AH Realty Trust, Inc (AHRT) 2017 Q3 法說會逐字稿

Greetings, and welcome to the Armada Hoffler Properties Third Quarter 2017 Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

各位好，歡迎參加 Armada Hoffler Properties 2017 年第三季電話會議。(接線員指示) 提醒各位，本次會議將被錄音。

It is now my pleasure to introduce Michael O'Hara, Chief Financial Officer. Thank you; please go ahead.

現在我很榮幸介紹財務長 Michael O'Hara。謝謝；請開始。

Good morning, and thank you for joining Armada Hoffler's Third Quarter 2017 Earnings Conference Call and Webcast. On the call this morning, in addition to myself, are Lou Haddad, CEO, and Eric Smith, our Chief Investment Officer, who will be available for questions.

各位早安，感謝各位參加 Armada Hoffler 2017 年第三季財報電話會議與網路直播。今天早上的電話會議中，除了我之外，還有執行長 Lou Haddad 以及投資長 Eric Smith；他們將可回答提問。

The press release announcing our third quarter earnings, along with our quarterly supplemental package, were distributed this morning. A replay of this call will be available shortly after the conclusion of the call through November 30, 2017. The numbers to access the replay are provided in the earnings press release. For those who listen to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, October 31, 2017, and will not be updated subsequent to this initial earnings call. During this call, we will make forward-looking statements, including statements related to the future performance of our portfolio, our development pipeline, impact of acquisitions and dispositions, our construction business, our portfolio performance and financing activities, as well as comments on our outlook. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the risk factors discussed in our press release this morning and in documents that we have filed with or furnished to the SEC.

我們今早已發布第三季盈餘新聞稿，並同時發送季度補充資料包。本次電話會議結束後不久，將提供重播，並可收聽至 2017 年 11 月 30 日。重播的撥入號碼已載於本次盈餘新聞稿。對於收聽本次簡報重播的聽眾，我們提醒：本簡報中的發言係截至今日（2017 年 10 月 31 日），且在本次初次財報電話會議之後不會再更新。在本次電話會議中，我們將發表前瞻性陳述，包括與我們投資組合未來表現、開發案儲備（pipeline）、收購與處分的影響、營造業務、投資組合表現與融資活動相關之陳述，以及對前景的評論。提醒聽眾注意，這些陳述受若干風險與不確定性影響，其中許多難以預測，且通常超出我們的控制範圍。這些風險與不確定性可能導致實際結果與我們目前的預期出現重大差異；我們建議聽眾查閱今早新聞稿以及我們向 SEC 申報或提供之文件中所討論的風險因素。

We'll also discuss certain non-GAAP financial measures, included but not limited to, FFO and normalized FFO. Definitions of these non-GAAP measures, as well as reconciliations to the most comparable GAAP measures, are included in the quarterly supplemental package, which is available on our website at armadahoffler.com.

我們也將討論若干非 GAAP 財務衡量指標，包括但不限於 FFO 與標準化（normalized）FFO。這些非 GAAP 指標的定義，以及與最可比 GAAP 指標之調節表，均收錄於季度補充資料包中；該資料可於我們網站 armadahoffler.com 取得。

I'm now turning the call over to our Chief Executive Officer, Lou Haddad. Lou?

接下來我把電話會議交給我們的執行長 Lou Haddad。Lou？

Thanks, Mike. Good morning, everyone, and thank you for joining us today. This morning, we reported third quarter results of $0.25 of normalized FFO per share, which was slightly higher than our expectations. We have also raised our guidance for the full year, as Michael will detail later in the call. Amongst others, a meaningful factor behind the increase in guidance is the performance of our construction company, and that is a great place to start my commentary.

謝謝，Mike。各位早安，感謝各位今天加入我們。今天早上我們公布第三季每股標準化 FFO 為 0.25 美元，略高於我們的預期。我們也上調了全年財測指引，Michael 稍後會在電話會議中詳細說明。在多項因素之中，推動指引上調的一個重要因素是我們營造公司的表現，而這正是我評論的最佳起點。

We have raised the top end of the guidance in this sector of the business to another all-time high of $7.5 million. We challenged that group at the beginning of the year with the reality that 2017 would be a year of prudent deleveraging of the balance sheet, without any concurrent rental income from new development deliveries. Therefore, additional third-party construction profit would be an important driver for earnings growth, with a caveat that the efficient execution of portfolio projects remain paramount. It was a tall order to eclipse the stellar year they had in 2016. To say that they answered the challenge would be an understatement.

我們已將該業務部門指引區間的上緣提高至另一個歷史新高：750 萬美元。年初我們就向該團隊提出挑戰：2017 年將是審慎降低資產負債表槓桿的一年，同時新開發案交付不會帶來同步的租金收入。因此，額外的第三方營造利潤將成為盈餘成長的重要驅動力，但前提是必須以高效率執行投資組合內的專案為最優先。要超越他們在 2016 年的亮眼表現，是一項艱鉅任務。若說他們回應了這項挑戰，那還只是保守的說法。

It is important to note that while these results are largely due to the hard work of many committed professionals, the numbers for both 2016 and 2017 were aided significantly by outsized contract volume and a significant one-time savings from a $100-plus million contract. Our expectation is that the construction company will return to its historic third-party gross profit norms of $4.5 million to $5.5 million in the next year. Remember, the primary mission of this division is execution on our development projects, which do not contribute to construction profits, as well as helping to secure further portfolio business with public entities and joint venture partners.

需要強調的是，雖然這些成果主要歸功於許多敬業專業人士的辛勤努力，但 2016 與 2017 年的數字也在很大程度上受惠於偏高的合約量，以及一份超過 1 億美元合約所帶來的一次性顯著節省。我們預期，營造公司在明年將回到其歷史性的第三方毛利常態水準，即 450 萬至 550 萬美元。請記得，該部門的首要任務是執行我們的開發專案（這些不會貢獻營造利潤），並協助與公共機構及合資夥伴爭取更多投資組合相關業務。

A great example of the complementary nature of our various divisions is currently taking place within our footprint. Our construction group has a long history of third-party work in the industrial and distribution sector. This experience began back in the early 1990s and continues today, as we are currently working on a few significant engagements with brand-name companies. In these negotiations, we have offered a menu of fee construction and development, build-to-suit purchases, or long-term lease arrangements, thereby giving clients optionality not typically seen in the industrial sector. We anticipate having an announcement soon from this cross-selling platform.

我們各事業部門之間互補性的絕佳例子，正於我們的營運版圖內上演。我們的營造團隊在工業與物流配送領域承接第三方工程，擁有悠久歷史。這段經驗可追溯至 1990 年代初期並延續至今；目前我們正與數家知名企業合作數個重要案子。在這些洽談中，我們提供一套選項組合：代建（fee construction）與開發、量身訂做（build-to-suit）購置，或長期租賃安排，從而讓客戶擁有在工業領域中並不常見的彈性選擇。我們預期不久將就此交叉銷售平台發布公告。

Before Mike takes us through the quarterly results and updated 2017 guidance in detail, I'll comment on our retail portfolio and the many exciting office, multi-family, and student housing projects in our development pipeline. As a diversified REIT, we invest in, develop, and build several different product types: office, multi-family, student housing, retail, and mixed use; and we also generate additional revenue through our operating divisions. Due to our opportunistic, rather than formulaic, approach to development, over the course of our company's history, the segment mix in our portfolio has fluctuated, and will continue to do so. For example, just three years ago, office assets generated nearly half of our portfolio NOI, and retail assets made up less than 40%. Through constant proactive and strategic portfolio management, the retail portion of our portfolio today stands at over 60% of NOI, yet still significantly less when combined with the other income from our operating divisions.

在 Mike 帶我們詳細檢視本季業績與更新後的 2017 年指引之前，我先就我們的零售投資組合，以及開發案儲備中多個令人振奮的辦公、多戶住宅與學生宿舍專案做些評論。作為一家多元化 REIT，我們投資、開發並興建多種不同產品類型：辦公、多戶住宅、學生宿舍、零售與複合用途；同時也透過營運事業部門創造額外收入。由於我們採取的是機會導向、而非公式化的開發策略，在公司歷史進程中，我們投資組合的業態占比曾經波動，未來也將持續如此。例如，就在三年前，辦公資產貢獻了我們投資組合 NOI 的近一半，而零售資產占比不到 40%。透過持續主動且具策略性的投資組合管理，如今零售部分已占 NOI 的 60% 以上；然而若與我們營運事業部門的其他收入合併計算，零售占比仍明顯較低。

While we expect this percentage to drop significantly upon stabilization of the multi-family, student housing, and office projects in our development pipeline, we remain confident and bullish about the retail assets in our portfolio. These properties continue to perform, with year-to-date same-store NOI up over last year. Given the current trepidation over all things retail, I will reiterate our philosophy on this sector of our business. As most of you know, we don't own malls, we don't own department stores, and we shy away from big-box centers. We own three types of retail properties: mixed use destination assets, grocery-anchored centers, and power centers anchored by best-in-class retailers.

雖然我們預期，隨著開發案儲備中的多戶住宅、學生宿舍與辦公專案達到穩定營運（stabilization），此一比例將顯著下降，但我們對投資組合中的零售資產仍保持信心並持正向看法。這些資產持續展現表現，同店 NOI 年初至今較去年成長。鑑於目前市場對所有零售相關事物的憂慮，我將重申我們對此業務領域的理念。如各位多數人所知，我們不持有購物中心（malls），不持有百貨公司，且會避開大型盒式（big-box）商場。我們持有三類零售資產：複合用途目的地型資產、以超市為主力店（grocery-anchored）的商場，以及由同級最佳零售商作為主力店的 power center。

For nearly 40 years, we have adhered to the basic tenets of real estate: Prime locations, proven operators, and diligent monitoring of sales traffic and demographics. The current retail environment has yielded a host of opportunities to acquire such properties, particularly in the grocery sector, and we are currently combing through these for centers that may meet our standards. We invest in superior locations in our geographical footprint, including high quality addresses in secondary and tertiary markets and most public REITs dismiss, featuring high quality anchors that we believe will continue to perform well in an increasingly competitive landscape. We are looking to add to this portfolio in the near future. Off-market opportunities that involve the issuance of OP units are especially attractive.

近 40 年來，我們始終遵循不動產的基本原則：黃金地段、經驗證的營運商，以及對銷售人流與人口結構的嚴謹監測。當前的零售環境帶來了大量機會，可收購此類資產，特別是在生鮮超市領域；我們目前正仔細篩選，尋找可能符合我們標準的商場。我們投資於自身地理版圖內的優質地段，包括多數上市 REIT 往往忽略的次級與三級市場中的高品質地址；這些資產擁有我們相信在競爭日益激烈的環境下仍將持續良好表現的高品質主力店。我們希望在不久的將來擴充此一投資組合。涉及發行 OP units 的場外（off-market）機會尤其具吸引力。

I will now spend a few minutes on our projects currently under development. Construction is underway on our two student housing projects on the historic Charleston Peninsula. These developments are located within one mile of the College of Charleston and in close proximity to five other schools in the area. We also continue to evaluate and explore further opportunities to grow our footprint in this market.

我現在將花幾分鐘談談我們目前正在開發中的專案。我們在歷史悠久的查爾斯頓半島（Charleston Peninsula）上的兩個學生宿舍專案已開始施工。這些開發案位於查爾斯頓學院（College of Charleston）一英里範圍內，且鄰近該區另外五所學校。我們也持續評估並探索更多機會，以擴大我們在此市場的布局。

Design progress on our new build-to-suit office building for Huntington Ingalls at Brooks Crossing is on track for an early 2018 construction start and 2019 delivery. This state-of-the-art facility is expected to house nearly 600 employees and serve as a catalyst for further development in this public/private partnership with the city of Newport News.

我們在布魯克斯克羅辛（Brooks Crossing）為亨廷頓英格爾斯（Huntington Ingalls）量身打造（build-to-suit）的新辦公大樓設計進度如期，預計於2018年初動工，並於2019年交付。這座最先進的設施預計可容納近600名員工，並在與紐波特紐斯市（Newport News）之公私合營夥伴關係中，成為帶動進一步開發的催化劑。

Construction on our Harding Place project in downtown Charlotte is nearing its midpoint, and we remain pleased with the strong rental rates and absorption that this sub-market continues to display.

我們位於夏洛特市中心（downtown Charlotte）的哈丁廣場（Harding Place）專案施工已接近中期，我們仍對該次級市場持續展現的強勁租金水準與去化（absorption）表現感到滿意。

The construction of Phase 6 of the Town Center of Virginia Beach has topped out and is tracking for a delivery next summer. This [infield block] will have a variety of entertainment options, as well as exciting new retailers and loft-style apartments. We're pleased to announce that Williams Sonoma and Pottery Barn will be the anchor tenants of this development. These sought-after names in home furnishings will join their sister brand, West Elm, further solidifying Town Center as a prime destination for shopping, dining, and entertainment in coastal Virginia.

維吉尼亞海灘市中心（Town Center of Virginia Beach）第6期工程已完成結構封頂（topped out），並按計畫於明年夏季交付。這個[infield block]將提供多元的娛樂選項，以及令人期待的新零售商與閣樓風格公寓。我們很高興宣布，Williams Sonoma 與 Pottery Barn 將成為此開發案的主力店（anchor tenants）。這些備受青睞的家居用品品牌將與其姊妹品牌 West Elm 一同進駐，進一步鞏固 Town Center 作為維吉尼亞沿海地區購物、餐飲與娛樂的首選目的地。

The initial units at Annapolis Junction have been delivered on schedule, and two months into the leasing effort, we have signed over 80 leases at pro forma rents. Needless to say, we are very pleased with the progress to date, but there is a long way to until stabilization.

安納波利斯交匯處（Annapolis Junction）的首批單位已如期交付；在招租啟動兩個月後，我們已以預估（pro forma）租金水準簽下超過80份租約。不用說，我們對目前的進展非常滿意，但距離達到穩定營運（stabilization）仍有一段路要走。

The Point Street Apartments at Harbor Point in Baltimore are on track to begin deliveries early next year. Given the prime locations and compelling market dynamics of both of these off balance sheet projects, we fully expect to exercise our at-cost purchase options.

巴爾的摩（Baltimore）港灣點（Harbor Point）的 Point Street 公寓（Point Street Apartments）進度符合預期，預計於明年初開始交付。鑑於這兩個表外（off balance sheet）專案的優越地段與具吸引力的市場動態，我們完全預期將行使以成本價（at-cost）的購買選擇權。

Last quarter, we entered into an LOI for a significant block of the remaining office space at One City Center in downtown Durham. Lease negotiations continue in earnest, and assuming lease execution, the office component will be 90% pre-leased in advance of our expected summer 2018 delivery. We have begun preliminary discussions with our joint venture partner and Duke University about the next development project in Durham.

上季，我們就達勒姆市中心（downtown Durham）One City Center 剩餘辦公空間中的一大區塊簽署了意向書（LOI）。租賃談判仍在積極進行中；若能完成簽約，則在我們預計於2018年夏季交付之前，辦公部分將可達到90%的預租（pre-leased）率。我們已開始與合資夥伴及杜克大學（Duke University）就達勒姆下一個開發專案進行初步討論。

With almost $440 million of development in our current pipeline and our target wholesale-to-retail spreads of around 20%, we expect that these projects alone will add well over $1 per share of NAV, once all projects are delivered and stabilized.

目前我們的開發管線接近4.4億美元，且目標批發轉零售利差（wholesale-to-retail spreads）約為20%；我們預期僅這些專案在全部交付並達到穩定營運後，就將為每股淨資產價值（NAV）增加遠超過1美元。

We continue to explore a number of exciting development opportunities in our target markets. As an example, you may recall that last quarter, we entered into an agreement with SJ Collins, a seasoned developer of high quality grocery-anchored retail centers, to deliver a Whole Foods center in Decatur, Georgia. We have now closed on a second Whole Foods engagement through this relationship, this one in Delray Beach, Florida. We are actively working on more opportunities with both this developer and exclusive retailer.

我們持續在目標市場探索多項令人振奮的開發機會。例如，您可能還記得上季我們與 SJ Collins 達成協議；SJ Collins 是高品質、以生鮮超市為主力店（grocery-anchored）的零售中心資深開發商，將在喬治亞州迪凱特（Decatur, Georgia）交付一座 Whole Foods 中心。我們現已透過此合作關係完成第二個 Whole Foods 專案的簽約，本次位於佛羅里達州德爾雷海灘（Delray Beach, Florida）。我們正積極與該開發商及此獨家零售商合作，推進更多機會。

Assembly of our next development pipeline is well underway, and we look forward to discussing those projects with you early next year. At this time, I'll turn the call over Mike to discuss our third quarter results and updated 2017 guidance in detail. Mike?

我們下一階段開發管線的整合（assembly）正順利推進，並期待在明年初與各位討論這些專案。接下來，我將把電話會議交給 Mike，請他詳細說明我們第三季業績與更新後的2017年財測指引。Mike？

Thanks, Lou. Before I discuss the quarter, I want to point out that we updated the company logo and branding, which you can see on the cover of our supplemental package. We also enhanced our website. If you get a chance, please visit the updated website and look at the new information we've added regarding our development pipeline and portfolio.

謝謝你，Lou。在我討論本季之前，我想先指出我們已更新公司標誌與品牌識別，您可在補充資料封面看到。我們也強化了網站。若您有時間，請造訪更新後的網站，查看我們新增的開發管線與投資組合相關資訊。

This morning, we reported FFO of $0.25 and normalized FFO of $0.25 per share, which is slightly above expectations. On the Construction front, we reported a segment gross profit in the third quarter of $1.8 million on revenue of $41 million. We increased the guidance on this segment of our business again this quarter. Construction company is having perhaps its best year ever. As Lou said, we do not expect this level of profit in 2018. At the end of the third quarter, the company had a third-party construction backlog of $77 million.

今天早上，我們公布FFO為每股0.25美元，標準化FFO（normalized FFO）亦為每股0.25美元，略高於預期。在營造（Construction）方面，我們第三季該分部在4,100萬美元營收下，分部毛利為180萬美元。我們本季再次上調此業務分部的財測指引。營造公司今年可能是有史以來表現最好的一年。如Lou所說，我們不預期2018年仍能維持這樣的獲利水準。截至第三季末，公司第三方營造在手訂單（backlog）為7,700萬美元。

Now, turning to our balance sheet, we continue to take actions to enhance flexibility on our balance sheet and to work on loan maturities. As discussed last quarter, maintaining a strong balance sheet as a private company was instrumental in being successful for 34 years, prior to going public in 2013. With the management team being the largest shareholder at 17%, this approach has not changed.

接著談資產負債表，我們持續採取行動以提升資產負債表的彈性，並處理貸款到期結構。如上季所述，在2013年上市前，作為私人公司維持強健的資產負債表，是我們34年來成功的關鍵。管理團隊持股17%，為最大股東，因此這項做法並未改變。

In May, we completed an equity offering to raise $85 million to help fund our $440 million development pipeline. With this equity raised, we now have the capacity to complete and bring the current development projects on balance sheet. With our current leverage metrics well positioned, we do not issue any shares this quarter and do not intend on issuing any during the fourth quarter. We do not currently have an ATM program in place, but we expect to implement a new program early next year. As Lou discussed, we are seeing a lot of activity in predevelopment and acquisitions. With these opportunities, we want the availability of additional capital for accretive transactions.

5月，我們完成一項股權發行，募得8,500萬美元，以協助資助我們4.4億美元的開發管線。在完成此股權募資後，我們現在具備將目前開發專案完成並納入表內（on balance sheet）的能力。在目前槓桿指標處於良好水準的情況下，我們本季未發行任何股份，且第四季也無意發行。我們目前尚未設置ATM（at-the-market）計畫，但預期將於明年初推出新的計畫。如Lou所提，我們在前期開發（predevelopment）與收購方面看到大量活動。面對這些機會，我們希望能保有額外資本的可用性，以進行具增益（accretive）的交易。

We continue to work on loan maturities. Our 2015 credit facility was scheduled to mature in early 2019, and last week, we closed on a new credit facility to stay ahead of the maturity. The new facility is $300 million, with an (inaudible) of $450 million. This facility includes a $150 million revolver and a $150 million term loan. The revolver matures in four years, and the term loan matures in five years. During the quarter, we also closed on a new five-year, fixed-rate loan on the Hanbury Harris Teeter center and lowered the interest rate on the Cosmo.

我們持續處理貸款到期事宜。我們2015年的信用融資原訂於2019年初到期；為提前因應到期風險，我們於上週完成一項新的信用融資。新融資額度為3億美元，並有（聽不清）至4.5億美元的增額選擇權（accordion）。此融資包含1.5億美元循環額度（revolver）與1.5億美元定期貸款（term loan）。循環額度到期為四年，定期貸款到期為五年。本季期間，我們也完成 Hanbury Harris Teeter 中心一筆新的五年期固定利率貸款，並下調 Cosmo 的利率。

At the end of the quarter, we had total outstanding debt of $494 million, including $58 million outstanding under the $150 million revolving credit facility. We continue to evaluate our exposure to higher interest rates and look for opportune times to hedge our interest rate exposure. At quarter-end, 100% of our debt was either fixed or hedged. Again this quarter, we purchased a two-year, $50 million interest rate cap at 1.5%.

截至季末，我們未償還總負債為4.94億美元，其中包括在1.5億美元循環信用融資下已動用的5,800萬美元。我們持續評估對利率上升的曝險，並尋找適當時點對利率風險進行避險。截至季末，我們100%的債務皆為固定利率或已避險。本季我們再次買入一筆兩年期、名目本金5,000萬美元、上限利率1.5%的利率上限（interest rate cap）。

During the quarter, we continued with asset recycling. We sold the two Commonwealth of Virginia single-tenant office buildings at a 6.8 cap rate, with a gain of 38% over our development costs. The proceeds from this sale were used in a 1031 tax-free exchange to purchase the (inaudible) parcels at Wendover Center.

本季期間，我們持續進行資產循環。我們以6.8%的資本化率出售了位於維吉尼亞州聯邦的兩棟單一承租戶辦公大樓，較我們的開發成本實現38%的收益。本次出售所得款項透過1031免稅交換，用於購買位於Wendover Center的（聽不清）地塊。

This quarter, we signed a term sheet with SJ Collins, solidifying the relationship on their grocery-anchored development business. We expect to be their capital source on development projects that have signed anchor leases and strong small shop preleasing. In addition, we have the option to purchase these centers upon completion. As we mentioned, we closed on a second mezz loan with SJ Collins for a Whole Foods-anchored center in Delray Beach, Florida. The loan is for $6 million at 15%. This center is 85% leased (inaudible) LOI in a strong market.

本季，我們與SJ Collins簽署了一份條款清單，鞏固了在其以超市為主力店的開發業務上的合作關係。我們預期將成為其開發專案的資金來源，這些專案需已簽署主力店租約且小型店鋪預租表現強勁。此外，我們也擁有在這些中心完工後予以收購的選擇權。如我們先前提到的，我們已與SJ Collins完成第二筆夾層貸款的交割，標的為佛羅里達州德爾雷海灘（Delray Beach）一座以Whole Foods為主力店的中心。該筆貸款金額為600萬美元，利率15%。該中心已出租85%，並在強勁市場中有（聽不清）的意向書（LOI）。

Now I want to discuss our same-store NOI results. Last quarter, we discussed this metric, which has been positive for 11 consecutive quarters, decrease as expected. It is being impacted from the drop in occupancy at the Cosmo, as a result of the construction of Town Center Phase 6 across the street, and by the relocation expansion of two significant office tenants to 4525 Main Street, which is not in our same-store NOI calculation. We believe this activity is a positive for the company, not negative, and adds true value, despite the interim financial optics. We expect this anomaly to reverse around mid-2018, once 4525 Main Street is in the same-store NOI calculation and the Cosmo occupancy rebounds concurrently, with Phase 6 opening for business as expected.

接下來我想討論我們的同店NOI結果。上季我們談到這項指標，已連續11個季度為正，並如預期出現下滑。其受到Cosmo入住率下降的影響，原因是街對面正在施工的Town Center第6期；同時也受到兩家重要辦公租戶搬遷擴張至4525 Main Street的影響，而該物業不納入我們的同店NOI計算。我們認為這些活動對公司是正面而非負面，儘管短期財務呈現上不夠好看，但確實能增加真實價值。我們預期此一異常情況將在2018年年中左右反轉，屆時4525 Main Street將納入同店NOI計算，同時隨著第6期如期開業，Cosmo的入住率也將同步回升。

To truly illustrate what is happening with our portfolio, look at our occupancy and releasing spreads. Our core operating portfolio occupancy this quarter is 95%, with office at 89%, retail at 97%, and multi-family at 94%, and our releasing spreads have been strong for 2017, with GAAP positive 5.7% and cash positive 3.9%.

要真正說明我們投資組合正在發生什麼，請看我們的入住率與續租/再出租價差。本季我們核心營運投資組合的入住率為95%，其中辦公為89%、零售為97%、多戶住宅為94%；而我們2017年的續租/再出租價差表現強勁，GAAP口徑為正5.7%，現金口徑為正3.9%。

Now for an update on our full-year 2017 guidance that we issued this morning. We expect 2017 normalized FFO in the range of $0.98 to $1 per share, which is an increase from last quarter. The updated 2017 guidance is predicated on the following: Total NOI in the $72.6 million to $73 million range; third-party construction gross profit in the $7.2 million to $7.5 million range; general administrative expenses in the $10.4 million to $10.6 million range; interest income from our mezzanine finance program in the $6.9 million to $7.1 million range. At the end of the quarter, the aggregate balance of these mezzanine loans was $75 million. This updated guidance includes the Delray Beach loan. Interest expense in the $17.2 million to $17.5 million range, and 60.2 million in weighted average shares outstanding.

接下來更新我們今天早上發布的2017全年指引。我們預期2017年標準化FFO介於每股0.98至1.00美元，較上季上調。更新後的2017年指引基於以下假設：NOI總額介於7,260萬至7,300萬美元；第三方施工毛利介於720萬至750萬美元；一般及行政費用介於1,040萬至1,060萬美元；來自我們夾層融資計畫的利息收入介於690萬至710萬美元。截至本季末，這些夾層貸款的合計餘額為7,500萬美元。本次更新指引已包含德爾雷海灘貸款。利息費用介於1,720萬至1,750萬美元，加權平均流通股數為6,020萬股。

Now I'll turn the call back to Lou.

現在我把電話交回給Lou。

Thanks, Mike. As you may have surmised by now, we remain extremely bullish on the performance of our company. With an accretive pipeline nearing delivery, positive re-leasing spreads, and a solid balance sheet, we believe we are poised for significant growth over the next few years. When combining these factors with a well-covered dividend that has increased annually, now yielding in excess of 5%, we feel that we are delivering exceptional value to our shareholders.

謝謝，Mike。如各位現在可能已經推測到的，我們對公司表現仍然極度看多。在具增益性的開發管線即將交付、續租/再出租價差為正，以及穩健的資產負債表支撐下，我們相信未來幾年將具備顯著成長動能。再加上股利覆蓋充足且逐年提高，目前殖利率超過5%，我們認為正為股東創造卓越價值。

Thank you for your time this morning and your interest in Armada Hoffler. Operator, we would like to begin the question-and-answer session.

感謝各位今天早上的時間，以及對Armada Hoffler的關注。接線員，我們想開始問答環節。

Thank you. The floor is now open for questions. (Operator Instructions) Our first question comes from the line of Dave Rodgers of Robert W. Baird. Please go ahead.

謝謝。現在開放提問。（接線員指示）我們的第一個問題來自Robert W. Baird的Dave Rodgers。請開始。

Hey, good morning guys. Lou, wanted to start with --

嗨，早安各位。Lou，我想先從——

Dave.

Dave。

Yeah, thanks. Wanted to start with the retail discussions that you were having at Phase 6 at Town Center, obviously two great signings since the last time we all spoke. But maybe just more about the discussion; did West Elm help that commitment, or are you just really seeing no slow-down in the demand for that kind of retail in the portfolio?

對，謝謝。我想先談談你們在Town Center第6期所進行的零售招商討論；顯然自上次我們通話以來有兩個很棒的簽約。但想更了解一下討論的情況：West Elm是否有助於促成那項承諾？或者你們只是看到投資組合中這類零售需求完全沒有放緩？

Thanks, Dave; good question. Certainly, West Elm being here for the last couple years has helped, and obviously, they're all members of the same parent company as Williams Sonoma. And so, obviously they liked their experience here with West Elm and decided to bring the other two brands into the development, as well.

謝謝你，Dave；問得很好。當然，West Elm在這裡的這幾年確實有幫助，而且很明顯，他們都隸屬於與Williams Sonoma相同的母公司。因此，他們顯然很喜歡在這裡與West Elm合作的經驗，也決定把另外兩個品牌一併帶進這個開發案。

The environment for the mixed-use retail remains strong, but I would tell you that it's shifting. There's a lot more -- we all term it as retail, and it's what's at the bottom of these high-rise buildings, but it's not pure retail. Where it used to be a lot of soft goods, it's now more services, fast casual eateries, professional office space, and the like. But you still need to have a number of these top shelf tenants to add to that mix, and that's why we're really pleased with the two new signings.

複合式用途的零售環境仍然強勁，但我會說它正在轉變。現在有更多——我們都把它稱為零售，也就是這些高樓底層的店面，但它並非純零售。過去多是軟性商品，現在更多是服務業、快速休閒餐飲、專業辦公空間等等。但你仍需要一些頂級租戶來豐富組合，因此我們對這兩個新簽約感到非常滿意。

And maybe [to begin] with the Town Center, I know that you have some office leases that have not yet commenced that you've executed on, but I'm just curious, because you do have some holes to fill I think in the some of the older assets.

另外，或許從Town Center談起，我知道你們已簽了一些尚未起租的辦公租約，但我只是好奇，因為我想你們在一些較舊資產上仍有一些空缺需要填補。

Yes, we're feeling really good about what's going on right now in office. We've got some -- we've almost rolled through all of the initial Town Center leases. We've got a few more to go, and we're already well into renewing those, as well. So as far as our retention rate, it remains at pretty darn close to 100%, and as Mike mentioned, releasing spreads are pretty strong.

是的，我們對目前辦公市場的進展感到非常樂觀。我們已經——幾乎把Town Center最初那批租約都輪替完成了。還剩下少數幾份，而我們也已經在積極推進續約。因此就續租留存率而言，仍然非常接近100%；而如Mike提到的，續租/再出租價差也相當強勁。

That leaves us -- if you look at Town Center on the whole, forgetting what's in the same-store pool and what's not, we've got about 800,000 square feet of office space, and about 10% of that is vacant. That's across the entire portfolio. A lot of that is in the older assets, and it's all in -- a lot of it's in small pieces. So re-leasing, although somewhat tedious, is pretty robust and we expect, as I've mentioned on the last couple calls, that the Town Center office will get back into its 95% range in fairly short order.

這使得我們——如果你從整體來看Town Center，不去區分哪些在同店池、哪些不在，我們大約有80萬平方英尺的辦公空間，其中約10%為空置。這是整個投資組合的情況。其中很大一部分在較舊資產，而且多數是——很多是小面積分散的空間。因此再出租雖然相對繁瑣，但需求相當強勁；正如我在過去幾次電話會議中提到的，我們預期Town Center的辦公入住率將在不久後回到約95%的水準。

And then, maybe last one for me, on SJ Collins and the recent loan that you put out this quarter, the $6 million, can you kind of remind us on how big that you'd be willing to kind of go with that program in terms of kind of, maybe the impact that it would have on earnings, et cetera?

然後，可能我最後一個問題，關於 SJ Collins 以及你們本季推出的那筆近期貸款 600 萬美元，你能否提醒我們，針對這個計畫你們願意把規模做到多大？以及它可能對盈餘等方面造成的影響？

It's going to be interesting. I mean, the relationship, although we've known those guys for quite a while, the relationship is fairly new. And obviously, the relationship between Amazon and Whole Foods is fairly new as well, so we're not sure how fast that run rate's going to be. But our companies continue to get tighter and tighter. Our construction company has been introduced into the mix, and I think, with very few exceptions, you'll see that whatever those engagements are, they'll involve our construction company, as well as Mike said, our option to purchase. We're obviously very excited about the whole prospect of what could be coming down the pike in that arena.

這會很有意思。我的意思是，雖然我們認識那些人已經有一段時間了，但這段合作關係其實還算新。而且很明顯，Amazon 和 Whole Foods 之間的關係也相當新，所以我們不確定那個運行速度（run rate）會成長得多快。但我們的公司之間持續變得越來越緊密。我們的營造公司也被引入到這個組合裡，我想，除了極少數例外，你會看到不論那些合作案是什麼，都會包含我們的營造公司；另外如 Mike 所說，也會包含我們的購買選擇權。我們顯然對於在那個領域可能即將到來的整體前景感到非常興奮。

Okay, great; thank you.

好的，很棒；謝謝你。

Thank you. Our next question is coming from John Guinee of Stifel. Please go ahead.

謝謝。我們下一個問題來自 Stifel 的 John Guinee。請繼續。

Great. Thank you very much. Lou, not to put you on the spot a little bit, but could you expand on the conversation we had previously, which I think would be very helpful to everyone on the call? Talk about how your major grocery anchors are thinking right now about the threat from the top end in terms of e-commerce and the bottom end in terms of Lidl and Aldi, and those deep discount grocers.

很好。非常感謝。Lou，不是要讓你有點為難，但你能否延伸一下我們先前的對話？我想這對電話會議上的每個人都會很有幫助。談談你們主要的雜貨主力店（anchor）目前如何看待來自高端的電商威脅，以及來自低端的 Lidl、Aldi 這些深度折扣雜貨商的威脅。

Sure. Thanks, John; it's a good question. I'll try and be concise. As we've said before, we have nearly a 40-year history in the grocery space. We believe that groceries are going to continue to be a stalwart in the retail game, but it's going to be changing, just like it's changed several times over the past 40 years, with category killers coming and going and shifting demographics and the like.

當然。謝謝你，John；這是個好問題。我會盡量簡潔。如同我們之前說過的，我們在雜貨領域有將近 40 年的歷史。我們相信雜貨將會持續是零售市場中的中流砥柱，但它也會改變，就像過去 40 年裡已經改變過好幾次一樣，包含品類殺手（category killers）的興衰、更迭的人口結構等等。

The basic tenets are still there, both for the proven operators, as well as the real estate professional, in that good locations, with proven operators, with the right demographics, are going to continue to perform. We play primarily in what would be termed probably the high middle of the road grocer, the Harris Teeter, the Kroegers, the Publix, Lowes Foods, Food City, really good national and regional names. If we stick with those names and we stick into the right locations, we feel very, very good about what's going to continue to happen in that space.

基本原則仍然存在，無論是對成熟的營運商，還是對不動產專業人士而言：好的地點、經驗證的營運商、以及合適的人口結構，將會持續有良好表現。我們主要布局在可稱為「中高端主流」的雜貨商，例如 Harris Teeter、Kroger、Publix、Lowes Foods、Food City，都是非常優秀的全國性與區域性品牌。如果我們堅持這些品牌並選在正確的地點，我們對於這個領域接下來的發展會非常、非常有信心。

I think if you were to interview professionals in that space, they'd tell you that yes, there is going to be some bleed from the internet top end, and yes, there's going to be some bleed from the Europeans at the bottom end. But the middle, while affected, is still going to be a great place to play. You've just got to really be careful about locations, as well as your whole distribution strategy.

我想如果你去訪問這個領域的專業人士，他們會告訴你：是的，高端會有一部分被網路分流；是的，低端也會有一部分被歐洲業者分流。但中間帶雖然會受到影響，仍然會是一個很好的戰場。你只需要在選址以及整體配送／供應鏈策略上非常謹慎。

So we continue to believe in those names. We're going to continue to invest in those names, again, in the right locations, and we're going to continue to trim around the edges where we don't see that value. We think that the bottom end is going to be challenged greatly, particularly from the Europeans, and so if you look at the names that play in that space on the grocery business, there's going to be some winners and loser. There is certainly going to be some consolidation, long term, but we've faced consolidation in every sector of our business, be it office, retail, or multi-family. And again, that's why they pay us to be real estate professionals and come up with the right locations.

因此我們仍然相信這些品牌。我們會持續投資這些品牌，同樣是在正確的地點，並且會在我們看不到價值的邊緣地帶持續做修剪與調整。我們認為低端市場將會面臨很大的挑戰，特別是來自歐洲業者的競爭；所以如果你看那些在雜貨業務低端市場競爭的品牌，將會出現一些贏家與輸家。長期來看一定會有一些整併，但我們在每個業務領域都面對過整併，不論是辦公、零售或多戶住宅。而且再次強調，這也是為什麼他們付費請我們當不動產專業人士，去找出正確的地點。

Thanks, and then second question, Williams Sonoma and Pottery Barn, can you talk a little bit about two things? One, what kind of deal do you have to cut in terms of base rent, net and gross, as well as tenant concessions, TI dollars, to get them in the space? And also, are they new to the trade area, and are they moving from a different location, and if so, from where are they moving?

謝謝，那第二個問題，關於 Williams Sonoma 和 Pottery Barn，你能談談兩件事嗎？第一，為了把他們引進來，你們在基本租金（base rent）、淨租金與總租金（net and gross），以及承租人讓利（tenant concessions）、裝修補助（TI dollars）方面，需要做到什麼樣的條件？另外，他們是否是該商圈的新進品牌？他們是否從其他地點搬遷過來？如果是，是從哪裡搬過來？

Okay, great question, John. You're exposing all of our secrets here. As I alluded to earlier, with this mixed-use retail, it's really a mixed bag of operators. And what I said about professional space and fast casual restaurant space, and even education space for for-profit colleges, those are predominantly the high payers. I would tell you that, in these mixed-use, open-air centers, particularly in a secondary market like Virginia Beach, you are not doing those deals to get rich. You want to have a good roster of those kinds of names so that you can drive traffic to your restaurants, to your office space, and to your multi-family. But for us, that takes a good amount of incentive, and very often, a percentage rent deal that as a microcosm, is not a great deal for us. When we put it into the mix, it adds. Where we might have to give some concessions to get a Williams Sonoma, you would then get a high-volume restaurant next door paying $50, $60 a square foot, and that's where we have to continue to play. The mix is incredibly important in these mixed-use centers. You've got to stick with the one-of-a-kind retailers as well as restaurants, because you've got to bring the highest volume -- I'm sorry; the highest income traffic to the center.

好的，John，這是個很棒的問題。你這是在把我們所有的祕密都挖出來。如我先前提到的，這種複合式零售其實是各種營運商的混合。我先前談到的專業服務空間、快速休閒餐飲空間，甚至是營利性大學的教育空間，這些通常都是付租能力最高的。我會告訴你，在這些複合式的露天型中心，尤其是在像維吉尼亞海灘這樣的次級市場，你做這些交易不是為了賺大錢。你希望有一份好的品牌名單，藉此帶動餐廳、辦公空間以及多戶住宅的人流。但對我們而言，這需要相當程度的誘因，而且很多時候會是抽成租金（percentage rent）的交易；就單一個案來看，對我們並不是一筆很好的交易。但當我們把它放進整體組合裡，它就會加分。我們可能必須提供一些讓利才能引進 Williams Sonoma，但接著你就能在隔壁引進一家高營收餐廳，支付每平方英尺 50、60 美元的租金，而這就是我們必須持續布局的地方。在這些複合式中心裡，組合配置極其重要。你必須堅持引進獨一無二的零售商與餐廳，因為你必須把最高量——抱歉，是最高收入的人流帶進中心。

With regard to Williams Sonoma and Pottery Barn, they have had presence in the market. They were both, I believe, in a major mall, regionally. I do not know if they have decided whether or not to consolidate or simply to open these new locations, and that's really more for them to say.

至於 Williams Sonoma 和 Pottery Barn，他們在這個市場一直都有據點。我相信他們兩家之前都在一個大型的區域型購物中心裡。我不知道他們是否已經決定要整併，或只是要開設這些新店點，這部分更應該由他們來說明。

Great. Thank you.

很好。謝謝。

Thank you.

謝謝。

Thank you, our next question is (inaudible) Scott (inaudible) from Bank of America. Go ahead.

謝謝，我們下一個問題是（聽不清楚）來自美國銀行的 Scott（聽不清楚）。請繼續。

Hey, guys; good morning.

嗨，各位；早安。

Hey, Scott.

嗨，Scott。

I noticed you sold two office assets in the quarter. I was wondering if you could just update us on the non-core that may look to sell, and also maybe just an update on your food line assets.

我注意到你們本季出售了兩項辦公資產。我想請你們更新一下，還有哪些可能會出售的非核心資產；另外也想請你們更新一下你們的 Food Lion 資產。

Non-core assets, we've cycled through what we typically sell as a matter of course. As we've said in the past, we don't like to hold on to single-tenant office space, particularly suburban office space, and that pretty much is it as far as the portfolio. I'd mentioned last quarter, if not two quarters ago, that we have three food lines still in the portfolio. They're fairly old. We developed them in the late 1990s. They've served us well. We don't believe that there's really further growth to be had there. One has since renewed. They're coming to the end of their 20-year leases. One has since renewed; we expect to renew the other two. And I would say, over the next 12 to 18 months, that they won't be in our portfolio.

非核心資產方面，我們已經把通常會例行出售的項目都輪過一遍了。如同我們過去所說，我們不喜歡持有單一承租戶的辦公空間，尤其是郊區的辦公空間；就投資組合而言，基本上就是這些。我在上季（如果不是前兩季）提到，我們的投資組合裡仍有三條食品相關的資產線。它們相當老了。我們在 1990 年代末期開發的。它們一直以來對我們很有幫助。我們認為那裡基本上不會再有進一步的成長。其中一個已經續約。它們的 20 年期租約也快到期了。其中一個已經續約；我們預期另外兩個也會續約。我會說，在接下來 12 到 18 個月內，它們將不會再留在我們的投資組合中。

But we are also not in any hurry to dump any real estate. These are really fine locations with really good performance on the small shop side. But again, as a matter of course, we don't believe that they belong long term in the portfolio.

但我們也不急著拋售任何不動產。這些地點真的很好，小店鋪端的營運表現也非常出色。但同樣地，按慣例來說，我們不認為它們適合長期留在投資組合中。

Okay, and then on your expiration schedule for next year, I noticed you have about 8.5% of your office rent expiring and a similar number for retail, just your expectation to renew, and then also, if there are any known move-outs in those numbers.

好的，那關於你們明年的到期時程表，我注意到你們大約有 8.5% 的辦公室租金到期，零售也差不多是同樣的比例；想請教你們對續約的預期，以及這些數字裡是否有任何已知的退租。

Yes, that's -- and again, thanks for this question, Scott. We don't expect anybody to move out. Again, I want to get back to the strengths here at Town Center. We're home to about 115 commercial tenants on the office and mixed-use side. We've been operating this development for going on 15, 16 years. I believe -- I don't think anybody will correct me on this -- I believe you can count on one hand the number of tenants that have actually left. I don't expect anybody in that 8.5% to leave -- or I shouldn't say anybody, because I don't know how many real small guys there. But I'm thinking of the top four or five that make up that percentage, and re-leasing negotiations are well underway.

是的，那是——再次感謝這個問題，Scott。我們不預期有人會搬走。我想再次回到 Town Center 這裡的優勢。我們在辦公與複合用途端大約有 115 家商業租戶。我們營運這個開發案已經將近 15、16 年了。我相信——我想應該沒有人會糾正我——我相信真正離開的租戶數量，用一隻手就數得出來。我不預期那 8.5% 裡有人會離開——或者我不該說「任何人」，因為我不知道裡面有多少很小的租戶。但我想到的是構成該比例的前四、五大租戶，而續租談判已經在積極進行中。

And is it the same thing on the retail side?

那零售端也是同樣的情況嗎？

On the retail side, the most significant thing, there's a large Kroeger at North Point that is going -- it's a very high-volume Kroeger, and it's going to renew just fine, either before the end of the year or shortly thereafter. There also is an expiration in late 2018 of the small Kroeger that we talked about last quarter or two in Waynesboro, Virginia. It's a 30,000-foot Kroeger. It was a throw-in to the portfolio that we bought, and our expectation is that they will not renew there, and we're working on a redevelopment plan on that space.

零售端最重要的是，North Point 有一家大型 Kroeger——那是一家銷量非常高的 Kroeger——它會順利續約，可能在年底前或不久之後完成。另外，2018 年底還有一個到期項目，是我們在上一季或前兩季談到的、位於維吉尼亞州 Waynesboro 的那家小型 Kroeger。那是一家 30,000 平方英尺的 Kroeger。它是我們收購那個投資組合時附帶進來的資產；我們預期他們不會在那裡續約，而我們正在就該空間擬定再開發計畫。

Great; thank you for taking my question.

很好；謝謝你回答我的問題。

Sure.

當然。

Thank you. Our next question is coming from Rob Stevenson from (inaudible). Please go ahead.

謝謝。下一個問題來自（聽不清）Rob Stevenson。請開始。

Hi, good morning guys. Mike, just wanted to dive more into the guidance here. Was there anything in third quarter FFO that's not recurring moving forward? I mean, you guys have done $0.76 of FFO year-to-date; midpoint of the guidance is $0.99, which would be a $0.23 fourth quarter, which is a $0.02 quarter-over-quarter decline. Is that just the construction company? Is there something else that's potentially pushing earnings down sequentially?

嗨，大家早安。Mike，我想更深入談談你們的指引。第三季的 FFO 裡，有沒有任何未來不會再發生的非經常性項目？我的意思是，你們年初至今的 FFO 是 0.76 美元；指引中位數是 0.99 美元，這代表第四季要做到 0.23 美元，也就是較上一季季比下降 0.02 美元。這只是因為營造公司嗎？還有沒有其他可能讓獲利呈現連續下滑的因素？

Yes, good morning, Rob. A couple things in the third quarter that affected NOI, one was the occupancy at (inaudible) dropped during the summertime, and that occupancy dropped lower than we were expecting. That dropped down into the 25% range, and certainly, that's going to bounce back. Now we're 100% leased for the full -- for the fourth quarter. We also had some miscellaneous items and some bad debt from some small tenants that hit in the third quarter we don't expect to repeat in the fourth quarter, so certainly, we're looking for the NOI to rebound. We had a one-time item during the third quarter; we had sold an outparcel, (inaudible) outparcel. I think we talked about it in the first or second quarter that that closed during the quarter, and that gain was around $500,000.

是的，早安，Rob。第三季有幾件事影響了 NOI，其中之一是（聽不清）在夏季期間的入住率下滑，而且下滑幅度比我們預期更大。那降到大約 25% 的區間，當然，這會回升。現在我們第四季已經 100% 出租。我們第三季也有一些雜項，以及來自一些小租戶的壞帳，我們預期第四季不會重複發生，所以我們確實期待 NOI 反彈。第三季還有一個一次性項目；我們出售了一個外圍地塊，（聽不清）的外圍地塊。我想我們在第一季或第二季提過，那筆交易在本季完成，處分利益大約是 50 萬美元。

Okay, so the $500,000 is the only sort of negative to earnings going forward.

好的，所以那 50 萬美元是未來對獲利唯一的那種負面因素。

Correct.

正確。

Which shouldn't -- I mean, given the shares outstanding, I mean, shouldn't be, you know, more than sort of a penny. Because I'm just trying to figure out at the midpoint if you're looking at a $0.02 quarter-over-quarter decline in earnings and what else would sort of make up for that, or whether or not you guys are more likely to come in at the higher end of that guidance range.

這應該——我的意思是，以流通股數來看，應該不會超過大概 1 美分。因為我只是想弄清楚，在中位數情境下，你們看起來是季比下滑 0.02 美元，那還有什麼其他因素會補上這個差額；或者你們是否更可能落在指引區間的高端。

Yes, the other area is the construction company. If you take a look at the gross profit year-to-date in our guidance on there, you'll see that the fourth quarter is not going to be like the previous quarter.

是的，另一個部分是營造公司。如果你看一下我們在指引中所列的年初至今毛利，你會看到第四季不會像前一季那樣。

Okay. All right, perfect. And then also, did I hear you correctly to say that the -- all the development pipeline, plus the JV and mezz project take-outs, are now funded at this point?

好的。好，完美。另外，我是否聽對了：也就是說，所有開發案管線，加上 JV 與 mezz 專案的 take-out（承接/退出融資），目前都已經到位、完成資金安排了？

Yes, we did that $85 million equity raise in May, and determining the size of that equity raise was able to complete these projects, bring them online and keep our debt-to-EBITDA in the mid-6x range.

是的，我們在 5 月完成了 8,500 萬美元的股權募資；在決定那次股權募資規模時，我們就能完成這些專案、讓它們上線，同時把我們的淨負債對 EBITDA 維持在 6 倍中段的水準。

Okay, so the next time you really need capital is when you kick off anything substantial from a development standpoint and/or decide to make a stand-alone acquisition without a corresponding disposition.

好的，所以你們下一次真正需要資本，是在你們啟動任何重大的開發案，和/或 決定做一筆沒有對應處分的單獨收購時。

Correct, and as I was just saying in here earlier, that we do not have an ATM in place right now, so we are not planning on issuing any equity in the fourth quarter, and we'll look to file that early next year, as hopefully we'll see some more development acquisition activity pick up.

正確，而且如同我稍早在這裡提到的，我們目前沒有設置 ATM（隨市發行）機制，所以我們不打算在第四季發行任何股權；我們會考慮在明年初申報設立，因為希望能看到更多開發與收購活動回升。

Okay, and then, Lou, in terms of the construction company, I mean, is there any -- did somebody come out of the blue and give you a one-off project that makes you think that the current level, or somewhere in that neighborhood, is not sustainable going forward? Did the other hotel in Virginia Beach with one of the related parties kick off, or something like that, that wound up driving the sort of outsized year in construction?

好的，另外，Lou，關於營造公司，我的意思是，有沒有——是不是突然有人給了你們一個一次性的專案，讓你們覺得目前這個水準、或差不多這個水準，未來無法持續？是維吉尼亞海灘那家與關係人之一合作的另一個飯店開工了，或是類似那樣的事情，導致今年營造業務特別突出嗎？

No, it's -- let's see if I can get this a little bit more clear for everybody. The predominant drive over there was a $140 million high rise construction project in Baltimore at the Inner Harbor there. In that $140 million -- and that was done over a very short period of time, relatively, to the size of that contract -- so contract volume during that 18 months or so was certainly outsized. And the second feature of that was a significant savings split that we had with the owner that yielded a seven-figure check back to us. And as much as I'd like to think that there's another one of those around the corner, I'm not seeing it right now. So that's really it.

不，這個——讓我看看能不能把這點講得更清楚一些，讓大家都明白。那邊主要的推動因素是一個位於巴爾的摩內港的 1.4 億美元高樓建築工程案。在那個 1.4 億美元的案子——而且相對於合約規模，那是在很短的時間內完成的——所以在那大約 18 個月期間的合約量確實是異常偏高。第二個因素是我們與業主之間有一個可觀的節省成本分成，讓我們拿到一張七位數金額的回款支票。雖然我也希望轉角就還有下一個類似的案子，但目前我沒有看到。所以大概就是這樣。

Remember, this construction company is a balancing act. The most -- it's really nice to make these third-party fees, and it's always augmented our business, and it really keeps the name out there, and it helps attract tenants to the portfolio. But we really need those guys focusing -- when we talk about these 20% and 30% spreads -- for instance the two office buildings that we sold last quarter were nearly a 40% spread between what we built it at and what we sold them at -- the key component of that is our construction company, and so that's got to be job one. So, we've got a full slate of development projects that they're working on that we need to stay focused on, and therefore, our expectation is that it's going to go back to the norm. Remember, we've been in this business for going on 40 years, so it typically reverts back to the norm.

記住，這家營造公司是一種平衡的運作。最——能賺到這些第三方費用當然很好，它一直都在強化我們的業務，也讓品牌持續曝光，並有助於吸引租戶進入我們的資產組合。但我們真正需要他們專注的是——當我們談到 20% 和 30% 的價差時——例如我們上季賣掉的兩棟辦公大樓，從建造成本到出售價格之間的價差接近 40%——其中的關鍵組成就是我們的營造公司，所以那必須是第一要務。因此，他們目前手上有一整套開發專案在做，我們需要保持專注，所以我們的預期是它會回到常態。記住，我們做這行快 40 年了，所以通常都會回歸常態。

And again, I stress -- I don't want to go on and on here -- we are not looking to expand this company or its backlog, or its personnel, beyond just a little bit. The kind of work that we do is negotiated, third-party work with well-heeled clients that see the value of hiring a construction company up front and working with their architect to bring about the best result. We are not going to go out and bid for contracts and slug it out for nickels and that sort of thing, and that's why it has consistent earnings. Those types of engagements take a long time to develop. Those relationships take a long time to develop, and it's a fairly finite passel of people. And so, it's going to stay consistently in that $200 million to $300 million range, with a solid mix of our work versus third-party work.

再強調一次——我不想在這裡講個沒完——我們不打算把這家公司或其在手訂單量、或人員編制，擴張到超過一點點的程度。我們做的工作類型是協商取得的第三方工程，客戶資力雄厚，他們看得到一開始就聘請營造公司、並與建築師合作以達到最佳成果的價值。我們不會出去投標合約，為了幾毛錢的利潤去硬拚之類的，這也是為什麼它的獲利能夠保持一致。這類合作案需要很長時間才能促成。這些關係也需要很長時間才能建立，而且相關的人脈圈其實相當有限。因此，它會穩定維持在 2 億到 3 億美元的規模區間，並在自有工程與第三方工程之間保持良好的組合。

Okay, thanks guys.

好，謝謝各位。

Thank you. Our next question is coming from Craig Kucera of Wunderlich Securities. Please go ahead.

謝謝。下一個問題來自 Wunderlich Securities 的 Craig Kucera。請開始。

Hey, good morning guys. Want to circle back on the operating expense. Mike, you gave a little bit of color, but there was a pretty big increase sequentially, and was that all bad debt and sort of miscellaneous, or was there anything else in the rise in operating expense this quarter?

各位早安。我想回到營運費用這一塊。Mike，你提供了一些說明，但這一季相較上一季增加幅度很大；那是否全部都是壞帳以及一些雜項，還是本季營運費用上升還有其他因素？

Yes, (inaudible) Craig. Yes, it's a lot of, I'm going to say, miscellaneous expenses across all the different properties. And then, the other piece was the bad debt write-offs this quarter.

是的，（聽不清）Craig。是的，很多——我會說——是分散在各個不同物業的雜項費用。另外一塊就是本季的壞帳沖銷。

Got it, so should we assume -- you know, obviously the bad debt is not necessarily recurring, but the other pieces, are any of those recurring, or more likely nonrecurring?

了解，所以我們是否可以假設——你知道，壞帳不一定會重複發生，但其他部分，有哪些是會重複發生的，或更可能是不會重複發生的？

We hopefully don't expect the bad debt to keep recurring. No, I think the -- you know, some of it was ramping up some expenses on a couple of properties and doing some maintenance and et cetera, but we expect it to pretty much stay in line going forward.

我們希望壞帳不要持續重複發生。不，我認為——你知道，其中一部分是在幾個物業上把一些費用拉升、做一些維護等等，但我們預期往後大致會維持在相近水準。

Okay, and it looks like you had some pretty good success at Annapolis Junction here in October, you know, on the leasing front. Is there any chance that if that continues, you would close on that asset in 2018, or is that still likely a 2019 event?

好的，另外看起來你們在 10 月於 Annapolis Junction 的出租方面取得了相當不錯的成果。如果這種情況持續，有沒有可能你們在 2018 年就完成該資產的交割，還是仍然比較可能是 2019 年的事件？

Our hope is to close on it in 2018. It's 400 units, so we're trying not to get overly excited, but we're real happy with the start. Of course, we're heading into what would be a slow lease-up time here, heading into the holidays. But we want to close on that thing as close to stabilization as possible.

我們希望在 2018 年完成交割。那是 400 戶，所以我們盡量不讓自己過度興奮，但我們對起步表現非常滿意。當然，我們正進入通常會是較慢的出租期，因為接近假期。但我們希望在盡可能接近穩定（stabilization）的時點完成那個案子的交割。

We've got a great partner up there who is active daily in the leasing efforts, and that's -- you know, I can't stress enough, we do a lot of these JV, joint venture arrangements, picking the right partners is so critical, because that's your boots on and ground in all these various markets. You know, we're sitting here in Virginia Beach; we've got an office in Baltimore. So when we're talking about Annapolis Junction or Charleston or Raleigh or wherever, our partner with boots on the ground is extremely important to our success, and Annapolis Junction is proving to be exactly what we had hoped.

我們在那邊有一位很棒的合作夥伴，每天都積極參與出租工作；而且——你知道——我再怎麼強調都不為過，我們做很多這種 JV、合資的安排，選對合作夥伴非常關鍵，因為他們就是你在各個市場的第一線人員。你知道，我們人坐在維吉尼亞海灘；我們在巴爾的摩有辦公室。所以當我們談到 Annapolis Junction、或查爾斯頓、或羅利、或任何地方時，我們在當地有第一線人員的合作夥伴，對我們的成功極其重要，而 Annapolis Junction 的表現正好證明它完全符合我們的期待。

Okay, thanks guys.

好的，謝謝各位。

Thank you. Our next question is coming from Laura Engel of Stonegate Capital Partners. Please go ahead.

謝謝。下一個問題來自 Stonegate Capital Partners 的 Laura Engel。請開始。

Good morning, and thanks for taking my questions, and I did notice the website, new logo; everything looks great. Wanted to know, the investment in Florida, is this principally as a result with the Whole Foods connection, or is this a state that we might see more activity in going forward?

早安，謝謝讓我提問。我也注意到網站和新 Logo；看起來都很棒。我想了解一下，在佛羅里達的投資，主要是因為 Whole Foods 的連結所致，還是說這會是一個我們未來可能看到更多活動的州？

It's predominantly through this Whole Foods connection, through SJ Collins, but Florida is a market we're comfortable with. We did our first project in Florida in 1992. We've been back several times since. We're very comfortable in that marketplace, and I hope that it will be a focus for SJ Collins, Whole Foods, and Amazon. We're certainly going to be looking for more opportunities there.

主要是透過這個 Whole Foods 的連結，經由 SJ Collins，不過佛羅里達也是我們熟悉的市場。我們在佛羅里達的第一個專案是在 1992 年。之後我們也回去做過好幾次。我們對那個市場非常有把握，也希望它會成為 SJ Collins、Whole Foods 與 Amazon 的重點。我們當然也會在那裡尋找更多機會。

Okay, and then as far as the development pipeline, I know you spoke about the bullish thoughts on the retail sector. But as far as seeing more and more multi-family developments in the pipeline, I guess can you just give us your general outlook on that sector in the next, you know, upcoming few years as far as that versus retail, or mixed use, or office space?

好的，接著就開發案的儲備管線而言，我知道你提到對零售產業的看多想法。但就管線中看到越來越多的多戶住宅（multi-family）開發而言，我想請你談談未來幾年你們對該領域的整體展望——相較於零售、複合式用途（mixed use）或辦公空間。

Sure. Great question. Multi-family, for us, is going to continue to be a focus. We are concerned about -- and let me back up. We're seeing a tremendous amount of multi-family opportunities. I mean, they're showing up on a weekly basis, and we're weeding through those for the best. What's starting to concern us, even in the best markets like the Charlottes and the Baltimore's Inner Harbor and the like, is that there's becoming less and less space at the top end. People are pushing rents higher and higher, and there's more and more supply coming online, so we're going to be really cautious on that end, and unless it's an A-plus location, we're just not going to pull the trigger, because we think that there's got to be a ceiling out there somewhere, particularly with all the new supply coming online.

當然。這個問題問得很好。對我們而言，多戶住宅將會持續是重點。我們擔心的是——我先補充一下。我們看到非常大量的多戶住宅機會。我的意思是，幾乎每週都有案子出現，而我們正在從中篩選最好的。即使在最好的市場，例如夏洛特、巴爾的摩內港等等，開始讓我們擔心的是，高端市場的空間正變得越來越少。大家把租金推得越來越高，同時又有越來越多供給進入市場，所以我們在這一端會非常謹慎；除非是 A+ 的地點，否則我們不會輕易拍板，因為我們認為某個地方一定會有天花板，尤其是在這麼多新供給陸續上線的情況下。

One thing that really intrigues us that we're investigating now, and where there is plenty of room currently, is down in the workforce housing market. There's a shortage of good quality apartment projects that are available to teachers, policemen, firemen, and the like, and that part of the market has been left to aging facilities. And so, we're seeing some good opportunities there, and I'd like to think you'll see an announcement here in the not-too-distant future about doing more of that kind of space.

有一件事確實讓我們很感興趣、而且我們現在正在研究的領域，並且目前仍有很大空間的，就是勞動力住房市場。市場上缺乏能讓教師、警察、消防員等族群負擔得起、且品質良好的公寓專案，而這一塊市場長期以來多由老舊設施所支撐。因此，我們在那裡看到一些不錯的機會，我也希望你們在不久的將來會看到我們宣布在這類領域做更多布局。

Great. Well thanks for taking my questions, and I'll get back in the queue.

很好。謝謝你回答我的問題，我會回到隊列中。

Thank you. Our next question is coming from Paul Puryear of Raymond James. Please go ahead.

謝謝。下一個問題來自 Raymond James 的 Paul Puryear。請開始。

Hey, good morning, and thanks for taking my questions, also. Yeah, I was going to ask about the multi-family as well, and I guess since you brought up workforce housing, just curious, when you say you're going to see an announcement, are you just talking about a lower price point? Could you be more -- could you give us any more color there?

嗨，早安，也謝謝你回答我的問題。是的，我本來也想問多戶住宅的部分；既然你提到勞動力住房，我想請教一下，你說會看到一個公告時，你指的是只是較低的價格帶嗎？你能不能再——能不能再多提供一些細節？

Sure, you're definitely talking about a lower price point. You're also talking about -- you know, Paul, we think of that more in terms of three-story walkups, garden-style breezeways, that sort of thing. Still high quality within the units; just not high rise configurations and elevators and the like. You also have less design features on the exterior of the building, which your architecture is really important, because it still has to remain attractive. But you don't have a lot of relief that you see in these products that we're building now that, you know, you're leasing for $2-plus, or in the case of some of ours, the $3-plus range. So it's not really a departure from the basic model; it's just somewhat more value engineered and more of the type of construction that it is.

當然，你講的確實是較低的價格帶。另外——你知道，Paul，我們更多是把它想成三層樓的無電梯公寓、花園式走廊（breezeway）那類型的產品。室內單元仍然維持高品質；只是沒有高樓配置、電梯等等。建築外觀的設計元素也會少一些；這時建築設計就非常重要，因為仍然必須保持吸引力。但你不會看到我們現在正在建、那種你知道、租金每月 2 美元以上（每平方英尺）——或就我們某些案子而言、3 美元以上——的產品所具備的那麼多外觀層次變化。所以這並不是偏離基本模式；只是做了更多價值工程，並且在施工型態上有所不同。

Okay, and then, as far as your apartments there at Virginia Beach, and of course you've already said it and we're all seeing it, more supply toward the higher end. Are you at all concerned about that in that market, and what levels of construction do you think you see at sort of the higher end for the apartment sector?

好的。那接著，關於你們在維吉尼亞海灘的公寓——當然你已經說過了，我們也都看到了——高端供給增加。你對那個市場有任何擔憂嗎？你認為在公寓領域的高端市場，大概會看到什麼樣的建設量水準？

Fortunately, in Virginia Beach -- that's a great question, Paul. Fortunately, in Virginia Beach, we really can't be challenged on the location. I think you guys have heard me mention before, as I'm sitting here in our conference room, I'm looking out at probably three apartment projects that are off in the distance, a mile of two away. I think there's a total of seven of them in circumference around us, and the advertisements that we hear on the radio is that you can walk to Town Center, or you can bike to Town Center, or it's minutes from Town Center, blah-blah-blah. And we continue to say, and if you'll pay a little bit more, you can actually live in Town Center. So we really don't have competition at the top end, here in this market.

幸好在維吉尼亞海灘——這是個很好的問題，Paul。幸好在維吉尼亞海灘，我們在地點上基本上不會被挑戰。我想你們以前聽我提過，我現在坐在我們的會議室裡，往外看大概能看到三個遠處的公寓案子，距離一到兩英里。我想在我們周邊一圈總共有七個案子，廣播上的廣告都在說你可以走路到 Town Center、或騎車到 Town Center、或離 Town Center 只要幾分鐘，等等。而我們一直說的是：如果你願意多付一點，你其實可以直接住在 Town Center。所以在這個市場的最高端，我們其實沒有競爭對手。

Now, that said, and I'm glad you brought it up, for years, the Cosmopolitan has been the leading rent-per-square-foot getter in Virginia Beach. it is now over 10 years old, and the two products, the one that's up at the Encore next door on one side, and a Premier that's going up on the new block on the other side, are going to eclipse it, if we're not careful. And so we, next year, we're going to go on a major refresh of the facility and make sure it stays at the top.

不過話說回來，而且我也很高興你提到這點，多年來 Cosmopolitan 一直是維吉尼亞海灘每平方英尺租金最高的產品。它現在已經超過 10 年屋齡，而隔壁一側在 Encore 那邊的新產品，以及另一側新街區正在興建的一個 Premier 產品，如果我們不小心，可能會超越它。因此明年我們會對該物業做一次大規模翻新，確保它仍然維持在頂端。

But that's a kind of a long answer to a short question, but in Virginia Beach, we believe that we're going to continue to be able to command the highest rents, irrespective of what's going on in the market. Now, in other places where we think we have an A location but not a singular location, for instance our Harding Place project in Charlotte. Charlotte remains robust, but our project, where it's really well located amongst several that are really well located in Charlotte, and those are the kinds of places where we really need to see some caution, hopefully, amongst our brethren in the development business, because at some point, you're not going to be able to drive rents. So we're going to be -- like I said, we're going to be really cautious about anything other than an A-plus location (inaudible).

這個回答有點長，對應一個簡短問題；但在維吉尼亞海灘，我們相信不論市場發生什麼，我們都能持續收取最高租金。不過在其他地方，我們可能擁有 A 級地段但不是唯一的地段——例如我們在夏洛特的 Harding Place 專案。夏洛特仍然很強勁，但我們的專案雖然位置很好，卻是位於夏洛特幾個同樣位置很好的專案之中；在這類地方，我們確實需要看到一些謹慎——希望我們開發同業能更謹慎——因為到某個時點，你將無法再推升租金。所以我們會——如我所說——對任何非 A+ 地段的案子都會非常謹慎（聽不清）。

Yes, that helps. Yes, thanks, that helps. And then, I guess a couple of more questions for us. With Amazon buying Whole Foods, are you seeing any changes in sort of how you're working with Whole Foods, maybe the store design, anything at all, as a result of what's happened there?

是的，這有幫助。是的，謝謝，這很有幫助。然後，我想我們還有幾個問題。Amazon 收購 Whole Foods 之後，你們在與 Whole Foods 合作方式上是否看到任何變化？例如店面設計，或任何因為這件事而產生的改變？

Not at this time. And again, we're working with Whole Foods through our relationship with SJ Collins, who their relationships are right at the top. They keep being told that there's a major rollout that's going to happen. They're braced for it; we're braced for it. We're not sure what it looks like, but right now, it's all talk. And what we're building in the two that we are working on, we really don't see significant changes.

目前沒有。而且我們是透過與 SJ Collins 的合作關係來與 Whole Foods 合作，他們的關係層級非常高。他們一直被告知會有一個重大的展店/推廣計畫要發生。他們已經做好準備；我們也做好準備。我們不確定會長什麼樣子，但目前都還只是口頭說法。就我們正在合作的兩個案子而言，我們確實沒有看到顯著變化。

But you -- I mean, they've been pretty clear that changes are coming?

但你——我的意思是，他們不是很明確地說會有變化要來了嗎？

I don't know that changes are coming. They're pretty clear that -- you know, and I think as I read the same stuff that you read, they didn't buy it to sit on it. They want to expand it, but I couldn't tell you -- I don't have any insight as to what's going to happen, configuration-wise.

我不確定是否真的會有變化。他們很明確的是——你知道，而且我想我讀到的內容跟你讀到的一樣——他們收購它不是為了放著不動。他們想要擴張，但我沒辦法告訴你——我對於未來在配置/形式上會怎麼變，沒有任何內線資訊。

Okay, great; thank you. Thanks, Lou.

好的，很好；謝謝你。謝謝，Lou。

Thank you. Our next question is a follow-up coming from John Guinee of Stifel. Please go ahead.

謝謝。下一個問題是來自 Stifel 的 John Guinee 的追問。請開始。

Oh, great. Thank you. Hey, just to clarify, Mike, when you're talking about bringing assets on balance sheet, are you talking about the two mezz deals and the Durham JV, or just the two multi-family mezzanine deals?

喔，很好。謝謝。嘿，我只是想確認一下，Mike，你在談把資產納入資產負債表時，你指的是那兩筆 mezz 交易和 Durham 的合資案，還是只指那兩筆多戶住宅的 mezzanine 交易？

No, John, all three of those projects.

不是的，John，是那三個專案全部。

Okay, so all three of them --

好的，所以三個都是——

City Center should -- yes.

市中心應該會——是的。

So City Center and the two mezzanine multi-family can all come on balance sheet at full cost, and still stay at the mid-6 net debt-to-EBITDA?

所以市中心以及那兩個夾層融資的多戶住宅都可以按全成本入表，而且淨負債對 EBITDA 仍可維持在 6 倍中段？

Correct. So I would just break these down. So City Center, which will be completed next summer, we have funded 100% of the equity on that project, so we've already funded the equity, so at that point in time we bring it on, we're just bringing on the construction debt, which is going to be somewhere in the $23 million range or so, so that's not big. And on the two multi-family projects, again, we have funded all the equity through our mezz loan, and we're bring those on balance sheet, we're going to have properties that are producing EBITDA, and we're only bringing on the construction debt onto the balance sheet.

沒錯。所以我會把這些拆開說明。市中心這個案子預計明年夏天完工，我們已經為該專案投入了 100% 的股權資金，也就是股權部分都已經出資了，所以到那個時間點把它入表時，我們只是把建築融資債務帶進來，金額大概在 2,300 萬美元左右，並不大。至於那兩個多戶住宅專案，同樣地，我們也已透過我們的夾層貸款把所有股權都出資到位；把它們入表後，資產本身會產生 EBITDA，而我們帶進資產負債表的也只會是建築融資債務。

Okay, but the construction debt can come on balance sheet and still stay under 6.5 net debt-to-EBITDA?

好的，但建築融資債務入表後，淨負債對 EBITDA 仍能維持在 6.5 倍以下？

Yes, right around 6.5, yes.

是的，大約就在 6.5 倍左右，是的。

Okay, and then the second question --

好的，那第二個問題——

And if you do the math -- go ahead.

如果你算一下——你繼續。

I have to do the math?

我還得算數學？

No, no, I was going to say if you do the math, you can see what Mike and I have been out there saying. Once this thing stabilizes, we're looking at a double-digit increase in earnings, and if you did that math, you'd see that's pretty much baked in the numbers, given that these projects lease up.

不不，我是想說如果你算一下，你就會看到我和 Mike 一直在外面講的內容。等這些案子穩定後，我們預期獲利會有兩位數的成長；而如果你把那個數學算一算，在這些專案順利出租、入住的前提下，你會發現這基本上已經反映在數字裡了。

Got you, okay. And then, just out of curiosity, I was actually driving through Waynesboro a few weeks ago. When you have a vacant, 30,000 square foot box in a place like that, is it worth zero or $50 a foot? And then, when you sell a food line, which I'm assuming is a five-year renewal, is that a 10 or a 20 cap deal, just out of curiosity?

了解，好的。另外，純粹好奇，我幾週前其實開車經過 Waynesboro。像那種地方有一個空置的 30,000 平方英尺大盒子店面，它的價值是零，還是每平方英尺 50 美元？還有，當你賣出一個 Food Lion（我猜是續約五年），那會是 10 cap 還是 20 cap 的交易？純粹好奇。

If it's a 10 or a 20 cap deal, I don't know, it may be staying in our portfolio. Actually, John, it's interesting, because I was driving through Waynesboro about three weeks ago as well, which is -- who'd of thunk it, right? We actually have some good -- I shouldn't say this -- we actually have some good activity for re-leasing in that center, so we'll probably see that project stay in the portfolio.

如果是 10 cap 或 20 cap，我不知道，那可能就會留在我們的投資組合裡。其實 John，很有意思，因為我大概三週前也開車經過 Waynesboro——這不是誰會想到的，對吧？我們在那個中心其實有一些不錯的——我不該這麼說——我們其實有一些不錯的重新出租動能，所以我們可能會讓那個專案留在投資組合裡。

And John, this is Eric, but in that leasing activity, you probably do end up breaking up that space to some extent. You know, there are not that many 30,000-foot users looking at Waynesboro, so you could expect that to be a multi-tenant re-leasing effort.

John，我是 Eric，不過就那個出租動能而言，你最後很可能會在某種程度上把那個空間切分。你知道，在 Waynesboro 想找 30,000 平方英尺使用者的並不多，所以你可以預期那會是一個多租戶的重新出租作業。

Okie-doke, thanks a lot.

好的，謝謝你們。

And then, to answer your question on the food lines, to Lou's point, yeah, a 20 cap, we're going to be the proud owners of those food lines. What we're seeing in the market, and again, it looks like some of the anxiety and angst around retail has dissipated slightly. And so, based on the cap rates we're seeing on food lines, the ones that really nobody wants to own seem to be up in that 10, 12 cap rate range with the better ones, and we would put the ones we're talking about in our portfolio in that range, given the location of the real estate. And despite the short term, even after renewal of five years, we're seeing those trade in the mid-8s right now. So if those cap rates held, I think that you could take Lou's statements at face value that those are probably not long-term holds. If those cap rates obviously move materially higher, we would reconsider that at some point. They're much more valuable on balance sheet.

另外，回答你關於 Food Lion 的問題，呼應 Lou 的觀點，是的，如果是 20 cap，我們就會很自豪地繼續持有那些 Food Lion。我們在市場上看到的是——而且看起來市場對零售的焦慮與不安已稍微消退。因此，依我們看到的 Food Lion 資本化率（cap rate），那些真正沒人想持有的，cap rate 大概在 10% 到 12% 左右；較好的也在那個區間，而以不動產位置來看，我們投資組合裡正在談的這些也會落在那個範圍。而且即使是短期、就算只續約五年，我們現在也看到它們以 8% 中段的 cap rate 成交。所以如果那些 cap rate 維持不變，我想你可以把 Lou 的說法當作字面意思：這些大概不會是長期持有。如果那些 cap rate 明顯大幅走高，我們到某個時間點會重新評估。它們在資產負債表上的價值要高得多。

Great, all right, thank you.

很好，好的，謝謝。

Thank you. At this time, I would like (inaudible).

謝謝。此時，我想（聽不清）。

Thanks, everybody. I appreciate your interest in our company and look forward to updating you on our activities and results in the coming quarters. Have a great day.

謝謝各位。感謝各位對我們公司的關注，也期待在接下來幾個季度向各位更新我們的活動與業績成果。祝各位有美好的一天。

Ladies and gentlemen, thank you for your participation. This concludes today's conference. You may disconnect your lines at this time, and have a wonderful day.

各位女士先生，感謝各位的參與。今天的電話會議到此結束。您現在可以掛斷電話線，祝您有美好的一天。