Greetings, and welcome to Americold Realty Trust Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Scott Henderson, Senior Vice President of Capital Markets and Investor Relations. Please proceed.

Good afternoon. We would like to thank you for joining us today for Americold Realty Trust third quarter 2020 earnings conference call. In addition to the press release distributed this afternoon, we have filed a supplemental package with additional detail on our results, which is available in the Investors section on our website at www.americold.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. A number of factors could cause actual results to differ materially from those anticipated. Forward-looking statements are based on current expectations, assumptions and beliefs, as well as information available to us at this time, and speak only as of the date they are made. Management undertakes no obligation to update publicly any of them in light of new information or future events. During this call, we will discuss certain non-GAAP financial measures. More information about these non-GAAP financial measures and reconciliations to the comparable GAAP financial measures is contained in the supplemental information package available on the company's website. We also would like to note that numbers presented in today's prepared remarks have been rounded to the nearest million, with the exception of per-share amounts. This afternoon's conference call is hosted by Americold's Chief Executive Officer, Fred Boehler; and Executive Vice President and Chief Financial Officer, Marc Smernoff. Management will make some prepared comments, after which we will open up the call to your questions. Now, I will turn the call over to Fred.

Thank you. And welcome to our third quarter 2020 earnings conference call. We hope everyone on this call and their families are well. This afternoon I will discuss our third quarter 2020 results and activity. I will then discuss our recently announced acquisition and development activity and provide some perspective on what we are seeing as we move toward year-end. Marc will then review our quarterly results in more detail as well as the financial benefit of our recent external growth initiatives. He will also comment on our guidance for 2020. After our prepared remarks, we will open the call for your questions. In a year that has been truly unpredictable, our business remains steady and consistent on an annual basis. Our global network of temperature-controlled infrastructures and the services we provide are a mission-critical part of the food supply chain. While the reopening has been uneven across individual states, regions, and countries, food continues to move through the temperature-controlled supply chain to meet demand. Consistent with our expectations, our third quarter results showed a small pickup in food service with continued elevated retail activity. As we stated last quarter, food service activity is well below historic norms and protein processing plants are not yet running at full capacity. Additionally, as expected, we continue to experience incremental costs related to COVID-19, including higher sanitation and PPE costs and certain inefficiencies due to social distancing, staggered schedules and other changes to processes. In the third quarter, our Global Warehouse same-store pool generated total revenue growth and NOI growth of 1.2% and 7.9%, respectively, on a constant currency basis. Please recall in the third quarter last year, we incurred elevated healthcare expenses. Adjusting for these, our same-store NOI growth this quarter would have been 4.4%. For the year-to-date, same-store revenue and NOI increased 3.6% and 6.5% on a constant currency basis. Please note that these year-to-date same-store results include the impact of our frontline appreciation bonus in the second quarter and the incremental costs related to COVID-19, which demonstrates the consistency and strength of our platform. In addition to the strong growth we have seen in our core business, let me now turn to our development and acquisition activity. We continue to execute on our external growth strategy during the third quarter, as we remain focused on helping our customers strengthen their supply chains. During the third quarter, at our Chicago facility, we have sold all available pallet positions, the majority of which will be under fixed commitments and we continue to onboard customers. We remain on track to stabilize this facility in the first quarter of 2021. We have sold approximately half of our capacity in Savannah, Georgia and we remain on track to stabilize this facility in the third quarter of 2021. In Atlanta, at our major market expansion, we have sold all pallet positions in advance of completion. We remain on track with construction to be completed in mid-2021. We are continuing construction of our New Zealand expansion. At this time, over 80% of the pallet positions have been sold in advance of completion and we remain on track with construction to be completed in mid-2021. Finally, we are underway with construction at both sites in Connecticut and Pennsylvania for build-to-suit development projects for Ahold Delhaize and completion timelines remaining the same. Today, we also announced two additional development projects in Russellville, Arkansas and in Calgary, Canada. We are expanding an existing facility in Russellville, Arkansas by approximately 13 million cubic feet and 42,000 pallet positions. This will be a highly automated temperature-controlled facility and dedicated build for Conagra Brands, a top-tier strategic customer. Our total cost is expected to be approximately $84 million and Conagra will be on a fixed commitment pricing structure with a 20-year initial term. We continue to work with our customers to find ways to support their production and supply chains. We are providing mission-critical long-term infrastructure to one of North America's leading branded food companies. We plan to break ground later this quarter with a targeted completion date of the fourth quarter of 2022. We are also launching an expansion at our Calgary site that we acquired with Nova Cold at the start of the year. We are expanding this conventional facility by approximately 2 million cubic feet and 7,000 pallet positions for approximately CAD 15 million or $11 million. The Calgary cold storage market is currently at capacity and we have a diverse mix of existing and new customers in our pipeline. We expect to begin construction immediately and the completion is slated for the fourth quarter of 2021. Please see page 38 of our IR supplement for more detail on both of these expansions, which have targeted ROICs consistent with our previous development projects. During the quarter, we also continued to grow our portfolio through strategic acquisitions. We closed on the previously announced acquisition of two facilities which we had leased in Auckland, New Zealand for NZD 12 million. We closed on the acquisition of AM-C Warehouses, which consisted of two facilities for $85 million. AM-C is located in the Dallas-Fort Worth market and allows us to grow our capacity by 30% in that major market. We acquired Caspers Cold Storage, an owner of a 3.2 million cubic foot facility in Tampa, Florida for $26 million. This recently built facility complements our two existing Americold facilities near Tampa, which enhances our scale in this market. In addition to our third quarter activity, after quarter end in October we signed an agreement to acquire Agro Merchants Group, the fourth-largest temperature-controlled warehouse company globally and the third-largest in Europe for $1.74 billion. The Agro portfolio includes 46 facilities located in 10 countries totaling 236 million refrigerated cubic feet and which serve 2,900 customers. Let me talk through what we believe are some of the most compelling aspects of this acquisition. First, Agro's portfolio allows us to establish a strategic footprint in Europe. This enhances our ability to serve our multi-national customers on a global scale. We're also adding depth to our existing networks in North America, Australia and South America. Second, this acquisition will further diversify our customer base while increasing our wallet share with key customers. We will also expand our fresh produce offering and diversify our commodity mix. From a growth perspective, we expect there to be significant value creation as we bring the 46 facilities Agro has operated individually onto our platform. We expect this integration will take five years to fully implement our commercial business rules and the Americold Operating System. We also expect to realize SG&A synergies which are expected to be fully realized by year three of ownership. Further, the portfolio comes with significant future growth opportunities through additional M&A, given Europe's fragmented temperature-controlled storage industry. Moreover, we expect the expansion and development opportunities to support multinational customers within Agro's and Americold's portfolio. The acquisition also included call options to acquire the remaining interest in a one facility operator in Chile, as well as a joint venture with Comfrio, which operates 13 facilities in Brazil. Finally, we want to point out that the sellers, Oaktree and Agro management are taking a meaningful component of their consideration in Americold common shares, which are subject to a mid-May 2021 lockup. We believe this demonstrates that all parties involved believe this transaction will lead to outsized future growth and value creation. We want to emphasize that we believe Americold is uniquely positioned to create value through this combination. We're able to bring an aggregated but not integrated portfolio onto the powerful and efficient Americold Operating System. We will establish our market position in Europe and enhance our existing network in the US, South America, and Australia. Lastly, we were able to bring our competitive cost of capital to bear and use our shares as currency, as the only publicly traded temperature-controlled storage operator today. I am also very excited that we are able to announce another strategic acquisition today. We recently closed on the acquisition of Hall's Warehouse Corporation, a high-quality integrated cold storage operator with eight facilities near the Port of Newark, New Jersey for $480 million. The 95% occupied portfolio is 58 million cubic feet, with approximately 200,000 pallet positions and serves 220 customers in the important northeast market. Five of the facilities are owned, with the remainder leased and all of the facilities are located within 15 miles of each other and 30 miles of Newark port. The transaction will allow us to grow our wallet share with key customers while diversifying our overall customer base. Inclusive of Agro and Hall's, our portfolio will consist of 239 facilities, totaling 1.41 billion refrigerated cubic feet with a global network spanning four continents. Needless to say, we are extremely excited about these acquisitions given their strategic relevance. Marc will discuss the details of these transactions as they relate to accretion, synergy realization, financing, and expected closing in a few moments. I do want to take this opportunity to note that as part of the financing for these transactions, we included raising €750 million unsecured debt private placement. We are very pleased to announce that we priced this debt at a weighted average coupon of 1.63% and duration of approximately 11 years. We believe this is extremely attractive financing that demonstrates the inherent value and stability of our business. We expect to close this financing concurrent with the closing of the Agro acquisition. Now I'd like to take a few moments to discuss our outlook for the remainder of the year. As we all know, the fourth quarter is typically the strongest for Americold given the impact of holidays on our business. While we cannot predict what will happen in the fourth quarter of this year due to continued social distancing and fewer social gatherings, we want to note a few key trends that we expect to remain consistent. First, as we always say, what people eat and where they may change, but people are going to continue to eat. This year, due to the COVID-19 pandemic, we may see smaller household gatherings and fewer larger parties, but ultimately we expect that food consumption will stay relatively consistent with previous years. Let us remind you that our portfolio is diversified by geography, customer, commodity type, facility type and node in the supply chain. This helps us to reduce volatility and shifts in consumption behavior and even specific commodity disruptions. Second, we may see individual states, regions, and countries shift between being open or locked down at times. Americold's infrastructure serves all parts of the food supply chain. It preserves food and supports the distribution of products to both food service and retail. We know we are well-positioned to support these changing dynamics, and we will partner with our customers to ensure the food supply chain is safe and effective. Lastly, barriers to entry in our business remain high. Americold has an integrated global network of temperature-controlled infrastructure, which will be even more enhanced with the completion of our announced acquisitions. Over many years, we have invested in building deep customer relationships, proprietary technology, the Americold Operating System, and the commercialization of our business including our fixed commitment model. We continue to leverage competitive advantages every day to support our customers and their critical temperature-controlled supply chain needs. Now I'll turn the call over to Marc.

Thank you, Fred and good afternoon everyone. Today we will provide updates on our actual performance as well as certain metrics on a constant currency basis. We will also provide further detail on our recent acquisitions, our capital markets activity, and our outlook for 2020. For the third quarter, we reported total company revenue of $497 million and total company NOI of $135 million, which reflects a 6.7% increase and a 12.1% increase year-over-year respectively. Core EBITDA was $104 million for the third quarter of 2020, an increase of 11.5% year-over-year. This was driven by our 2019 and 2020 acquisitions and solid growth within our core portfolio, partially offset by higher COVID-19 related costs and higher corporate SG&A. Our core EBITDA margin increased by 89 basis points to 20.9%. For the third quarter 2020, we reported net income of $12 million compared to net income of $27 million for the same quarter of the prior year. Our third quarter core FFO was $59 million or $0.28 per diluted share. Our third quarter AFFO was $63 million or $0.30 per diluted share. As a reminder, the full definition and reconciliation of core EBITDA, core FFO, and AFFO to reported net income can be found in our supplemental. For the third quarter of 2020, Global Warehouse segment revenue was $388 million, which reflects growth of 6.1% year-over-year. Global Warehouse segment NOI was $128 million, which reflects growth of 12.7%. Global Warehouse segment NOI margin was 32.9% for the third quarter, a 190 basis point increase compared to the same quarter of the prior year. The NOI growth was primarily due to improvements in our core business, accretive acquisitions, and the benefit of the Americold Operating System. Our NOI growth and margin expansion was partially offset by increased property insurance and property tax expense and the incremental expense we incurred to address COVID-19. As a reminder, in the third quarter of last year, we realized elevated healthcare expenses that favorably impacted the year-over-year comparison. Incremental COVID-19 expenses include higher hard costs associated with sanitation and PPE and higher soft costs including certain labor inefficiencies to accommodate social distancing and other process-related changes. The total sanitation and PPE costs for the third quarter were approximately $1.2 million, which was down from last quarter's cost of approximately $1.7 million. As we stated previously, we now underwrite these costs and expect to reduce their impact to our margin over time. At quarter end, we derived $280 million of our annualized rent and storage revenue from customers with fixed commitment storage contracts as compared to $270 million for the second quarter of 2020 and $244 million for the third quarter of 2019. Since our recent acquisitions have a limited percentage of fixed commitment contracts as a percent of rent and storage revenue, we view this as a significant opportunity as we bring these acquisitions to Americold's commercialization standards. For the third quarter 2020, we generated 42.1% of rent and storage revenue from fixed commitment storage contracts on a combined pro forma basis, which is a 70 basis point increase over the sequential quarter. During the quarter, we are pleased to report that we successfully brought a long-term protein customer onto the fixed commitment pricing structure. Due to having committed space available, COVID-19 has had significantly less of an impact on our customers on fixed commitment contracts. We continue to pursue opportunities to increase our percentage of these contracts, which meaningfully benefit both parties. As of September 30, 2020, our global portfolio consisted of 185 facilities. Our total facility count includes 175 facilities in our Global Warehouse segment portfolio and 10 facilities in our third-party managed segment. This total facility count reflects the two facilities from AM-C Warehouses and the single facility in Florida, which were acquired during the third quarter. Now I will turn to our same-store results in our Global Warehouse segment. As a reminder, a facility is counted as same-store if it meets our definition at the beginning of the year and same-store currently includes 135 facilities. For the third quarter of 2020, our same-store Global Warehouse segment revenue was $297 million, which reflects growth of 1.6% year-over-year and 1.2% on a constant currency basis. Same-store Global Warehouse NOI was $100 million, which reflects an increase of 8.1% year-over-year and an increase of 7.9% on a constant currency basis. Again, please recall that in the third quarter of last year, we realized elevated healthcare expenses that impacted this year-over-year comparison. Adjusting for this, our third quarter 2020 NOI growth would have been 4.4%. Same-store Global Warehouse NOI margin increased 204 basis points to 33.6%. This shows the continued benefit associated with the Americold Operating System and our commercialization efforts. For the third quarter, same-store global rent and storage revenue grew by 1.4% year-over-year. This was driven by contractual rate escalations offset by customer mix. On a constant currency basis, our growth would have been 1.6%. Our same-store economic occupancy was 78.6%, which reflects a decrease of 13 basis points from the prior year, impacted by COVID-19 related supply chain fluctuations. Our same-store global rent and storage NOI decreased by 0.3% year-over-year and was flat on a constant currency basis. This was due to customer mix as well as increased costs year-over-year, including COVID-related expenses, higher property taxes, and increased property insurance expense. Same-store rent and storage NOI margin decreased 104 basis points to 63.5%. The margin compression was driven by the same factors that impacted same-store global rent and storage NOI. Same-store Global Warehouse services revenue for the third quarter increased by 1.7% year-over-year or increased by 1% on a constant currency basis. This was driven by the benefit of contractual rate increases in our services, which was partially offset by business mix including lower protein and food service volumes. Our same-store Global Warehouse services NOI increased by 70% year-over-year or 66.4% on a constant currency basis. This growth was primarily driven by the favorable comparison to the prior year, which included higher health insurance costs in the third quarter of 2019, partially offset by the incremental labor costs caused by the inefficiencies due to COVID-19 and PPE costs. We also continue to see lower overall throughput volumes associated with reduced protein processing and food service as compared to the prior year. Same-store warehouse services NOI margin was 11.1% for the quarter, which resulted in a margin increase of 445 basis points driven by the same factors. Our recent acquisition activity has both provided further overall diversification while enhancing our wallet share of our key customers. Within our Global Warehouse segment, we had no material changes to the composition of our Top 25 customers who on a pro forma basis account for approximately 57% of our Global Warehouse revenue, down approximately 300 basis points from 2019 year-end. Additionally, our churn rate was approximately 3.3% of total warehouse revenue. Corporate SG&A totaled $36 million for the third quarter of 2020 as compared to $32 million for the comparable prior-year quarter. The increase was driven by higher headcount to support our development pipeline, SG&A absorbed through our recent acquisitions, and higher share-based compensation, partially offset by lower travel expense during the pandemic and realized synergies. Now let me update you on our development and acquisition activity. We invested $60 million in the third quarter on expansion and developing capital. About half of which was related to spending at our Ahold build-to-suit projects in Connecticut and Pennsylvania. As Fred discussed, we are making progress on all previously announced developments. As a reminder, our supplemental has additional disclosure on expected yield and target stabilization dates for these projects, which remain unchanged. As Fred highlighted, today we also announced two new development projects, one in Russellville, Arkansas, and one in Calgary, Canada, for total expected cost of approximately $84 million and CAD 15 million respectively. We expect to achieve returns consistent with our past development at stabilization. We expect to fund these developments with a combination of proceeds from our recent debt and equity offerings, which I'll discuss momentarily. Also during the third quarter, we completed several M&A transactions, all of which had been previously announced. As Fred mentioned, we invested an aggregate of $119 million to complete acquisitions in New Zealand, Dallas, and Tampa. Please refer to page 39 of our supplemental for more detail on these acquisitions. Additionally, we completed the sale of a non-core asset in July, a limestone quarry, that was adjacent to our facility located in Carthage, Missouri for $9 million. Subsequent to quarter-end, we closed the acquisition of Hall's Warehouse Corporation for a purchase price of $480 million on November 2. Our purchase price translated to an in-place net entry NOI yield of 6.3% and then an in-place EBITDA multiple of approximately 20 times. Of the $6.2 million of associated SG&A, we expect we can eliminate $3 million by the start of 2022. This acquisition was immediately accretive upon closing on a leverage-neutral basis. Now let me take a few minutes to walk through some details of the $1.74 billion acquisition of Agro. Based on estimated 2020 adjusted results, we underwrote this transaction assuming a net entry NOI yield of approximately 6.3% and implied adjusted EBITDA multiple of 22.3 times. We anticipate that this acquisition will be modestly accretive in 2021. We expect to stabilize this NOI yield at 7.3% to 8.3% by the end of 5 years after closing, which represents significant value creation through the implementation of our commercialization practices and the Americold Operating System. In-place adjusted SG&A is approximately $32 million today. We expect to achieve between $7 million to $10 million in SG&A synergies, which we expect to have fully realized by the beginning of ownership. We also want to note that we expect that we won't incur an incremental current tax expense of $2.5 million to $3.5 million per year. We expect this transaction to close in late fourth quarter 2020 or early first quarter 2021, and this transaction is subject to regulatory approval in Austria and Australia. Now, turning to our balance sheet and our funding for our recently announced developments and acquisitions. We continued to maintain a conservative balance sheet with ample liquidity and flexibility in order to take advantage of attractive growth opportunities when appropriate. During the third quarter, we issued approximately 3.9 million common shares all on a forward basis and at a weighted average gross price of $37.43 under our $500 million ATM program. As of September 30, 2020, total debt outstanding was $2 billion. Our real estate debt had a weighted average remaining term of six years and carries a weighted average contractual interest rate of 3.59%. At quarter end, we had total liquidity of approximately $1.2 billion, consisting of cash on hand, revolver availability, and $291 million of outstanding equity forwards. Please see page 12 of our supplemental for additional disclosure on our outstanding equity forwards. For each tranche outstanding, we have disclosed the net share price, the net proceeds, the settlement date, and the targeted use of net proceeds. We hope that you find this new disclosure helpful. Our net debt to pro forma core EBITDA was approximately 4.3 times. Consistent with past practice, we endeavored to de-risk and match fund our growth initiatives. As such, during the fourth quarter, we have completed the following capital markets transactions. We completed an equity offering of 31.9 million shares at $38 per share, raising total gross proceeds of approximately $1.21 billion or approximately $1.17 billion net of the underwriting fee. The equity offering closed on October 16, 2020 and all 31.9 million shares were issued under a forward, which requires us to settle the forward no later than October 13, 2021. Now these figures exclude the underwriters' 30-day option to purchase up to an additional 4.8 million shares. Separately, at the close of the Agro transaction, we expect to issue a total of approximately 14.2 million of Americold common shares to Oaktree and Agro management. These shares are subject to a lockup period until May 17, 2021 and were valued at approximately $554 million at the time of announcement. Finally, we priced a €750 million dollar unsecured debt private placement consisting of two tranches; a €400 million dollar tranche with a coupon of 1.62% and a 10-year maturity and a €350 million dollar tranche with a coupon of 1.65% and a 12-year maturity. Please note that €750 million dollars is equivalent to $877 million. We expect to close and fund these notes at year-end concurrent with the closing of the Agro acquisition. Of this $877 million private placement proceeds, we expect to allocate $325 million towards the purchase of Agro, $105 million towards the purchase of Hall's, $104 million will be allocated towards the remaining development cost, and $325 million towards the repayment of the fixed component of our US dollar unsecured term loan A. We'll use the remaining net proceeds for Russellville and Calgary expansions and general corporate purposes. Pro forma for the new private placement in the Agro and Hall's transactions, our total debt outstanding is $2.7 billion and our net debt to pro forma core EBITDA is 4.5 times. Our real estate debt will have a weighted average remaining term of approximately eight years and will carry a weighted average contractual interest rate of 3.21%. Now let me discuss our outlook for the remainder of 2020. Consumer behavior with respect to the holidays in the fourth quarter and future impacts from COVID-19 remain uncertain. However, our business remains fairly constant on an annual basis due to the consistency of overall food consumption, combined with the scale and diversity of our portfolio, as well as our strong market share. For that reason, as we approach the end of the year, we are tightening our AFFO per share guidance from our previous range of $1.24 to $1.30 to $1.26 to $1.29. Please refer to our supplemental for updates embedded in this guidance. Please note that this guidance includes the recently closed Hall's acquisition and assumes a year-end closing for Agro. While the Agro closing results in an increase in the number of Americold shares outstanding, it does so for only one to two days. Therefore, we did not anticipate a material impact to our per-share metrics for the full year 2020. Please keep in mind that our guidance does not include the impact of acquisitions, dispositions, or capital markets activity beyond which has been previously mentioned. Now let me turn the call back to Fred for some closing remarks.

Thanks, Marc. We are very proud of our ongoing work to support our customers as a mission-critical part of the global temperature-controlled food supply chain. Even with the impact of COVID this year, our business remains steady and consistent on an annual basis. We continue to drive internal growth through our commercialization efforts and the Americold Operating System and drive external growth through development and acquisitions. This growth strategy is supported by our conservative low-leveraged balance sheet. Finally, we again want to thank all of our frontline associates and the entire Americold team for their hard work and dedication. We are pleased to welcome the AM-C, Caspers, and Hall's teams to the Americold family. We look forward to welcoming the Agro team upon closing. We believe we all have a very exciting opportunity to grow together through these transformative transactions that position us to better compete on a global scale. Thanks again for joining us today, and we will now open the call for your questions.

Thank you. At this time, we will conduct a question-and-answer session. Our first question comes from Dave Rodgers with Baird. Please proceed with your question.

Yeah. Good evening, everyone. Fred, Marc, you guys have done a really good job of getting everyone focused on the economic occupancy number that was flat year-over-year and largely flat sequentially as well. The bigger delta came in the physical occupancy, which I know we're not paying as much attention to, but I'm wondering if there's an ability to maybe talk about the third quarter into the fourth quarter and really the ability to see that economic occupancy percentage start to move higher into the fourth quarter and into 2021, and then maybe the reasons why it's kind of lagging in terms of growth? I think there's upside there and I don't know if that's just COVID, if that's the protein shortages, capacity issues, but any help that would be helpful.

Yeah. No, thanks, Dave. Those are definitely metrics that are difficult to manage given COVID. The bottom line is we have over 2,600 customers and every one of those customers is doing something inherently different with their supply chains and it's highly unpredictable. It was funny, I was just with the GCCA, the Global Cold Chain Alliance board meeting a couple of weeks ago and we all kind of looked at each other and talked about what we saw going on in the marketplace, and it's just a lot of unpredictable sporadic behaviors by customers. Some customers are trying to push inventory forward, some are helping manufacture and kind of keeping product back at point of production, and some are kind of in between, right? We do have the protein plants, especially the larger protein plants that are not up to 100% efficiency just because of what they had to do in their plants in terms of social distancing and such. So there's just a lot of COVID noise and that's why we really kind of focus our attention on the year-to-date results and kind of the full-year aspect because I think this year more than ever as we look back and do our statistics on quarter-to-quarter fluctuations and what happens in the marketplace on a normal year and how that matches this year, it's just kind of crazy this year, right? Obviously, a lot was pulled forward into the third quarter and kind of more evenly spread. We are seeing some lift as we go into October which we would expect in terms of volume for the holidays, but I don't think it's as steep as what it normally is. I think the whole supply chain kind of flattened out over the course of the year. But again, the important thing to note here is that consumption during this 12-month period will be very, very similar. It's just what's going on month-to-month and quarter-to-quarter that's a little kind of out of cycle given all that has happened. And look no further than our same-store results; if you look on a year-to-date basis, 3.6% on the top line and 6.5% from an NOI perspective as we head into this fourth quarter. Again, great confidence that we're going to be able to deliver on what we've said that we're going to do. So, the economic occupancy and physical occupancy thing, again, there is a correlation, albeit not necessarily a direct correlation as you can see in our financial results.

Thanks. Thanks for all that detail, Fred. Appreciate that. And then maybe just one follow-up for you. You had mentioned in your comments the small food service pick up. Can you put that in the context of maybe where you would have been pre-COVID to where you are today and maybe the trajectory that you think could come back to you?

Yeah. Very, very small pick-up, and then that's kind of reversing itself a little bit as states like New York and California lock things back down. So I expect that not to continue that trend line. But it was a very, very slight pick-up. I mean, retail is still ruling the day right now. Remember pre-COVID, I'd say 50% was going food service and 50% was going retail. When the light switch went off, that immediately switched to 90/10 retail. I'd say that we're still in that 75/25 range. So, a slight pick-up just meaning if it was 80/20 last quarter, maybe now it's 75/25, but not material in nature.

Okay. Thank you.

Our next question comes from Michael Carroll with RBC Capital. Please proceed with your question.

Yes, thanks. Fred, I want to talk a little bit about the developments you announced and obviously with the Ahold deal and Conagra deal, it seems like the development yields are around 10% to 12%. I know some of the other expansions. Is there anything unique going on there driving those yield lowers? Is it just an individual investment basis, so you still expect to kind of be around that 10% to 15% range going forward?

I think we're just trying to be a little bit more transparent in terms of kind of giving you a more realistic range. Here's what I would say. I mean, it's all about risk, right? And so, if I'm building a dedicated facility for a high-quality customer, whether it's Ahold Delhaize or Conagra, you de-risk that project, right? I mean, it's a 20-year commitment, fixed commitment right out of the gate, very little risk going into it. So you're probably willing to accept a slightly lower yield, right, versus a market development project like Chicago, like Italy and like Calgary, like Clearfield. Those types of projects, we’ve got great confidence, albeit we have several different clients that we're bringing into it, right? So we're bringing a solution to the market because of overall market demand, not because of an individual's dedicated build. That's why you're going to vary a little bit between the different types of builds based on kind of that risk assessment.

Okay. And then can you explain I guess the difference between the Conagra build-to-suit and why is there a 12-plus month J-curve with that asset versus the Massachusetts build-to-suit that you completed a few years ago when it was stabilized almost immediately?

Yeah. That's a great question. Look, the Massachusetts asset, if you recall, was for Ocean Spray. We opened that building. So same fixed structure, okay? So both of them were under a fixed variable structure where they're paying for the full facility day one upon completion. The difference is, one is in agriculture and one is consumer products. The agricultural facility we happened to open that facility in September right at the time of the harvest. So literally that building filled up overnight. We got all the variable components immediately. With Conagra, they'll take care of the fixed component day one, but it's going to take them time to ramp that plant and ramp that facility up. It will take about 12 months before we get all of that volume actively running through there from a variable standpoint. Now the J-curve on that facility, and Scott, I'm sure will have follow-ups to give more details on it, but the J-curve associated with that facility won't be like a J-curve on a major market facility. We're not going to go negative, right, because you're getting the fixed commitment out of the gate. It's just you'll be ramping up kind of that variable component and hit that full run rate coming out of the first year. Hope that makes sense.

Thanks.

Our next question comes from Ki Bin Kim with Truist. Please proceed with your question.

Thanks. I guess, first I want to say you guys have had a pretty busy year. So congratulations on that.

Thanks.

Thank you.

So, when I look at the G&A guidance for fourth quarter, I think you have implied that G&A goal increases from $35 million to $45 million. I'm curious if that the new run rate, $45 million, or is that really a function of some acquisitions that are coming online where you're carrying some G&A?

Yeah. It's function of timing and just the acquisitions and the G&A absorbed through those recent acquisitions.

I see. So $45 million is a good run rate going forward?

$45 million, yes, that would be a decent run rate. As we look forward, we'll give guidance next year because that's the gross run rate Ki Bin, and then we have synergy targets against all these acquisitions. So we'll be giving full-year guidance with our next reporting. But just remember, I think we've built up the grocery. What you see here is really our same-store or our organic business with two months of the Hall's acquisition now layered in. Obviously, next year we'll be building on the full year of Hall's as well as the full impact of the Agro acquisition, which ramps up, and we've quoted that as being roughly $32 million in free synergy.

Okay. And so, into the fourth quarter, I know the holiday sales season this time around it's a lot more volatile. Any kind of early reads into October-November in terms of how the business might shape up in the fourth quarter?

Yeah. No, I'll just repeat what I said earlier today. It's slightly different curves in terms of ramp up, but the volume is definitely picking up like we would expect going from September to October, if you will. So I'm here to tell you Thanksgiving, Christmas, R&D is going to happen. Again, it's just going to look a little bit different, Ki Bin. And I think the way the volume is going through, it's really hard to predict. I mean, put yourself in that Conagra Foods position. They have no idea how much food you have stocked up in your refrigerator or freezer at home, right? It's really hard because the buying habits of the consumers have really kind of been all over the place. We’ve got to kind of get a little bit further into the fourth quarter to really understand the overall volumes, but again, we're reconfirming here, and actually upping the midpoint of our guidance, which tells you that we believe that the fourth quarter will come in commensurate with the rest of the year.

Okay. Thank you.

And then, Ki Bin, I apologize. You said 45% or 35% on SG&A? I just want to make sure you heard the correct number.

Well, your guidance for the full year for G&A increased to about $142 million?

Yes. Yes.

And I was just doing kind of whatever is left that implies for the fourth quarter that's about $40 million, right? $40-plus-million?

Yes. Sorry. Just want to make sure we're talking about correct numbers there. Thank you. Yes.

Our next question comes from Nate Crossett with Berenberg. Please proceed with your question.

Hey, good evening, guys. For the Hall's acquisition, I was just curious how did that come about? Was it a competitive process? And then, is there any development potential in there?

Yeah. Thanks for the question, Nate. We're extremely excited about this Hall's acquisition. It actually came to the market four years ago – 4.5 years ago on a competitive bid. It was a family-owned business and one of the family members wanted out, so they took it to auction. That was an unsuccessful sale at the time. They did not agree and did not want to sell at that time. They bought one of the brothers out. Fast forward to today, they decided that it was time. I mean, they've been in the business – the three brothers were in the business for 50 years. Their dad started 60 years ago and they decided that it was time and ran a competitive process. So it was a competitive process.

Okay. Can you kind of speak to what the competition is like outside of Lineage just in terms of the depth of potential buyers for cold storage? Because obviously you guys and Lineage have been by far the most acquisitive, and so it'd be interesting to see what that looks like outside of you two?

Yeah. So there's actually been a just a number of especially infrastructure-focused private equity firms that have been very active in all these deals as well. Yeah, actually, I think there’s a Bloomberg article about it in Canada actually going to one of those types of funds and we know they've been competitive. So we do continue to see interest from significant pockets of capital going after this market. Clearly, I think both ourselves and others, when there are probably auction, there's a lot of attention on and they're drawing broad interest.

Okay, that's helpful. And then, I just had one on the Agro transaction. I'm just wondering how it's affecting your discussions with multi-national customers, and if you actually are getting increased business flow because of that?

Yeah. I mean, that'd be premature for that to happen overnight. But it will definitely happen, right, because there is overlap in those customers, and remember, we're not closed on the deal yet. So we're not able to really dig in and go re-commercialize the business with customers until we close that. So, not going into that depth yet. But we fully expect, as Rob Chambers and his team go out and work with our customers and look at the overlaps and look at the networks. New opportunities are going to occur, not just within the existing infrastructure, but I think what we're excited about is we've been asked a number of times, hey, can you build us a facility in Europe? And we're like, well, we're not there. So we're not going to build an individual facility, standalone facility sitting in Europe. That answer will look very - very different going forward, because now we have people on the ground in Europe that can manage overseas and operate that infrastructure when we determine it makes sense to go ahead and build. So I really see those opportunities and advantages taking hold. But it's not something that will happen day one. That is something that we will kind of transition to as we're having those conversations.

Okay. Thank you.

Our next question comes from Joshua Dennerlein with Bank of America. Please proceed with your question.

Yeah. Hey, Fred, Marc and Scott, hope you're all doing well. I've noticed the Agro and the Hall's Warehousing acquisition both came with a transportation component...

Yes.

Just kind of curious if this is something we should expect to see more of going forward. Is this just something you guys want to grow into? Yeah, any color there would be great.

Sure. Yeah. Thanks. We do not set out to go buy transportation companies, right? But what you find with some of the larger and certainly the more mature operators is, they offer that transportation component as another value-added service to their offering. They do it for the same reason that we have transportation within our portfolio. It helps to create stickiness within those customers, especially small customers where you're doing consolidation like programs. Hall's actually started off as a transportation company. That's what their dad started the operation off as, and then they got into the warehousing and then really got out of dedicated transportation and then solely focused on consolidation programs, which is exactly what we want to do with transportation because again, it creates stickiness for our customers for our warehouse business. That one was easy. Agro, obviously, with it being as large as it is, it has miscellaneous transportation programs that were attached to some of the enterprises that they had previously brought into the family. We'll look at those as we go through and find ways to make sure that we're keeping it to our core, if you will. And that's all part of our integration programs as we go forward. But, again, lots of these guys, even a single warehouse operator might have a couple of tractor trailers that they're running shuttle programs for their customers or something like that. So, none of them are pure – well, I shouldn't say none of them, but a lot of these enterprises are not pure clean just warehouse and types of operators.

Okay. And thanks for that color. Appreciate it. And then just maybe one, you did the private placement in euros. Just curious how we should think about your debt strategy going forward. Is this something we'll see more of, like you guys tapping the European cost of capital from that?

Yes. Look, I think it was the right place to raise that capital especially when you think about the $1.7 billion Agro acquisition and the strong presence in Europe and the strong cash flow that the European business will generate. Obviously, we're sizing – we sized the offering to where it makes sense to give us the best natural hedge to lower our overall cost of capital, as you can see from the source and used I laid out. We are going to use part of the proceeds to repay US dollar term loan. Ultimately, we're ending up better allocating, better matching in terms of naturally hedging the portfolio in terms of where the dollars going forward will be generated from, just all the way through the debt component now, the capital structure. We're able to do so where it actually lowers our overall cost of capital too based on the rates available in the European market as opposed to the US market.

And we increased our overall duration on our real estate debt by roughly 2 years to 10 years. So...

Great. Thanks, guys.

Our next question comes from Mike Mueller with JPMorgan. Please proceed.

Yeah. Hi. Couple of questions. I guess first on the Hall's acquisition. How does that portfolio compare to yours, say age-wise out of curiosity?

It's maybe a couple of years, two years younger than our average age. Most of their infrastructure is new. I think one of the assets is slightly older, but yeah, it still is absolutely doing the job. Their infrastructure is in great shape.

Got it. And then, I guess, we were talking about Agro regulatory approvals. What are some situations where you wouldn't get granted, not necessarily for this transaction, but just in general as you're going around the globe? I mean, what would be a situation where you'd run into a problem where you wouldn't get an approval?

Well, look, in this situation, there are two countries that we had to get approval from. One was Austria, which is kind of ironic because we don't have any competitive landscape there. So we don't expect that to be an issue at all. And then there's Australia where we do have competitive landscape, we do have operations. So that just needs to run through its normal course. Look, absolute worst case if something happens, I'm sure we'll figure out a way to split off that single asset to not hold off the rest of the deal.

We're not anticipating any trust concerns on this transaction.

So yeah, just got to go through the process.

Got it. Okay. That was it. Thank you.

Yeah. Thanks, Mike.

Our next question comes from Eric Frankel with Green Street Advisors. Please proceed.

Thank you very much. I'm just curious, obviously, this is such a unique year and your mix of retail and food services sales is quite lopsided. But we've kind of observed that overall food demand for dry warehouse. So I was wondering if you could speak to that trend and maybe if there's some upside relative to kind of what's happening with supply chains in the future?

Yeah, I think when you look at the dry food grocery warehouse, I think unfortunately that also contains some of the consumables like toilet paper and gel and napkins and those types of things. I think that that takes up a lot of cubic feet. I think that's probably the bigger push versus canned foods, dry box cereals and that type of thing. So I think it's overall generally gets labeled as food but anything that would go through your grocery store, general merchandise, and food is probably what's driving that up a little bit.

Got you. Got you. And your retail food customers, sorry to kind of get into e-commerce further, but – (01:02:26) question regarding that subject, but obviously grocery – online grocery sales a lot. I understand that consumption is consumption and that's growing at a steady pace. But can you speak to how you think your retail customers are adjusting to online grocery this year?

Yeah. No, look, I think hats off and please pay your respects to your local grocery store. They've done an incredible job. I mean, think about it, they had a tidal wave of people come in and empty out those grocery stores and have to contend with customers coming in there and not being able to find the right sized ketchup that they want. So our grocery workers out there deserve a tremendous round of applause for what they've been able to do in those operations. You couple that bliss with e-commerce and the changing way that they're doing business. They've done an incredible job. You go to your local grocery store and you see what they've done and a lot of other retailers have done this too, like Best Buy, for example, where they have parking spaces out in the parking lot that you pull into and you dial a number and you tell them what space you're in and they bring your product to your door. Again, remember, that's all registered as e-commerce. The vast majority of e-commerce growth is being driven through your local grocery store by Instacart or customer pickup. That's where all the e-commerce is coming from. I think they're doing a phenomenal job handling it. All of that volume is obviously coming through our retail distribution centers to get to those stores for fulfillment. You asked what they're doing. Aside from some of the small changes that I just mentioned that they're doing at your local store, they're also investing a lot of capital in the back room just to put automation in. The vast majority of retailers out there are investing in that automation that takes the 10,000 fastest volume, highest volume skews in the stores and putting them in the back room so that they can automate the selection of those goods for those customer pickup orders or a store delivery orders. So, they're ramping that ahead and we're hearing nothing but great things from that automation that's going in at various retailers.

Got you. Got you. Switching gear, if you could touch upon the Agro Merchants deal? Can you discuss just a little bit more detail your growth plans there and what type of values or yield do you think you could get on bolt-on acquisitions or development projects and whether the absolute yields are any different than?

Yeah. We expect development and M&A yields to be commensurate with the development and M&A yields that we get out of our core business. So we don't expect that to really change a whole lot. The added juice obviously that we get from Agro is it gives us access, like I was mentioning earlier, to be able to do those development projects in Europe because without their presence, before, that was not a market that we would go out and develop in developing a single site. So it gives us access to do that development. We expect those yields to be very-very similar. From an M&A perspective, kind of same thing, I wouldn't go over there and just buy a one-store operator or a two-store operator. We wanted to get something of substance to create that base and then it will be a lot easier for us to bolt-in and do those tuck-in acquisitions. Again, very, very fragmented industry over there. The top 10 players in Europe only represent about 20% of the market share. Again, comparing that to the US where the top 10 represent about 60%. So, very fragmented market. That will open it up to additional M&A, and again, we expect to see similar yields. And then the other value prop obviously with Agro is the one that we disclosed in talking about where we would grow that yield through the implementation of the Americold Operating System and our commercialization efforts. So through those integration efforts, over the course of five years, we'll get SG&A benefits, we'll get operating benefits, and we'll get commercial benefits, which will increase that yield. So...

Got it. Appreciate the color. One final quick question, maybe for Marc. So, healthcare costs, do you foresee – I know you don't want to dig too much into 2021 guidance, but do you foresee any expense issues going into next year? I think everybody's healthcare costs are probably going up due to COVID and all the insurance company-related issues related to that? So do you see that affecting expenses next year?

No. If you think about it, we see overall healthcare costs. Obviously, we're not immune to that, but obviously we have a lot of initiatives in place to diversify the overall pool. We think just like our healthcare costs are embedded in the same-store results that Fred talked about earlier, we're really overcoming that in the ordinary course. So we don't anticipate any headwind from healthcare.

I think the other thing to keep in mind too is, remember, we're an activity-based costing house. As our cost structure goes up, that gets embedded into our pricing models and pass-through. Our exposure is not zero, but it's certainly mitigated by the fact that we have these sophisticated pricing models that take all of our cost elements into play.

Got you. Thank you for taking my questions.

Sure.

Thank you.

Thank you. At this time, I would like to turn the call back over to Mr. Fred Boehler for closing comments.

Great. Thanks. Thanks, everyone for joining us tonight. I know it was a long call. A lot of activity that obviously happened in the quarter and post-close, so we're very excited about all the activities we're striking on, we're really delivering on all three of our growth strategies, organic growth in terms of delivering the same-store, continuing to mature our operations with the Americold Operating System and our commercialization efforts, continuing to bring very, very attractive development opportunities both dedicated operations for strategic customers as well as more market-driven types of deals that take care of a lot of different customers. And then certainly on the acquisition front, we've really stayed true to what we have said that we're going to do. We're going to buy quality companies that we can merge into our way of doing business. We are one company, and we will continue to focus on that integrated model and deliver upon it. So, just very excited about what we were able to execute on all three of those platforms in this last quarter. Very proud of what the team has accomplished. Again, thank you all for your continued support. So, good night to everyone.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time and thank you for your participation and have a good day.