Welcome to the 08:50 a. M. Session at Day two of Citi's twenty seventeen Global Property CEO Conference. This session is for investing clients only. And if media or other individuals are on the line, please disconnect now.
Disclosures are available here and on the webcast. For those in the room or the webcast, you can sign on to slido.com, enter code City17. This is room Regency one. To submit your questions, you don't have to raise your hand. We're pleased to have with us EastGroup, me, CEO, Marshall Loeb.
Marshall, I'll turn it over to you to introduce your management team and provide a couple of minutes of opening remarks, and then we'll begin Q and A.
Okay. Thanks, Manny. Sitting here to my right is John Coleman. John is our Senior Vice President really for the Eastern Part Of The United States. John covers from North Carolina, Charlotte market, Atlanta and all of our Florida markets.
And also with me is Brent Wood, who has a couple of hats with us today. He is our Executive Vice President over our Texas market. He's based in Houston. And then as of announced Friday at market close, our CFO, Keith Mackey, who's been with us for thirty seven years, is retiring July 31, so Brent will become our new CFO. Brent started in accounting, moved to Texas and is coming back to be our CFO in August.
So those are the gentlemen with me. EastGroup is an industrial owner, shallow bay, smaller industrial properties, infill locations. Our geographic markets are California, Arizona, kind of West To East California, Arizona, Texas, Florida, Carolinas and entered the Atlanta market a little bit earlier this year. Manny, I'll stop there and try to not take all your questions away by continuing with my summary. Thanks,
Marshall. So we've been kicking off each session with the same opener here, and that is what differentiates you from your property sector peers that you expect will result in outperformance in your stock over the next twelve months?
Okay. Twelve month time frame. Our where we fit within the industrial space, and I touched on it earlier, we're shallow bay. So we're 15 quarters at 95% leased or occupied or higher. So we don't see that trend.
And then it doesn't work great in this setting, but I've got some graphs with me that would show that what we hear 75% to 80% of the new supply in industrial is big box, meaning usually larger buildings on the edge of town delivered for kind of Fortune 1,000, e commerce, Whirlpool, FedEx, Amazon, those type buildings. So very few people I like our niche and how uncrowded it is. And we see industrial is being much more institutionally controlled this cycle. Infill sites, most of our developments are 10,000,000 to $15,000,000 developments. We're just doing and we have a different program than our peers do.
And where we're as I touched on, we're 95% leased, finished the year at actually 96.8% or 95.8% occupied is that the last mile. Amazon is just starting to enter this. That's where we would differentiate ourselves from our peers. It works for a broad section of people delivering carpet, beverages, whatever within a geographic region. It's a bet on our GNPs and then really the last mile.
We feel like we're that's much earlier in the e commerce cycle than big box. And so hopefully that all comes together in the next twelve months. We're also simply because we have a little bit of Houston overhang that we've been working with at a lower multiple than many of our unfortunately of our industrial peers. So hopefully, that gives us a chance to cure it. We see Houston improving.
We're starting to see that turn. We're not feeling it day to day, but on the horizon, we can walk you through any number of stats where Houston is improving. We'll push Houston aside for
a second because we'll go back to that. But Let's take the e commerce for a second. And so if you look at your portfolio, you look at your leasing pipelines or however you want to quantify it, how much of that is coming from e commerce and the last mile needs there versus the thought that it may come one day?
It's a small percent today but growing. And what I mean by that, we're seeing we're competing in and this is a major U. S. Market front like Amazon Fresh, that they're just starting the grocery delivery. We just signed in Houston I'll give you kind of anecdotal examples.
And I'll say that's what I say, it's a small percent. Costco is just now delivering furniture online in Houston. So Brent, that's this year, we signed a lease with Costco. John has a couple of tenants in his portfolio that are that it's a third party supplier, that last mile delivery for Amazon. And then the ones that are harder, where we say it's a little bit harder to measure where we see FedEx and the post office growing in our portfolio, certainly the post office people probably aren't writing letters, they're probably writing fewer letters, but the post office growing within our portfolio.
So we do we see that. And then really even outside of e commerce, our third largest customer is Mattress Firm, where we that's really a shift from where the mattresses and box springs used to be in the back of a strip center location, and it's just we're the lower cost alternative. So in Fort Myers, Florida, John just delivered a building a year ago to a mattress firm in Tampa, fully leased. Brent's got one in Houston, where they're running. You'll you'd order the mattress, and they'll have it to your home or not Manhattan, but would have it to your home or apartment in Manhattan that afternoon is really the format.
So we see a shift in retail altogether and then more and more e commerce, really all of our tenants have a website to some degree that they're selling off of now.
How much of that sort of shallow bay, smaller space stuff is then in more direct competition from a 3PL or some other type of distribution channel versus somebody doing it themselves?
I think we and we have a number of 3PLs. I mean that to me, that's where I'm not answering your question exactly. I hesitate answering because we know they're doing the work for other customers or and a little bit on the side, we were just seeing an article where like when you order off Amazon, a lot of what you will buy is from other retailers that Amazon really does the logistics of it that FedEx, you may have seen, announced similar program within the last month. So as FedEx does that, it will go through theirs, but it's really e commerce related there. So some customers will do it.
And then any number of our properties, we like being near an airport. That's a good anchor. It's distribution spot. And so that's where we would particularly end up with a lot of freight forwarders and 3PL companies.
Questions in the room? Brent, let's switch over to you. First on the CFO role. I remember when Marshall joined here at EastGroup, I think a lot of discussion focused on the fact that you liked being in the field and you wanted to run a region. So that's kind of why maybe you didn't raise your hand, maybe there's other reasons involved for Marshall seat.
We're happy to have Marshall here. But sort of what has changed since then that now you've decided to move to corporate?
Yes. Well, first of all, that's been a number of years ago, maybe three plus years before that. But it's really, I would break it down personal and professional level. On a personal level, my wife and I both All our family is still there.
Our kids have gotten older. They've drifted back. I've got a son that's a freshman at Ole Miss, a daughter that's graduating high school. She decided she's going to Ole Miss. So a lot of personal factors, aging parents and all those sorts of things you don't really want to hear about, but there were personal things that drew us or had a desire to want to go back.
And then on a professional level, you're right, I've enjoyed for fifteen to twenty years now being a dealmaker for East Group. But when Keith announced his retirement, we've talked off and on through the years and the Board and going through their process approaching me and my wife and I thinking about that. And then you reflect on do I want to be a dealmaker for another ten, twenty, thirty years. And we came to the conclusion that it would be something, I think, a different challenge for me, just a different opportunity to do things and go back home. Marshall and I, when I started with the company in 'ninety six, Marshall was with the company then.
And when after I started with the company as an Assistant Controller, Keith Mackie, our CFO, hired me. After about one years, point I was given the opportunity to move over to the asset side. So I was happy at that time to put my CPA hat down and wear another. But I think all of that gives me a skill set though, Manny, that maybe is diverse. I've done everything from property accounting to reconciliation to 10 Qs, 10 Ks then to buying land and developing property.
So I look forward to it and I've got to get myself replaced in Houston, but then spend more time in Jackson coming up in probably beginning April, May and then I'll physically move my family back over the summer in between school and that type thing. So And I just look forward to it. It's life, you never know, you get in the fork of a road and you look each way and you pick a path and I'm excited to do this, happy to work with Marshall. And we don't have a CIO role within the company. We're very horizontal, which John and I have enjoyed as being field growers having it that way.
So I look forward to being a sounding board with Marshall and John and the other guys in the field talking strategy and what we're doing and what path we're headed as a company. So I still think I'll have a little bit of a hand in deals in that sense, but look forward to it.
And if we think about backfilling that Houston role,
how are you approaching that? We've got we for many years as part of succession planning, John and I and our counterpart in the West Coast, we periodically would give to, at the time, David Hoster, our former President and CEO, and then Marshall, a list of names that if we got hit by the proverbial truck names that we felt like, hey, you guys can call these guys and this would be the starting point. So we have bright, young internal guys that work under me in Texas. I have two Vice Presidents. And then there are some very bright qualified people in Houston and in Dallas.
And I wouldn't see that I would necessarily have to be replaced in Houston. So we'll look in both those markets and I've got a list of names I want to now that we're public, can reach out to and we'll go through a process and I'm very confident. I'm not leaving EastGroup, so it's clearly in our best interest to make sure we have the right person. And once we get that taken care of, then again, I'll begin to segue into my new role.
And let's just stick to Houston. Give us a quick update since the calls, any changes you've seen?
Well, now I'm segueing in that CFO role, Manny. I'm not really talking about Houston anymore. Can we
call in Keith Mackey to That's talk about right.
That's right. Now Houston on the whole, the industrial market has held up very well, 5.1% vacancy rate per the CBRE reports at year end. It's had positive net absorption through every quarter through now 2.5 of the oil downturn. The under construction spec development pipeline is down to 2,400,000 feet, which is frankly fairly immaterial relative to the market size. So from that context, it's been very good.
The one challenge we've had specific to EastGroup is that we've had the unfortunate timing of 2016 and 2017 being heavier than normal rollover years for us. We've been in the 17% plus range. And a lot of our holdings are in the North submarket, which are up near the airport. And so that is the location of a lot of 3PLs and freight forwarders. And those have tenants that have been more prone to downsizing when their lease is rolled.
Their contracts with a Halliburton or a Schlumberger or these different oilfield providers have slowed. So they're more it's easy for them to contract. So we've had some musical chairs. That being said, we there's still a lot of lease velocity in the market. We signed 30 leases last year for 835,000 feet.
20 of those were new and 10 more renewals, which is the inverse of what we would want. This year so far, we've signed 10 leases for 340,000 square feet, two of which have been, as Marshall alluded to, Internet fulfillment last mile type tenants, so good to have those. And so we still have we've gotten our role this year under 10% now for the remainder of the year. Amongst that are a fair number of known vacates. So we've got a block and tackle through the remainder of this year, but then looking into 2018, we only have a 7% role.
There's a general optimism in the market. Oil and gas company, the rig rate counts up quite a bit from its low. There's a general positive sentiment within the oil and gas sector of the new administration in terms of permits and environmental clearances and those type of things. So there's a general optimism. So I think we're looking at the end of the tunnel seeing a light and feeling positive about it, but we'll have some still some bumps and bruises through this year to get to the end, but we're headed in the right direction.
On the deals that you got done this year, what do the stats look like?
The stats look similar to last year. We're on you'd much prefer to do renewals because you've got more leverage. And even if market's lower than what the tenants paying, they don't tend to negotiate quite that heavily. But being that seven of the 10 were new, meaning they backfill vacancies, we'll continue to show a little bit of backward movement in our GAAP rental comparisons. And I'm going to say that's probably going to remain like it was last year in that 5% to 10% on average.
Now we may have a quarter where it blips because we only had a handful of transactions, but I think on the whole, we'll be in that range. But good term, good credit. So other than some rent and free rent deterioration, looking good beyond that.
And my comment, Manny, I'll say on Houston, if I can,
that Well, he's CFO now, so
Yes. Where I and I'm the optimist on this, it feels to me that usually I would walk into a room at the city conference and people would say, Marshall Industrial EastGroup Houston. That was the word association. And a couple
of years, you've I heard some harsher words, but
I want
to say
the ones I'll repeat here. Thank you. I'm glad you'll stick up for me then. But what I would say is with Houston, so we're down from 21% of our NOI a year ago first quarter to 15 this year and it will be below 15% as our projections for the fourth quarter this year. And then as Brent mentioned, just with the rig rate count up, oil and gas prices and our role is under 10% for the balance of this year, under 10% next year.
The rig rate count is up. Natural gas prices are up. Oil prices are above breakeven. Oil and gas companies are hiring again. And then in a new administration with Secretary of State from ExxonMobil, Department of Energy, all the things like that, it will be interesting to me to see as it really wasn't until mid-twenty sixteen when we felt the downturn in our portfolio in Houston.
So Wall Street was a good year plus ahead of where we felt it in our portfolio of worried concerns about Houston. It will be interesting to me on the way out of this downturn as Wall Street get ahead. We're not Brent and Kevin and the team aren't feeling it day to day, but is Wall Street ahead of where we feel it? Which if so, we feel like we're starting to see that light at the end of the tunnel in Houston. It may be 2018 or the back half of this year, but that things are turning in that sector.
So that to me, when you say what do you think could help you outperform your peers in the next twelve months? I think if sentiment changes on Houston or what should feels like at least in the oil and gas industry, there's, was it $27,000,000,000 invested in the Permian Basin and land acquisitions just the second half of last year. So all those things feel positive. And if the market turns, it will be interesting to see.
So in conversations with tenants or potential tenants, do they approach it from a some type of magical crude oil number? Do they think about sort of what their needs are in two years and that's just what they're signing on? Like how do they approach the leasing or the conversation decision? How has that changed?
Tenants are much less sophisticated in that analysis than we would like to think or project. The end of the day, at a local level, they're looking at how's my bottom line, am I growing, am I contracting, does this space fit me? And that at the bottom line is the decision making They're doing it. As they're looking at space, if they are moving, they may be giving consideration to do I need a little more space and that type of thing. They're generally a shorter term view.
Does it fit me now? Do I feel good about where my business is headed and they're Our average lease would be four to five years. So again, they're not looking too far out into their crystal ball. So the good thing is that, again, tenants general sentiment is turning positive.
So however that translate into their decision making in terms of leasing space, it's again, it's gone positive.
Questions in the room? Everyone's going to be shy. Shy people go to Slido. Talk about global trends. Do you think that that sort of more of the macroeconomic stuff that we talk about, especially with some of your industrial peers impact your markets and your smaller spaces as much as it does the big box and larger demand?
Probably, guess, kind of yes and no. I mean, one thing and we've and everybody's speculating on this, we think driverless trucks or when we think global trends or maybe this is where you're going manual, for example, it's going to happen probably before driverless cars in the sense that there's a shortage of truck drivers and there's a limit per hours of days. If we all ran a trucking firm, you'd be very much in favor of driverless trucks. I think for us, it will affect us less than our peers, meaning that what it probably means is our best guess at this is better things for the ports of L. A, Long Beach, West Coast ports because it will be faster to get goods with a Peloton of trucks that can go twenty four hours a day to the East Coast than it is today.
But still, when you get to Tampa or when you get to certain of our markets, get to Dallas, there's got to be someone that basically disassembles that inventory almost like a train and puts it on a van or smaller truck to get it to your house to get you to sign it to unload it. So from that end, it would be a bigger disruptor for those large distribution centers than the infill locations. I think within ours, we've kind of looked to see like where does the disruption come. We our overall, maybe if I backed up to your original question, bet on EastGroup is really a bet on the GNP of the markets we're in. So with an infill location in Tampa or San Antonio or Charlotte, it's just that there's going to be 5,000,000 people in those cities ten years from now.
And if that happens, we'll be able to push rents and we try to build as flexible a building as possible, whether it's manufacturing. If there's a border tax and manufacturing gets the supply chain gets disrupted, move back into The U. S, we would lose any number of our freight forwarders or 3PL, but we also have light assembly, light manufacturing within our building. We don't have heavy industrial kind of manufacturing buildings, but we could see light assembly and things like that. So when we try to think about emerging trends, our goal is to be in such fast growing cities and it feels like there's probably and our guess, when you look at the country, I'll move it away from politics, there's probably 25 cities that have job growth.
And if you're not in those 25 cities in The U. S, you see struggling economies in small places in the country. And if you're not in that they're not all Sunbelt, but a lot of those major markets where it's just a hub of jobs, that's kind of how we're hoping those markets. There'll be disruptions, but with growth that we'll manage our way through it.
Development opportunities in that light, do you see yourself intensifying your exposure in each of those markets?
Yes, we do. I may bring John in, if you want to, if it's okay, I'll let John talk about, I mean, we're seeing great good opportunities for development.
Yes. I manage the Eastern Region for the company. And just editorial note, looking back a year ago, we've had a very strong twelve month run. And as I look at my markets right now, we are as strong or stronger across the board in each city. Positive drivers, the fundamentals for positive net absorption are up, vacancies are down and rental rates continue to increase.
Then as we look forward, we still think we've got plenty of runway for that to continue. In the Eastern Region from a development perspective, I have ongoing operations right now in Orlando, Tampa, Fort Myers and Charlotte. Each of those cities, have active buildings under construction. What's transitioned when we look at the health of the market I see now where I used to have a vacancy on a development, I'd have one prospect we're trying to negotiate a deal with. In Orlando, for example, we delivered a building in January, 50% leased.
The remaining vacancy, I've got three prospects that are all proposing to take that vacancy. I have the next phase just released or under construction that if the prospects that I have that we can accommodate, we will try to shift to that new phase of development. So very, very strong dynamic in the market. One thing we've we also added a development site in Dade County. In November, we closed on 61 acres, North Dade County, it will be our first new development in Dade, and we can accommodate 850,000 square feet going through the entitlement infrastructure, permitting and design right now.
And by the fourth quarter, we'll be under construction with our roads and first phase of the building.
Kind of the other side of development, I'll speak for Brent, but it's been sometimes surprising we've had investor meetings and probably more international investors with oil and gas, how bad is Texas? And what we would say is that and you probably know the economies there, the city economies are totally decoupled what we see within Texas. The Dallas has absorbed over $20,000,000 per year for the last couple of years. I mean, it's doing well. Austin, we're 100%.
So we're building in San Antonio, our Dallas developments. And really, the pain we felt in Houston, really we public market a couple of years and the field maybe nine months, we're not feeling that at all in San Antonio, Austin, El Paso even, which is it's 1% of our NOI. That's one we have where if you build a wall, have a border tax, that's certainly an economy that relies on Mexico, but we hit 100% occupancy in El Paso for the first time in a few years, fourth quarter last year.
I would just add that we have a Sunbelt strategy and I think there for a period people are saying we had a Houston strategy and it's been very gratifying for us that I think people thought when Houston slowed down with Houston EastGroup's development pipeline would just dry up and that's their primary grower and it's done the opposite. I mean, again, diversification, John's markets have rebounded. He's done a great job and again, San Antonio, Dallas, other markets have stepped in and more than backfilled that. So it's just been very satisfying to be able to have anecdotal examples of here truly is our development program and it's way more than that one market.
If we're sitting here without as intimate a knowledge of sort of the ins and outs of each of your markets, we look at broker reports, we see stuff like Dallas sort of maybe on the precipice of oversupply. You talk about it really positively and building not just in Dallas, but sort of close to Dallas markets. How do we get comfort in sort of the supply and demand side, I hope, of some of these markets between your smaller, I'm going to call them niche here, though they're probably not spaces versus the big boxes and the stuff that's more commodity tilt up and get it done stuff?
And I think probably maybe a two part answer. One, as Brent mentioned earlier, mean, I like how our company is structured. We don't have a Chief Investment Officer or Chief Operating Officer. We're pretty flat. We also really don't have an IR Officer.
So what I'd say is, one, welcome to reach out to us. I think I'm trying to answer your question because I think you'll see supply numbers in Dallas, and they'll give you pause. They do us, for example, or Atlanta or some of the markets. But it's really that deeper dive of, okay, what's being delivered, what we'll look at is how much of that is big box because our average tenant size is growing, but it's about 26,000 feet. So to take 26,000 feet and a half a million square foot building on the edge of town, they would be building you a bowling alley.
It just won't work. It may as well be multifamily development or hotels. They can't they don't aren't structured or designed to accommodate. So I would look at, if you can, through the CBRE or Cushman or whoever's research you're looking at, of this 20,000,000 square feet in Dallas or the 17,000,000 square feet in Atlanta, for example, how much of that is big box development? And then if you could look at when we look at Houston, it's helpful to see a lot and the supply is back down to where it was in 2011.
And where there is new supply, it's the Eastern side of the city, down by the port, kind of downstream oil and gas or Southwest, where we really our properties aren't concentrated. So those, to me, and you know, timing would be, what's the new supply consist of, if you can get to that level and then where is it? And that's where really we'll among ourselves and kind of get to what's our true competitive set. And that's usually a small fraction of the overall supply.
I would just add to that, Dallas Pacific, 19,000,000 square feet under construction, well, it had 24,000,000 square feet of net positive absorption and vacancies down, rents are up. So we're not seeing any signs of it's not going to last forever and you have your eyes open for those signs of a slowdown, but we're not seeing supply outpace demand at this point. Also, you look at that $19,000,000 to Marsh's point, you break it down, you're going see a lot of bulk construction down in the Great Southwest submarket, south of the airport. We don't do anything there. Over at the intermodal, Southeast Dallas way down 45,000,000 and getting a lot of construction there, we're not active there.
Hillwood up at Alliance, Far North Fort Worth, a lot of big box construction, we don't play there. So when you break it all down, you look at where we do have our properties located at, again, you break it down, there's very little multi tenant, and that's really our fastball as a company, the multi tenant business distribution and that is still showing really good signs of life.
If you look at the year end stats for Florida, all the property that was under development, what surprised me was that 50% of it was already pre leased or build to suit. So that of that inventory, only half of it was going to come to market as a spec development.
I'll get to you in a second. Brent, to your comment earlier on building new markets, Houston has come down. Do you think that you'd be going into Atlanta right now if Houston were doing well? You made the comment of everyone thought that we were a Houston development company. And so if Houston hadn't slowed and you could continue to be a Houston development company, would you have gone sort of outside of the current markets and the current wheelhouse to build in a new market?
I'll let Marshall answer. Mean the short answer is yes. I mean, we're always looking at markets within our footprint. We wouldn't be looking outside our footprint, but Yes.
And I would agree. I mean, I think we probably if Houston had stayed red hot, and we like Houston. We want to develop in Houston again, but at 21%, kind of when some of the conversations we said, it's almost like if you had a good stock in your in one of your portfolios. How much Google do you own? How much Apple?
I mean, is it 21%, 25%, 30%? At some point, even a good market can get over concentrated. And in Atlanta, John had worked in the industrial market for fourteen years and we spent really about two years meeting with brokers and researching and turning over stones and getting beaten out on deals and passing on deals. And we think it's it reminded us a lot of Dallas, where it's a large market, very competitive, but most of the new delivery wasn't where we felt like our product would work. So we felt like we found our niche.
Time will tell, but we felt like we found a niche in it. And it helps us also long term create that runway for Houston to keep doing what we do well there.
In terms of supply, can you talk a bit about why it hasn't been there for that small base segment? And should we expect that rental growth, notwithstanding Houston, would be stronger for your type of properties given that the supply reaction hasn't been there for them?
Yes. Maybe a good question. There are probably two answers or it's kind of two parts to that. One, we think supply most of our peers are larger than us. And so you've got more capital to place.
And most of our buildings, we'll build a subdivision, we'll build a park and we'll build it one building at a time, which we think kind of taper supply into demand. And so our we think our development program is less risky than our peers. But if you're a large institution, I mean, even on the private side, if you're Clarion or AEW or someone, putting out and building those buildings, one, there's the land is not available. It's awfully hard to find the good park sites because we're the first guys to get priced out of land usage compared to retail, multifamily. And then it's like working for minimum wage for them.
I mean these are our theories. It's just it's hard and you don't you can place more dollars more quickly on a big e commerce logistics center on the edge of town. So that's kept people out of our sector. And then it was even interesting as in a side was meeting with a group that was kind of private group that I knew and they do all property sectors. And they're asking me like, we can do anything, what would you do?
And I was pushing them because I said, would go buy even smaller industrial, lease it up and then flip it. And their comment, they work with friends and family and kind of small institution is that it's kind of the same thing. We can make more money buying a suburban office building, getting it from 50% to 85% leased and selling it that if we go build or buy a small industrial building, even if we're right, the profits are so low. So it's really if I understood from the large entities why they're not in our space, it was an eye opener to me to go, wow, why aren't the three and four people are the smaller firms playing in industrial? It's not that no one does.
It's just same amount of time and you can make more money elsewhere. In terms of rent increases, I think we I think both sectors will see them. Our rents are usually higher than, say, the large building because the land is cheaper and it's more efficient. We'll build a building for $80 a foot, a big box maybe $60 a foot and the yields are about the same. So the rents reflect that.
We'll both raise rents. I think our risk long term of obsolescence is lower than a state of the art building on the edge of town because it won't be state of the art, the new cycle or a friend was just delivering an it was his third Amazon building to build, finishing it up and they had told him, we wouldn't build this building the same way if we were doing it today. So that was interesting for me to anecdotally hear that.
Any last questions? We'll go to rapid fire. What will same store NOI growth be for the industrial sector overall in 2018, Mr. New CFO?
Same store, I would say 3%. Yes, I was thinking 3% will be You're coaching them already? I would
say
He three usually disagrees with me.
3%. How much higher or lower do you expect private market cap rates for the industrial sector to be in twelve months?
I personally don't see a lot of upswing in cap rates. I think they'll be I don't think they'll compress lower, but I think they'll be very similar to today at low points.
Do you agree?
I agree. Maybe what we're hearing is cap rates are constant, fewer bidders. So maybe I'd say 25 to 50, maybe 50 at the high 25 basis points higher, so probably in line.
And then rank the best real estate decision to make today, buy, build, sell? Build. And then the other two, buy or sell? Build
and then I would say buy. Thank you.