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American Finance Trust, Inc (RTL 2.38%)
Q4 2018 Earnings Conference Call
March 06, 2019, 11:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
See all our earnings call transcripts.
Prepared Remarks:
Operator
Good day and welcome to the American Finance Trust's Fourth Quarter and Year-End 2018 Earnings Conference Call and Webcast. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Ms. Louisa Quarto, Executive Vice President. Please go ahead.
Louisa Quarto -- Executive Vice President
Thank you, Operator. Good morning, everyone, and thank you for joining us for AFIN's fourth quarter and year-end 2018 earnings call. This call is being webcast in the Investor Relations section of AFIN's website at www.americanfinancetrust.com. Joining me today on the call to discuss our results are Michael Weil, Chief Executive Officer; Katie Kurtz, Chief Financial Officer; and Zachary Pomerantz, Senior Vice President-Asset Management.
The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. We refer all of you to our SEC filings, including the Annual Report on Form 10-K for the year ended December 31st, 2017, filed on March 19th, 2018, and all other filings with the SEC after that date for a more detailed discussion of the risk factors that could cause these differences.
I'll now turn the call over to our CEO, Mike Weil. Mike?
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Thank you, Louisa. We appreciate everyone joining us for today's earnings call. I'm going to start with some high level comments about the quarter and the year before Katie and Zach provide financial and real estate details.
2018 was a milestone year for American Finance Trust as the Company commenced a listing of its common shares on the Nasdaq in July of 2018. As of January 9th, 2019, AFIN had completed the phased listing of its common stock, and we now have approximately 106 million shares fully liquid and trading. In the fourth quarter, AFIN was added to the MSCI US REIT Index or the RMZ, which, as expected, has resulted in significant increases in institutional ownership. In a short period of time, institutional ownership of AFIN shares has increased from essentially zero at the time of the listing to 8% at the end of the third quarter and 16% at the end of 2018, representing over 16 million shares. AFIN's management team continues to work on developing relationships with the institutional investor community and industry analysts.
In addition to AFIN's accomplishments in the capital markets, the Company executed important strategic and operational initiatives throughout 2018. I'm proud of the strong acquisition activity AFIN completed this year, as our team delivered $239 million of single-tenant acquisitions at an average cap rate of 8.1%. These acquisitions not only exhibit an attractive yield, but strong fundamentals which support our continuing investment strategy, as over 90% of the properties acquired are service retail locations with extensive lease durations averaging 15 years. This improves AFIN's overall property mix, further enhancing and diversifying the overall portfolio in line with our stated objectives and deliveries in over 99% occupancy level across our single-tenant portfolio. AFIN's multi-tenant portfolio also improved its occupancy in the fourth quarter of 2018, and the multi-tenant portfolio's executed year-end occupancy is 88.3%, which includes leases executed as of 12/31/2018, in which the tenant has yet to take possession. This demonstrates ongoing upside from future rental income.
Finally, AFIN increased the commitments of its credit facility in two phases in 2018, with total commitments increasing by over $200 million to $540 million by September of 2018. This financing execution greatly enhances AFIN's liquidity position and provides the Company with significant resources to help finance our growing acquisition pipeline.
It's clear that across important strategic and operational fronts, 2018 was a very active and important year for AFIN in positioning the Company for long-term success. We continued to remain bullish on the service retail sector, and during the fourth quarter, grew this segment of our portfolio by deploying proceeds generated from opportunistic dispositions using available cash and leveraging attractive financing through our credit facility. We consider the service retail segment to include properties you likely visit personally at least once or twice a week, such as restaurants, pharmacies, gas and convenience stores and retail bank branches. Our portfolio includes all of these types of assets, as well as other experiential retail that we believe is e-commerce-defensive.
At the end of the quarter, AFIN owned 626 properties, had portfolio occupancy of almost 95% and a weighted average remaining lease term of 8.6 years. Additionally, the average contractual rent growth of the portfolio is 1.3% per year, driven by the 78% of our leases that include rent escalators. Our execution and results are in line with our strategy of owning a diversified portfolio of retail assets leased on a long-term basis to high-quality tenants.
Retail makes up 59% of AFIN's 11.9 million square feet of single-tenant portfolio with the balance made up of industrial and distribution properties, and a small allocation of office assets. Occupancy across the single-tenant portfolio is strong at over 99% with a weighted average remaining lease term of 10.6 years and 1.2% average annual rent escalators. AFIN exhibits one of the highest concentrations of investment-grade or implied investment-grade tenants among its net lease peers at 77% of the Company's straight-line rent and its single-tenant portfolio is derived from these high-quality tenants. AFIN has increased its single-tenant portfolio to 593 properties, representing 64% of the total portfolio straight-line rent at the end of 2018, which is up from 505 properties and 61% of the straight-line rent at the end of 2017.
Our multi-tenant retail portfolio complements the single-tenant net leased portfolio. The balance of store concepts in our multi-tenant portfolio is designed to drive shoppers to the centers with 48% of rent coming from experiential and e-commerce-defensive properties. Our 33-property 7.2 million square foot multi-tenant portfolio has increased its occupancy to 87% as of 12/31/18 with a weighted average remaining lease term of 5.1 years and 1.5% average annual rent escalators. AFIN continues to pursue NOI growth through aggressively leasing up spaces in the multi-tenant portfolio, which Zach will expand on.
I'd also like to note a recent market development with SunTrust, AFIN's largest tenant. SunTrust is a strong investment-grade rated bank that has been a stable long-term tenant for the Company. Last month, we were pleased to see SunTrust and BB&T announced their proposed merger, creating a premier investment-grade financial institution between these two regional banks. We expect this to be an overall positive as AFIN is contractually entitled to receive rent payments from our occupied SunTrust properties through the full duration of the lease term, which has a weighted average 10.4 years remaining. We'll provide additional detail on SunTrust later in today's call.
As part of AFIN's asset management process, our team actively reviews the portfolio and identifies opportunities to limit or reduce exposure to any one tenant, industry or geography. Additionally, the Company will pursue opportunities to redeploy sale proceeds of identified dispositions into assets that align with our investment criteria and support long-term portfolio growth.
We are pleased with the overall position of the AFIN portfolio and believe the Company's long duration leases and high credit quality tenants will drive shareholder value as we continue to grow the portfolio.
I'll turn it over to Zach for an overview of fourth quarter acquisition, disposition and leasing activity, and the summary of AFIN's 2018 activity.
Zachary Pomerantz -- Senior Vice President of Asset Management
Thanks, Mike. AFIN's multi-tenant occupancy stands at 87% at year-end, up from 86.7% in the previous quarter. Fourth quarter leasing activity included new 10-year lease with At Home for over 100,000 square feet. At Home replaced the vacated Elder-Beerman space, and the new lease represents a 22% increase in rent per square foot compared to the prior lease.
Additionally, the Company has executed leases as of 12/31/18 where the tenant has yet to take possession for nearly 100,000 additional square feet or approximately 1.3% of the total square feet in the multi-tenant portfolio. Once these additional leases commence, they would raise AFIN's multi-tenant occupancy to 88.3%. For the year, the Company has significant leasing activity as we executed 30 new leases for 442,000 square feet and 89 lease renewals for 807,000 square feet. These 30 new leases, which were executed in 2018, represent over $4 million in annual straight-line rent.
In the fourth quarter, AFIN closed on the acquisition of 29 single-tenant net leased properties for a purchase price of almost $49 million, consistent with the investment objectives our team has set for the portfolio. Together with these acquisitions, AFIN closed on 130 acquisitions for $239 million during 2018 with a weighted average remaining lease term of 15.6 years at a weighted average cap rate of 8.1%. This compares favorably to 2017's acquisition activity, which included 75 properties purchased for approximately $150 million with a 15.9-year weighted average remaining lease term and a 7.9% weighted average cap rate, excluding the properties acquired in the 2017 merger. We're pleased with our team's ability to deliver acquisitions at a large scale while continuing to meet key investment criteria, single tenant, service retail properties with attractive yields, long-term duration and an investment-grade focus.
On the dispositions side, in the fourth quarter, AFIN sold 19 properties for total gross proceeds of $46 million, which included four occupied SunTrust properties, 14 vacant SunTrust properties and one occupied multi-tenant property. $15.5 million of the proceeds from the quarter four dispositions was used to repay associated debt and the net proceeds of $27.7 million will be used to fund further acquisitions.
For the full year 2018, AFIN closed on the sale of 44 properties consisting of 10 occupied single-tenant properties, two occupied multi-tenant properties, 31 vacant SunTrust properties and one other vacant single-tenant property for an aggregate contract price of $161 million, exclusive of closing costs. $90 million of the proceeds from the 2018 dispositions was used to repay associated debt and the net proceeds of $58.6 million will be used to fund further acquisitions.
Katie, will you walk us through the financial results in more detail?
Katie Kurtz -- Chief Financial Officer, Treasurer and Secretary
Thanks, Zach. AFIN reported fourth quarter revenue of $75.1 million, an increase from $72.4 million in the fourth quarter 2017. Total revenue for the year ended December 31st, 2018 was $291.2 million compared to $270.9 million in the prior year. The Company's 2018 GAAP net loss was $37.4 million versus $46.5 million in 2017 and NOI was $237.1 million versus $227.2 million for 2017. For the fourth quarter of 2018, our FFO attributable to stockholders was $27.9 million and our AFFO was $24.6 million. As always, a reconciliation of GAAP net income to non-GAAP measures can be found in our earnings release supplement and Form 10-K.
The Company ended the fourth quarter with net debt of $1.4 billion, which is total debt, less cash and cash equivalents, at a weighted average interest rate of 4.5%. The components of our net debt include $324.7 million drawn on the credit facility, $1.2 billion of outstanding mortgage debt, and cash and cash equivalents of $91.5 million. At quarter's end, interest rates on our mortgage debt were all fixed, leaving only the amount drawn on our credit facility as floating. Liquidity, which is measured as undrawn availability under our credit facility plus cash and cash equivalents, stood at $228.2 million at December 31st, 2018. The Company's net debt to gross asset value or total assets plus accumulated depreciation and amortization was 38.6%, and the net debt to annualized adjusted EBITDA was 7.4 times at December 31st, 2018.
With that, I'll turn the call back to Mike for some closing remarks.
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Thanks, Katie. I wanted to take a moment to share some additional thoughts about the recently proposed merger of SunTrust Bank and BB&T. And based on information filed by the banks when the merger was announced, this will create the sixth largest US bank. This merger could also be a potential two-notch credit enhancement for the corporate credit guarantee AFIN has in its SunTrust leases based on the current credit rating of BB&T. As of year-end, SunTrust is AFIN's largest tenant as the Company owns 139 occupied SunTrust properties with an average remaining lease term of 10.4 years. These leases all include 1.5% annual rent escalators, and AFIN is contractually entitled to receive rent payments from these SunTrust properties through the full duration of the lease term, regardless of any corporate initiatives associated with the potential merger. On average, these leases do not mature until the year 2030. We'll continue to monitor the proposed merger, but expect this to be an overall positive for AFIN.
AFIN has been diligently managing and positioning the Sun Trust portfolio for years, well before the announced merger between SunTrust and BB&T. In May of 2016, AFIN executed various agreements with SunTrust to extend leases for 10-plus years for the majority of the then 213-property SunTrust portfolio. At the time, SunTrust portfolio had approximately 1.5 years of remaining lease term and SunTrust represented 18% of AFIN's total portfolio. As of 12/31/18, SunTrust represents 8.7% of the total portfolio, demonstrating a significant and deliberate reduction over that time frame. As of February 26, 2019, AFIN only has seven SunTrust properties that are not occupied, and two of these properties are already under contract for sale. Additionally, AFIN sold four occupied SunTrust properties in the fourth quarter and has sold or agreed to sell an additional nine occupied SunTrust properties in 2019 for a weighted cash cap rate of 5.5%, a promising indicator of value for the remaining occupied SunTrust portfolio. This disposition cap rate is nearly 200 basis points tighter than AFIN's acquisition cap rates on a cash basis for the year. We believe that we will see similar opportunities to continue this selective disposition program after the merger is complete.
AFIN continues to operate with a conservative balance sheet, which stands at 39% net leverage at year-end, and the Company owned 626 properties across the US. The portfolio is highly diversified by tenant, geography and asset type, has a strong credit-worthy tenant base and has an experienced management team. AFIN is well positioned to identify, assess and capitalize on opportunities across a wide set of markets in order to continue growing the Company.
We will remain proactive and disciplined in our acquisition strategy to identify compelling opportunities to acquire assets that fit within the Company's investment model. We'll maintain a near-term focus on service retail and other properties defensively positioned against competition from e-commerce relative to traditional retail in order to continue to drive shareholder value.
Our team looks forward to continuing to lead the AFIN effort to enhance long-term value for our stockholders.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. (Operator Instructions) The first question will come from Jeremy Metz with BMO Capital Markets. Please go ahead.
R. Jeremy Metz -- BMO Capital Markets -- Analyst
Hey, good morning.
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Hi, Jeremy.
R. Jeremy Metz -- BMO Capital Markets -- Analyst
Hi. Just wanted to start off on the retail environment given some of the headlines out there. I don't think you have any Sears and Kmarts in the portfolio, correct me if I'm wrong there. But just wondering what sort of exposure do you have to some of the other names, Mattress Firm, Payless and Gap and then how much cushion are you therefore baking into your budget here for 2019 for some further tenant fallout.
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
So I'll start with the first part of your question and then I'll turn it over to Zach for some deeper detail. Sears and Kmart, we don't have exposure to. We do have some Mattress Firm, both in the single-tenant portion of the portfolio, as well as the multi-tenant, and we have handled those through negotiations. So we feel that we don't have any additional exposure there. Zach will follow-up to my comments.
We feel that as the portfolio stands today and not being able to foretell the future obviously, but we don't feel that we have a lot of remaining risk with the retailers. We have been monitoring, like most people are, for the last couple of years as the headline started to hit. So the portfolio does feel very stable to me at this point, and we've done some really good work on the backfill side coming out of some bankruptcies as we mentioned in the call, At Home and some other very strong retailers.
So we feel that not only did we backfill, but we have improved the credit in the portfolio, we've improved value in the retail centers where we have backfilled. So although nobody enjoys going through these types of forced changes, I think, how you handle it is what's most important and having a proactive view of the portfolio being in-market, having brokerage relationships on the ground already as we start, if we see a credit that we feel is shaky or questionable, which we did with Mattress Firm even before their announcement, we had already started to evaluate their rent versus market rent, potential backfill tenants, et cetera. So it was something that we were able to hit the ground at full speed when the announcement did come.
Zach, do you want to?
Zachary Pomerantz -- Senior Vice President of Asset Management
Yeah, I agree with Mike's comments on Mattress Firm, and I think we were able to negotiate deals with them as necessary and in cases where we thought they were asking for too much, we've made decisions to maybe go in a different direction on, I think, one or two cases, but generally speaking, we kept them in place in all -- in most of the cases. As far as Payless, we have none of those in the portfolio. We have no Gaps in the portfolio. We do have some Old Navy's, which we like a lot and perform well at the centers that they're located. But yes, we're tracking tenants like anybody else and nothing else right now that's jumping out and no Sears, no JCPenney, so we're comfortable.
R. Jeremy Metz -- BMO Capital Markets -- Analyst
And one I forgot to include was Pier 1, which seems to be headed for a potential for liquidation. Do you guys have any of those?
Zachary Pomerantz -- Senior Vice President of Asset Management
I have to double-check. There may be one, although I'll double-check that.
R. Jeremy Metz -- BMO Capital Markets -- Analyst
Okay. No, I appreciate that. And then sticking just with this multi-tenant, I know you don't breakout the occupancy between anchor and in-line. But if you can maybe just generally talk about the opportunity there between the two, how many vacant boxes are you sitting on today or maybe even just more broadly, where do you see the multi-tenant portfolio occupancy trending here by the end of the year. I know, Zach, you mentioned, if you get that addition, I think it's 32,000 square feet, close, you'll get 88.3%, but how should we think about that kind of looking out toward the end of 2019 and beyond?
Zachary Pomerantz -- Senior Vice President of Asset Management
So I think we've seen a lot of improving trends in the portfolio. We've worked a lot of effort with our asset managers and our brokers throughout the country. We've had new leases we've secured in a number of cases that are greater than 10,000 square feet with -- we've mentioned At Home, Hobby Lobby, Kohl's, Guitar Center, Gabe's, just to name a few, but we've had success with the in-line tenants.
We've done deals recently with GameStop, UPS, Great Clips and these kind of 1,400 to 2,500 square foot in-line spaces. So I think we've been really, I hope, blocking and tackling, but we've been really working hard with our local brokers and asset managers to attract both national and local tenants to those smaller spaces. We've had I think great momentum, we've pushed the occupancy up, and we have leasing pipeline in excess of 120,000 square feet, which is like kind of 2% of the total multi-tenant portfolio. So I think we're moving in the right direction, and we should have a good 2019 as we go forward.
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
And Jeremy, if I can just add, we think that both are important, the anchor and the in-line. So whether it's a renewal, whether it's a new tenant, the in-line tends to have higher rents, but because their square footage is small, its ability to move the needle is much harder to recognize. The anchor tenants obviously move the occupancy faster, but it really comes down to stabilizing the center, bringing additional foot traffic and that then creates an opportunity to increase other rents as those renewals come to term. So Zach and the asset management team had results in the fourth quarter relating to anchor space as well as in-line space, and we'll continue to approach it that way.
R. Jeremy Metz -- BMO Capital Markets -- Analyst
Yeah, that makes sense, and one obviously definitely leads to the other. Just based on the pipeline, I guess, it does sound fair to think you could get up to that 90% level here based on some of your comments. Is that a fair kind of bogey to have out there for folks?
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Yes. So I'm going to hedge my answer a little bit as I think you'll understand. But yes, we do believe that this multi-tenant portfolio should be able to exceed 90% occupancy over the year. I don't want to put a flag out there that it will be first quarter, per se, but again, momentum is the most important thing you can have. We don't want to hit the ground from a standing start, we want to be running, and the brokers know that we are extremely focused on the time involved for lease-up and where we've had to, Zach has replaced brokers with other brokers. So yeah, we are trending along the lines that we had originally communicated and feel good about that type of expectation.
R. Jeremy Metz -- BMO Capital Markets -- Analyst
Great. And then, Mike, in terms of the maintenance and leasing CapEx involved with the multi-tenant portfolio, is this something you're considering disclosing here going forward at some point factoring in into your AFFO calculation? I guess, the argument here is obviously that it's generally standard practice among the public shopping center, REITs. And with occupancy where it is today at 87%, your expectations to really drive that higher, it's arguably going to be a bit elevated until you reach a more stabilized level that we've talked about here. And it does help paint a more complete picture of the near-term cash flow shortfall after paying dividends; and more importantly, as you continue to grow cash flow, your ability to fully cover the dividend and eventually grow it from there. So, any thoughts around that?
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Yeah. So my thoughts are that as we're sitting here today, we're obviously talking about the fourth quarter 2018 and the full year 2018 results. As we prepare and start to think about Q1 earnings call and results, Zach and Katie and I will sit down and take a look at that. I am not prepared to give you an absolute yes or no at this point. I think your points are valid, and we'll consider them and let you know.
R. Jeremy Metz -- BMO Capital Markets -- Analyst
Right. Last one from me for Katie. Just in terms of the balance sheet and your leverage today, you talked about the capacity of cash on hand and the line to buy -- in order to be able to buy what you have on the contract, plus you have some of the disposition proceeds here that will come on. But going back to maybe the near-term lack of free cash flow, how do you think about balancing funding additional growth and leverage, the wall of maturities you have coming up in 2020? And maybe if you could, just talk about your leverage targets more broadly as we look down the line.
Katie Kurtz -- Chief Financial Officer, Treasurer and Secretary
Yeah. So first, I'll talk about kind of you mentioned leverage target. I think that we are comfortable with our current kind of 38% leverage that we have on our balance sheet, especially given the credit quality of our tenants. So that's kind of number one around the leverage targets. Going forward, we will be looking at using our credit facility, as well as other forms of capital to fund our growing acquisition pipeline in the future there. So that's one thing that we remain focused on, and we will be talking about actively.
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
The other part of it, Jeremy, for funding is the targeted dispositions of the SunTrust portfolio...
Katie Kurtz -- Chief Financial Officer, Treasurer and Secretary
Yeah. I mean, as you've seen toward the end of 2018, we started to kind of sell some of our occupied SunTrust portfolio, redeploy those proceeds into our current service retail focused pipeline and for going forward. And so we're really -- you're starting to see some recycling of capital going on in our portfolio, also we sold two of our multi-tenant assets, one in the third quarter and one in the fourth quarter. So we'll continue to look at that strategically in 2019. While we do plan on being a net buyer, we will look at strategic dispositions and some recycling along with the other parts of our capital structure to fund that growth .
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
And I've got to add, being able to continue to see this roughly 200 basis point spread on the SunTrust portfolio for where we can sell versus where we can redeploy, obviously, it's very easy to see the benefit of that source of capital for the Company from an accretion standpoint.
R. Jeremy Metz -- BMO Capital Markets -- Analyst
Appreciate the time and all the color. Thanks, guys.
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Thanks, Jeremy.
Operator
The next question will be from John Massocca with Ladenburg Thalmann. Please go ahead.
John Massocca -- Ladenburg Thalmann -- Analyst
Good morning.
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Hey, John.
John Massocca -- Ladenburg Thalmann -- Analyst
So understanding the over 10-year weighted average of lease term on the in-place SunTrust portfolio, is there any near-term lease roll from that portfolio, let's say kind of maybe anything in the next two years?
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
No, there is not. We don't have any SunTrust role for -- the earliest one is over nine years from now.
Katie Kurtz -- Chief Financial Officer, Treasurer and Secretary
Yeah.
John Massocca -- Ladenburg Thalmann -- Analyst
And then, have you guys checked out like what roughly maybe is a percentage of occupied SunTrust you own that are in a close proximity of BB&T branch, maybe say two miles, just kind of roughly maybe?
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Yes, we have. We did that analysis as soon as the announcement was made. It was exactly as I expected. These are two regional banks that have very strong footprints in the Southeast. So there was overlap in the portfolio. I don't think that we can make any assumptions as to what that will mean, because obviously deposits are an incredibly important indicator for a bank -- for the surviving bank. So we continue to monitor. We have a great relationship with the SunTrust corporate real estate department. Obviously, this is very important to us. But in the general overall scheme of this size merger, there are other things like regulatory, et cetera, that BB&T and SunTrust are really working through right now. So we -- whatever determination is made by the corporate real estate group regarding the branch footprints, we -- because of the lease structure, we will not see an impact on NOI, and we're very comfortable with the locations of these assets and the quality of the location.
John Massocca -- Ladenburg Thalmann -- Analyst
Can you give like maybe a percentage of kind of, let's say, an arbitrary mileage for two, five, 10 miles, is there anything that can kind of help us get our hands around it?
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
In a two-mile radius, you've got about 50 branches in the BB&T SunTrust overlap.
John Massocca -- Ladenburg Thalmann -- Analyst
Okay. And then with regards to the kind of dispositions that are under contract that haven't closed, when were those originally agreed to, was it before or after the merger announcement?
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
There have been -- I believe, it's three that have been put under contract after the announcement. So six prior to the announcement. So I understand your question. We believe that people understand the triple net lease structure and the guarantee behind it. So we haven't seen a pause in the momentum. Again, we're being very strategic in how we're marketing these assets, and we continue to find local buyers, and we haven't had any reason to pause.
John Massocca -- Ladenburg Thalmann -- Analyst
Okay. And then one last detailed question. The impairment charge in the quarter, could you maybe provide a little color around that?
Katie Kurtz -- Chief Financial Officer, Treasurer and Secretary
Sure, John. This is Katie. The impairment in the quarter was really kind of comprised of two things: one was the sale of one of our multi-tenant assets, but the bulk of the impairment had to do with vacant SunTrust. As we've talked about on previous calls, we've been kind of selling and offloading the components of our SunTrust portfolio that were vacant. And as those sales took place, there were some impairments. As of the balance sheet data at year-end, we only had seven of those vacant SunTrust left in the portfolio, which represents less than 0.2% of the total portfolio.
John Massocca -- Ladenburg Thalmann -- Analyst
All right. That's it from me. Thank you very much.
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Thanks, John.
Operator
Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Louisa Quarto.
Louisa Quarto -- Executive Vice President
Thanks, Ted. Before I turn it over to Mike for closing remarks, we've been asked whether a replay of the call is available. It will be, one hour after the end of this call through June 6th, 2019. Please call 877-344-7529 and reference conference number 10128641. A replay of the webcast will also be available on our website.
We also filed an investor presentation, a copy of which is available in the Investor Relations section of our website at www.americanfinancetrust.com. As always, we encourage shareholders and financial advisors who have account-specific or general questions about the Company to call our Investor Relations Group at 866-902-0063 for assistance.
Mike, I'll turn it over to you for closing remarks.
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Okay. Thanks, Louisa. I want to thank everyone for joining today. We look forward to the potential for steady growth, both through opportunistic acquisitions and dispositions, and the NOI impact we'll realize from the leasing activities already under way. While day to day changes in stock price will occur, our focus will remain where it should be, on the operations of the Company and the execution of our strategy. We look forward to continuing to tell the AFIN story to a growing audience. Thank you, Operator.
Operator
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Duration: 38 minutes
Call participants:
Louisa Quarto -- Executive Vice President
Michael Weil -- Chief Executive Officer, President and Chairman of the Board of Directors
Zachary Pomerantz -- Senior Vice President of Asset Management
Katie Kurtz -- Chief Financial Officer, Treasurer and Secretary
R. Jeremy Metz -- BMO Capital Markets -- Analyst
John Massocca -- Ladenburg Thalmann -- Analyst
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