Spirit Realty Capital CEO Reviews Active Year for Acquisitions

Thomas Nolan, chairman and CEO of Spirit Realty Capital (NYSE: SRC), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.

Scottsdale, Ariz.-based Spirit Realty Capital was formed in 2003 to purchase single-tenant, net lease properties. The company’s portfolio consists of approximately 2,100 properties across 48 states.

For the nine months through Sept. 30, Spirit Realty acquired 241 properties for approximately $570 million. Leases on the properties have an average remaining term of 15.1 years.

Nolan discussed the factors behind the flurry of acquisitions this year.

“It’s an excellent market environment,” said Nolan, emphasizing that the company’s goal is to create durable cash flow for its shareholders.

“Between the attractive capital markets and the attractive property markets, it’s a bit of a Goldilocks scenario. We’re a spread-investing organization, and those spreads are pretty high by historical standards, so we see excellent opportunity to add to shareholder value,” Nolan explained.

Meanwhile, Nolan discussed the appeal of sale-leaseback transactions for Spirit Realty and its customers.

“We’re both looking for the same thing, just on opposite sides of the equation. We’re looking for durable cash flow. They’re looking for consistency in expenses and costs,” he observed.

Nolan also pointed out that there has been a growing realization among companies that it makes more financial sense to remove their property holdings from their balance sheets for an extended period of time.

“We’re the recipient of those steady-growing cash flows over time, so it’s a win-win,” he said.

Asked whether he anticipates any potential “game changers” for the company in the near term, Nolan responded that the strong economic environment and inexpensive sources of capital make such an event unlikely.

“I’m not looking for game changers. Spirit is about consistency in quarter-over-quarter performance that people can rely on,” he said.