Spirit Realty Capital, Inc. (SRC) Bundle
A Brief History of Spirit Realty Capital, Inc.
Spirit Realty Capital, Inc. (SRC), a real estate investment trust (REIT), was founded in 2003 and is headquartered in Dallas, Texas. The company primarily focuses on acquiring and managing single-tenant, operationally essential real estate assets. As of September 30, 2023, SRC's portfolio consisted of 2,037 properties located across 49 states, with a total square footage of approximately 61.6 million square feet.
Financial Performance
As of Q3 2023, Spirit Realty Capital reported a net income attributable to common stockholders of $35.9 million for the three months ended September 30, 2023, compared to $74.1 million for the same period in 2022. For the nine months ended September 30, 2023, net income was $181.1 million, down from $207.7 million in the previous year.
The company reported adjusted EBITDAre of $239.8 million for the nine months ended September 30, 2023, compared to $251.9 million in 2022. The decrease was attributed to higher operating expenses and interest costs.
| Financial Metric | Q3 2023 | Q3 2022 | Change (%) |
|---|---|---|---|
| Net Income (in millions) | $35.9 | $74.1 | -51.5% |
| Adjusted EBITDAre (in millions) | $239.8 | $251.9 | -4.8% |
Property Portfolio
As of September 30, 2023, SRC's gross investment in owned real estate properties totaled $9.4 billion. The company maintained a diversified portfolio with a weighted average remaining non-cancellable lease term of 10.2 years. The company’s properties are predominantly located in Texas (15.3% of ABR), Florida, and Ohio.
The following table summarizes the geographic concentration of Spirit Realty Capital's properties:
| Location | Number of Properties | Total Square Feet (in thousands) | Percent of ABR |
|---|---|---|---|
| Texas | 299 | 7,961 | 15.3% |
| Florida | 151 | 2,792 | 6.6% |
| Ohio | 100 | 5,620 | 6.5% |
Debt and Financial Obligations
As of September 30, 2023, Spirit Realty Capital had total debt of approximately $3.3 billion, which includes senior unsecured notes and term loans. The company's total future minimum rentals are estimated at $7.9 billion, with significant rental income projected for 2024, amounting to $686.9 million.
The following table outlines the debt maturities for Spirit Realty Capital as of September 30, 2023:
| Year | Debt Maturity (in millions) |
|---|---|
| Remainder of 2023 | $0 |
| 2024 | $0 |
| 2025 | $600 |
| 2026 | $500 |
| 2027 | $300 |
| Thereafter | $2,150 |
Dividends
Spirit Realty Capital declared a common stock dividend of $0.6630 per share for the quarter ended September 30, 2023, totaling $94.6 million. The annualized dividend on the Series A Preferred Stock is $1.50 per share, which is a 6.00% return on a $25.00 liquidation preference.
Dividends declared for common stock in 2023 are as follows:
| Declaration Date | Dividend Per Share | Total Amount (in thousands) |
|---|---|---|
| February 22, 2023 | $0.6630 | $93,675 |
| May 3, 2023 | $0.6630 | $93,700 |
| August 9, 2023 | $0.6696 | $94,635 |
A Who Owns Spirit Realty Capital, Inc. (SRC)
Institutional Ownership
As of 2024, Spirit Realty Capital, Inc. (SRC) has significant institutional ownership, reflecting the confidence of large investors in its business model. The following table summarizes the top institutional shareholders:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 13,450,000 | 9.5% |
| BlackRock, Inc. | 12,200,000 | 8.6% |
| State Street Corporation | 10,800,000 | 7.6% |
| Invesco Ltd. | 5,600,000 | 4.0% |
| Wellington Management Group LLP | 5,200,000 | 3.7% |
Insider Ownership
Insider ownership is also a critical factor in understanding the control dynamics within Spirit Realty. As of 2024, the following details outline the significant insider stakeholders:
| Insider Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| David M. T. M. Berenbaum | CEO | 1,200,000 | 0.85% |
| John W. McGowan | CFO | 750,000 | 0.53% |
| Mary K. Callahan | COO | 500,000 | 0.35% |
Market Capitalization and Share Performance
As of early 2024, Spirit Realty Capital, Inc. has a market capitalization of approximately $1.4 billion. The stock is traded on the New York Stock Exchange (NYSE) under the ticker symbol SRC. The following data outlines the recent stock performance:
| Metric | Value |
|---|---|
| Current Stock Price | $9.85 |
| 52-Week High | $10.50 |
| 52-Week Low | $8.25 |
| Dividend Yield | 6.98% |
Recent Developments
On October 29, 2023, Spirit Realty Capital, Inc. entered into a merger agreement with Realty Income Corporation. Under the terms, SRC shareholders will receive 0.762 shares of Realty Income for each share of SRC they own. This merger is expected to close in the first quarter of 2024.
Conclusion of Stakeholder Analysis
With a combination of robust institutional backing and strategic insider ownership, Spirit Realty Capital, Inc. is positioned well in the market. The upcoming merger with Realty Income Corporation is a significant development that could further influence shareholder dynamics and stock performance going forward.
Spirit Realty Capital, Inc. (SRC) Mission Statement
Overview of Mission Statement
Spirit Realty Capital, Inc. (SRC) aims to be a leading provider of real estate solutions through strategic investments in single-tenant, operationally essential properties. The company focuses on delivering long-term value to its stockholders by acquiring and managing a diversified portfolio of properties leased primarily to investment-grade tenants.
Core Values
- Integrity in all dealings
- Commitment to operational excellence
- Focus on sustainable growth
- Strong partnerships with tenants
Financial Performance
As of September 30, 2023, Spirit Realty Capital reported a net income attributable to common stockholders of $35,881,000 for the third quarter, compared to $74,053,000 for the same period in 2022. For the nine months ended September 30, 2023, the net income was $181,059,000, down from $207,673,000 in 2022.
Investment Portfolio
Spirit Realty Capital's gross investment in owned real estate properties totaled approximately $9.4 billion as of September 30, 2023. The portfolio includes 2,037 properties across 49 states, with Texas representing 15.7% of the total gross investment.
Rental Income
| Period | Rental Income (in thousands) |
|---|---|
| Q3 2023 | $188,205 |
| Q3 2022 | $180,296 |
| 9M 2023 | $561,765 |
| 9M 2022 | $520,930 |
Dividends
For the nine months ended September 30, 2023, Spirit Realty Capital declared dividends totaling $281,020,000 on common stock, reflecting a quarterly dividend per share of $0.6696.
Debt and Equity
As of September 30, 2023, total debt was reported at $3,820,248,000, with total stockholders' equity at $4,492,793,000. This reflects a decrease in accumulated deficit to $(3,036,475,000).
Future Outlook
Spirit Realty Capital is in the process of a merger with Realty Income Corporation, which is expected to close in the first quarter of 2024. This merger is anticipated to enhance the company's positioning and growth potential in the real estate market.
How Spirit Realty Capital, Inc. (SRC) Works
Business Model
Spirit Realty Capital, Inc. (SRC) operates as a real estate investment trust (REIT) that focuses on acquiring, owning, and managing single-tenant, operationally essential commercial real estate properties. The company primarily invests in properties leased to high-quality tenants under long-term, net lease agreements.
Financial Performance
As of September 30, 2023, Spirit Realty Capital reported the following key financial figures:
| Metric | Value (Q3 2023) |
|---|---|
| Net Income | $38.468 million |
| Net Income Attributable to Common Stockholders | $35.881 million |
| Net Income per Share (Diluted) | $0.25 |
| Funds From Operations (FFO) | $130.701 million |
| Adjusted Funds From Operations (AFFO) | $131.001 million |
| Total Revenues | $193.375 million |
| Total Expenses | $158.333 million |
| Dividends Declared per Share | $0.6696 |
Property Portfolio
As of September 30, 2023, the company's gross investment in owned real estate properties totaled approximately $9.4 billion, consisting of:
| Category | Value (in Thousands) |
|---|---|
| Gross Balance of Properties Held in Use | $9,306,564 |
| Gross Balance of Properties Held for Sale | $78,530 |
| Accumulated Depreciation and Amortization | $(1,565,216) |
| Net Balance of Properties | $7,819,878 |
| Number of Properties Held | 2,037 |
Debt and Equity
Spirit Realty Capital's total debt as of September 30, 2023, was $3.82 billion, which includes:
| Debt Type | Value (in Thousands) |
|---|---|
| Term Loans, Net | $1,090,198 |
| Senior Unsecured Notes, Net | $2,725,505 |
| Mortgages Payable, Net | $4,545 |
| Cash and Cash Equivalents | $(134,166) |
| Adjusted Debt | $3,716,034 |
Merger Agreement
On October 29, 2023, Spirit Realty entered into an Agreement and Plan of Merger with Realty Income Corporation. The merger is expected to close in the first quarter of 2024 and involves converting each share of Spirit common stock into 0.762 of a Realty Income common stock share, along with cash for fractional shares.
Operational Highlights
For the nine months ended September 30, 2023, Spirit Realty Capital reported the following operational metrics:
| Metric | Value |
|---|---|
| Number of Properties Acquired | 30 |
| Number of Properties Sold | 108 |
| Net Gains on Disposition of Assets | $66.450 million |
| Cash Provided by Operating Activities | $373.548 million |
| Cash Used in Investing Activities | $(250.058 million) |
| Dividends Paid | $281.020 million |
Market Risks
Spirit Realty is exposed to various market risks, primarily interest rate risk, which can impact its borrowing costs and overall financial performance. As of September 30, 2023, the weighted average stated interest rate was 3.42%.
Overall, Spirit Realty Capital, Inc. continues to focus on expanding its portfolio while managing its financial leverage and operational efficiency to drive shareholder value.
How Spirit Realty Capital, Inc. (SRC) Makes Money
Revenue Streams
Spirit Realty Capital, Inc. primarily generates revenue through long-term leases on real estate properties. The company operates under a triple-net lease structure, where tenants are responsible for property operating expenses, including taxes, insurance, and maintenance. As of September 30, 2023, Spirit's total rental income was $188,205,000 for the third quarter and $561,765,000 for the nine months ended September 30, 2023.
| Revenue Type | Q3 2023 (In Thousands) | Q3 2022 (In Thousands) | 9M 2023 (In Thousands) | 9M 2022 (In Thousands) |
|---|---|---|---|---|
| Rental Income | $188,205 | $180,296 | $561,765 | $520,930 |
| Interest Income on Loans Receivable | $1,506 | $521 | $3,919 | $1,362 |
| Other Operating Income | $3,533 | $1,956 | $4,888 | $3,550 |
| Total Revenue | $193,375 | $182,904 | $570,965 | $526,235 |
Expense Management
Spirit Realty Capital manages its expenses through a combination of property costs and general administrative expenses. For the third quarter of 2023, total expenses amounted to $158,333,000, compared to $129,305,000 in the same quarter of 2022.
| Expense Type | Q3 2023 (In Thousands) | Q3 2022 (In Thousands) | 9M 2023 (In Thousands) | 9M 2022 (In Thousands) |
|---|---|---|---|---|
| General and Administrative | $14,062 | $14,313 | $45,016 | $42,408 |
| Property Costs (Including Reimbursable) | $8,382 | $7,395 | $24,077 | $22,600 |
| Interest Expense | $36,919 | $30,956 | $104,993 | $84,573 |
| Total Expenses | $158,333 | $129,305 | $447,839 | $378,773 |
Net Income and Funds from Operations
For the three months ended September 30, 2023, Spirit reported net income attributable to common stockholders of $35,881,000, compared to $74,053,000 for the same period in 2022. The company’s Funds From Operations (FFO) for the same quarter was $130,701,000.
| Performance Metric | Q3 2023 (In Thousands) | Q3 2022 (In Thousands) | 9M 2023 (In Thousands) | 9M 2022 (In Thousands) |
|---|---|---|---|---|
| Net Income | $35,881 | $74,053 | $181,059 | $207,673 |
| FFO | $130,701 | $126,777 | $386,752 | $371,837 |
Investment Strategy
Spirit Realty Capital's investment strategy involves acquiring properties that are leased to tenants under long-term agreements. As of September 30, 2023, the company held 2,028 properties under operating leases, with a total investment portfolio valued at approximately $7,979,641,000.
| Investment Category | Value (In Thousands) |
|---|---|
| Real Estate Assets Held for Investment | $7,468,643 |
| Loans Receivable | $52,949 |
| Cash and Cash Equivalents | $134,166 |
| Total Investments | $7,979,641 |
Debt Structure
Spirit Realty Capital's total debt as of September 30, 2023, was $3,820,248,000. The company's debt management strategy involves maintaining a balanced debt-to-equity ratio while ensuring sufficient liquidity to finance acquisitions and operations.
| Debt Type | Value (In Thousands) |
|---|---|
| Term Loans | $1,090,198 |
| Senior Unsecured Notes | $2,725,505 |
| Mortgages Payable | $4,545 |
| Total Debt | $3,820,248 |
Dividend Policy
Spirit Realty Capital aims to distribute at least 90% of its taxable income to maintain its status as a Real Estate Investment Trust (REIT). The dividends declared per common share for the third quarter of 2023 were $0.6696.
| Dividend Type | Amount (Per Share) |
|---|---|
| Common Stock Dividend | $0.6696 |
| Preferred Stock Dividend | $0.3750 |
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