Earnings Call: Q3 2019

Nov 7, 2019

Good morning, and welcome to Phillips Edison and Company's 3rd Quarter 2019 Earnings Presentation. My name is Ian, and I will be your conference operator today. Before we begin, I would like to remind our listeners that this live conference call is being recorded and simultaneously webcast. The webcast and accompanying slide presentation containing financial information can be accessed by visiting the Events and Presentations page in the Investors section of the company's website at www.phillipeddison.comor@phillipeddison.com /investors. A replay will be available later today on the Investors section of the Phillips Edison website at www.phillipedison.com under the same Events and Presentations page. I would now like to turn the call over to Mike Koehler with Phillips Edison and Company. Sir, please proceed. Thank you, operator. Good morning, everyone, and thank you for joining us. I am Michael Koehler, the Director of Investor Relations with Phillips Edison and Company. Joining me on today's call are our Chairman and CEO, Jeff Edison our CFO, John Caulfield and our Executive Vice President, Mark Addy. During today's presentation, Jeff will touch on our highlights for the quarter and provide an update on our portfolio. Following Jeff's comments, John Caulfield will discuss the financial results, balance sheet and our share repurchase program activity. Finally, Jeff will speak to the progress we have made executing our strategic initiatives. Upon conclusion of our prepared remarks, we will address your questions. If you are logged into the webcast and have a question, you can submit it by typing it into the webcast text box and clicking submit question. We encourage you to submit your questions as soon as possible. Before we begin, I would like to remind our audience that statements made during our prepared remarks and the question and answer session may contain forward looking statements, which are subject to various risks and uncertainties. Please refer to Slide 3 for additional disclosure and direction on where you can find information regarding potential risks. In addition, we will also refer to certain non GAAP financial measures. Information regarding our use of these measures and reconciliations of these measures to our GAAP results are available in our earnings release issued yesterday afternoon, as well as in the slide presentation for this webinar, which is available for download on our website. I would now like to turn the call over to Jeff Edison, our Chief Executive Officer. Jeff? Thank you, Michael. Good morning, everyone, and thank you for being on the call today. Before I get into the results, I'd like to review our key initiatives for 2019 as outlined on slide 4. We believe that these initiatives will create growth for the future while positioning for a full cycle liquidity event. Across our organization, we are 1st and foremost committed to delivering solid operating fundamentals and growing net operating income at our properties. We do this by improving occupancy, increasing revenues through rental increases and driving foot traffic at our properties by focusing on our center's merchandising mix. Our best in class fully integrated management platform delivered a same store NOI growth of 2.9%, record leasing activity and another quarter of improved occupancy, which we'll cover in more detail in a moment. Our second initiative is to execute on our active disposition plan to fortify the quality of our property and portfolio. We have reviewed our portfolio and are selling assets that no longer meet our growth objectives or quality standards. We are recycling the sale proceeds into better quality, lower risk and higher growth assets. We are investing in redevelopment projects with attractive yields at our existing centers and we're repaying debt. Our disposition team remains active as we sold 4 centers during the quarter, bringing our total to 10 for the year. Again, we'll provide more detail on this in a minute. And our 3rd initiative is to grow our investment management business, which provides recurring income streams and allows us to grow without additional capital investment. It can also provide proceeds to a portfolio transaction to delever while maintaining our assets under management and building institutional relationships. To maximize the potential outcome of a future liquidity event, we will need to pay down debt to have a balance sheet in line with market expectations. So reducing leverage is a priority for PECO. Although these three initiatives should allow us to improve our operations and leverage ratios in order to prepare for this liquidity event. Now turning to Slide 5. Q3 of 2019 was the 3rd full quarter since transformation of merger with Phillips Edison Grocery Center REIT II, which closed on November 16, 2018. The $1,900,000,000 merger added 86 high quality grocery anchored shopping centers totaling 10,300,000 square feet to our portfolio. The quarter was highlighted by significant leasing activity, which improved our occupancy to 95% at September 30, 2019, marking a meaningful improvement from 93.2% at the beginning of the year. This is particularly impressive as we also delivered double digit new leasing spreads for the quarter and the 1st 9 months of the year. Our same center NOI grew 2.9% for the quarter and 2.4% for the 1st 9 months of the year. Further, our FFO increased to $56,400,000 which fully covered our gross distributions for the quarter. The 1st 9 months of 2019 were highlighted by the disposition of 10 centers, which produced $90,300,000 of gross proceeds, a portion of which we used to acquire an Aldi anchored center in Naperville, Illinois, an affluent suburb outside of Chicago. The area immediately around the center is experiencing surge of development as more than 800 new residential units are expected to be built, including 58 high end apartments directly adjacent to the shopping center. We believe our center will benefit from this development as it will serve resource for necessity based goods and services. We were also able to decrease our leverage to 40.4% of total debt to enterprise value or TEV. That was from 42.3% just a year ago. These strong operating results continue the momentum we have seen over the past 3 years and reflect sustained healthy tenant demand for well located As of September 30, 2019, our portfolio consisted of 294 wholly owned properties anchored by 36 leading grocers representing multiple banners. They're located in 32 states and totaling 30 3,200,000 square feet of GLA. This compares to 2 33 properties as of September 30, 2018, located in 32 states with 34 leading grocers, totaling $25,900,000 which was before our merger with REIT II. As of September 30, 2019, our lease portfolio occupancy was 95% and our in line occupancy was 89.2%, both improved from the beginning of the year. 76.6% of our annualized base rent came from grocers and national and regional tenants illustrating an established tenant base and 77% of our total rent came from necessity based tenants. The average remaining lease term for our portfolio was 4.7 years. Making 6 0.9% of our average base rents for the quarter across 68 centers. We are Kroger's largest landlord. Publix and Albertsons Safeway are our 2nd and third largest tenants, marking 5.5% and 4.3% of our ABR respectively across 50 830 centers. We are Publix's 2nd largest landlord. Ahold Delhaize, which owns Giant, Stop and Shop and Food Lion among others, and Walmart round out our top 5 tenants. We strive to own centers anchored by the top 1 or 2 grocer in a given market and our portfolio has excellent anchor diversification. The scale of our relationships with our grocer anchors provides us unique advantages that we believe generate better property level performance. As we look at our leading grocer anchor tenants, we continue to see brick and mortar as a cornerstone of their business strategies and we remain very positive about the long term prospects of owning and operating gross ranker real estate. Slide 8 outlines our occupancy metrics and in place rents or ABR and provides an overview of our 95%, which is an increase from 93% 93.9% as of September 2018. Anchor occupancy was 98.1 percent, which decreased from 98.4 percent a year ago, although it increased from 97 point 5 percent at year end. In line occupancy increased to 89.2% from 85.3% a year ago due to strong leasing activity we talked about. Overall, our overall annualized base rent or ABR was $12.35 per square foot, which was an increase of 6.2 percent from a year ago. Our in line ABR was $19.28 per square foot, which was an increase of 5.9% year over year. Many have asked what an in line tenant is on post on past calls. The graphic on the top right illustrates an example of one of our centers. The anchor in orange is a grocer and the other tenants in blue are referred to as our in line tenants. The in line tenants use the foot traffic generated by the grocer to create demand and awareness for their businesses. And these rents are typically much higher than the rent the grocer pays. Outparcels, as illustrated in green, are typically freestanding buildings like fast food restaurants, bank branches or coffee shops. We identify opportunities to add outparcels throughout the redevelopment, which can add value to our portfolio. On the slide, the Green Building is an example of an outparcel, which we include in our in line ABR and occupancy. When we look at the makeup of our ABR, 77% comes from convenience and service based businesses like grocers, restaurants, nail salons, barbershops, healthcare and fitness centers, which we believe offer goods, services and experiences that are Internet resistant and will continue to drive recurring foot traffic to our centers on a regular basis. Slide 9 provides some examples of leases that our 1st class leasing team executed during the quarter. We remain focused on leasing our vacant space to tenants that offer necessity based products, services and experiences, as well as a high level of convenience, which we believe are and will be Internet resilient. Jersey Mike's, Domino's, Smoothie King and 99 Restaurant and Pub are a few examples of national that are expanding in our portfolio from the food and beverage industry. Other new anchor leases include TJ Maxx and an expansion with 1 of our grocery anchors, Coburns. Craig Wireless and Verizon are 2 national tenants in the services category and Workout Anytime and 9 round kickboxing are 2 national fitness concepts that will also be added to our portfolio in the near future. Our leasing activity was at an all time high for the quarter as we executed a record 246 leases, including new leases, renewals and totaling 1,400,000 square feet, an increase of 22% over our activity in Q3 of 2018. The 1st 9 months of 2019 was also a record setting period for the company as we wrote 775 leases, including new leases, renewals and options, totaling 3,500,000 square feet. Our current leasing pipeline is robust, and we are very positive about the future. With that, I will now turn the call over to our CFO, John Caulfield. John? Thank you, Jeff, and good morning, everyone. As Jeff mentioned earlier, one of our key growth initiatives is to further expand our investment management business. As such, Devin Murphy has been promoted to President, where he is focused on growing our Investment Management business, raising additional equity and overseeing our current joint ventures. As of September 30, 2019, our investment management business provided asset and real estate management for 36 properties owned by 5 entities, including 3 joint ventures in which PECO has an ownership interest. Altogether, at quarter end, we had approximately $690,000,000 of third party assets under management. Slide 10 reviews our year to date pro form a same center NOI. For the purpose of evaluating same center NOI on a comparative basis, we are presenting pro form a same center NOI as if the merger with REIT II had occurred on January 1, 2018. As such, our pro form a same center NOI includes 287 properties that were owned and operational since January 2018. During the 1st 9 months of 2019, same center NOI increased 2.4% when compared to the 1st 9 months of 2018. Driving our NOI growth was a $4,000,000 increase in base rent, which primarily resulted from a 0.23 dollars increase in average minimum rent per square foot, increased occupancy and increased recovery income. Offsetting this improvement was an accounting presentation change requiring bad debt expense to be reflected as a reduction to rental income and tenant paid real estate taxes to be excluded from tenant recovery income. Together, these resulted in a reduction to 2019 revenue as compared to 2018 revenue and pro form a same center revenues decreased 0.3%. This decrease in revenue for accounting presentation was offset by a corresponding decrease in expenses where they were reported in 2018. Beyond the adjustments in accounting presentation was a reduction in property management expenses resulting from the merger with 3.2. Additional details are available in our Form 10 Q, which will be filed with the SEC later today. Slide 11 outlines our financial results for the 9 months ended September 30, 2019. The company recorded a net loss of $77,700,000 compared to a net loss of $32,200,000 for the same period in 2018. Our net loss was primarily the result of $74,600,000 of non cash real estate impairment charges and non cash impairment charges of 8,200,000 dollars related to the suspension of the equity raise of Phillips Edison Grocery Center REIT III. We closed on the acquisition of REIT III on October 31. As real estate companies recycle assets, both the recognition of impairment charges and gains on asset sales are regular occurrences. Further, as we are selling non core assets and recycling capital into higher growth opportunities, we may continue to realize these cash impairments in the coming quarters, although we expect to wind down our non core disposition program in the first half of twenty twenty. Also contributing to the loss was $40,500,000 of additional depreciation expense, primarily due to the additional properties owned after our merger with REIT II when compared to the year ago period. When we add back these non cash impairments, depreciation and other items, the company generated FFO of $160,600,000 for the 9 months ended September 30, 2019, which was a 37.2 percent increase from $117,100,000 for the same period in 2018. This increase in total FFO is attributed to income from the merger, including NOI from the acquired properties and year over year property level NOI growth, partially offset by the loss of NOI from properties sold. On a per share basis, FFO decreased by 3.9 percent to $0.49 per diluted share. This reduction in FFO on a per share basis is the result of our net disposition activity over the past 12 months, starting with the joint we created in November 2018 with Northwestern Mutual as our debt to TEV decreased to 40.4% from 42.3% at September 30, 2018. During the 1st 9 months of 2019, the company made gross distributions of $164,400,000 including $51,300,000 reinvested through the dividend reinvestment plan for net cash distributions of $113,100,000 which were fully covered with FFO year to date. For the 9 months ended September 30, 2019, the company generated modified funds from operations or MFFO of $165,400,000 which was a 34.9% increase from the 122,600,000 dollars earned for the same period in 2018. On a per share basis, MFFO decreased by 3 point 8 percent to $0.51 per diluted share during the 1st 9 months of 2019. The decrease in leverage and our net disposition activity reduced our MFFO, offset by higher earnings from the larger portfolio resulting from the merger with REIT II. Slide 12 outlines our well laddered debt profile as of September 30, 2019. Our net debt to total enterprise value was 40.4% as of September 30, 2019. Our debt had a weighted average interest rate of 3.5 percent and a weighted average maturity of 4.3 years. Approximately 79% of our debt was fixed rate. This compares to a debt to total enterprise value of 41.1 percent at December 31, 2018. During the quarter, we repriced the $200,000,000 term loan, lowering the interest rate by 50 basis points from 1.75 percent over LIBOR to 1.25 percent over LIBOR, while maintaining the current maturity of September 2024. Then shortly after quarter end in October, we repriced a $175,000,000 term loan, again lowering the interest rate spread by 50 basis points from 1.75% over LIBOR to 1 0.25% over LIBOR, while maintaining the current maturity of October 2024. We continue to seek opportunities to refinance certain debt to lower our interest rate or extend the length of our debt maturities in order to strengthen our balance sheet and maintain a cost of capital that is as low as possible. As we look at our liquidity, we had 49 $1,000,000 of borrowing capacity available on our $500,000,000 revolving credit facility. Slide 13 outlines the history of our common stock. From the initial public offering price of $10 per PICO, we have increased our estimated value per share 4 times, including most recently in May of 2019 when we increased the estimated value per share to $11.10 The current distribution rate is $0.67 per share per year. Together with REIT II, we have made distributions of over $1,200,000,000 to our stockholders and our distribution on November 1, 2019 marked our 107th consecutive month of distributions. Most recently, our Board has again approved our monthly distribution rate at an annualized rate of $0.67 per share for December, January 2020 February 2020. We are committed to driving stockholder value and that is illustrated by the strong performance of our common stock. Depending on the timing of your investment and treatment of your distributions, Phillips Edison and Company common stock has delivered returns between 49% and 102%, which equates to between 7.5% 8.7% compounded annual performance. For our former REIT II stockholders, your investment has delivered between 16% 34%, which equates to a compounded annual performance between 4.2% and 5.2% per year. Slide 14 provides an update on the activity under our share repurchase program or SRP. During the 3 months ended September 30, 2019, we repurchased 1,700,000 common shares totaling 18,200,000 dollars for death and disability and incompetence, or DDI, in accordance with the SRP, and we executed a standard redemption on a pro rata basis at $11.10 per share. We continue to make DDI repurchases in full at the end of each month. However, we are not currently accepting standard repurchase requests. We plan to have an update on our standard repurchase program in the spring of 2020. I would now like to turn the call back over to Jeff for a closing summary and some commentary on liquidity. Jeff? Thanks, John. As we have stated on past calls, one of the possible ways we can achieve a full cycle liquidity event is through the listing of our shares on a National Stock Exchange, like the New York Stock Exchange or the NASDAQ. In preparation for a listing, I discussed 3 important strategies at the beginning of this call that we feel will position the company for successful listing and long term growth. We executed on these strategies during the quarter, but we need to continue to execute our growth plans and reduce our debt to achieve a successful listing. Retail shopping centers have performed very well in 2019 overcoming the losses they experienced in the Q4 of 2018. That said, we are not completely in the clear yet as our peers still trade at an average discount to their net asset value of about 10%, with a discount as high as 39% for 1 of our competitors. To be clear, we're very encouraged with the improvement in the retail shopping center environment we continue to evaluate the market for the appropriate timing. We maintain our belief that a patient approach to liquidity is necessary and believe executing on our strategic initiatives will position us to achieve a full cycle liquidity event at a more attractive valuation. In closing, we are pleased with our results for the 1st 9 months of the year, but know we have to be laser focused on execution in order to achieve our goals and successfully provide liquidity for our investors. With that, I would now like to turn the call over to Michael Kaylor, our Director of Investor Relations. Michael? Thank you, Jeff. This concludes our prepared remarks. Our webcast listeners are able to submit a question via the webcast portal. Our first question comes from Captain Hans Hobiek, an individual investor. His question is as follows. We would like to hear the reason why the SRP was dropped. Does this mean that there are no new investments planned? Also, when do you plan to turn on the share repurchase program again or provide any company sponsored liquidity? Mark, do you want to take that one? Yes, sure. As John indicated, in August, our Board suspended the standard purchase portion of our share repurchase program. I would note that the program is still open for death and disability repurchases, which we do on a monthly basis. And we intend to have an update on the overall share purchase program in the spring of 2020. All this messaging, as many of you know recently, we brought the shareholder services back into Phillips Edison. So we'll continue to communicate and push that information out to all of you. The question with regard to why did we suspend as far as voluntary? We believe those changes were really in the best interest of all of our shareholders and will help to improve our overall leverage ratios and really to maximize the overall stock value when and if we do have that liquidity event, which Jeff outlined, which will provide benefits to all of our shareholders. And as we look at really the dollars that we'll be saving from that, it's about $40,000,000 in cash flow that we'll be saving through that. And what we'll be doing is really using those funds to invest back into better quality, lower risk, higher growth assets and we'll also continue to invest back into redevelopment projects as well as to continue and further our deleveraging efforts. Michael? Great. Thanks, Mark. Our next question comes from Matthew Wright from Wright Financial. He has a 2 part question. Why did PECO shareholders not have a say in the acquisition of REIT III? Was there any opportunity for current shareholders to provide feedback to PICO management? And second part of his question is, why did PICO pay such a large premium for 3? Over the past few years, PICO has consistently told us that REITs are trading at a discount to NAV. If that's accurate, why pay the premium for another REIT? John, you want to take that? Sure, Michael. Thank you for the question, Matthew. The acquisition of REIT III, which closed last week, was an acquisition of 3 assets with an interest in another 3 for about $71,000,000 This is it was not a significant acquisition relative to our total size of about 300 assets or $6,000,000,000 in total value, which is why it didn't require us to go to the shareholders. With regards to the question of the premium paid, the additional consideration was primarily return of asset management fees and acquisition fees that we'd earned, as well as our invested offering costs, which we invested to support the launch of the fund in combination with our co sponsor Griffin. We view this as the best result for PECO and the REIT III shareholders to come to a quick resolution of a failed fund. So ultimately, it was not a very large acquisition for us and we were just seeking to do the best we could for those shareholders and for PECO it was not a significant acquisition. Thank you, John. Our next question comes from John Osborne, a financial advisor. He says, in your Q2 call, you stated that you haven't gone full cycle yet due in part to a weak marketplace where your peers, your publicly traded peers are trading at a meaningful discount to NAV. In the Q3 of 2019, he states that 34 of the top 50 mutual funds were real estate funds. Can you provide some commentary on that? Jeff, do you want to take that? Sure. John, thanks for the call. I don't think you're the only one with that question out there. We are as you know, we are focused on trying to get a liquidity event, But and the market has definitely improved. We've seen good improvement. It still continues to be trading at about a 10% discount to NAV. That spread is meaningful for us if we were to take we were to go and list the company. So what we're doing is we're doing the same things we have been doing, which is continue to focus on the operating platform, make sure we are prepared so that when the market gets to where it's trading at NAV or above that we will be in a good position to be able to take advantage of that. And we're a lot more optimistic today than we were in our last call. We still have a little ways to go and hopefully that will happen over the shorter timeframe. So thank you. Thanks, Jeff. A related question to liquidity. You said you need to delever in order for the company to best pursue a listing. How much debt do you need to pay down? How long do you anticipate that taking? And what are what's your target and what are the peers' target ratios in terms of debt? John, you want to take that? Sure, Michael. Thanks for the question. So we're about 40% debt to total enterprise value today. Based on where the peers have taken their leverage points. 2 or 3 years ago, 40% would have been in line. But over the last few years, they've all delevered and moved to lower. So I would say our target on debt to total enterprise value is probably closer to 30%. This is certainly not a high leverage point. I mean, we have the ability to go significantly higher as in a private setting, but in a public setting as we prepare for liquidity, our target would be closer to 30%. And our disposition activity is something that we continue to lean into. We've sold several assets and have been able to pay down debt this year. But we also view our investment management business as an opportunity to delever at an attractive price in a meaningful way. We did that with Northwestern Mutual in November 2018. And in our that's something that Devon is focused on and something that we would hope to do in the future. Great. Thanks, John. Another question. This is another quarter with a substantial net loss. Can you provide some more detail on the impairments? It's a very high number. When will impairments stop? And when do you expect to turn in net profit? John, do you want to take that? Sure. So we did have additional impairment losses this quarter for about $75,000,000 full on the full year $35,000,000 this quarter. These are non cash charges that do not affect our cash flows. As Jeff articulated, one of our initiatives this year is the disposition program. We've sold a few assets at aggressive cap rates and have been able to record gains on those and are using that to delever. But we're also taking this opportunity to prune the portfolio. Lower growth non core assets are the ones that are creating those impairments. And as we indicated, I believe in the press release, we are and even in today's commentary, we're striving to complete that program of non core disposition program by the first half of twenty twenty. Great. Thanks, John. A related question, how does the company continue to make distributions with the net loss every quarter? I'll take that one as well. So I would again, the net loss for the quarter is primarily non cash impairment charges. Our actual cash earnings continue to improve. The FFO or funds from operations is a real estate metric that adds back depreciation because that doesn't actually impact the fair value of our assets, but it is an accounting charge. I would note that our FFO and our MFFO or the modified funds from operations both exceeded 100% of the distributions we made during the quarter. So again, from a cash position, we continue to generate solid cash flow to pay the distribution and are using those additional proceeds then to delever invest in redevelopment in addition to buying new assets. Great. Thanks, John. We've got a question submitted on the webcast from Val Vogel. The question is, do we anticipate growth of value in the properties held? Do you want to take that? Sure. The answer is yes. And the assets where we don't believe we can see growth, we'll be selling and the assets we're buying will have, we believe, outsized growth compared to the existing portfolio. So that is a big part of our strategy. And that's going to be done through the day to day grind of leasing our properties, getting the spreads on the new tenants that we put in and increasing our occupancy. Those will be the pieces that will be the biggest movers in that growth. And if you look at our same center growth, you can see that we've done well in that and relative to our peers have done a very strong job. So yes, it's a great question, one that we obviously, that's what the operating platform is all about is being able to create that value. Great. Thanks, Jeff. The next question comes from Michael Cook from Cook Financial. Number 1 is when will the REIT revalue? And number 2, any indication of whether the share price would increase or decrease? John, you want to take that? Sure. So the next schedule, we revalue the net asset value with a third party as of March 31 each year. So our next anticipated would be March 31, 2020. As Jeff just indicated, the portfolio continues to grow from an NOI perspective. When you look at valuations, it's a combination of both the cash flow from those properties and then kind of market sales activity. So it's hard for me to say whether or not it will go up or down. But I would say that our NOI growth for the year that we believe will continue, we'll certainly be very supportive of the valuation. Great. Got a question submitted from Jay McClellan. He asked, what is the plan for maturing debt? John, you want to take that? Sure. Thank you, Jay. So the plan we have an upcoming debt maturity in 2020, and we're currently looking at different plans to refinance that in addition taking into account where the long term interest rates are and looking at options there. So I would expect that between now and the next quarter, we'll have a plan and come back to the shareholders with our plans to refinance that debt. Or as I indicated, we'll be looking at opportunities to repay different debt as well. Great. Our final question for the morning comes from Will Will Pugh from National Securities. He asked with the 10 year rates getting closer to 2%, have we missed the liquidity window? Finds it hard to believe grocery anchored tenant REITs are going to trade up par when the tenure was down below 1.5%. Can you provide some commentary on that? Sure. I'll take it and John add in as we go. So our it's a great question. Obviously, interest rate we're a yield driven stock that historically has traded relative to yield. And if I knew where interest rates were going, I would I'd be in a different position than I am now because it's really hard to know where they're going from where we are. The biggest damper on our segment has not been interest rates. The interest rates have been very supportive of it. It's really been the discussion about where retail is going over a longer period of time. And so that I think is going to drive our pricing more than interest rates, although obviously we keep a very close call on it. It's important to note, I mean, we're almost 80% to 85% of our debt is fixed. So we do not go up and down with the change in rates. But obviously, the investor demand for yield as the treasuries come yield come down does obviously make our stock more favorable. So we will that is something that we're hopeful that interest rates do stay low, but what we're really most looking at is the perception of retail and the perception of online and how and the impact it's going to have on our product. As you can see from our operating results, it's not having immediate results other than really positive. And we're in about as good operating environment as we've been in, in the history of the company. But it's a retail itself is a volatile concept and investment right now. This now concludes our question and answer session, and I'd like to turn the call back to Jeff for some closing comments. Thank you, Michael. On behalf of the entire management team, I'd like to express our appreciation for the continued support we received from our shareholders, our associates, our agents and importantly, our tenants. So we look forward to updating you with our Q4 results for 2019 in March of 20 20. And thank you all for being on the call today. Thank you for joining us. You may now disconnect.