Well, thanks, everyone. I'm Michael Goldsmith, the US REITs analyst at UBS, and today, you're here for the Kimco presentation. Up here with me, Conor Flynn, CEO, Glenn Cohen, CFO, and Ross Cooper, like, President, Leasing, Chief Investment Officer, like, everything else. You know, I think we should just jump into some questions, and we'll elucidate some of the key themes that the company is experiencing through that. So you just came back from the large shopping center conference in Las Vegas, ICSC. From your conversations, like, what did you learn about the health of your tenants? How should that translate to the fundamentals of your shopping center?
Yeah, thanks, Michael. ICSC in Vegas was very well attended. When you look at the leasing environment, it continues to be a very robust demand side from the retailers. They're leaning into stores. You know, I think the takeaway from really the major retailers that we met with was there's almost a FOMO, a fear of missing out, of if you don't lease the space today, it won't be available tomorrow. And you're seeing that play through on a number of different aspects, where you know, vacancy rates in shopping centers as a whole are at historic lows. The supply side is extremely muted.
So in all the major commercial real estate sectors, shopping centers is actually the lowest in terms of new supply coming out of the ground. And what does that translate to? It translates to pricing power. And you're seeing it in our new leasing spreads, you're seeing it on the renewal rates, and the retention rates. And I think one of the most remarkable things that you're seeing today in retail is the 1.0 retailers are being replaced by 2.0 retailers. And it's just a... You see it through the bankruptcy season as well. It's, you know, last year was historically low. This year's slightly elevated versus last year, but actually quite low on a historical basis.
What's played out in the bankruptcy season is you're seeing that dynamic of supply and demand, where the leases of these bankrupt tenants are no longer liabilities, they're assets. Because the mark to market on those leases are so significant that they're anywhere starting at probably 20% below market, upwards to 40% plus below market. So what's happened is a lot of these retailers that have filed have either assumed all the leases because they know they will never get those economic terms again, or those leases have been purchased by other retailers that are trying to get into these markets that are very tightly controlled, and there's very little opportunity for them.
So the most recent one being 99 Cents Only, you saw Dollar Tree being a large acquirer of their leases, but we also had Burlington, Grocery Outlet, and a few others, acquire those leases from us as well. So it's an interesting dynamic that's playing out. I think shopping centers and, and Kimco as a whole, the retail environment is very healthy, and in a lot of ways, we're having this quiet revival, that has probably yet to be reflected in the public markets.
Great. And leasing activity, just to build on that, leasing activity has had a very strong start to the year. Are the dynamics in place so that the momentum can be sustained or even accelerate? And I guess, how is that demand translating to some of the operating metrics that you report, you know, occupancy, rent spreads, escalators, the terms of the leases?
Sure. So the dynamics of the Kimco Shopping Center is primarily it's anchored by a grocery anchor shopping center, a grocery anchor, and then you have some junior anchors as well. So a T.J. Maxx and their concepts, Burlington, Ross, or others. And so what we've seen is the anchor space has been absorbed relatively quickly. We're over 98% occupied on our anchor spaces, which is over 10,000 sq ft. And if you just look at the Bed Bath & Beyond boxes that we recaptured, you know, we're getting close to 40% increases on those rents that they were previously paying. The anchor occupancy has limited upside left in terms of occupancy growth, 'cause we're already near all-time highs at 98% plus. But we're seeing the momentum continue on the small shop side.
That's where we're over 91% occupied today, and we still see a lot of demand for small shops. 'Cause if you go into a shopping center today, really the expanding uses of the small shop categories continues to expand. So what was previously driven by quick-service restaurants, franchise-driven concepts, still continue to be on growth mode, but services are really ramping up, and that's really complementing the offering that we're driving at, at a Kimco shopping center. So you still have your quick-service restaurants, you still have your franchise, franchise-driven concepts, but medical uses, health and wellness, beauty. There's numerous categories now expanding in the small shop category that allows us to say, "Okay, our signed but not open pipeline," which is really all the leasing we've done that's yet to cashflow, is at historic highs, which showcases nice, growth in the future.
But there's also more upside to go as we look at the small shop sector as a way to really drive future growth as our occupancy on the anchors are near stabilization.
Great. And you do a great job of setting me up for my next question, but, right, like, Kimco has had success moving tenants from leased to occupied more quickly than maybe expected in the first quarter. As a result, your S&O pipeline compressed by $2.5 million as tenants started to pay rent. So what's your outlook for the pace of that conversion through the year? And just like, as we think about, you know, you do have this large S&O pipeline, like, does that provide visibility to stable or elevated trends kind of into 2025? I'm trying to get a sense of, you know, this has been a very strong environment. Can that kind of power you through the rest of this year into next year and potentially beyond?
Sure. So Kimco has numerous advantages, and obviously, you know, efficiencies of scale and advantages of scale is something we focus on. At Kimco, the S&O pipeline that you mentioned, the signed but not open pipeline, is essentially all the deals that you've signed that have yet to start cash flowing. The way leases are typically written is that the cash flow begins when they open for business. So the rent commencement date is critically important, and every day we can expedite that is obviously more cash flow to Kimco and our shareholders. So that's where our platform has really been focused this year, on expediting that opening date by using our advantages of scale. What I mean by that is we have expediters that run through the process of trying to get the permitting process done quickly.
Now, it's a manual process, it's a human process. It's very specific to the municipality where the asset is located. But we have been laser focused on trying to make sure that we can beat our internal rent commencement date projections for these tenants. And a lot of it is just making sure that you are constantly communicating with the retailer, understanding what is the landlord responsibility, so the, so in essence, the landlord work that needs to get done in the space, and then what we can do to help the retailer on their work that needs to be done, so that we can almost work concurrently to expedite the opening process.
A lot of it, you know, with construction, is long lead items that we can buy in bulk, that we actually have the ability, again, to acquire larger scale, you know, whether it's switch gear, whether it's HVAC units, whether it's, you know, different things that are specific to retailers that are in need on every space. We have the advantages of scale there to try and acquire these items that help expedite the build-out process, and that's why we were able to actually overachieve in the first quarter on getting more tenants open than we anticipated at the beginning half of the year. You want to mention just on the compression of it for the rest of the year?
Yeah. So right now we're at 330 basis points. The total pipeline is about $63 million, and we would expect somewhere around $25 million-$30 million of it to flow during the year. So it really, it's a really good leading indicator of, you know, future same-store NOI growth. So we're set up pretty well.
You know, tenant health is something that always requires monitoring. Uh, what's your exposure to companies that are either filing for bankruptcies or closing stores or, you know, maybe on your, on your watchlist? Has there been any changes over the last couple of months? Any categories that, you know, that are, like, attracting more of your focus or time, now?
So retail is an evolving landscape. I think that's what makes it one of the most exciting sectors to work in. I see we have some young interns and some young folks in the audience. So it is very exciting because, honestly, every day is different. And instead of, like, leasing a one-bedroom apartment, that's really not going to change, you have to be, you know, able to be nimble and think ahead and longer term about what retail is going to look like, what are the consumers' trends that are working today, and how do you go about anticipating future trends and putting the right merchandising mix that's going to drive more traffic, drive more cash flow for the future?
So one of the things that we always look at is the watchlist tenants, and those haven't really changed all that much historically over the past five years. And again, a lot of it is Retail 1.0. There are folks that have yet to change with the times, where e-commerce was obviously the dawn of the internet, was critically seismic to the retail landscape. And now what's happened is the best-in-class retailers are all omni-channel retailers. They have a point of contact with their consumer that is unmatched today, that has ever been done before. If you think about, you used to have to walk through the door and really to get a retail experience. These days, they know everything about you.
They know exactly where you live, exactly where you work, exactly where you play, and they're trying to anticipate your future needs and wants. And so with the dawn of e-commerce, the data that they have now gleaned from everyone, they have better consumer information than they ever have before, and they're leaning into their store base to give them that experience that they want. And that's the big change, is after COVID, you saw this huge surge of in-store experience being what the consumer wants and demand. They still want the e-commerce experience. They still want the ability to have the convenience factor of delivering it to their home, but they also want the ability to have the convenience factor of returning it to a store.
They also want to have the convenience factor of the, of the in-store experience, of feeling or touching or experiencing the goods and services that are in demand today. And so that's really the, the change, I think, of what's happened. And when you look at our watchlist tenancy, it's the smallest it's ever been. And again, the economics of those leases that were done 10, 15, sometimes 30 or 40 years ago, you know, we still are the largest landlord of Kmart and Sears. And, you know, when you look at those economics, you are salivating to get back those, those deals because you know the best-in-class retailers want that high-quality real estate. And with that, with no new supply coming online, the valuable real estate is becoming more and more valuable because of the demand drivers we're experiencing today.
So maybe two follow-ups to that. One is, you know, is there any way that you can kind of, like, hasten or more quickly get back some of that property so that you can release it and take advantage of this really strong leasing backdrop? And then the second part, where I think you, you talked a little bit about e-commerce and omni-channel. How can you, as a landlord, help support retailers' efforts to become, you know, strong omni-channel players?
... Yes, so the first piece of the question, how do you expedite recapturing, sort of Retail 1.0? Well, a lot of it is obviously tied to the leasing that was the contractual nature of the lease. Many times you're in negotiations with retailers that are expanding, the Retail 2.0 tenants, and you're showcasing your future opportunities. And because, you know, inventory is so tight right now, you are showcasing all of, you know, the future potential pipeline of deals that are currently occupied, but are not yet available, anticipating that at some point, you'll get another bite at the apple. Many times, you are able to renegotiate certain times and recapture things early if they're looking for something else in the pipeline. So it is sort of a nuanced negotiation of how to recapture things early.
But many times, when you go through a wave of store closures or a bankruptcy filing, you have the ability to expedite the backfilling when you have that pipeline of wait list tenants that know that there's a store coming available, that they can jump on, and they can, you know, come to the table very quickly on that.
We're still waiting for sell-side 2.0. You know, Kimco completed the acquisition and integration of RPT in the first quarter. That's digesting the second large portfolio in the last three years. So what have you learned about the RPT portfolio since it's kind of since it's been in your hands, how's the integration going? And what is driving those synergies that kind of have moved to the high end of the range or maybe slightly above the initial expectations?
Yeah, we're off to a great start. Obviously, you know, integrating a large company is something that we have muscle memory of doing with Weingarten being, you know, the previous M&A deal, and then RPT being the most recent. It's exciting to see, obviously being able to beat and raise in the first quarter, showcasing that the assumptions on our synergies were... You know, we were able to raise the guidance on the synergy side, as well as bring those cost savings online faster than anticipated. So those two factors were obviously lessons learned from our first transaction that we did close to three years ago now, that we were able to replicate on the most recent one.
I think when you look at the integration, a lot of what we focus on is clearly taking advantage of our scale, understanding the markets really well, understanding what we can do to bring, you know, the leasing up to Kimco standards, and that was really sort of the upside on the revenue synergies that we're just now starting to capture. When you look at the occupancy levels on the assets that we acquired, when you look at, you know, the upside and the redevelopment potential on some of the assets we acquire, we acquired, there's a lot of juice to squeeze, and we're just getting started 'cause it's really the first year of the integration, and so the leasing is ahead of anticipation.
We've got a lot of small shop momentum as well as anchor momentum, some grocery redevelopments that we didn't necessarily anticipate, some multifamily densification opportunities, in some of the assets, like Mary Brickell Village down in Miami. So there's some unique attributes to that portfolio that we feel are really exciting about not only the near term, but the long term.
Yeah, I would just add, you know, when you're doing M&A transactions and the integration part, then, you know, the hardest parts of it actually are the people element and making sure you do the people element properly, and integrating all the systems, and I think we have a really, really good playbook for how to handle that. We are very good at preparing upfront. You know, we announced the transaction in August, and immediately, we're just focused on interviewing every single person that was there, determining who we wanted, who we could keep, and who we could actually fill other positions within the company. So, you know, we kept about 30% of the people that were there, so they. And then day one, they hit the ground running, fully integrated into the Kimco profile.
From a system standpoint, the same thing. We looked at all of their systems. All of the RPT systems within the first 2 weeks of the closing were fully integrated into Kimco. So we don't think of it as Weingarten and RPT, we think of it all as one big Kimco today, and it's all fully integrated, it's all operational. Now we just, you know, look for the next fun one to do.
So it sounds like, right, there's an initial kind of like, you know, deal closes, there's an initial integration piece with some cost savings, but then there's kind of like a long tail of, you know, implementing changes, whether it's the leasing on the leasing side, whether it's on the redevelopment. You know, can you just talk, maybe go into a little bit more detail about the opportunity there? Because you've done this once, you've learned a lot about it, and now you're going to do it again. How is it gonna be the same? How will it be slightly different?
Sure. So from an operating standpoint, you look at really where the upside is in terms of how does it enhance your growth? 'Cause the last thing you wanna do is just get bigger to be bigger. You wanna get- you wanna actually enhance your growth profile. And so when you look at the combination, we really went asset by asset and looked at where we see significant upside, both on the leasing front and on the redevelopment front. And so when you take a, take a portion of their portfolio and you look through it, you can sort of bifurcate the high growth versus the low growth, and, and we quickly identified a strategy that there was a piece of that...
Now, a small piece, but we sold off a small piece of the portfolio that we felt didn't have significant growth, that it was well occupied, but it was relatively flat in terms of growth profile. And so we identified a strategy to sell off the the lowest growth assets, which was only, you know, a handful of assets, around 10, that we thought would be better served in the private hands, where we could focus on the 90% of the portfolio that had the significant growth profile that we felt like our platform could unlock. A lot of that is just through the blocking and tackling of leasing.
And when you look at the occupancy levels, they were 200+ basis points below our occupancy on the small shop side, and we felt like in a lot of these markets in Miami and Florida, that they had significant assets, almost, you know, in direct competition to our own. Our assets were significantly higher occupied. We felt like we could come in with our team and capture that relatively quickly. On the redevelopment side, that takes a little bit longer, but we do feel like we have the platform to be able to unlock a lot of that potential. And so when you look at the Kimco portfolio, we always believe that shopping centers were the best-covered land plays in all of commercial real estate.
If you think about it from a high level, you know, a shopping center is almost 80% parking lot and 20% single-story buildings. And so if these assets are in great areas that are actually have density coming up around them, in time, we're gonna be the hole in the donut, where everything has gone vertical around us, and will give us the opportunity to go vertical and add multifamily, typically, to that asset and create a mixed-use village. What we've found is that in our own portfolio, we're nearing close to 10,000 apartment units entitled, and there's a lot of that embedded in the opportunity set of RPT as well.
We are laser-focused on Mary Brickell Village, as I mentioned before, because that, if you've been to Brickell, it's like every luxury brand in the world is now branding a new luxury condo or apartment tower, almost entirely surrounding our asset. It'll take time to get the asset entitled and ready to develop, but it's a unique situation there, where almost every brand you can imagine has branded something coming up out of the ground around us. And so it gives us the ability to plan accordingly and think of long-term value creation and how to go about unlocking it.
Ross, don't get too comfortable over there. I'm coming for you next. Kimco's been an active acquirer. You've talked about $300 million-$350 million of acquisitions this year. Now, how do you expect that to play out over the remainder of the year, especially given, you know, we, we've been in this stubborn interest rate environment, which has influenced how, house sellers are, are approaching the market?
Sure. Thanks, Michael, and appreciate the warm intro before. It was very kind of you to say that I do everything. So that was very nice of you. Yeah, and I mean, we're very confident in our ability to unlock opportunities. As we've talked about, you know, it's very much back-half weighted for us. The first half of the year, we were very focused on the execution of the RPT transaction. Conor mentioned the dispositions that we're very excited that we're able to complete, and really move forward with a clean slate on that portfolio and focus on enhancing value. In terms of additional external growth opportunities, you know, we really see two pillars of opportunity for us.
First, we have our Structured Investment Program, which is extremely active in an environment where, as you indicated, is somewhat stubborn in terms of the macro challenges that are out there, interest rates being a bit higher than where they were a year ago. So we've been able to utilize our platform with some pretty flexible capital and creative capital to be helpful to other owners and operators that are in need, whether it's with assets that have debt that's coming due to be refinanced, where we can provide some bridge financing on acquisitions, where there's a buyer that needs a little bit of capital in the form of mezzanine financing that we've been able to provide.
So we're having a lot of those conversations, and we're able to get very attractive yields, while also obtaining a right of first offer or right of first refusal on these assets, that ultimately might become part of our acquisition pipeline in the future. In addition to that, it has been a challenge because there's a lot of capital chasing grocery-anchored shopping centers, neighborhood shopping centers, and therefore, cap rates have stayed very sticky and low. As we look at our cost of capital, we wanna make sure that we're doing deals that are accretive.
So, another opportunity for us has really been focused on utilizing our platform and our operational abilities to focus on some of the larger, more complex assets, where because of the deal size, because of the complexity, there's been a bit more of a shallower bidding pool. So we're seeing some more opportunity with more attractive yields to focus on a very select few potential acquisition opportunities of assets that are larger, but have all the ingredients that we like, whether it be a grocery anchor, a densification opportunity, tenants that are still that 1.0 that we talked about, with the ability to upgrade to 2.0 and increase the rent. So we think that there's gonna be some opportunities that we can talk about in the near term, as soon as we get them done, and we're excited about.
Can you maybe quantify, like, you know, for the larger shopping centers, you know, how many bidders there may be versus something that's smaller, just to put some perspective around, you know, how the market is playing out right now?
Sure. Every situation is a bit unique, but we're in an interesting dynamic today, where in years past, it's always been a little bit easier for the private investor to finance deals more attractively than a lot of the REITs and the public companies. That's sort of the inverse today. So when you think about where we, as REITs, can borrow, either with a bond issuance or a term loan, we're actually able to borrow much more attractively than the private investor today. So when you couple that with a deal size that might be north of $100 million, it really limits the bidder pool to really just a handful or even fewer select groups, large public institutions, that have the ability to take down an asset of that size.
So that's where we're seeing some unique situations for us that maybe are not there for everybody else.
Got it. We talked a little bit about redevelopment and densification. You know, just given this backdrop, is this something Kimco is interested in pursuing now? Is it something that maybe we need to wait until the financing environment or the cost of capital comes down? Just in general, like, how does the financing market affect the outlook around redevelopment and densification?
So there's two pieces to redevelopment for us. It's the smaller add-on retail, so adding a pad or a drive-through in the front of the shopping center for an In-N-Out or a Chick-fil-A, those are double-digit type returns that we continue to look for and mine for and activate year-over-year. The larger scale, mixed-use, where you add an apartment tower, those are ones that we're entitling today, but we have the luxury of not having a shelf life on that, meaning that they don't expire. So we're giving us the optionality and flexibility to set up for long-term value creation. We do believe that a lot of these mixed-use environments are going to be successful because we have the proof of the pudding in the ones that we've already activated.
We're able to drive premiums on the apartments because of the retail amenity that we already have built into the shopping center. That being said, the financing market makes it very challenging to want to activate large-scale multifamily developments today. We're seeing better use of our capital elsewhere. As Ross mentioned, you know, the structured finance program, you know, those are nice yields, and they're—I don't know how long this window's gonna be, where we can borrow at a bond at, say, 5.5, and the structured investment program is double digits. And so when you have that type of spread opportunity, that's really sort of a unique environment to take advantage of. That, again, is not typical, where private market value, like, the access to debt, is not as necessarily advantageous as we have.
Yeah, I would just add, when you think about these entitlements, they truly add value, even without taking up anything out of the ground, because we have the ability to ground lease them, and someone else can put the capital in, which we've done many times. We can sell the entitlements, which we've done, like in, you know, in the case in Dania. You know, we sold the land to Spirit Airlines, who built their full office facility there. So those entitlements have real value, even though they don't necessarily show up on the balance sheet. But, yeah, and they just... You know, they really add a lot of value to us.
I've got a couple of questions in my back pocket, but, I feel like we should open it up for questions if there's any from the audience.
Hi, my name is Billy Lawrence. I'm an asset management intern at Amelia Realty Trust. I have a question regarding redevelopment and adding. When does it get to a point when you have successfully run a shopping center, and they decide you want to develop residential units there?
So a lot of it has to do with the actual format of the shopping center that you own, and a lot of what we own has excess parking fields. And so what we try and do is not actually take down any of the existing retail. What we try and do is activate unbuilt or, you know, parking fields that are underutilized. And so that way, you don't have NOI coming offline when you go into the ground and try and put the building up. And so what we've done at a large number of our shopping centers is look at where that makes sense and where there's a significant amount of demand for apartments in those trade areas. And so when you look at our mixed-use portfolio, that's where we've taken advantage of that.
And so we do believe that there are certain markets where the mixed-use environment has already proven itself out, and we even see it in our own portfolio, where the same site, NOI growth, the leasing spreads in the apartments, the premiums that we're able to drive there, make total sense, and it's, it's playing out through the numbers. That being said, it does take a lot of time to activate these projects, and it is capital intensive, and so we've been very selective on activating projects. And so it does... On the activation side, it does make sense in a lot of cases, but sometimes there's too much supply coming into a market, so you don't want to activate it, and you want to put it on the shelf and wait for another day to do it or have somebody else take on that risk.
It just depends on, again, the supply and demand and how the format of the shopping center lays out.
Any other questions? Well, if anyone has a question or thinks of one, feel free to ask, but maybe I'll ask here. You know, how have your capital allocation priorities changed and investment thresholds changed over the last several years?
You want me to start? I'll start. So, like, I mean, clearly, the best returns for us is still leasing. If you look at the leasing returns, it's sizable, the difference there, versus our next opportunity. So when we put leasing at one, two, and three, that's where we start. The smaller redevelopments still return double digits, and then again, those are compounding. So again, you typically get bumps in those redevelopment leases, so you can activate retail pads or expansions of boxes, and those would be usually number one and number two. After that, you know, we have this structured investment program that Ross has mentioned. We do have the opportunity to look at unique one-off assets, and those are sort of the ways we look at the investment universe today of...
We have a higher hurdle, obviously, today, where rates are and where our cost of capital is today. But when you look at the organic growth and the free cash flow we have coming from this, from the portfolio, we have the lowest debt we've ever had as a company. Our balance sheet is well-laddered in terms of, you know, the long- one of the longest debt maturity profiles in the REIT sector. We have access to numerous different pools of capital. And so we try and look and see for unique dislocations, where we can take advantage of our size and our scale and our Rolodex. And so some of the times it's, you know, sale-leasebacks with retailers that are real estate-rich, like we did with Albertsons.
We just completed, you know, the last tranche of the Albertsons sales, where, you know, we had $140 million of capital invested, and we returned $1.4 billion. And so when you look at those types of unique opportunities, that's where we try and take advantage of our, of our relationships and our unique investment opportunities. And, you know, we continue to see today, where it's a rare occurrence where the public market REITs have an advantage on the debt side. Because typically, the private side will lever up to the hilt and take advantage of that with low debt financing to, to outbid you. Where today, we have the opportunity to use our balance sheet to our advantage, and because of how much delevering we've done through the Albertsons monetization-...
Yeah, and I would just add, I think one of the differentiators for Kimco is, is our diversification. The diversification of geographies, the diversification of format, the diversification of strategy. It enables us to react to what the market conditions are giving us. So we talk a lot about being opportunity driven. What Conor alluded to it, whether it's working specifically with our retailers and what was our plus business and our, our special situations group, whether it's our structured investment, when there's a unique window of opportunity, where there's real needs for capital that we can provide creatively, or when the transaction market is more in our favor, and our cost of capital allows us to be more aggressive on the acquisition side. We can sort of be flexible with what the market gives us and then take advantage of it at that point in time.
Yes, go ahead.
Hi, Rob Lawrence with Best Investments. How has insurance costs impacted Kimco, and has it affected the total rent that you're able to get from the tenants because of the pass-throughs?
That was perfectly timed because Ross was just talking about diversification. One of the advantages we have with our scale is our diversification of geographies. When you price insurance, if you're concentrated in areas that have significant, you know, escalations in terms of the premiums that you're paying, you're not able to really get insurance that makes cost-effective sense. Because of our diversification of our portfolio, we actually are able to have insurance costs that are significantly below what any private owner could potentially achieve. We do pass that on to the retailers. Again, it's a Kimco advantage, I would say. It's one that we continue to be mindful of because we know that that market can change pretty dramatically and pretty quickly.
But that's an ability for us to, again, showcase the advantages of scale that we've focused on.
Yeah, just to add, right. So, we have a large blanket policy that covers all 580 assets, and by spreading the risk that wide, and quite candidly, our loss record has been really pretty great. So it's kind of helped, even in a very high rate environment in the insurance world, we've been able to actually keep our rates a little bit lower than the average.
We have one minute left. So, we do this general presentation once a year. When we come back in a year, you know, what do you think the themes or the topics are going to... Or what do you think the conversation is gonna be focused on? Like, anything different, or is it just gonna be a continuation of sort of this, this strong environment?
I guess who's gonna be in the White House? We'll leave it at that.