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Store Capital: What's In 'Store' For This Intelligently-Designed REIT?


  • We’re well aware that REIT investors are often income-oriented investors.
  • We prefer to focus on the quality of the management teams that run the REITs we track and own.
  • These profit/loss statements are so important to Store because they serve as the foundation of a healthy relationship.
  • This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Learn More »

This article was coproduced with Nicholas Ward.

It’s easy to think of the net lease sector as being fairly homogeneous. The majority of the companies we cover in this space can look very similar, after all, with their generalized focus on single-tenant retail properties.

Yet they’re not all created equally. And thinking otherwise can be detrimental to the health of your portfolio.

It’s true that the triple-net lease space is known for its reliable dividends. So we’re not completely surprised to see investors expect that of every single real estate investment trust in this grouping.

Plus, we’re well aware that REIT investors are usually income-oriented investors. We love a high yield as much as the next investor.

However, it needs to be a bonus attached to a quality management team. Because ultimately, over the long term, management’s strength to consistently execute is what results in a safe and reliable dividend yield.

With that in mind, we wanted to look at our recent iREIT on Alpha interview with Christopher Volk. He’s president and CEO of Store Capital (NYSE:STOR), a net-lease REIT that’s anything but equal.


More Than Willing to Store This REIT Up

Like many net-lease stocks, Store’s stock experienced significant weakness when the shutdowns began. And many investors dropped it like a hot potato.

However, we have a long-term relationship with Volk. And our own independent analysis kept us confident in his team’s ability to navigate the volatile economic environment.

As such, we were willing and able to buy into the dip.

iREIT purchased shares at $19.78 last March. And this March?

We’re looking at total returns in the 70% range since STOR is now back to $32.28. And, as a cherry on top of this dividend-paying sundae, it never cut its dividend along the way.

(Source: Koyfin)


A Front Row Seat to March Madness

Join iREIT on Alpha today and get a “front row seat” to our “March Madness” REIT Bracketology series where we break down each property sector to arrive at the “Sweet 16 REITs” to own.

We include exclusive video so our members can get all of the latest and greatest insight and maximize portfolio performance. Our coverage spectrum includes equity REITs, mREITs, Preferreds, BDCs, MLPs, ETFs, and we recently added SPACs to the lineup.

And this offer includes a 2-Week FREE TRIAL plus my FREE book.

This article was written by

Brad Thomas profile picture

Brad Thomas has over 30 years of real estate investing experience and has acquired, developed, or brokered over $1B in commercial real estate transactions. He has been featured in Barron's, Bloomberg, Fox Business, and many other media outlets. He's the author of four books, including the latest, REITs For Dummies.

Brad, with his team of 10 analysts, runs the investing group iREIT® on Alpha, which covers REITs, BDCs, MLPs, Preferreds, and other income-oriented alternatives. The team of analysts has a combined 100+ years of experience and includes a former hedge fund manager, due diligence officer, portfolio manager, PhD, military veteran, and advisor to a former U.S. President. Learn more

Analyst’s Disclosure: I am/we are long STOR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Note: Brad Thomas is a Wall Street writer, which means he's not always right with his predictions or recommendations. Since that also applies to his grammar, please excuse any typos you may find. Also, this article is free: written and distributed only to assist in research while providing a forum for second-level thinking.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (19)

Brad Thomas profile picture
Store Capital: No Margin Of Safety

Probably like a lot of folks who follow Buffett I had this one on my watch list. When March madness hit in 2020 I jumped in with buys at 16 and 18.

I'd of grabbed even more, but I was buying so many stocks during that time I only ended up with 225 shares of STOR. Added some MPW too which I really like.

Seriously doubt I will ever get those kind of prices again, but who knows. Might add some more STOR if the opportunity presents itself even at higher prices.
Brad Thomas profile picture
@cjsmit77 Nice job! Come visit us at iREIT n Alpha.... 20% off today!
twajetgod profile picture
this seems to be the same business model as NNN. how is it different?
Nicholas Ward profile picture
@twajetgod it's similiar to NNN - they're two of the names who really focus on the middle market here, rather than relying on investment grade tenants. However, STOR's team has been able to generate better results than NNN since STOR's IPO.
Good article. I purchased STOR in April 2020 after you and iREIT made me aware of STOR and considering how it fit in my portfolio. My only regrets are that my position was relatively small and I didn't increase my position as I watched it do very well. It has paid for the cost of my subscription for a couple decades!

I do have some questions. You quoted Mr. Volk as saying “Over the last five or six years,” he told us, “we've sold $1.3 billion worth of real estate and made about $90 million over our costs.” My math says that is a 7% return on just the real estate if those properties were purchased with cash. It is likely that they were financed so I'm assuming that the return was much better than that. Also, we don't know how long the properties were held for and I'm assuming that these properties were sold because they were underperforming. (there is much that we just don't know.) My questions are what is a good rate of return on just the real estate for a triple net REIT as it turns over property? How significant is property turnover for the overall return on an triple net REIT? Is it a metric that should be analyzed or is it just a bonus? Is there a standard turnover rate that is about right and too much or two little is concerning? Thanx.
Thanks for the article, Brad. You bring up good points. I started buying STOR pre-pandemic and when it crashed I bought more in the 16s and plan to hold my STOR. It's proven to be a very well run REIT with consistent dividends and growth potential.
Todd Kenyon, CFA profile picture
In Mr Volk's own words: "We are also value investors, wanting to buy assets you can't buy at rates you can't get, with lease documentation you're unlikely to see and financed more efficiently than you could otherwise do yourself. If we can do more of this, we will. But we will not simply make an investment because it is accretive today." This is exactly the reason to partner with this company as a shareholder. The only decision to be made IMO is at what price. Long.
Brad Thomas profile picture
@Todd Kenyon, CFA I always enjoy my interviews with Chris! Thanks for commenting.... come see all of our c-suite interviews at iREIT on Alpha.... get a front row seat .... March Madness Sale underway 🏀🏀
Josiah Leal profile picture
STOR is worth a premium compared to its peers because of its superior capital practices. For example, management used stock issuances to fund growth; however, instead of diluting the shares, they grew the company at a rate higher than that of dilution, thus achieving a net-positive return for investors. This allowed STOR to only leverage 40% of its assets in the debt markets while leaving 60% of assets completely unencumbered. Further, it also allowed them to grow at a double-digit rate. Last March, STOR's market cap dropped below the book value of those unencumbered assets and for that matter, below equity, presenting a superior and rare bargain. In addition, STOR's Master Funding LLC is a unique way to raise debt compared to other REITs, allowing STOR to do it more cheaply and efficiently. This is a specific point, @brad Thomas, that often gets overlooked. Warren Buffett rarely buys REITs, but he currently holds STOR. Perhaps the high competence of Chris Volk (CEO) and Catherine Long (CFO) had something to do with that. I think the type of financial and structural intelligence demonstrated by Volk transcends most other REIT managers. Great article with wonderful points, @brad Thomas. As usual, your material is a pleasure to read!
I purchased STOR when I saw that Buffett's company had made a purchase. I had it on my radar for a time, and that made me make my purchase. It has done well for me. My only mistake was not buying more when it dipped so low in March of last year.
Brad Thomas profile picture
@gary 15 Thanks for reading and commenting! get a front-row seat .... March Madness Sale underway 🏀🏀
Income4ever aka Cyclenut profile picture
Nicely done ,
Stor on my watch list. Opted for VICI over STOR couple months ago...
Speaking of VICI did you catch up to the CEO interview on CNBC yesterday... funny thing was asked about Ski resorts and didn't rule out..... Skisaino....

Volk even went so far as to turn his company’s relatively low rent collection figure into a positive:..... in my world they call that Spin.... and deflection...
Brad Thomas profile picture
@Income4ever aka Cyclenut

Thank you... I plan to have VICI's CEO on our podcast next week..... come and visit us at iREIT on Alpha to get all of our exclusive c-suite interviews... we had $CIO yesterday and we have $NTST, $IIPR and $BXP this week...

All the best - Brad

get a front row seat .... March Madness Sale underway 🏀🏀
STOR has been an excellent addition to my portfolio and I continue to nibble at the low 30s. Started purchasing in the mid 20s some time ago and have enjoyed the (rising) dividend along the way. Thanks for the encouraging analysis.
Brad Thomas profile picture
@kibbutz Thanks for reading.... come see all of our c-suite interviews at iREIT on Alpha.... get a front row seat .... March Madness Sale underway 🏀🏀
seIII profile picture
One of best CEO’s in the REIT triple net world. Chris “explains the complex simply” better than most.
Brad Thomas profile picture
@seIII Thanks for reading and all the best. Brad
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