Realty Income Corporation (O) Earnings Call Transcript & Summary

We appreciate everyone being with us for Realty Income's conference call covering third quarter 2026 results. Present on today's call are Sumit Roy, our President and Chief Executive Officer; Jonathan Pong, Chief Financial Officer and Treasurer; Neil Abraham, Chief Strategy Officer and President of Realty Income International; Greg White, Chief Operating Officer; and Mark Hagan, Chief Investment Officer. On this call, we'll be making some statements that federal securities law may treat as forward-looking. Actual results in the future for the company could differ materially from what any forward-looking statements discuss. The factors that might lead to those differences will be described in more detail in our Form 10-Q filed with the SEC. During the Q&A portion, we'll keep to a limit of 1 question and 1 follow-up so that everyone gets a chance to participate. With that, I'd like to hand the call over to our CEO, Sumit Roy.

Thanks, Alex, and hello everyone. In the third quarter you can see what Realty Income's shift into a more diversified allocator of capital is worth; the levers open to us now reach further across both investing and capital formation, widening both the places we put money to work and the ways we finance it. Not many firms in this sector can move capital across regions, asset classes, investment structures and funding sources the way we can in a market that keeps shifting; the payoff showed up once more in our Q3 numbers, with AFFO per share of $1.12, up 3.7% from a year earlier, while our operating portfolio stayed strong. Given how we performed and what we see ahead, we're lifting 2026 AFFO per share guidance to $4.45 to $4.46 and holding to a $10 billion target for investment volume. In the quarter we put roughly $2.6 billion to work, including $2.2 billion at our pro rata share at a cash yield of 6.8%. For property acquisitions, weighted average annual contractual rent bumps came to 1.9%. Importantly, those deals delivered a realized leverage-neutral spread of about 170 basis points over our short-term weighted average cost of capital, and 53% of investment activity involved investment-grade clients. We sourced a record of roughly $59 billion in potential investments in the quarter, taking year-to-date sourcing past $120 billion, which already beats our previous full-year record. That activity reflected a 4.4% selectivity rate, with 92% of our investment activity relationship-driven. Jonathan will walk through the financing behind these investments. Our results show what having multiple investment and capital levers is worth as relative economics move. With long-term rates higher, the most attractive investment economics have tilted toward Europe, credit investments and private capital managed co-investments. Those channels let us widen investment spreads and open more ways to deploy capital when rate volatility squeezes balance sheet acquisition economics. In that setting, Europe stands out for especially attractive relative value. In the third quarter we invested about $940 million in Europe, which was 42% of pro rata investment volume at an initial weighted average cash yield of 7.1%. Over 85% of our European real estate investment volume was industrial, at an initial cash yield of 6.9%. Among our biggest investments in the quarter was a $180 million e-commerce logistics facility in Western Poland, leased to a large investment grade international retailer at a 6.8% yield. The recently built purpose-built facility sits in an established logistics hub and supports product distribution across Central and Western Europe. It typifies the industrial opportunities we're chasing in Europe, modern purpose-built assets in established logistics markets that serve broad regional demand. While price discovery keeps shifting given the higher rate environment, we remain constructive on Continental Europe for the rest of the year, with opportunities emerging through existing relationships and across multiple markets. Our advantage isn't just geographic reach. What really underpins this is the local teams, the relationships, and the playbook we've developed to assess Europe one market at a time and move when the economics meet our standards. Beyond widening where our capital comes from, we've also broadened how we can invest throughout the capital structure. In Q3, we put roughly $250 million into credit investments, which was more than 10% of total volume across retail, industrial, and data centers. Credit investments are an appealing way to shift capital toward better risk-adjusted returns in response to a higher rate environment. Our approach to credit investing brings the same discipline and real estate expertise that support our equity investments. With an emphasis on high-quality real estate collateral, strong counterparties, and attractive positioning in the capital stack, these investments sit in industries and assets already common across our real estate portfolio and with partners who lead in their respective industries. Importantly, the higher yields that credit offers can also act as a natural hedge against the higher financing costs we face in a higher rate environment, which further strengthens the reliability of the cash flows our business generates; we evaluate these investments through a real estate lens. Credit can deepen how well we understand operators and the underlying real estate in both the U.S. and Europe, while opening a potential path to future ownership and strengthening our ties with key market participants. Credit doesn't replace traditional real estate. It's a complement and one more level we can pull when risk-adjusted returns are more compelling, as they are today. Industrial combines industry tailwinds with embedded growth. It was our biggest area of investment this quarter, with about $1.15 billion invested at an initial weighted average cash yield of 6.5%, and weighted average contractual rent increases of 2.5% domestically, while international leases are largely tied to inflation and market rent growth. Across e-commerce, manufacturing, digital infrastructure, adjacent uses, and a growing range of industrial real estate client use cases, we're finding opportunities backed by durable demand. Those fundamentals also show up in rising build-to-suit activity, repeat demand from existing customers, and significant contractual rent growth. Dallas industrial fundamentals are still very strong, supported by substantial net absorption that keeps outpacing new supply and pushing vacancy lower. In the third quarter, we acquired a large logistics park next to DFW Airport. The acquired prop portfolio has in-place rents roughly 45% below market, which creates meaningful mark-to-market growth potential as leases start to roll in a few years. Data centers also remain part of our long-term investment strategy, but we're staying selective. We're focused on top-tier supply-constrained markets, experienced operators, established clients with long duration leases and strong annual lease escalators, and real estate where we have conviction in the long-term residual value. Lastly, an increasingly important part of how we allocate capital is using our current portfolio as a source of funding. In Q3, we finished roughly $527 million in dispositions, which included $395 million of occupied sales at a 7.1% net cap rate. We anticipate that disposition activity will stay elevated in Q4. So far this year, proceeds from dispositions have come to about $875 million, which already tops our full-year 2025 disposition volume, following a capital recycling program that is more proactive. Importantly, our approach to dispositions isn't solely about lowering portfolio risk; we also sell assets that are performing well when private market value and reinvestment returns produce a better result. Our aim is to create nondilutive capital that we can redeploy toward investments that offer superior risk-adjusted returns. Zooming out, we've widened both sides of capital allocation — where we can put money to work and how we fund those investments; that adaptability is important because the best use of capital will shift over time. We remain focused on leveraging the breadth of the business to stay selective, chase the best risk-adjusted returns, and act with conviction as market conditions change. With that, I'll hand the call to Jonathan.

Thanks, Sumit, and good afternoon, everyone. Where financing is concerned, our strategic priority is still to widen and expand the capital sources we can access at efficient prices; when the quarter ended, we had about $5.4 billion in available liquidity, with net debt to annualized pro forma adjusted EBITDA at 5.4x, or 5.2x if you include $1.1 billion of unsettled ATM equity we raised at a weighted average gross price of $60.61 per share. A fixed rate applies to more than 94% of our pro rata debt, and we designate our variable rate capacity mainly for European commercial paper yielding under 3%. How our investment yields compare with funding costs demonstrates the worth of that flexibility. To build on what Sumit said, during the quarter we finished roughly $2.2 billion in pro rata investment activity, with an initial weighted average cash yield of about 6.8%, measured against the financing activity we actually carried out. Over that period, we funded those investments at a blended first-year cost of capital of approximately 5%. That gave us a leverage-neutral investment spread of around 170 basis points. These economics come from a deliberate push to broaden how we finance the business, so that our investment choices don't depend on how attractive any one capital source happens to be. When relative costs and market conditions change, the ability to switch among a range of alternatives allows us to protect investment spreads while maintaining our leverage discipline. During the quarter, we applied that strategy by accessing both the euro-denominated debt market and the convertible market. In July, we issued EUR 600 million in senior unsecured notes with an effective annual yield of roughly 3.7%, taking advantage of the euro market's depth and lower yield. Then in August, we came back to the convertible market for the second time this year, issuing $1 billion of 3.75% convertible senior notes and bringing in about $950 million in net proceeds after purchasing < >, which locked in an effective conversion price of $83.55 per share — 35% above the August reference price and roughly 45% above today's closing price. Equity from the public markets is still a relatively small piece of how we fund the business, and roughly $470 million was settled via our ATM program in the quarter. Obviously, having a wide range of capital options means we rely less on the ATM equity market — in particular, public equity accounted for just 19% of pro rata investment volume so far this year, versus a three-year annual average of 47%. A key element of that shift is our growing ability to tap private capital: the KKR joint venture we closed recently takes our retirement and insurance private capital strategy into a new partner relationship and a new geography. Through this partnership, KKR put in EUR 528 million to acquire a 49% equity stake in a portfolio spanning 54 retail and industrial properties in 4 European nations, at an initial cap rate of 5.9%, which includes recurring asset management fees. As the joint venture is structured, Realty Income holds the right to call KKR's interest in years 10 through 17 of the JV, aiming for a 6.4% IRR — an especially attractive long-term cost of equity, particularly alongside a partner who values the long duration and stable cash flow characteristics of a diversified net lease portfolio. The strategic importance goes past the capital this transaction raised: by combining long-term institutional equity with our sourcing, underwriting and asset management expertise, we can leverage our leading net lease operating platform, generally recurring capital light asset management fees, widen our buy box of investment opportunities and limit share dilution via fewer public equity issuances. Beyond these external sources, a bigger portion of investment activity is being funded with capital generated inside the business, through adjusted free cash flow as well as portfolio dispositions. During the first 9 months of the year, adjusted free cash flow and disposition proceeds came to over $700 million and $875 million, respectively. Taken together, those funding sources allow us to cover a meaningful portion of our remaining 2026 funding needs, while keeping plenty of liquidity and conservative leverage that sustains our A-rated balance sheet. Moving on to guidance: at the midpoint, we're increasing 2026 AFFO per share guidance by $0.01, and we reaffirm the $10 billion investment volume target; we're also raising occupancy guidance to above 98.5%, reducing nonreimbursable expense leakage guidance at the midpoint by 10 basis points to a range of 1.3% to 1.5%, and bringing our credit loss expectation down from 40 basis points to roughly 30 basis points. Those changes reflect strong asset management execution and tenant credit that came in better than expected. We continue to see a healthy outlook on both volume and yield for investment activity in the fourth quarter, which is entirely prefunded on an equity basis and carries meaningfully accretive investment spreads. Turning to 2027 and the reason this expanded funding strategy matters: it's not simply that additional capital sources let us adjust financing as relative economics change; we also see an opportunity to build on the programmatic and strategic relationships we already have and to develop new ones with well-respected institutional investors, steering meaningful capital toward netting these strategies outside of the public market. We look forward to sharing our progress as our private capital platform keeps scaling. With that, I'll hand the call back to Sumit.

Thanks, Jonathan. Realty Income has changed a great deal over time, yet what we're aiming for hasn't shifted: putting capital to work with discipline in a way that backs lasting growth on a per-share basis and dependable income for the people who own our stock. Right now, we've got a wider range of avenues for investing, and a wider range of ways to finance those investments, than we've ever had before. Because that opportunity set has grown, we can steer capital toward the best returns after adjusting for risk, while tapping the most cost-effective capital sources open to us. As markets keep changing, we think these strengths put us in a strong spot to produce sustainable per-share growth and still hold to the discipline that Realty Income has been known for over the years. Having said that, I'd like to turn things over now for your questions. Operator?

We've heard a few times now about that 170 basis point spread on the capital you raised this quarter. I guess it looks like it was done with attractive euro and convertible. If you look at the current investment pipeline and where funding markets are today, is that 170 basis point spread you mentioned sustainable? Or how should we be thinking about it going forward?

Great question, Michael. As you know, we've just reaffirmed our $10 billion investment. You can do the math yourself. What's good for us is that we have effectively prefunded that whole investment; so — and we've brought in the capital at very attractive pricing, which we've shared with you in terms of how much equity we have outstanding on our forward, which is $1.1 billion, raised north of $60 per share, plus the capital recycling as well as the free cash flow that we're going to lean on to help fund the remaining investments we have; so obviously, we have very good visibility into the yields these investments are going to generate, which is more akin to the first half of 2026; and the fact that we've also got very good visibility into how we plan on permanently financing that investment gives us the conviction that Jonathan shared with you regarding the spreads we're going to be able to achieve.

And then I just want to follow up. Last quarter you mentioned capital recycling, and this quarter we saw some dispositions. I believe those went at a 71 net cap rate. So could you speak to how you can — how you intend to redeploy that capital, given that this cap rate is somewhat elevated relative to some of the cap rates you're using for acquisitions? I'm just trying to better understand the sources and uses behind this capital recycling.

Yes. So capital recycling — and in the prepared remarks, I think we attempted to explain what exactly we're trying to recycle. Obviously, part of it is purely risk management. Part of it is ensuring that when we have an outsized exposure to a particular client, we try to take advantage of that. But a lot of it is also driven by this mismatch in terms of where we're trading, what we're able to buy, and I want to dive into that shortly. And what we're able to achieve in the private markets, given certain phenomena we're seeing around accelerated depreciation, the 1031 market, end of the year — all of those are creating a very favorable backdrop in terms of what we can potentially recycle this capital at. And so for us, this is going to become part and parcel of how we fund our investments going forward. And I've already hinted at the fact that the yields obviously were largely driven by the type of asset types we were investing in during the third quarter. And what one can't lose sight of is the fact that the inherent growth rate these leases have is 1.9%, almost 2%, which is 100 basis points north of what you'd find in our traditional U.S.-centric retail business. And so if we were to share with you what the straight-line cap rates are, these would be north of 200 basis points off of where the day 1 cash cap rate we've just shared with you sits. And so you can't lose sight of that element. And this is something we're leaning into aggressively. We've grown our investable avenues, with 1 eye towards where we can find more inherent growth, organic growth in our leases, and the fact that we're leaning into data centers and industrial and retail in Europe — those tend to have well north of what our traditional U.S.-centric retail business tends to have, which is circa 1%; so this, I think, longer term, is going to start to manifest itself in a much higher internal growth structure over the entire portfolio, thus lessening the need for internal — sorry, investments, external growth, driving the vast majority of our earnings per share growth. And that is the journey we are on.

A number of your competitors have mentioned that higher yields are flowing through into higher cap rates more quickly than is usual when rates are climbing. I'm wondering whether you're observing the same thing. And could you also shed some light on how far cap rates have gone up to this point?

Thanks for that, Brad — excellent question. With your permission, I'll cite a few data points, and my hope is that this will help put this question in context regarding the speed at which cap rates adjust, what we're currently hearing in cap rate conversations, and so forth. On August 5, the 10-year treasury stood at 4.63%. Then, exactly 30 days afterward — 31 days afterward, on October 5 — the treasury reached its peak of 5.35%. As of today, it has fallen back to 4.9%. And as you're aware, our business — and this applies not only to net lease but to real estate broadly — has a tendency to track what happens in the treasury market when it comes to cap rates. Historically, we've stated that once there's conviction about where the ten-year will ultimately settle, market participants largely begin to reprice. You observe a modest lag — roughly 12 months, give or take — before cap rates start reflecting the cost of capital. In my view, that 12-month period has gotten shorter today. Net lease assets now attract far more buyers. Many of them are private purchasers of net lease assets. However, they're also affected by developments in the debt capital markets to a much greater degree than public buyers are. Still, they constitute a reasonably large group that is actively buying and selling net lease assets. So when the ten-year swings around as much as it currently is — and I've just given you some figures — it's quite hard to claim, over the long term, that cap rates have now risen 30 basis points, 50 basis points. What complicates giving a general answer to that question is the set of options we've built; we're no longer confined to the U.S. market; and yes, the cap rate movement phenomenon I can describe for the U.S. is mostly tied to the 10-year treasury. But that isn't precisely what drives the European or U.K. markets. Consequently, our ability to operate across several markets and several asset types genuinely lets us chase the strongest risk-adjusted returns. If you're asking specifically about the U.S., then yes — the conversations we had just a week or 2 weeks ago involved cap rate discussions at a far higher level than what showed up in the third quarter. It's also true that the more institutional the potential seller is and the bigger the transactions we're looking at, the simpler it becomes for us to pursue those deals, since they grasp this mark-to-market cost of capital idea much more readily than, say, a one-off seller in the market who is attached to the assets being sold and more emotionally invested in them. So I apologize for the lengthy, drawn-out response, but the complexity of our investment thesis justifies a longer answer.

All right. And you've sort of set me up for my next question too. You mentioned that Europe looks especially appealing from a relative value standpoint. Could you walk us through the reason for that? I mean, clearly the debt rates are lower over there, but yields have gone up there too.

Yeah. Well, when cap rates are comparable to what we see here, we're able to finance our debt with 3.7% paper, long-duration debt. The spreads you can earn are clearly far more attractive. And these are assets we definitely want to grow our focus on, like industrial; and when we — I gave you an example of a kind of industrial asset we went after in Poland with growth rates well above 2%; and with these long-duration leases in locations we're very bullish on in terms of industrial markets, and seeing those dynamics show up in much wider spreads, that's the reason we find European markets quite compelling.

My question concerns the volume of investment. You've restated the $10 billion guidance; however, based on much of what's been said today, it rather feels as though there are some puts and takes versus where things likely stood at the start of the year. Could you help us think through what that mix looks like going forward — it sounds like Europe now accounts for more than it did perhaps at the start of the year. Industrial now accounts for more than it did at the start of the year. I'm just curious how that mix has shifted and how investment spreads may have shifted too, relative to how you were thinking at the beginning of the year versus now?

Tayo, that's a lot of questions in one, but to answer you, I wouldn't say the mix has changed. In fact, looking at what we delivered in the third quarter and the second quarter, it's roughly 50 to 50 — a bit less international, a bit more here in the U.S., but you can think of it as 50 to 50 in terms of investment volume from a geographic standpoint. As we entered the year, we spoke about wanting a larger allocation to data centers; we spoke about growing our allocation to industrial. And by and large those have unfolded as we had sort of projected at the start of the year. Naturally, we can't give you exact percentages for how that will look. But we did share our intent to concentrate on these areas, since we identified the demand drivers for both parts of the business. And we believe — our house view is — that on a risk-adjusted basis, these are generating the best spreads day 1 as well as the overall return profile across a full investment cycle. And by and large that has proven to be the case. What we've done since then is respond to what we're observing in today's environment. Look, take something like this: did we expect the tenure to reach 5.35% at the start of the year? Categorically no. But once again, I'll point to the fact that while that created a headwind for equity investments in U.S. real estate, it actually opened up opportunities through our relationships, et cetera, on the credit side of the equation, where we gained exposure to the same real estate — not by purchasing it at aggressive cap rates, but by making credit investments against that real estate as collateral, which let us sort of capitalize on this higher and more volatile cost of debt environment. So yes, those things evolve and we respond to market conditions. Yet I'd say our real differentiator is the capacity to mirror overall market conditions and capitalize on them in real time. So this year — pardon me, this quarter — our credit investment came to roughly $250-ish million, though at a very high yield. That largely reflects certain opportunities we spotted and seized; and so I believe you'll keep seeing us operate with real flexibility and lean into these levers we've built in order to capture the best opportunities. And it's also the case — just to restate this point — that our fourth-quarter pipeline is entirely prefunded. Consequently, public-market volatility won't affect our ability to achieve the inherent spread we underwrote to; and I think remarks have been offered suggesting it is quite healthy.

Congratulations on a solid third quarter. Jonathan, with the updated 2026 guidance, you're implying perhaps a $0.01 to $0.02 AFFO deceleration in 4Q. I was wondering whether there are any one-timers worth flagging? Or is it simply a matter of capital markets timing?

Jana, I believe much of it comes down to when capital gets deployed, along with, as you say, some flow-through from capital markets activity. But there's nothing to read into. In fact, looking at the business fundamentals, the watch list is stable, and I talked about how the credit loss component is declining from 40 to 30 basis points. You're seeing consistent investment flow, and much depends on when those transactions actually close during the quarter. There were a few one-timers here and there. But largely, it's a clean flow-through into the fourth quarter.

And then as we look ahead to next year, are there any significant one-time items from this year worth flagging that won't happen again?

No. For the most part, I'd say you can count on a pretty steady level of transactions that benefited us in 2026. The obvious big item to mention is the lease termination income. But for 2 years running now, we've been sitting at roughly a $45 million to $50 million run rate. And given how proactive the team has been and the more natural churn in the portfolio, we'd expect that run rate to continue holding in 2027.

I'd like to dig a bit deeper into those credit investments you mentioned — the ones with better yields and 10% of volume. Do you have any kind of limits in mind, like a maximum as a share of volume or a dollar figure? And I'm curious: do you originate these loans yourselves directly with the borrowers, or do they come from some other source?

Yes. Good question, Smedes. What I'd like you to do is — we've already touched a bit on the thinking behind our credit investments. There are, I believe, several reasons why credit investments make a great deal of sense at certain moments in the economy. When we're up against headwinds on the refinancing side given this higher interest rate environment, being able to make investments that can somewhat soften that headwind by capitalizing on opportunities we can create directly through existing relationships — that is a big plus. And in most cases we're structuring these transactions with more collateral, lower LTV, and better rates than we could achieve on the equity side of the equation. What that lets us do is, obviously, keep strengthening our ties with these existing potential clients, and it lets us understand — particularly if it's an asset we don't know well in a given geography — it lets us understand how those assets perform. It lets us deepen the relationship with these clients; and clearly, it hedges some of the potential headwinds one faces in an elevated interest rate environment on the financing side of our business. So for reasons like those, I think it makes a lot of sense for us to make these kinds of investments at certain moments. I would say that — and we've been very clear on this point — one shouldn't say, "Oh, credit investments now replace what we're doing on the equity side." The vast majority of what we're doing, above 90%, is still our traditional business. You asked what the allocation is going to look like. We're going to stay very much focused on some of the points I've made. Is this a natural hedge to some of the finance — the refinancing headwinds, and it isn't unique to us. It's something the entire sector will experience in this elevated tenure treasury environment. And how much makes sense for a balance sheet with $85 billion, $90 billion of assets — that's what's going to govern what the appropriate amount of credit investments we should make is; we are acutely aware of the reinvestment risk, et cetera. And so there are inherent breakers, if you will, that will dictate what this allocation needs to be. And I can tell you, we're nowhere near reaching those allocation figures.

Is that something you can share — maybe it isn't disclosed — but roughly, how long is that loan book, so to speak, and what reinvestment risk could that create?

In fact, each quarter we disclose the embedded tenor; and our aim, once more, since these deals are so tailored, is that we can secure a considerably longer tenor on certain of the more structured transactions. As of today, though, the credit investment we completed in the third quarter came in at approximately 3.4 years.

I'd like to return to the data center opportunity — with rates, regulation, all the things we've been hearing about, has anything shifted in that opportunity or in deal flow?

That's a great question, Ron. I'll ask Mark to address the data center business.

Sure, thanks, Ron. Clearly, a great deal is happening across the data center industry, and all of us have witnessed the growth in power limitations as well as rising community worries regarding electricity expenses and water consumption, AI, and so forth. We are therefore keenly conscious of this and tracking it carefully. That said, we remain quite positive on this asset class and how well it fits our strategy. Again, what I believe matters greatly — and you have likely heard us mention this previously — is that we continue to be positive about putting capital into data centers. Even so, we will keep being extremely, extremely choosy and highly disciplined about adhering to the core strategy we set out earlier: remaining within top-tier data center markets, working alongside developers who have — who have spent a long time doing this and our expertise at securing power and resolving complications and so forth. Ensuring our tenants within the data centers, our clients, fit the strong IG hyperscale-type profile, and securing lease structures, duration, rent bumps and ideally even triple net lease provisions that genuinely safeguard us. Thus, clearly mindful of and watching closely all developments concerning the industry, yet still positive, though we will continue to be extremely selective.

Sumit, could you give us a little more detail on that new European JV? Perhaps some color on the target size once fully deployed, leverage included, the return thresholds, and the timeline for deployment? And how will you decide what goes into that JV as opposed to staying on balance sheet for Europe?

And Haendel, this is Jonathan — you mean the KKR JV, I presume, yes?

Yes, yes.

So to start with, this JV has no leverage, and we'd anticipate that any tranches down the road would stay unlevered as well. Look, this is quite comparable to the Apollo JV we completed in the U.S.; and what feeds into it, clearly, is seeded from our portfolio, very stable, with fairly solid duration and a very fragmented portfolio. All of what you'd think insurance capital would be wanting — the net lease business model is uniquely positioned to work for this. Going forward, this is simply one part of the toolkit. The insurance JV won't be the sole form of equity that we issue, but it is a very meaningful permanent equity, and that's part of what let us deliver such attractive investment spreads on a leverage-neutral basis in the third quarter, since the IRR we effectively locked in came to 6.4%. And much of that rests on just being euro-denominated and lower base rates. Going forward, I'd say expect more of the same. There's a different buy box that goes into the insurance JVs, and that does tend to be more of your lower initial yield, but very long duration, very diversifiable type of properties. And so I'd expect some of the more stable, perhaps higher credit long duration type of properties to go into that, and some of the higher return assets would go into other vehicles.

Jonathan, thanks — that was useful. And while I've got you, I'd like to follow up on the balance sheet and the near-term maturities. My understanding is that you've got roughly another $2.9 billion — close to $3 billion — coming due next year at a rate below 3; so I'm curious about your initial thinking on how you'll tackle that. And could you remind us what the weighted average rate is on the new debt cost you managed to raise this year compared with what's expiring? I know you had a similarly low coupon this year. So I'm just curious what lessons we can draw from that, maybe to get a sense of the tools — the leverage — the various levers you can pull to deal with next year's maturities as well?