Store Capital's Amended Credit Agreement and Strategic Financial Flexibility: Assessing Operational Resilience in the REIT Sector

In 2025, Store Capital has emerged as a case study in strategic capital structure optimization within the REIT sector, leveraging a series of credit agreement amendments to enhance operational resilience. By expanding its unsecured borrowing capacity and restructuring debt obligations, the company has positioned itself to navigate macroeconomic uncertainties while maintaining financial flexibility. This analysis evaluates Store Capital's recent financial maneuvers against broader REIT sector trends, highlighting how disciplined debt management and liquidity preservation are critical to long-term stability.

Credit Agreement Amendments: A Blueprint for Flexibility

Store Capital's December 2023 credit facility expansion increased its aggregate borrowing capacity from $2.5 billion to $3.2 billion, accompanied by the addition of $467.5 million in incremental term loans per the First Amendment. This move was paired with the early repayment of a $2.0 billion secured privatization bridge loan, reducing secured debt levels and extending the maturity profile of its liabilities, according to a Business Wire release. By October 2025, the company further restated its unsecured credit agreement, allocating $1.25 billion to a revolving credit facility and $1.65 billion to term loans per the restated agreement. These amendments reflect a proactive approach to managing liquidity, ensuring access to capital for growth opportunities while mitigating refinancing risks.

The strategic benefits of these actions are twofold. First, the increased unsecured borrowing capacity provides Store Capital with greater flexibility to finance acquisitions and capital expenditures without over-reliance on secured debt, which typically carries higher interest rates and collateral risks. Second, the early repayment of the secured bridge loan-originally set to mature in February 2025-demonstrates the company's ability to leverage favorable market conditions to reduce debt costs and improve balance sheet metrics, as shown in the SEC exhibit.

REIT Sector Trends: Capital Structure Optimization in 2025

The broader REIT sector has prioritized capital structure optimization in 2025, driven by macroeconomic headwinds such as elevated interest rates and inflationary pressures. J.P. Morgan research projects 3% funds from operations (FFO) growth for REITs in 2025, with industrial and office REITs showing stabilization amid supply constraints and improving occupancy rates. Notably, REITs with low leverage ratios (32.5% sector average) and strong cash flow generation are better positioned to capitalize on acquisition opportunities, particularly in sectors like senior housing and data centers, where fundamentals remain robust, according to the CenterSquare outlook.

For Store Capital, the alignment with these sector-wide strategies is evident. Its focus on unsecured debt-now accounting for 3.2 billion in total capacity-mirrors the REIT sector's shift toward low-cost, long-term financing. Additionally, the company's interest rate management efforts, including a 5.06% weighted average rate on its 2025 securitization, compare favorably to the sector's average borrowing costs, which remain tied to the 4.57% 10-year Treasury yield per a Q1 2025 review. This cost efficiency enhances capital returns and supports dividend sustainability, a critical factor for income-focused investors.

Liquidity and Leverage: A Sector-Wide Benchmark

While Store Capital's specific leverage ratio for 2025 is not disclosed, the REIT sector's average debt-to-equity ratio of 32.5% provides a useful benchmark, according to the REIT Industry Snapshot. By comparison, the retail sector-where Store Capital operates-exhibits higher leverage (2.58x in Q2 2025) and weaker liquidity metrics (current ratio of 1.02, quick ratio of 0.23), per the retail sector ratios. Store Capital's unsecured credit facility, with its expanded accordion feature and lower interest rates (e.g., LIBOR + 85 bps in prior amendments), positions the company to maintain a stronger liquidity buffer than its retail peers, as noted in the KeyBank amendment.

The company's interest coverage ratio further underscores its operational resilience. In Q1 2025, Store Capital reported $90.7 million in interest expenses, a slight increase from 2024, but its 7.11x coverage ratio (as of Q2 2025) far exceeds the REIT sector average of 4.1x, according to industry coverage ratios. This robust coverage, combined with a diversified debt maturity profile, reduces the risk of liquidity crunches and supports confidence in its ability to service obligations even in a rising rate environment.

Strategic Implications for REIT Investors

Store Capital's credit amendments and debt management strategies align with the REIT sector's 2025 priorities: preserving liquidity, optimizing leverage, and securing cost-efficient financing. By expanding its unsecured credit facility and repaying high-cost secured debt, the company has strengthened its balance sheet while retaining flexibility to pursue growth. These actions are particularly relevant in a sector where capital deployment and operational efficiency are key differentiators.

For investors, Store Capital's approach highlights the importance of proactive capital structure management in an uncertain macroeconomic landscape. As the REIT sector navigates elevated interest rates and shifting demand dynamics, companies that prioritize financial discipline-like Store Capital-are likely to outperform peers reliant on high leverage or short-term financing.