengthen our long-term value proposition for shareholders. We are encouraged by the progress to date and look forward to building on this momentum. Operator, we are ready for Q&A.

So, this was obviously part of the forecast that we had shared with the market. If you recall, we had come out with a forecast of $40 to $45 million. We were expecting this to be front-loaded. We have increased that based on the momentum we've seen to $45 to $50 million. So, this was not concentrated in any one single name. It was across the board. And again, the rationale for doing this remains the same. It is 100% focused on trying to create and maximize our total return profile on our investments. And if we feel like we have the ability to recoup the remaining rent and be able to lease these assets to alternative tenants who are better suited for those locations, that is one of the main drivers of doing this. The second being rather than waiting for an asset to become vacant in 3 to 4 years from now, being able to recycle the capital today and create a value proposition for our clients who are not long-term occupiers of that asset is again a win-win situation. So, it is really us leaning into our analytics and being much more proactive about harnessing these types of opportunities in our portfolio that's driving this and despite the fact that it was all pretty much front-loaded, the actual increase in lease termination is only $5 million.

The add back to AFFO for credit loss is really a non-cash dynamic. So, we have loans that we invested in. These are non-cash allowances for loan loss. Very standard with how we've treated similar situations in the past. So, incidentally, they happen to be the same number, but one is CECL non-cash driven add back. The other one is an actual cash payout to us, which is certainly part of AFFO.

Brad, this is a continuation of a theme that we've been touching on for the last call it 18 months now where we used to share pretty much every quarter some of the transactions that we were passing on just because it wouldn't fit what our public shareholders demand, which is day one accretion or spread investing along with meeting a long-term hurdle rate. And part of why we are doing what we are doing is to be able to continue to take advantage of transactions that we think actually meet the long-term return profile. These are very good investments and there's a pocket of private capital that is very interested in trying to take advantage of that. So, that was really the genesis behind why we started to look at these opportunities. And if you think about the three buckets of capital that we have and you try to sort of dive in and analyze what is the potential overlap, if you will, on strategies, there's very little, if any, to be very honest. One is a potentially lower initial yield, but with higher growth, which lends itself to our open-ended fund. The insurance capital is much more steady Eddie, low growth investments that don't necessarily meet the long-term hurdles, but are very good predictable cash flow streams that works very well for insurance capital. And then the third is a build-to-suit that we have with GIC that is, we go in with the intention to provide debt capital and then have the path to ownership downstream if we so choose to exercise. So, I think these are three distinct strategies, which if you think about in the traditional sense of the word and how we were able to or not able to recognize earnings in these three different buckets, and in some cases not even do these transactions, it is now allowing us to execute those three strategies, and it's largely based off of third-party capital. And the way it translates to a positive for our public shareholders is through predictable permanent fee income stream, allowing us to recognize development investments that we make and interest income during development, which we were not able to do in the past, and be able to satisfy a need by insurance capital that doesn't really work long-term on our balance sheet, but allows us to create a fee income stream by leveraging our platform. So, that's how this strategy that we've now started to implement and will continue to grow is going to benefit our shareholders, is essentially monetizing the platform that we've built.

Yeah, so the rationale here is again, anytime we are making credit investments, it's with a desire to own the real estate or at least a path to ownership. And so, what we have said about our data center sleeve is we are highly selective around who our operator is going to be, and I'm very happy to say that we are partnering with one of the best private operators out there. We are also very highly selective in terms of the location of these assets. Once again, it is in Virginia, what I've described in the past as the epicenter of the data center business. To again address the residual risk that is associated with these assets. And then the underlying asset itself, the lease itself needs to be able to fit into our investment thesis of being a single tenant asset, long duration lease, well above growth rates that we've been able to realize on the retail side of the business. And it fits all those boxes. And so, my hope is this is the second investment we've made with this particular developer. And it is with the intent to have a path to actual ownership of these assets. And in the meantime, we are lending our balance sheet. We are getting very decent yields on these investments, which will then allow us to be able to ultimately own the real estate.

That's a good question, Michael. So, let me step back and share with you that anytime we are exploring attracting third-party capital, it was the singular intent to grow our earnings per share for our public shareholders. If it doesn't translate to that, there is no reason for us to be attracting third-party capital. So, let's start there. And if you filter any decision that we make and how it translates to growth, and if there isn't a clear tie-in, then we are not going to be pursuing that capital source. So, that's the governing factor on anything we do. The reason why I've said what are we going to do in the future remains unclear, but our intent is we have effectively solved for what we need here in the US, and our built-to-suit with GIC also includes Mexico. But, we do happen to be in other geographies as well. We are being approached by other sources of capital. And if we can create a distinct strategy that does not interfere with our ability to continue to buy on balance sheet and is truly accretive to what we're doing on balance sheet, those types of decisions and those types of channels are ones that we are going to continue to look at, continue to consider, and potentially add to the ecosystem that we have created. Just like we've done on our investment side where we've diversified asset types, we've diversified across geographies, we're trying to do the same on the capital side. Jonathan's done an amazing job diversifying on the fixed income side. We continue to do that today with this muni pre-pay structure that he talked about. But, we had a single point of failure when it came to our equity capital, and that's what we are trying to diversify today. And hopefully this is the path to being able to get to our double-digit total return profile that we are all singularly focused on.

Sure. And again, great question, Michael. Now, a portion of the investment that we made was on this build-to-suit in Mexico. It's a perfect example of how we are effectively lending during the construction phase with the intent to own the asset once it's fully stabilized. That is part of our credit investment. The other bigger credit investment was on this data center project. Again, the intent there is to lend capital to a partner that we have decided is the right partner going forward on our data center strategy. And what we are hoping, and we believe will happen, is on the back end, we are going to be the owners of these data center assets. And what it is effectively allowing us to do is get a much higher yield on the front end of the development side, which can then make up for perhaps a nominal yield when we are actually buying the assets on balance sheet. And so, again, this is a strategy. Yes, we start off with the credit side of the business, but it is leading to what we believe is the real estate, which was the intent behind why we instituted this credit investment strategy to begin with. So, there's a similar story behind every credit investment that we do. And we are acutely aware that these tend to be shorter duration, which by the way, is by design. We want it to be shorter duration, so that we can then have the decision on whether or not, when it comes to an end, do we own the real estate or not, or at least develop relationships with clients or with developers who can then feed us a lot more product downstream, but we are starting the relationship building on the development side. So, that is really the thesis behind why we are making credit investments.

It's a good question, Smead. Look, obviously it's not going to suddenly start to dominate what we do. Our capital is very dear to us, and it is very important that we allocate it appropriately. And look, we turn down a lot more credit investments than we actually engage in. And so, despite the plethora of opportunities available to us in the credit side, we are highly selective. And what size could it become? It's going to be a function of the overall size of our platform. Today, we are $90 billion, plus minus. We have a small book of loans. But again, it's by design. These loans are short duration, and the hope is that this same capital will then be used towards the permanent buying of the real estate. And so, if we can't create that clear path, it's not something that we're going to be leaning into. Unlike a true credit company that all they do is invest in loans. In terms of percentages, I really don't have a number, Smead. This is going to be opportunistic driven. It's going to be driven by the strategy that I've laid out.

Yeah, look, we obviously feel very confident of what our pipeline looks like. It is largely a function of the pipeline and our ability to forecast out what that's going to translate into for the entire year. That's what's helped us raise our number from $8 billion to $9.5 billion. And what I would say is we did about, it was an even split...

between the US and Europe. And this was something we started talking about in last quarter where we had started to see a bit more of a momentum here in the US than we had seen for the prior three quarters in 2025 where Europe was dominating what we were getting over the finish line. And so, that trend we are continuing to see a lot of opportunities in Europe and that will continue to drive a lot of the volume. But we are starting to see similar impact here in the US, which is a good thing, which is why it gives us the confidence to increase the investment to 9 and a half billion. And the other piece is what you touched on, Smead. I mean, the fact remains that having these different sources of capital will allow us to do transactions that we wouldn't have done in the past. And again, why are we doing all of this? It is to help grow our earnings per share. And so, that's what we're seeing. From a competition perspective, public markets here in the US, I think that hasn't changed much. There is certainly a lot more competition on the private side here in the US. I think our product is well understood now and it's very attractive to private sources of capital to sort of pursue. So, we do see that competition, but elevated interest rate environment will continue to be a benefit for us because debt capital remains elevated and so in order for these private sources of capital to meet their return hurdles, it's going to be a little bit more of a challenge. Europe continues to be a very interesting area for us. I mean, I've mentioned this in the past and I'll mention it again. I think Neil and the team have done a great job of becoming the go-to net lease name, especially in the UK and soon it's translating into mainland Europe as well, where we get a lot of off-market transactions, where transactions are negotiated on an off-market basis and closed. And the fact that we have delivered for so many of our clients there, the repeat business continues to be a big driver of the volume that we've got in over the finish line. I believe for this quarter it was circa 94% was effectively relationship-driven businesses. So, I think that's what the landscape looks like from a competition perspective.

So, I'll start it off and then, Neil, if I miss something, please jump in. Yes, it is absolutely true that the bond market in the UK is quite elevated. But it is also true that we are getting higher cap rates because of the cost of capital environment in the UK. And more importantly, we are pursuing transactions and we are providing solutions because of the retail footprint that we have that continues to be very attractive to potential clients and it creates opportunities for us to invest with them either via the sale leaseback route or through repositioning of assets where we are attracting these clients remains an area that is very helpful. But outside of that, Neil, if there's anything else you'd like to add in terms of the market, in terms of what you're seeing, that would be great.

I wouldn't look into what we did in 2025 and what we are planning on doing in 2026 as the new watermark for lease terminations. I think what we are trying to do, Jim, is make sure that if we are starting to see opportunities with certain clients, with certain assets, that we are taking care of those right now. And this is an intent to sort of, look, we did two very large-scale M&A deals in the last 4 years. And we obviously inherited a lot of assets that were not ideal for the long-term hold strategy that we have generally speaking on anything that we do organically. And so, this is a mechanism that we are using to sort of reposition those assets with the right clients or accelerate the rent collection and dispose of these assets so that we can get to a profile of portfolio that will fall into that long-term hold strategy. So, I don't see 45 to 50 million, which is our current forecast, continuing indefinitely for our strategy going forward. This is much more episodic and much more around what we see in our portfolio today. And I gave you the rationale as to why we see that. It's largely through these M&A transactions.

Thanks, Mike. Look, we are very close. I think in our opening remarks we mentioned that we've raised the 1.7 billion which we had forecasted to the market. We are very close to full deployment. Our belief is that the next time we are having this earnings call, all of that equity capital will be fully deployed. And then of course, given that it is largely an unlevered structure today, we will still have dry powder to continue to invest beyond the 1.7 and get to a zip code of three and a half to four billion dollars of assets under management. I think we also share, Jonathan, do you want to take the management fee comment?

I really don't have a number for you in terms of what's going to constitute debt of that nine and a half billion, Tony. I'm sorry. Like I said, it is very opportunistic. It is very episodic. Some of what initially starts off as a debt investment will then convert over to an equity investment because ultimately the name of the game here is to own the real estate. So, if this is the way how we can ultimately own the real estate and in the meantime get enhanced returns, I think that is why we are doing what we are doing. But, I'm sorry, Tony. I don't have a number of that 9 and a half billion that I can share with you with a high level of confidence that it'll constitute the debt piece of our investment strategy.

Yeah. You should expect any new capital that we raise through the Apollo channel will be on new investments. Now, it is possible that just because of expediency, we end up warehousing the assets on our balance sheet, but it'll be assets that we are buying with the intent of putting into this Apollo strategy. So, look, the proof of concept was very important for everyone involved including Apollo and including us. And now that we have the mousetrap fully functional, fully endorsed by the rating agencies and the SEC, we're going to really lean into expanding that channel. But, it should be on new investments that we make.

Yeah, sure Ron, good question. No, this is precisely what we expected. When you're starting to buy assets into the fund, we have shared with the market that the fund is going to be buying assets at a lower yield. And when you blend all of that in, the fact that our average cap rate's going to be a little lower is a function of that strategy. So, ultimately it's all about growth. And if we look at the fact that we have effectively increased the midpoint of our guidance by 2 and a half cents, that is what's driving a lot of what we're doing. But the 6.7 was fully expected and it's a function of us being able to deploy more and more of the fund capital into the assets that are lower yielding.

No, it's, I think somebody prior to you asked this question, Ron, and I don't think you should expect us to come out with the same number year in, year out. I'm not going to say that next year we won't have a similar number, but I'm just saying that this is being done with the intent of making sure that the remaining portfolio that we have is truly a long-term hold strategy for us. And we're trying to create a win-win situation for our clients who are not long-term tied to that particular location. And at the same time, for us when we believe we can actually collect on all the remaining rent and then be able to entice another client to step in on these particular locations. But yes, if next year, mathematically speaking, if our termination income is going to be less, it is a headwind. But we're not doing this with the intention of this is going to become an ongoing strategy and it'll have a similar quantum. It is largely being driven by asset management decisions that our asset management team is very focused on executing upon.

Yeah, great question, Eric. Look, I think there were a lot of adjustments that we made to both the, when Regal came out of their Chapter 11 situation and so that obviously is part of what is flowing through on a same store basis. Also, I think the first quarter of last year we moved some of the cash accounting to accrual accounting. And so from a comp perspective we recognized and accelerated the recognition in the first quarter of last year. And so, when you compare that to what we have this year, it was again a headwind. Some renewals that have gone through we have shifted more to a percentage rent type of arrangement with some of these operators. And so, the base rent is lower vis-a-vis the base rent and that's all we actually compare. And so, again from a same store basis, that too would have been a bit of a headwind. And then some restructurings, At Home emerged and though the outcome for us was very good, there was a slight adjustment down on some of those rents and that's what's flowing through the business. If you're talking about what do we think about the theater business going forward, there was a big conference a couple of weeks ago. So far so good. First quarter was great. Second quarter is turning out to be pretty good. And the numbers that I've heard bandied about is 9 and a half billion in sales which is of course still not anywhere to 2019 levels of 11 billion, but moving in the right direction. And so, we hope to see some of this flow through on the percentage rent, but that gets calculated at the end of the fiscal year.

Yeah, look, I do see some of it is just unreasonable expectations. The pricing seems to be off. Everything else would work, but there's a disconnect between what the seller wants versus what we are willing to pay. And some of the sourcing is on the higher yielding stuff that we just are not comfortable given the risk adjusted return profile that we are seeing, especially in an environment where interest rates are highly volatile and the cost of debt could be something that we are acutely aware of could be a headwind for some of these operators. And so, it's a combination of multiple factors. Look, we've always been very selective. If you look at the history of what we've sourced and what we've closed, it is right in that 5 to 10% zip code. And so, 9% this quarter is in line with what we've done. But the point for sharing these sourcing numbers is to say, look, it's all trending in one direction and we are starting to source more and more and it is absolutely a byproduct of the team that we've developed, the geographies that we've added, the asset types that we have decided to pursue. All of these swim lanes are translating into much higher volume. And it's allowing us to pick and choose the investments that makes sense for us. And so, what we pass on there could be so many different reasons, including the couple that I've just shared with you.

Yeah, so Greg the GIC partnership is 1 and a half billion. That's their initial contribution to the partnership, the JV that we've created. Apollo obviously was a billion dollars of 2 billion dollars of assets under management. We don't have a number that we have shared with the street in terms of how much more could this be. I mean it's going to be again opportunity driven. And this will be us in constant contact with our partners to make sure that when we are seeing something that they would be interested in participating and it meets their return profile etc. The return profile obviously it will meet because those are the only ones we're going to be sharing with them. But we don't have Greg a number in mind in terms of how much bigger each one of these partnerships would be. But let me just tell you this that we wouldn't have engaged in either one of these partnerships if we didn't believe that this was programmatic in nature and could become a huge source of our alternative equity capital going forward.

Yes, you should assume that we are in ongoing discussions with our partners to obviously continue to grow this relationship. But once again, there are no definitive commitments on either side. So, but the goal is, when you're engaging with someone, the intent will always be to deploy more capital. And like I said, they are in our opinion one of the best in class private developers of data centers.

Yeah, so Ryan, I mean, obviously, we've been asked this question every quarter for the last I don't know how many years, but every time I've made a comment around we're starting to see the direction of drift of cap rates one way or the other, I've turned out to be wrong. I mean, it's pretty much stayed in this zip code, if you will, for now 2 years and continuing. And if you look at what's happened to the 10-year, it's stayed in this band of 3.8 to 4.4, 4.5 for that same duration. And so, it is so difficult, if you're asking for a forecast, Ryan, of where I see cap rates going, I might answer that question with a question, which is what is the direction of drift of the 10-year? I mean, every day we get this incredible volatility in terms of what people think will happen to the short-term rate and how it translates to the longer-term rate, etc. So, at this point, I'll tell you what we're seeing in the market is effectively what we've seen these last couple of years. It's the same zip code for assets that we are buying 100% on balance sheet, but obviously our ability to do more and go after lower-yielding, higher-quality, more growth assets has now widened, and so we are able to do a lot more.

Yeah, so Jay, if we talk about Mexico just for a second since you brought it up and it is the last geography that we entered into. Look, it was largely a client-driven opportunity for us. We went in there with our partners who've had decades of experience developing in that market. We tried to minimize the risk in terms of currency fluctuations by making sure that our leases were dollar denominated with clients that we understood and we knew very well. And it was largely a macro thematic play seeing the nearshoring and the onshoring of what we see as basically tailwinds in the logistics sector and the industrial sector. So, this was our way of playing that particular theme with partners who we felt very comfortable with. And so, if these types of thematic opportunities present themselves, Jay, we are happy to continue to expand geographies, etc. The good news is we've done it now in so many different geographies. We have the playbook down. We understand the risk. We know how to get our arms around the inherent risk of investing in new geographies. There was a piece that my colleague Neil did in the Financial Times where he talks about how people underestimate the operational intensity of making these investments. We've got that covered. We are at this point got the blueprint and we recognize the risks and we are happy to sort of absorb those for the right opportunities.

A lot of them are existing clients that we have operating our assets. Some of it was developers that we have done repeat business with. Some of it was clients that we are co-investing with and looking at opportunities together. It's all of those elements that go into that 94% and I think as we cultivate new relationships, as we cultivate new opportunities, you will see that number right around that 85 to 90%, 95%. It's been very steady. It's just that the quantum that that percentage represents is continuing to grow as we become more familiar, as our name becomes more familiar in the sale-leaseback arena with developers, with clients and with capital sources.

Yeah, sure. So Jason, anytime an asset is coming up for, if there's a lease expiration in the near term and I would say in the next two to two and a half years, our asset management team is very focused in trying to figure out what is going to be the ultimate outcome. And then it can effectively take multiple routes. That is one of the strategies that they are executing. Another one would be if, through our predictive analytics channel, if we are looking at location risk, and we see that a particular asset is no longer going to be viable, even if the expiration is 5, 7 years out, we would put those on the disposition bucket and we would try to dispose of those assets. And so there's a variety of reasons. There could be a credit event that we see coming down the pike that could help drive disposition decisions. We then look at, okay, even if this particular client is going to be willing to stay, what is the releasing rates that we believe we can get? And if our asset management team thinks that there is enough alternative clients that could be stepping in and giving us more, that's again a decision that they rely upon. Of course, all underpinned by the predictive analytics and what it's suggesting would happen in that particular location. So, there's a variety of analysis that the asset management team goes through. And what they are focused on is what is going to yield the highest return, economic return, based on these various different decisions that one can take. And then they try to implement that highest return probability. And in some cases, taking a rent haircut is the right decision. Having said that, if you look at what we've been able to achieve in totality every quarter, it's been, like even last quarter in this, we just reported it, it's north of 103%. So, our renewal rates and releasing rates in combination is yielding us north of 102%, 103% quarter in quarter out. But, like I've said before, sometimes the right decision is to take 99% recapture rate rather than trying to sell that asset vacant or try to attract a client knowing fully well that the recapture rate's going to be lower. So, it's a very fluid strategy, Jason, but one that we believe that we have the best asset management team on the street. They have years and years of experience. And when you control so many assets for a given client, the benefit of having a conversation not on a single asset, but on multiple assets for that client is something that translates into these higher recapture rates that our asset management team does brilliantly on. So, that's really how we think about renewals and releases and sales.

Yes, it totally is.

Sure, Upal. Good question. I would put gaming in a similar thought process that I described our digital investments. And what I would say is the operator is going to be very important to us. The location of these assets is going to be very important to us. The sustainability of EBITDA and the ability of these operators to extract that EBITDA is what we are very focused on, which is why if you look at the investments we've made, largely three investments. Right, Mark? It's CityCenter, Bellagio, and we own 100% of the Wynn in Boston. And so, that will continue to dictate our gaming strategy. And obviously having a very close relationship with both MGM and Wynn, two of, one could argue two of the best operators in the space, should yield more transactions for us. But again, we're going to remain very, very selective, Upal.

Thank you very much for joining us today and we look forward to seeing you at NAREIT in a few weeks.