Earnings Call: Q3 2020

Nov 5, 2020

Good morning, ladies and gentlemen, and welcome to Essential Properties Realty Trust Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. This call is recorded and a replay will be available 2 hours after the completion of the call for the next 2 weeks. The dial in details for the replay can be found in today's press release. Additionally, there will be an audio webcast available on Essential Properties webcast at www.essentialproperties.com, an archive of which will be available for 90 days. It is now my pleasure to turn the call over to Dan Donlin, Senior Vice President and Head of Capital Markets at Essential Properties. Thank you. You may begin. Thank you, operator, and good morning, everyone. We appreciate you joining us today for Essential Properties' 3rd quarter conference call. Here with me today to discuss our Q3 and full year results are Pete Mavoides, our President and CEO Greg Seibert, our COO and Mark Patten, our CFO. During this call, we will make certain statements that may be considered forward looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in these forward looking statements and we may not release revisions to these forward looking statements reflect changes after the statements were made. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's filings with the SEC and in yesterday's earnings press release. With that, Pete, please go ahead. Thank you, Dan, and thank you to everyone who is joining us today for your interest in Essential Properties. During the Q3, we experienced a market improvement in rent collections as our tenants reopened their properties for business. In addition to this positive operating trend, we saw a stabilization in our cost of capital and a constructive capital markets environment that was conducive towards maintaining a conservative balance sheet. As we stated on prior calls, we wanted to see these circumstances occur before deciding to resume our external growth plans. As such, we began looking for attractive investment opportunities early in the Q3, which allowed us to invest 149,000,000 this quarter and another $73,000,000 to date in the 4th quarter. Looking at our 3rd quarter investments, 92% were direct sale leasebacks and 98% were transactions that involved an existing relationship. We believe these direct opportunities were a tangible output of the accommodative and relationship based approach that we use to navigate the pandemic with our tenant base. While our short term collections may have been higher had we taken a more aggressive posture, our deliberate actions have strengthened our tenant relationships, which should benefit the company over the longer term. In order to maintain financial flexibility and appropriately fund our pipeline of opportunities, we raised $294,000,000 of net proceeds in mid September. We would like to thank those existing and new investors that demonstrated continued confidence in our company for supporting us. In terms of portfolio stabilization, approximately 99% of our portfolio as a percent of ABR is opened and operating today, which compares to 93% back in early August and just 66% in mid April. In terms of rent collections, we collected approximately 90% of contractual cash rent owed to us in the 3rd quarter, including 88% in July, 91% in August, and 91% in September. For October, we collected 91% of contractual cash rent and have another 3% attributable to recognized rental deferrals, which are scheduled to end after December. The remaining 6% of contractual cash rent is allocated as follows: 2.5% is non recognized rent deferrals, which is mostly attributable to our 5 movie theaters that are leased to AMC Theatres 2.5% is unresolved, which is mostly attributable to Towne Sports and Ruby Tuesdays. In the case of Towne Sports, the tenant rejected our master lease on September 29. All Ruby Tuesdays is currently in Chapter 11 bankruptcy proceedings. The remaining 1% is attributable to lost or temporarily abated rent. Turning to the portfolio, we ended the quarter with investments in 1096 properties that were 99.4 percent leased to 214 tenants operating in 16 different industries. We had 7 vacant properties at quarter end, including the 3 fitness centers that were formerly leased to Town Sports International. As we have stated before, the value of our company does not reside in our leases. It resides in our properties and our ability to keep them consistently leased. Therefore, we see high and stable occupancy as a key indicator of that value. More specifically, we have seen solid demand for our vacant properties and we expect to find replacement tenants or come to an agreement with the current tenants in the near term. Our weighted average lease term stood at 14.6 years at quarter's end with only 0.1% of our ABR expiring over the next year and 3.5% expiring over the next 5 years. Our weighted average unit level coverage ratio was 2.8 times, which includes the full impact of 2nd quarter tenant financials. We would expect our coverage ratio to continue to migrate lower, albeit at a moderating pace as the pandemic continues to have lingering impacts on certain industries. Turning to the balance sheet. We finished the quarter with leverage of 4x net debt to annualized adjusted EBITDAre and excellent liquidity of nearly $600,000,000 Looking forward, with the pandemic causing on smaller tenants, many of our experienced middle market operators are seeing opportunities to purchase smaller operators and increase market share. This is generating an attractive opportunity set and growing investment pipeline for our company. While we are confident in our future prospects as we look to grow alongside these operators, we recognize that the pandemic is by no means beyond us behind us. As such, we remain diligent in our underwriting and highly focused on industries that have experienced minimal to no impact from the current pandemic. With that, I'd like to turn the call over to Mark Patten, our CFO, who will take you through the balance sheet and financials for the quarter. Mark? Thanks, Pete. Before I get into my prepared remarks, I'd like to say thank you to Pete and the Board for the opportunity to be a part of EPRT. It's a privilege to be a part of the terrific team Pete and Greg have assembled and to participate in the opportunity of helping to maximize value for our shareholders. As we reported in our earnings release last night, we're pleased with our Q3 results, particularly given the significant challenges presented by the ongoing pandemic. Our operating results for the Q3 of 2020 compared to the same period of 2019 included Total revenue for Q3 2020 increased by approximately $6,600,000 or 18.2 percent totaling $42,900,000 We also saw our recurring Q3 G and A as a percentage of total revenue trend down sequentially to approximately 13.5%. This has improved from both Q22220 charges in Q3, which was not associated with any impact from the pandemic, but was related to our ongoing efforts to selectively recycle capital, including adjusting the basis of 8 investments we expect to monetize in the near term. Net income as you can see from the release was $12,300,000 in the quarter. Our FFO was up $7,300,000 a 35% increase totaling over $28,000,000 with our FFO per share reaching $0.30 up from $0.27 per share in the same period in 2019. Our core FFO was up $4,700,000 that's an increase of nearly 20% totaling $28,600,000 which equates to $0.30 per share, a decrease of $0.01 per share compared to 2019. Our AFFO was up 3,600,000 dollars That's a 16% increase totaling approximately $26,300,000 with our AFFO per share equaling $0.28 per share. That's also down $0.01 per share compared to 2019. Our per share metrics for core FFO and AFFO were obviously impacted adversely by the adjustments we made to revenues in connection with the pandemic. In addition, the increase in our share count of approximately 10,100,000 shares from our completed overnight offering in late September also had a marginal impact on these per share metrics, while the numerator in these calculations don't reflect the deployment of that capital in the yielding net lease investments. Picking up on Pete's remarks regarding our collection levels, I wanted to mention that we had no additional tenants move into non accrual status in the Q3, meaning no additional tenants are being accounted for on a cash basis. And importantly, we collected effectively 100 percent of the $1,300,000 in deferred rent we were owed in the 3rd quarter from those tenants we accounted for on an accrual basis. Regarding our balance sheet, I'll highlight just a few points. With the addition of the nearly $150,000,000 of investments we completed during the quarter, our total assets at September 30 stood at nearly $2,500,000,000 Our unrestricted cash totaled nearly $184,000,000 Our long term debt remained consistent with the prior quarter, totaling $804,000,000 on a gross basis. In addition to our oversubscribed overnight offering that generated approximately $184,000,000 of net proceeds, we also generated over $27,000,000 of net proceeds from our ATM program, selling just over 1,500,000 shares at a weighted average price of $17.88 per share. Our net debt to annualized adjusted EBITDAre, which as Pete mentioned was 4x@quarterend, continues to be well within our targeted range, providing ample runway for continued investment growth. We believe this provides us with a strategic advantage, especially given the challenging macroeconomic environment created by the pandemic. Our return to growth is supported by our significant liquidity position, which totaled approximately $580,000,000 at quarter end, including $189,000,000 of available cash and the $400,000,000 of available capacity on our unsecured line of credit. That excludes the $200,000,000 accordion feature that we have on the credit facility and an additional $70,000,000 of borrowing capacity via an accordion feature on one of our 7 year unsecured term loans. With that, I'll turn the call over to Greg Seibert, our COO. Thanks, Mark. I want to start with the ongoing impact of the pandemic on our portfolio, which we have summarized on Pages 1516 of our supplemental. As of late October, 87% of our portfolio ABR was open, 12% was open on a limited operating basis and 1% was closed, which is largely concentrated in our properties leased to entertainment and casual and family dining operators. In terms of rent deferrals, we have granted rent deferral request to tenants representing approximately $18,000,000 in rent. As of the Q3 end, we had approximately $3,900,000 of deferred rent remaining for future periods, of which we only expect to recognize $1,100,000 in future revenues. So the vast majority of deferrals are behind us and we have begun to collect repayment of these short term concessions. Moving on to investments. During the Q3, we invested $149,000,000 into 19 transactions and 50 properties at a weighted average cash cap rate of 7.1%. These investments were made within 7 different industries with over 85% of our activity coming from 4 industries: auto service at 36%, car washes at 28%, grocery@10%, and quick service restaurants@10%. The weighted average lease term of our 3rd quarter investments was 17.6 years. The weighted average annual rent escalation was 1.5%. The weighted average unit level coverage was 2.8 times and our average investment per property was $2,900,000 Consistent with our investment strategy, 92% of our 3rd quarter investments were originated through direct sale leasebacks, which are subject to our lease form with ongoing financial reporting requirements and 79% contained master lease provisions. From an industry perspective, quick service restaurants remain our largest industry at 14.1% of ABR, followed by car washes at 13.3%, early childhood education at 13.3%, medicaldental at 10.7% and convenience stores at 9.8%. We continue to view these business segments as Tier 1 industries for essential properties. And going forward, we see our concentration of properties increasing in auto service, equipment rental and sales, pet care services, building materials and grocery. Conversely, we expect our concentration in the casual and family dining, home furnishings, health and fitness and movie theaters continuing to decline. In aggregate, these five industries now represent 17.3% of our ABR, which compares to 31.7% in the Q2 of 2018, which was our Q1 as a publicly traded REIT. From a tenant concentration perspective, no tenant represented more than 3% of our ABR at quarter end with our top 10 representing 22.6% of ABR. In terms of dispositions this quarter, we sold 14 properties, including 3 vacant properties for $19,600,000 in net proceeds. When excluding vacant properties and transaction costs, we achieved a 7% weighted average cash cap rate on our dispositions in the quarter. As we have mentioned in the past, owning properties that are highly liquid is an important aspect of our investment discipline as it allows us to proactively manage industries, tenants and unit level risk within the portfolio. With that, I will turn it back to Pete for his concluding remarks. Thanks, Greg. We are excited that the operating environment and capital markets have allowed us to pivot away from managing through the pandemic with our tenants and properties and move forward with capitalizing on our robust pipeline of accretive investment opportunities in order to drive earnings growth. We look forward to the balance of the year and continuing to put pandemic related issues behind us as we continue to accretively build our portfolio of granular net leased properties. With that, operator, please open the call for questions. Thank you. We will now be conducting a question and answer session. Our first question comes from the line of Haendel St. Juste with Mizuho. Please proceed with your question. Yes. Thank you. Good morning. Good morning. So, Good morning, Mike. So, a question on, I guess, the portfolio. About a quarter of your revenue is tied to travel centers, movies, gyms, entertainment. So curious on perhaps where you'd like to get that over time. In your prepared remarks, I think you mentioned reducing movies and gyms, but not childhood centers. So maybe you could discuss some of these as well as potential portfolio shifts post COVID, post vaccine a bit more. Thank you. Sure. And thanks for that. And I think Greg gave you some stats in the prepared remarks and we've very deliberately been focusing our investments in industries that we saw as durable and had real estate characteristics that we liked. And you saw that trend really since pre pandemic and taking those 5 industries down from 37 to 17 was material. And quite frankly, we haven't invested in a movie theater since coming public. Our gyms have been growing at a much slower rate as has our casual and family dining. We've been lightening up both through growth as well as disposition. Notably, our kind of generic retail exposure has been coming down furniture. And so we've had a very deliberate shift in our industry mix. The one outlier to that that you pointed to is childcare. We like childcare. We think that industry has good place in our portfolio and has good operating fundamentals. Obviously, it was impacted pretty significantly by the pandemic, but our operators in that space have been recovering nicely and performing well. And so you should expect to see us continue to invest in child care. We have not been investing in a material way in any of those other industries and you should expect to see that continue. Thank you. Thank you. That's helpful. And maybe can you discuss a bit more of the investments in the quarter, cap rate here in the low 7s? We've heard some peers discuss higher cap rates and have even seen some investment yields north of 8%. So maybe you could discuss some of the pricing trends you're seeing in the assets that interest you. Is this low 7% rate that we actually expect to continue near term? And is the one $150,000,000 ish you acquired in the quarter a good run rate to think about near term? Thanks. Sure. And so in terms of volume and cap rate, generally our discussion around that has been pointing to our trailing quarterly average, which is pretty consistent with this quarter. So I think that's a good indicator of where we're set up to transact. In terms of cap rates, we generally have been telling people to expect us to transact in kind of the low to mid-7s range. And clearly, this quarter at 7.1% is towards the low end of that range. And I think what you see there is, we are deliberately focusing in industries that had relatively de minimis impact from the pandemic, notably auto service, QSRs and car washes, and really staying away from some of the higher cap industries that were adversely impacted, such as movie theaters and gyms and furniture. And so I think driving that cap rate down a little bit is the industry mix and the selection of tenants that we did during the quarter. But from a going forward perspective, you should continue to see us transact in the low to mid-7s range at a pace that's relatively consistent with our past practice. Got it. Got it. Thank you. Thank you. Our next question comes from the line of Nathan Crossett with Berenberg. Please proceed with your question. Hey, good morning guys. Just wanted to get your thoughts on if we went back into a potential lockdown, how that may affect your pipeline? And also, was there any kind of elevated deal activity from people trying to get things done before the election? Sure. I would say there's elevated deal activity really from what we saw as kind of a backlog of 6 months worth of deals. A lot of our relationships and operators put M and A and development and other expansion on hold while they focus on grappling with pandemic and as we come out of the backside, I think they've restarted those growth plans and that has created a backlog of opportunity. We have not seen a lot of election related sales and there may be some here in the late a bit late in Q4, but we have not seen that to date. In terms of shutdowns and a potential impact to the pipeline, I would say, we're making 20 year investments in industries that we think to be durable and lasting. And so I think temporary shutdowns really aren't going to weigh heavily on that. In my in our view, shutdowns would be very localized and temporary and shouldn't have a massive impact on our pipeline, may have some impact on the portfolio, but we'll monitor that and obviously continue to work with our tenants as we navigate through this pandemic. Okay. Thank you. And then I was just going to ask one on the theater assets. I know you only have 5 AMCs. But for your property specifically, are there any potential other use cases, I guess, in a worst case scenario for them? Yes. I think, we have 6 theaters, 5 of them with AMC on average. They're 50,000 square foot boxes with contractual rent of about $14 $15 a square foot. They're generic real estate. And to the extent that they're I think the first course of action to the extent that one of our operators were to go out would be a relet to another theater operator. And they are theaters and we believe firmly that theaters will survive and have a role and continue to exist. But to the extent that we had to gut them and reposition them into other uses, at the end of the day, there are 50,000 square foot boxes with a very reasonable rent per square foot. Okay. Thank you. Thank you. Our next question comes from the line of Sheila McGrath with Evercore. Please proceed with your question. Yes, good morning. Pete, I was wondering if you could comment if there's any evidence that your target tenant base may be more prone to seek out raising capital via sale leaseback given the pressure from COVID that might bode well for more acquisition opportunities as you look ahead into 2021? We haven't seen that, Sheila. Generally, our middle market tenant base one of the reasons they're in our tenant base is that they see the benefits of sale leaseback transactions and view the weighted average cost of capital of our capital as favorable to their own weighted average cost of capital. And at the margin, the pandemic hasn't shifted that mindset. But I think there will be some of that as alternative sources of capital become more expensive. Kind of against that is rates are really low and borrowings really cheap to the people that can get it. I would say that the people that the universe of people that can access traditional bank financing is probably a bit more limited as a result of the pandemic. So I guess a long way of saying we haven't seen it. We would expect to see some of it at the margin. But regardless, we have plenty of opportunities and a robust pipeline. Okay, great. One more. Just I missed what you said on Town Sports. They rejected the lease, but did you say you already have a tenant? I did not. But what I've said in the past, no worries. Listen, we saw that bankruptcy coming for a long time and we've engaged with the market to find tenants and we have robust demand in those properties and those gyms and we would expect to have them re let in short order, which is kind of what we said on the call that there's good demand and we have a number of discussions going on and those sites will be hopefully be productive here shortly. Okay, great. And one last quick one on Ruby Tuesdays. How many units do you have there? And do you have any visibility on their path forward? Do you expect to get those buildings back vacant? Or what is your expectation? Yes. I would listen, that's an ongoing negotiation with that tenant. What I would say, we have 7 sites leased to them in a master lease. And I would say, just generically, we're confident in the basis in our assets and that they have good reuse potential. And to the extent that we don't come to a favorable outcome with Ruby Tuesdays through this process. Much like Town Sports, we're confident that there'll be another user that would pay us similar levels of rent in those sites. Okay. Thank you. Thank you, Sheila. Thank you. Our next question comes from the line of Katie McConnell with Citigroup. Please proceed with your question. Great. Thanks and good morning. So based on the R and D fallout that you've already seen to date, can you elaborate on the demand that you're seeing to release that vacant space today? And based on any progress you've made so far, what are you expecting on spreads? Yes. Listen, I would argue that we haven't seen a vacancy fallout. At quarter end, we were over 99% leased and we were had 7 vacant properties, 3 of which came to us on the last day of the quarter. And so I think and we tried to say this in our prepared remarks that there's good demand for our properties and we have a very robust ability to keep these properties leased and occupied as evidenced by our very high occupancy. So it's an important part of our underwriting is to have fungible assets that have ready reuses and have the ability to re tenant sites when they do become vacant. And I think our team has done an excellent job of maintaining a very high occupancy in our properties. Okay. Thanks. And then can you provide some more color on your strategic plans for the 15% of tenant closure where you expect a slower recovery? And for those categories, how much of the unclunted 3Q rent have you referred at this point versus have left unresolved where we could potentially see fallout down the line? Sure. So the slower recovery industries, the casual dining, the health and fitness, entertainment, I would say the gyms, they're open operating and returning to profitability. Our entertainment sector has which is largely trampoline parks and bowling alleys. We've seen them rebound very nicely and return to profitability. And our restaurants are doing well in both the casual and dining, where the slowest recovery at 2.5% of our ABR really is in the movie theaters and I think everyone can draw their own conclusion on that. Our view is the recovery there is not necessarily pandemic related. It's more related to release the release of content and it seems like that is on the horizon which should bring those sites back open and operating. And so we have very little left to be deferred. We had some commentary on the call. I think it's about $3,000,000 and only $1,000,000 of that, one point something is going to be recognized into revenue. The vast majority of the balance of that is largely attributable to our theaters, which is AMC. Okay, great. Thanks. Thank you. Our next question comes from the line of Greg McGinnis with Scotiabank. Please proceed with your question. Hey, good morning. Greg, just to make sure I heard correctly, collections have held consistent 91% for the last few months. It sounds like deferrals are starting to be repaid. So does that mean we could see collections number tick up closer to 94% in November, given those repayments? Well, the repayments aren't going to really that's not ABR. The repayments really is prior period rent that was recognized, not collected. So that's really just a cash flow number. The paid ticking up from $90,000,000 to $94,000,000 is really going to be the burn off of the recognized deferrals, and which is 3% and that will happen. I think most of those deferrals probably go through the end of the year. So our return to that 94, it's going to be slower because those deferrals are in place. That said, we're recognizing revenue. We think their money good and those tenants are going to pay us as contracted. So in our view, there's not a big differential between the 91% and the 94% in those 3% recognized deferrals. Right. Okay. So it's basically just reflecting different deferral agreements that were maybe in place for Q2, but not Q3 and vice versa. That's why we're seeing that coming from there. Yes. They're the same deferral agreements that were in place. They just span through the end of the year. Okay. And then Pete on the acquisitions front, I have to imagine that you kind of weren't up to full speed this quarter given pandemic uncertainty. But obviously balancing that against your comments on the backlog of opportunities and the return to kind of pre pandemic level acquisitions, just curious how we should be thinking about kind of that level of acquisitions into 4Q and obviously not guidance on 2021, but how you're feeling about it? Yes. Listen, I think you're right. We got started in the quarter late, largely as a result of kind of working through August, wanting to see sustained collections and stabilization in the cost of capital. But I think if you look at the $149,000,000 in the quarter is kind of right on our trailing 8 quarter run rate, it's pretty indicative of our ability to scale the pipeline. We feel good about the pipeline. If you look in our Q that we filed last night, subsequent to quarter end, we've closed about $75,000,000 And so and we feel good kind of looking at the back half of the year here or back quarter, excuse me, almost there. All right. Thanks very much. Thank you. Thank you. Our next question comes from the line of Alexander Perkinakis with Bank of America. Please proceed with your question. Hey, guys. Thanks for taking the question. Sorry if I missed this, but how much quarterly revenue is on a cash basis? And is Town Sports included in that? Yes. So Towne Sports is on a non accrual basis. This is Dan Donlin. So you should look at the disclosure on Page 15. You should assume that everybody in their non recognized unresolved loss abated bucket, so it's all on the 6%, give or take, is all on non accrual status. So they're all on cash accounting. Okay, great. Thank you. And then could you just give your outlook for bankruptcies over kind of the next 12 months? And how's your tenant watch list changed over the course of the pandemic? Yes, I would say, at the onset of the pandemic, our tenant watch list was comprised of all of our tenants and really focused on the industries and the sectors that we felt to be most As we sit here today, I would say our main focus is on the 6% that's on cash accrual. Guys that are either not paying us rent that they owe us or there's a deferral that we're not sure we're going to get down the road. And so I think that is really where our focus is. And that as you would imagine is really in the sectors that have been most impacted and are the slowest to recover. But I think we see a path for most of those operators, and we'll continue to monitor them and work with them as hopefully we put this pandemic behind us. Great. Thank you. Thank you. Thank you. Our next question comes from the line of John Massaro with Ladenburg Thalmann. Please proceed with your question. Good morning. Hey, good morning, John. Sorry if I missed this earlier, but what drove the big decline in industrial same store rents? Yes. Hey, John, this is Dan. That was a typo. That's my fault. You should just switch around the retail and the industrial. It was updated on the website. So that's really the retail is actually down that amount related to Love's Furniture. Okay. And then as I think about dispositions, there kind of appears to be a strong bid out there for restaurant properties. Could that drive an acceleration in capital recycling on your end? And assuming you are seeing that kind of same strong bid, are you seeing an extended kind of family dining and casual dining assets as well as QSR? Yes. Listen, the QSRs are clearly there's a stronger bid for QSRs. Our disposition activity has been focused on kind of derisking the portfolio and as a result has been largely focused in the casual and family dining sectors. We feel pretty good about our QSR exposure and our tenants there. And so we don't feel the need to sell to recycle capital. I think we have a great capital position and good access to capital. And so really our sales of assets is going to be kind of just moving risk out of the portfolio and that will be in the casual and family dining sectors. Okay. But those would be, I mean, potentially as kind of a thesis in how you want to take portfolio, maybe that over time could be something that comes out of the portfolio via dispositions or partially out of the portfolio via dispositions? Yes, yes. I think that's been a thesis since day 1. And I think you've seen a kind of regular disposition activity and we disclosed kind of where the industries are we're selling. Greg gave you the commentary bringing down those 5 industries from 37 to 2017, and a lot of that is through strategic asset disposition. John, as we've discussed, a very important part of our portfolio construction is having asset level liquidity and owning assets that are granular and bite size and where there exists a good bid on an individual asset basis. And so we think for the most part, the vast majority of our assets have strong bids and that allows us to sell and manage industry exposures where we think appropriate. And I guess just generally, I mean, what is kind of the spread in the bid out there? I know it's a little bit generic, so it's kind of tough to know from asset to asset, but the spread out there between kind of the casual and family dining versus kind of QSR? Listen, I think QSR new deals, they could be 5.5 to 6.5, casual dining could be 7 to 8 to no bid, right? And so that's pretty a wide range, but there's not a lot of demand for casual diners. And I think a lot of the bankruptcies are focused in the casual dining. On the flip side, the QSR guys are doing great. Okay. That's it for me. So Carol's was in our top 10 last quarter. We really like them as a QSR operator. They dropped out this quarter and replaced by a Zaxby's franchisee, again, a great QSR operator that you can see them replacing names like Perkins and Ruby Tuesdays. And so that's been underway for a long time now. Thank you. There are no further questions at this time. I'd like to turn the floor back over to management for closing comments. Great. Well, thank you all for your time today. Hopefully this has been helpful and we look forward to engaging with you all in the coming NAREIT conference. Thank you. Have a great day.