Looking back, probably the biggest personal highlight of the whole experience was my beautiful 17-year-old daughter surrounded by her two brothers ringing the bell on the New York Stock Exchange (see photo, opposite page). That was a year ago. That is a picture and a highlight. I'll always remember it.

Professionally, I've had the pleasure of working for a number of great companies. But I think in Spirit's case, it was really exciting, as well. The thing about working on other matters—like a bankruptcy, which I did at GGP—is that you know it's got an end one way or the other. When you take an engagement that has an IPO as an outcome, it's a binary thing. You either get it done or you don't. To be able to convince the institutional investment community of the merits of Spirit Realty Capital was certainly a great personal and professional achievement.

ROTH: Looking back on the IPO, is there anything that stands out to you as the best piece of advice you got during the process. Is there anything you would have done differently?

NOLAN: As part of our preparation for going public, we put an entirely new board together, which I had the pleasure of spending a couple of months doing. The first executive I convinced to join us was our lead director Rick Gilchrist. And I remember Rick sat me down right before we launched the road show and said: “You are going to be off on this two-week roadshow, and you will meet with a lot of institutions. Some will be skeptical, some won't. Some will be engaging, some won't. But you don't know which one will put you over the top.”

His advice to me was: you need to treat each of those meetings as if it was the difference between getting the transaction done and not getting the transaction done. I thought that was terrific advice. As it turned out, we had 75 meetings over the course of the roadshow.

ROTH: Is there anything you would have done differently?

NOLAN: There isn't anything I would do differently. We put an excellent professional team together—Ernst & Young and Latham & Watkins, working with the Spirit management team here in Scottsdale. All of that came together and we were able to successfully convince the investment community that it was the right investment for them to make. And given that our total return since the IPO has been in excess of 30%, I am pleased we have been able to reward those investors that had confidence in us.

ROTH: Tom, you mentioned Rick and the board. It's fairly rare that a chairman has the opportunity to select and assemble the whole board of directors. Can you talk about the philosophy around boards—what you are looking for in terms of skill sets or experiences? How did you think of putting that slate of people together?

NOLAN: It was an interesting exercise. Even before you get to the board, you have to step back. The REIT industry, by and large, has been created by either families or portfolios that were held in private funds and ultimately were rolled up into a REIT or became merged into existing REITs. So you have longstanding management, ownership and board positions.

In Spirit Realty's particular case, the management team was really what I would call independent professional management. We were brought into an existing company. We did not have any economic ownership before. So there wasn't that kind of longstanding ownership that generally flows to the board membership.

I really had an opportunity to have a clean slate, and what I wanted was to be able to look the investors in the eye and say that I've assembled the best, most independent cast of professionals. We wanted a seven-person board and I wanted another CEO on the board. I wanted to have somebody who had been in the REIT industry—though somebody not currently in the REIT industry, meaning they were in the private real estate ownership side. I wanted at least one holdover from the predecessor board who would have institutional knowledge of the company. I also wanted somebody who represented our tenancy, because we have over 220 different tenants, over 2,000 properties, many of which are retail or retail oriented.

So on the tenancy side I was able to convince Nick Shepard, CEO of TGIF, to join us. I've already talked about Rick from the Irvine Co. I also recruited Dave Gilbert, the chief investment officer from Clarion Partners to join us from the private sector. We also had Diane Morefield, who came from Strategic Hotels, so I had a REIT CFO. While I've been in this industry a long time, I didn't know many of these people. I was able to convince the investment community that not only was there real talent on this board, but also that they were truly independent.

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From IPO to Merger

ROTH: I think everybody here appreciates that you had this IPO, went public, and within a very short time afterwards you, in the merger with Cole II, essentially doubled the size of your company. What were some of the unique challenges you faced in a merger of this size, so soon after an IPO?

NOLAN: We went public in September 2012, and naturally the board met a number of times before that, but they were really informal due-diligence meetings. Our first official post-closing full board meeting was early November 2012, and it was designed to be a completely informative and educational board meeting. The management team was going to take the board through our reporting package in some detail including how we look at the business, how we manage risk and how we identify transactions. We got through all of that, and I remember at the bottom of the agenda I had a little item—other matters.

I said I have one other thing that I want to bring up. There is a portfolio that is in the market, and I think we have an obligation to look at it because it's a portfolio of such high-quality assets, and so consistent with what we own. However, I don't want to be naive to think that, 60 days out of the box, we're going to be in a position to do anything of this magnitude. That board really encouraged the management team to take a hard look at it. They said if it fits and it is the right thing to do, don't let our relative newness scare you away from doing something that would be in the best interests of the company.

The management team got together after that and said: We really do owe it to our shareholders to be looking at this. I think part of the motivation was because it was the right transaction to do, but also because at those 75-plus one-on-one IPO meetings I talked about earlier, we listened to those institutions, in terms of the pros and cons of our offering and how those investors quantified certain company risk profiles. We thought this transaction would help ameliorate a number of those very quickly. So we had a lot of confidence that the transaction would be well received.

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ROTH: It's interesting to get so much input, especially from the whole public process, that you were able to meld into this great opportunity for you. Did you look at the nontraded REITs? And do you have any predictions around liquidity events for nontraded REITs going forward?

NOLAN: I have learned that things go in cycles. And there certainly has been a lot of activity in the triple net sector. Within a short period of time you had Spirit going public and executing the merger with Cole II. You have seen ARCP grow dramatically. You have the listing of Cole and of W. P. Carey. Now all of a sudden the market has gone from having a couple of public companies with a few billion dollars of market capitalization to a diversified industry with $50+ billion of market capitalization.

Now that the industry has that amount of critical mass, you aren't putting the genie back in the bottle. So, while I don't expect the exponential growth we have seen over the past year to be sustained, I do believe that the triple net industry has come of age and has substantial growth and profit potential in the years to come.