Earnings call transcript: FrontView REIT Q3 2025 sees EPS surprise, stock stable

FrontView REIT Inc. (FVR) reported its third-quarter 2025 earnings, showing a notable earnings per share (EPS) of $0.19, significantly beating the forecast of -$0.01. This surprise 2000% increase was complemented by revenue reaching $16.6 million. Despite the positive earnings surprise, the stock price showed a modest increase of 0.81%, closing at $13.61, reflecting a balanced market reaction.

Key Takeaways

• FrontView REIT posted an EPS of $0.19 against a forecasted -$0.01.
• Revenue for Q3 2025 came in at $16.6 million.
• The company's stock price rose slightly by 0.81% post-earnings.
• FrontView reduced its net debt to $288.9 million, improving its debt-to-EBITDAre ratio.
• The company maintains high occupancy levels at over 98%.

Company Performance

FrontView REIT's performance in the third quarter of 2025 underscores its strategic focus on diversifying its property portfolio and maintaining high occupancy rates. The company acquired three new properties, enhancing its presence in financial, fitness, and discount retail sectors. Moreover, its decision to sell 15 properties for $32.9 million aligns with its strategy to optimize its asset base and eliminate exposure to less profitable restaurant concepts.

Financial Highlights

• Revenue: $16.6 million in Q3 2025.
• Earnings per share: $0.19, compared to a forecast of -$0.01.
• Annualized base rent: $61.3 million, down from $63.2 million in Q2.
• Net debt: Reduced to $288.9 million.
• Liquidity: Increased to $236.1 million with preferred equity.

Earnings vs. Forecast

FrontView REIT's reported EPS of $0.19 far exceeded the forecasted -$0.01, marking a significant positive surprise of 2000%. This performance is a strong rebound compared to previous quarters and indicates effective cost management and strategic asset repositioning.

Market Reaction

Following the earnings announcement, FrontView REIT's stock price experienced a modest increase of 0.81%, closing at $13.61. This movement reflects a cautious yet positive investor sentiment, likely influenced by the company's strong earnings surprise and improved financial metrics. The stock remains within its 52-week range, suggesting stability amidst broader market trends.

Outlook & Guidance

FrontView REIT has revised its 2025 full-year acquisition guidance to $115-$125 million and expects net acquisitions of $100 million in 2026. The company also increased its AFFO per share guidance to $1.23-$1.25 for 2025, projecting a further increase to $1.26-$1.30 for 2026, indicating a 3.2% growth.

Executive Commentary

CEO Pierre Revol stated, "Having a small size allows us to deliver faster growth than all of our peers," emphasizing the company's agility in the market. Meanwhile, CFO Steve Preston highlighted the strategic advantage of the company's asset portfolio, allowing for quick repositioning in response to market dynamics.

Risks and Challenges

• Market Volatility: Fluctuations in the real estate market could impact property valuations.
• Interest Rate Changes: Increases in interest rates may affect borrowing costs and investment returns.
• Economic Downturn: A broader economic slowdown could reduce demand for commercial properties.
• Tenant Concentration: While diversified, reliance on top tenants could pose risks if any major tenant defaults.

Q&A

During the earnings call, analysts inquired about the resolution of the Tricolor property and the preferred equity investment with Maewyn Capital. Management also addressed questions about the acquisition pipeline, confirming a conservative approach to bad debt estimates at 50 basis points.

Full transcript - FrontView REIT Inc (FVR) Q3 2025:

Operator: Good morning, ladies and gentlemen, and welcome to the FrontView REIT Q3 2025 earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will come back to a question-and-answer session. If at any time during this call you require immediate assistance, please press 0 for the operator. This call is being recorded on Thursday, November 13, 2025. I would now like to turn the conference over to Mr. Pierre Revol, Chief Financial Officer. Please go ahead, sir.

Pierre Revol, Chief Financial Officer, FrontView REIT: Thank you, Operator, and thank you, everyone, for joining us for FrontView REIT's third quarter 2025 earnings call. I will be joined on the call by Steve Preston, Chairman and CEO. Drew Ireland, our Chief Operating Officer, will be available for Q&A. Before we get started, I would like to remind everyone that this presentation contains forward-looking statements. Although we believe these forward-looking statements are based on reasonable assumptions, they are subject to known and unknown risk and uncertainties that can cause actual results to differ materially from those currently anticipated due to a number of factors. I refer you to the Safe Harbor Statement and our most recent filings with the SEC for a detailed discussion of the risk factors relating to these forward-looking statements. This presentation also contains certain non-GAAP financial metrics.

Reconciliation of non-GAAP financial metrics, the most directly comparable GAAP metrics, are included in the exhibits furnished to the SEC under 408(k), which include our earnings release, supplemental package, and investor presentation. We have also furnished a press release in 8K for the $75 million related to ROL convertible preferred equity investment. These materials are available on the investor relations page of our company's website. With that, I'm now pleased to introduce Steve Preston. Steve?

Steve Preston, Chairman and CEO, FrontView REIT: Great.

Pierre Revol, Chief Financial Officer, FrontView REIT: Thank you, Pierre, and good morning, everyone. I'm very pleased to talk about our third quarter today, as it marks a powerful, transformative quarter for the company. As a reminder, our portfolio is built around smaller, highly fungible net lease assets typically located in front of major retail nodes across the country. This real estate positioning gives our tenants visibility, traffic, and staying power, which is why we emphasize frontage. The format of these properties makes them easier to recycle, retain it, or reposition quickly, and that flexibility is an important part of our strategy. Our tenant base is broad and generally necessity and service-oriented, allowing for consistent demand through the phases of economic cycles. Today, we have 323 leases, with the top 10 contributing just 24% of ABR, our top 60 at 74% of ABR, and our largest tenant at only 3.6% of ABR.

That diversification is a real strength. Just as important, this approach is unique in the public REIT market, as few peers are focused on small-format, necessity-driven retail and service tenancies. FrontView has now been public for just over one year. Over these last 12 months, we have experienced and worked through a number of circumstances that have made FrontView a stronger company today. To highlight, we have optimized our portfolio. We have an effective C-suite with industry-leading talent. We have been intelligent stewards of capital. We have kept a low levered balance sheet with ample liquidity. We have demonstrated the value, fungibility, and desirability of our frontage assets. We have focused on operational excellence to support increased AFFO for sure guidance, all while recycling assets. We have thoroughly revamped our external materials, including our investor presentation, supplemental, and website.

We have shown through dispositions that there is currently a significant dislocation in our share price relative to NAV. We have maintained a conservative dividend payout ratio. Finally, we have carefully tailored a perpetual preferred equity investment to have capital in place to accretively grow throughout 2026. I am excited for what lies ahead for FrontView as a public company. During the third quarter, we acquired three properties for approximately $15.8 million at an average cap rate of 7.5%, with a weighted average remaining lease term of approximately 11 years. From an industry perspective, we continue to add diversification, adding financial, fitness, and discount retail uses. There were several acquisitions planned for the third quarter that shifted into the fourth quarter, as reflected in our guidance.

The acquisition market remains very open to FrontView, with our competitive advantages in tow, so our timing in securing this accretive capital is particularly well-suited to continue to take advantage of our buy-side opportunities within the marketplace. In terms of property dispositions, we sold 15 properties for $32.9 million during the quarter. Thirteen were occupied properties, generating proceeds of $30.1 million at an average cash cap rate of approximately 6.78%. These properties had an average weighted lease term of eight years. Our current target dispositions are assets with lower WALTs and/or less optimal concepts. For example, through our recent dispositions, we have eliminated all portfolio exposure to the following concepts: Ruby Tuesday, Red Lobster, Bob Evans, Red Robin, Freddy's, Denny's, Dairy Queen, Hardee's, Café Rio, and Razzoos.

Although these concepts are household names, national or regional tenants that were rent-paying, we are focused on optimizing the portfolio by disposing of concepts that we think are or could become under pressure in the future. These asset sales demonstrate the continued desirability and liquidity of our real estate assets and highlight the meaningful spread between our stock's implied cap rate of approximately 9% and where our assets are transacting in the market, where our peers' implied cap rates are, both of which are approximately 6.75%. Looking at net investment levels, we were again net sellers this quarter, and our debt to annualized adjusted EBITDA fell to 5.3 times, with an LTV below 35%, leaving the company's balance sheet profile and liquidity in fantastic shape. Turning to the portfolio, we closed the quarter with occupancy north of 98% and just six vacant assets, an improvement from last quarter.

We have resolved the 12 previously reported troubled assets, with 10 either sold or leased, and one under contract to sell, with an overall recovery rate of approximately 85% for these 11 assets. Additionally, as has been broadly highlighted in the media, Tricolor's alleged fraud impacted several large financial institutions, with losses in the hundreds of millions. We had one Tricolor property, and we have already received multiple offers to buy and multiple offers to lease the property. Based upon these prospects, we are confident we will have an excellent outcome with minimal downtime and affirmation of our frontage-based strategy. Our assets are located in high-visibility, high-traffic corridors, properties that attract a diverse mix of users. That allows us, when necessary, to retain it, repurpose, or sell efficiently to unlock value. As we've optimized the portfolio, what remains is a higher-quality, better-tenanted portfolio with stronger concepts.

As a result, we do not see any material additions to our watchlist at this point. To be clear, we see bad debt in the approximately 50 basis point range for 2026, more in line with historical averages. Simply put, this is what disciplined capital allocation and active portfolio management look like: a stronger, higher-quality platform positioned for sustainable growth, resulting in us raising our earnings guidance for the year. On the capital side, last night we announced a $75 million convertible preferred equity investment. This is a bespoke instrument that we spent a considerable amount of time negotiating over the last couple of months. Pierre will provide more of the details and specifics, but from a bigger picture, strategy standpoint, this security is unique in its simplicity, with generally superior terms to that of comparable instruments. One, we anticipate the pref will fund our 2026 net acquisitions.

Two, the capital is accretive when deployed. Three, we can draw down capital in tranches over time as we acquire assets without paying any penalties or expensive carrying costs. Four, the transaction costs are well below market. Five, after two years, we have the ability to force convert the pref to equity at a $17 conversion rate if the shares are trading at a 17.5% premium. Six, the security is open for repayment after three years at par. Seven, there are no make-whole provisions. Finally, there are no onerous governance requirements. This capital raise was led by Maewyn Capital Partners and its founder, Charles Fitzgerald. Charles has nearly three decades of public markets investing experience, including founding V3 Capital and co-managing REIT portfolios at High Rise and JP Morgan. Charles is joining our board as part of this investment.

Maewyn also owns just under 1 million shares of common stock, roughly 3.4% of the fully diluted shares. That alignment with both common and preferred capital at work has a level of discipline and capital allocation focus that should benefit all shareholders. To wrap up, I believe that FrontView is stronger today than at any point since our IPO. We have a portfolio with flexibility, a top-tier management team with deep industry experience, and a balance sheet that positions us for growth. Our goal is straightforward: to continue to build a best-in-class net lease REIT that can grow faster, allocate capital smarter, and maximize shareholder returns. Today's valuation gives investors an opportunity to invest in our company at a price well below today's standalone asset values. Certainly, the valuation does not properly reflect the quality of what we've built or the growth and opportunity ahead.

With that, I'll turn the call to Pierre to go through the quarterly numbers and guidance. Pierre?

Thank you, Steve. As part of this quarter's release, we introduced several enhanced disclosures within our investor presentation, designed to give investors deeper insight into the quality and productivity of our real estate. These include detailed disclosures of our assets across the top 100 MSAs, Placer.ai visitation rankings, highlighting property productivity and historical recapture performance. We have also refreshed our company website to include a portfolio-level page to view 100% of the concepts by city and state, underscoring the visibility and quality of our footprint. Turning to the quarter, annualized base rent was $61.3 million as of September 30, compared to $63.2 million at June 30. The decrease in ABR primarily reflects the company being a net seller of assets during the quarter, with $32.9 million of dispositions and $15.7 million of acquisitions.

Excluding the Tricolor property, which vacated post-quarter, ABR would have been $60.7 million, which serves as a solid baseline for modeling the fourth quarter. Total cash rental income totaled $15.4 million, compared to $15.7 million last quarter, which included $73,000 of variable rent. Our non-reimbursed property costs or slippage was $405,000, slightly better than expectations of $500,000, helped by the dispositions in the quarter. On the expense side, cash G&A was $2.1 million and $6.3 million year-to-date, with no adjustment to our cash G&A guidance of approximately $8.9 million at the mid-quarter. Quarterly cash interest expense declined by $100,000 sequentially to $4.2 million, driven by a $21.2 million reduction in net debt to $288.9 million. In September and October, we also completed two amendments to our credit agreements for both the revolver and the terminal.

These amendments removed the 10 basis point SOFR adjustment and improved our pricing grid for LTVs below 35%, producing an expected 15 basis point savings across all our debt upon submission of our Q3 covenant package this week. Additionally, in early September, we hedged an incremental $100 million of one-month SOFR exposure through March of 2028, further reducing REIT volatility. Turning to the balance sheet, net debt to adjusted EBITDAre reduced by 0.2 times to 5.3 times. That's the lowest leverage since the IPO, LTV of 33% based on our bank covenants. Our fixed charge coverage ratio remained at 3.3 times, with 100% of our assets unencumbered. At the end of the quarter, with $161.1 million of liquidity, including $141.5 million of undrawn revolver capacity and $19.6 million of cash and equivalents. Including the recently closed delayed draw convertible preferred equity, our total liquidity increases to $236.1 million.

As a brief housekeeping note, having passed the one-year mark since our IPO, FrontView is now shelf-eligible. We will be filing the S3 registration statement shortly, and once accepted, we'll request authorization for a $75 million ATM program. Additionally, we have received board authorization to repurchase up to $75 million in shares, providing us with flexible tools for future capital markets activity. As Steve mentioned, our announced $75 million convertible preferred equity investment provides long-term growth capital with near-term accretion. This security carries a 6.75% dividend rate and a $17 conversion price, with no make-hole penalties and no restricted governance features. The structure allows us to draw capital in tranches as acquisitions close, making each draw cash flow accretive.

On a converted basis, the effective cost of equity net of fees is approximately 7.5%, and with modest leverage, our weighted average cost of capital is in the mid to high 6% range. We anticipate using the equity capital to acquire $100 million of assets net of dispositions. Currently, we are making conservative assumptions on the cash cap rates of acquisitions, 7.25%, versus our existing pipeline, which ranges from 7.25%-7.75%. Once the capital is deployed, it will drive 3% annualized AFFO per share accretion, utilizing modest leverage of 25%. This accretive equity positions us to capitalize on a compelling acquisition environment and to deliver sustained AFFO per share growth, supported by our nimble scale, access to granular frontage assets, and disciplined capital deployment in a fragmented market.

Turning to 2025 guidance for the full year, we expect acquisitions to range between $115 million-$125 million, and dispositions to range between $70 million-$80 million. For the fourth quarter, at the midpoint, this implies $37 million of acquisitions and $17 million of dispositions. Our AFFO per share guidance range increased by $0.01 to $1.23-$1.25. We expect approximately $0.30 in AFFO per share in the fourth quarter. That's primarily a function of timing, as the dispositions were more heavily weighted towards September, while the acquisitions are anticipated to close towards the end of the year. Looking ahead, when we exit December, our run rate AFFO per share will be slightly above $0.31, including the full impact of acquisitions and dispositions for the third and fourth quarter. This includes no NOI for the Tricolor asset that Steve discussed earlier.

Turning to 2026, with the preferred equity capital secured, we expect approximately $100 million in net acquisitions, driving AFFO per share range of $1.26-$1.30. This represents 3.2% year-over-year growth at the midpoint compared to $1.24. We believe this acquisition pace is highly achievable, and once fully deployed, we'll expand our asset base by more than 10%. Our results reflect the power of disciplined execution. Over the past quarter, we've enhanced transparency across our disclosures, strengthened our balance sheet, and secured long-term accretive equity capital, all to support sustained earnings and portfolio growth. With a high-quality real estate portfolio and a flexible capital structure, FrontView is positioned to compound AFFO per share growth faster than peers.

Our smaller scale is a structural advantage, as it allows us to move with precision and capitalize on opportunities in frontage retail real estate, where we continue to see strong fundamentals and high demand. With that, I'll turn the call back over to the operator to open it up for Q&A. Operator?

Operator: Thank you, Mr. Revol. Ladies and gentlemen, we now begin the question-and-answer session. If you'd like to ask a question, please press star followed by number one on your telephone keypad. If your question has been answered, you'd like to withdraw it from the queue, please press star followed by number two. We ask analysts to limit themselves to one question and a follow-up. If you're using a speakerphone, please lift your handset before pressing any keys. One moment, please, while we compile the roster. The first question concerns Anthony Blunn with JP Morgan. Please go ahead.

Anthony Blunn, Analyst, JP Morgan: Great. Thank you. First question relates to 2026. Can you just give us a little bit more on, you mentioned it sounds like Tricolor is kind of out and maybe it gets backfilled, but also just with 20 lease expirations next year, kind of just what's on the organic sort of core portfolio side you have baked into the guide?

Pierre Revol, Chief Financial Officer, FrontView REIT: Hey, Tony. Thanks for the question. Good to be here with you. In terms of the guidance, it's pretty simple. As we exited this year at $0.31 roughly with all the acquisitions and dispositions, that annualizes to $1.24. As mentioned, it doesn't include any income from Tricolor. We do expect a recovery. Hopefully, we'll be able to provide an update that'll be a little bit better depending on how the resolution ends up happening. We anticipate zero equity. We have fully funded with this new capital deployment, and that's really what's primarily driving. In terms of expirations, we're ahead of all of that. I can let Steve talk about our expiration schedule.

Anthony Blunn, Analyst, JP Morgan: Yeah, sure. Thanks, Pierre. Yeah, Tony, we view the expirations historically as a positive. Just remember that we do have quality real estate. It is desirable. It is a fungible portfolio. We maintain excellent diversification. What I would say is that since 2016, some data points, we have had 49 lease expirations with only 8 expiring, 41 of those renewed to the same tenant, 3 renewed to a different tenant. That represented about a 105% recovery rate, with 5 that have been sold or are working to be sold off, 2 sold, 1 under contract, and 2 underway. We look forward and we see that the renewals are an asset to bolster income based on historicals. Okay. Thanks.

Just a follow-up is if you can just describe kind of your deal pipeline and where cap rates are trending and just kind of how the pipeline's coming along now that you have the capital. Do you have a lot to spend it on?

Steve Preston, Chairman and CEO, FrontView REIT: Sure. Great. Yeah, good question. Thanks, Tony. Yeah, I'd say that the market for us continues to be fluid. We expect cap rates for Q4 to come in similar to Q3, somewhere in that 7.5% cap rate range. I think we've all seen increased institutional interest in net lease with abundant capital available for acquisitions. That is really setting a tone for the marketplace. What I would say is, importantly, we typically do not compete against the institutions in our marketplace just due to our property size. That gives us a bit of that competitive advantage. Now, for those smaller buyers, leverage just has opened up a little bit. It is a little bit easier for some of the smaller buyers to obtain lending from community banks, etc. We still see lots of opportunity. We've got a strong pipeline, similar assets that we've acquired along the way.

We certainly can increase the pace of acquisitions at any given time. Just remember, back in Q4, almost about a year ago, with the existing team that we had in place, we acquired a little over $100 million in acquisitions. We do have that capacity. We do have the team in place, and we do have the relationships to turn on that faucet if we need to.

Anthony Blunn, Analyst, JP Morgan: Okay. Thank you.

Operator: Thank you. Your next question concerns John Kelly Kavsky with Wells Fargo. Please go ahead.

John Kelly Kavsky, Analyst, Wells Fargo: Hi. Good morning. Thank you. Maybe if we could start back on the guide. You guys provided some helpful color around cap rates and credit loss. Could you talk to maybe what the high end and low end for the guide represents on each of those metrics? If there's any other color you could give around what helps formulate your guide?

Pierre Revol, Chief Financial Officer, FrontView REIT: Sure. John, great to hear from you. In terms of the low end at $1.26, it is really about the timing of the deployment of the capital. We set an investment guidance of $100 million next year, and it really depends on how quickly we deploy it. We do have some dispositions as well in our guidance next year, and we will continue to do some asset recycling. On the low end, the way to think about a $0.31 run rate at $1.24, we do think that this is accretive at least to $0.02. I feel very comfortable at $1.26, even if we deploy the capital a little bit later. On the high end, what would really drive that is a little bit of favorable resolutions on any sort of credit issues and earlier acquisitions, higher cap rates.

That would be the predominant drivers between the low and high end.

Anthony Blunn, Analyst, JP Morgan: Okay. Very helpful. Maybe if we could just jump to the preferred. It looks like great execution here. Just kind of curious if you can get some color on the relationship with Maewyn, how you got to this number. I think the street would have guessed something a little bit higher. Great job on your part, but just curious how you got to these terms and what the relationship was that got you here.

Pierre Revol, Chief Financial Officer, FrontView REIT: Sure. We've known Maewyn and Charles Fitzgerald for a while. He's been an investor and a good partner since the beginning, since the IPO. I've worked with Charles prior when I was at Spirit, so I knew him from that point as well. We sat with him. We met with him multiple times, and we were discussing price and cap rates. Ultimately, just to steal a line from one of our colleagues, Shank Mitra, he said, "We're in early stages of a long journey of delivering compounding per share of cash flow growth for our existing shareholders, and that's our North Star." I'd agree with his statement, and I think that is what we're trying to do here. We're trying to create a vehicle to get us back to growth. This is accretive per share capital growth that we think will drive a higher valuation.

He understood that. He thinks that with this portfolio that he completely underwrote and he completely understood our business plan and was extremely supportive of giving us this capital and understanding that at $17, it was very attractive for him as an equity capital. For us, it makes sense to issue it so we're fully funded and we can get back to growth. Given our size, which I do believe is a structural advantage in net lease, especially when you consider that 98% of net lease market cap is trading above NAV, having a small size allows us to deliver faster growth than all of our peers. We just have to get there, and I believe this is the first key step to do it.

Anthony Blunn, Analyst, JP Morgan: Great. Thank you.

Operator: Thank you. Your next question comes from Janet Gallen with Bank of America. Please go ahead.

Janet Gallen, Analyst, Bank of America: Thank you. Good morning and congrats on a nice quarter. Thinking about the dispositions you made this year, you kind of leaned away from casual dining. Just curious on that 50 basis points of bad debt in 2026, could it potentially be better than that given that the portfolio composition is different than the historical?

Steve Preston, Chairman and CEO, FrontView REIT: Yeah. No, I think that's a good question. I think we feel like that's a conservative measure at this point. Selling off the concepts that we mentioned before really did help to optimize the portfolio. We're going to continue to optimize the portfolio with select dispositions moving into 2026.

Janet Gallen, Analyst, Bank of America: Maybe just more color on what categories that you're looking to expand in. You mentioned kind of this quarter financial fitness and discount.

Steve Preston, Chairman and CEO, FrontView REIT: Yeah. No, I mean, we still like the same type of industries that we've been buying in. We like medical. We like financial. We like automotive service. We don't have any veterinarian. We look closely at acquiring or adding that as a concept. I think fitness seems to be strong. Fitness is back to COVID or pre-COVID levels. Class concepts getting added to some of the larger formats has been taken on well. Certainly QSR, we still like that. I mean, Taco Bell still has their sales are up with traffic, notwithstanding the consumer. And just a little bit of fast casual, so similar industries as we continue to go. We're going to be careful with pharmacy, careful with car wash, and certainly certain restaurants, as you've noticed, and concepts that are a little bit tired. Certainly, of course, small franchisee credit.

Janet Gallen, Analyst, Bank of America: Thank you.

Operator: Thank you. Your next question comes from Ronald Condon with Morgan Stanley. Please go ahead.

Ronald Condon, Analyst, Morgan Stanley: Hey, just a quick follow-up on the pipeline. Maybe just talk through sort of whether it's WALT or escalators, how you're thinking about those assets, and then the 40 basis points escalator on the acquisition, which I know is small. Just what happened there? Thanks.

Steve Preston, Chairman and CEO, FrontView REIT: Yeah. No, I think the 40 basis points was just the timing. We had some assets that got pushed. A bulk of them got pushed into Q4. I think when you see Q3 come together with Q4, you'll be a little bit more normalized with our typically 1-2% escalators. Of course, when we're acquiring assets, having escalators built in is a key component. Focusing on longer-term walls to continue to build our weighted average lease term and then also to continue to have those embedded rent bumps are, of course, critical to our acquisition criteria.

Ronald Condon, Analyst, Morgan Stanley: My quick follow-up on the prep. Just do you remind us where that gets to in 2026, just what that level set the EBITDA that ends up getting you to if you include that? Thanks.

Pierre Revol, Chief Financial Officer, FrontView REIT: As we ended this quarter, I thought one of the key priorities for us was to enter the end of this year at a very low leverage point. At 5.3 times, to me, that's a very productive print along with being able to increase our AFFO per share guidance. When we think about using the prep, which I do view as equity, and it's 100% equity from how our account is treated, it's going to effectively lower our leverage because we're going to be funding it at a bit lower rate than the 60/40, more like 25/75. Now, we do have some acquisitions baked in in the back half of this year in terms of the guidance. We do expect leverage to tick up into the fourth quarter. After that, it will stay well below 6 all of next year.

Ronald Condon, Analyst, Morgan Stanley: Helpful. Thank you.

Operator: Thank you. Your next question comes from Daniel Guglielmo with Capital One Securities. Please go ahead.

Daniel Guglielmo, Analyst, Capital One Securities: Hi everyone. Thank you for taking my questions. Although you've been in a bit of a holding pattern on acquisitions, I know you remain engaged with the brokers across the country. Over these past few quarters, which states or regions have you seen kind of these frontage outparcel properties that you focus on come up for sale? Is there anything of note there?

Steve Preston, Chairman and CEO, FrontView REIT: Yeah. I don't think there's anything state-specific from the marketplace. I think we're going to continue to target strong growth states. We're going to probably start to maybe reduce exposure just because we have a little bit more of that to Illinois. The general marketplace, there's general opportunity really across the space and across states. I wouldn't think it's really anything state-specific. I think we'll generally follow kind of that same progression of assets that we've acquired throughout the portfolio.

Daniel Guglielmo, Analyst, Capital One Securities: Great. Thank you. You touched on it in an earlier question, but the portfolio occupancy has improved kind of sequentially over the last three quarters. Can you just talk about are there any kind of industry mixes where you've seen something new this quarter, maybe areas where Drew and team are spending more time with tenants to understand their needs and consumer patterns?

Steve Preston, Chairman and CEO, FrontView REIT: Yeah. I'd say that by optimizing the portfolio and taking out some of those concepts that we mentioned earlier, I think that's certainly helped the way that we look at the portfolio going forward. That 50 basis points isn't a ton of action at the end of the day. The good news is, and we'll keep the fingers crossed, but we seem to be a little bit quiet there right now, and we hope that continues.

Daniel Guglielmo, Analyst, Capital One Securities: Great. Thank you.

Operator: Thank you, Daniel. There are no further questions on the phone lines. I will turn it back to Mr. Steve Preston for some closing remarks.

Steve Preston, Chairman and CEO, FrontView REIT: Great. Thank you. Thank you all for joining. We look forward to continuing to add value for the shareholders, and we hope to see you all at NAREIT in December or at our upcoming NDR with Bank of America. Thank you again for your time, and please be safe.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.

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