Kowalske: We had a one-year plan and we're on track to complete that by February. The last major piece is transferring all our net leases from Franchise Finance and getting them all in one system, an IT project. We'll be very happy to complete that last phase. We're very much one company now. We've kept a very large presence in Orlando and plan to keep that and leverage that. From the sale-leaseback aspect it's almost been like a reverse merger where we've actually brought a lot of our product into Orlando.

NLf: And how is this acquisition creating new business opportunities and growth?

Kowalske: It broadens and deepens our capability. We were already very focused in the restaurant industry and we've used this as an opportunity to realign our front-end origination. We aligned it along two main channels--franchisees and franchisors. We took both the existing Trustreet origination team, and they became the foundation of that franchisor origination team, to which we added some of our other existing and appropriate people. And then we have a franchisee team, which has been focused on key operators in the restaurant industry. We've been doing that for more than 30 years now. Both channels are active users of sale-leaseback transactions as well as debt financing. It allows us to bring a full suite of products to those customers.

NLf: Will you keep Trustreet's 2,000-plus property portfolio intact?

Kowalske: The model they had, which is similar to the model that we're maintaining going forward, is originating the sale-leasebacks, quite often in large portfolios, and then doing both--maintain and manage that portfolio and then on a regular basis selling a portion of it off, either through the 1031 desk or sometimes through specific portfolio-type transactions. We'll continue to maintain that model to balance the portfolio, maintaining our exposure and taking advantage of opportunities.

NLf: What's your outlook for the restaurant and other net-lease property sectors going forward?

Kowalske: One thing I've learned is that you can't predict the restaurant business. This is an industry that is constantly changing. I think you'll continue to see demand in the industry, it's more a question of whether it's evolving more toward QSR or casual or such. What we like about the sale-leaseback in particular is it's a longer term product, generally a 20-year type product, and we try not to time the industry. We try to pick good concepts, good operators, and structure around those transactions. At least so far, we're still seeing steady demand out there. Certainly, with the capital markets displacement, it's caused some excitement. We're seeing as much opportunities out there as challenges.

NLf: I was going to ask about the capital markets situation. How is that impacting your company?

Kowalske: We've been through it before and we tend to take a fairly disciplined approach to the marketplace. When you get market displacements like this, it's going to impact certain areas. Certain areas will remain the same and there will be increased opportunities in others. We try to maintain discipline, and we're lucky that we have a large balance sheet and a healthy credit rating, so we have access to capital, and for the most part we continue to maintain our approach to the market and our underwriting criteria.

NLf: So is it creating more opportunity for you in terms of debt investments?

Kowalske: There was a lot of demand in the first half of the year, and we're still seeing a lot of opportunities out there. I don't know if the demand in absolute terms is as high as it was in the beginning of the year, but on the other hand I think the supply of financing is less in absolutely terms. So for us it's honestly about the same.

NLf: Are there any particular trends, whether in the restaurant industry or the real estate market in general, you're keeping an eye on?

Kowalske: We have a $14-billion portfolio and we see those trends evolving. Right now I think a lot of people are seeing some of the trends in casual dining, where same-store sales have been trending down. QSRs have been doing a little better this year so we watch and monitor that to see how it's doing across our portfolio. The biggest thing we've learned is when we're playing with strong concepts and strong operators, they tend to weather those storms pretty well.