Stable and Diversified Tenant Base
Our portfolio of properties has a stable and diversified tenant base. As of March 31, 2017, our properties were 95% leased to 22 tenants operating in 18 different industries, with approximately 46% of our annualized base rent, or ABR, from leases with tenants or lease guarantors that have an investment grade credit rating from a major rating agency or have an obligation that has been so rated.
Our portfolio is diversified not only by tenant, industry and geography, but also by property type, which we believe differentiates us from certain other net lease REITs and allows us to further enhance the diversification of our portfolio.
Long-Term Net Leases
Furthermore, we seek to acquire properties with remaining lease terms in excess of 10 years that are structured as net leases. Net leases generally require our tenants to pay substantially all of the operating expenses related to the property, including real estate taxes, utilities, maintenance and insurance, as well as certain capital expenditures. Commercial properties that are not subject to net leases generally are subject to greater volatility in operating results due to unexpected increases in operating costs or unforeseen capital expenditures. As a result, we believe that our net lease terms minimize the potential impact of inflation on our property‑level operating expenses and reduce our exposure to significant capital expenditures.