STORE Capital CEO Says REIT Protected Against Rate Hikes

Chris Volk, president and CEO of STORE Capital Corp. (NYSE: STOR), joined REIT.com for a CEO Spotlight video interview at REITWorld 2015: NAREIT’s Annual Convention for All Things REIT at the Wynn Las Vegas.

STORE is an acronym for single-tenant operational real estate, which is the company’s target market. STORE’s tenants operate across a variety of industries within the service, retail and industrial sectors. Restaurants, health clubs, early childhood education centers, movie theaters and furniture stores represent the top industries in its portfolio.

Volk discussed how STORE’s balance sheet is structured to deal with rising interest rates. He explained that the company has reasonably low leverage, laddered maturities and almost no fixed-rate debt. At the same time, STORE has a dividend that’s increased 8 percent this year. The company is projecting adjusted funds from operations (AFFO) growth of 10 percent for 2016. Volk said the combination of these factors does a good job in insulating the company against additional rate increases in 2016.

Volk pointed out that that the retail segment of STORE’s portfolio, which represents about 15 percent of the company’s total investment, has been performing “extremely well.”

Meanwhile, STORE has increased its acquisition guidance for 2015 to $1.1 billion, while acquisitions in 2016 are projected at $750 million. The acquisition pipeline is more than $6 billion in terms of transactions STORE is looking at and evaluating.

“We think the market is actually enormous,” Volk said.