AH Realty Trust, Inc (AHRT) 2018 Q3 法說會逐字稿

Welcome to Armada Hoffler's Third Quarter 2018 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded today, Tuesday, October 30, 2018. I will now turn the conference over to Michael O'Hara, Chief Financial Officer at Armada Hoffler. Please go ahead.

歡迎參加 Armada Hoffler 2018 年第三季財報電話會議。（接線員指示）提醒各位，本次會議於今日（2018 年 10 月 30 日，星期二）錄音。現在我將把會議交給 Armada Hoffler 財務長 Michael O'Hara。請開始。

Good morning, and thank you for joining Armada Hoffler's Third Quarter 2018 Earnings Conference Call and Webcast. On the call this morning, in addition to myself, is Louis Haddad, CEO.

各位早安，感謝您參加 Armada Hoffler 2018 年第三季財報電話會議與網路直播。今天早上的電話會議，除了我之外，還有執行長 Louis Haddad。

The press release announcing our third quarter earnings, along with the quarterly supplemental package, were distributed this morning.

我們今早已發布宣布第三季財報的新聞稿，以及季度補充資料包。

Replay of this call will be available shortly after the conclusion of the call through November 30, 2018. The numbers to access the replay are provided in the earnings press release.

本次電話會議的重播將於會議結束後不久提供，並可使用至 2018 年 11 月 30 日。重播的撥入號碼已載於本次財報新聞稿。

For those who listen to the rebroadcast of this presentation, remind you that the remarks made herein are as of today, October 30, 2018, will not be updated subsequent to this initial earnings call.

對於收聽本次簡報重播的聽眾，提醒您：本次發言內容以今日（2018 年 10 月 30 日）為準，且在本次初次財報電話會議之後不會再更新。

During this call, we'll 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 guidance and 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.

在本次電話會議中，我們將作出前瞻性陳述，包括與我們投資組合未來表現、開發管線、收購與處分的影響、我們的營造業務、投資組合表現與融資活動，以及對指引與展望的評論等相關陳述。提醒聽眾注意，這些陳述受某些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。

The risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the forward-looking statements disclosure in our press release this morning and the risk factors disclosed in documents we have filed with or furnished to the SEC.

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存在重大差異；我們建議聽眾查閱我們今早新聞稿中的前瞻性陳述揭露，以及我們向美國證券交易委員會（SEC）提交或提供之文件中所揭露的風險因素。

We will also discuss certain non-GAAP financial measures, including, 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, 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 FFO。這些非 GAAP 指標的定義，以及與最可比 GAAP 指標的調節表，均收錄於季度補充資料包中，並已公布於我們的網站 ArmadaHoffler.com。

I'll now turn over the call to our Chief Executive Officer, Louis Haddad. Lou?

現在我把電話會議交給我們的執行長 Louis Haddad。Lou？

Thanks, Mike. Good morning, everyone, and thank you for joining us today. As you will hear from our discussion this morning, we have a lot going on here at Armada Hoffler. As I mentioned, during our last conference call, our company is built to thrive in a variety of macroeconomic environments, and the current backdrop is no exception. The growing economy has yielded increased opportunities in development, public-private partnerships, build-to-suit engagements, third-party construction, mezzanine lending and tenant expansions. We believe these factors more than offset the impact of gradually rising interest rates.

謝謝你，Mike。各位早安，感謝今天加入我們。正如各位將在今天早上的討論中聽到的，Armada Hoffler 目前有許多事項正在推進。如我在上次電話會議中提到，我們公司的架構能在多種總體經濟環境中茁壯成長，而目前的背景也不例外。經濟成長帶來更多機會，包括開發、公私合營、量身打造（build-to-suit）合作、第三方營造、夾層融資（mezzanine lending）以及租戶擴張。我們相信，這些因素足以抵銷利率逐步上升的影響。

Before we talk about our results, guidance and pipeline, I'd like to spend a few minutes on our business model. Many who follow our company have correctly pointed out that we do not fit neatly into the standard REIT box. Certainly, with third-party construction profits, build-to-suit asset sales and mezzanine interest income, our platform has a unique complexity that can't be measured wholly by traditional REIT metrics. These additional income streams are expected to continue their upward trajectory due to the ever-increasing volume of these types of opportunities coming our way.

在談論我們的業績、指引與管線之前，我想先用幾分鐘說明我們的商業模式。許多關注我們公司的投資人都正確指出，我們並不完全符合標準 REIT 的典型框架。確實，透過第三方營造利潤、量身打造資產出售，以及夾層利息收入，我們的平台具有獨特的複雜性，無法僅以傳統 REIT 指標完整衡量。由於此類機會持續增加並向我們湧入，我們預期這些額外收入來源將延續其上升趨勢。

That said, please do not overlook the positive trends in our operating property portfolio. While we are very proud of the growth in our NAV, normalized FFO, and of course, the annually increasing dividend over the past 4 years, it's important to note that our rental property NOI has nearly doubled over the past 5 years. We expect yet another double-digit increase in property NOI next year as our development delivery stabilized and the mature portfolio continues to excel. Although we will provide 2019 guidance early next year, preliminary forecast indicates that it is shaping up to be a very strong year in all of our income-producing areas.

話雖如此，請不要忽視我們營運中不動產投資組合的正向趨勢。雖然我們對 NAV、標準化 FFO 的成長，以及過去 4 年每年提高的股利感到非常自豪，但也必須注意，我們出租型不動產的 NOI 在過去 5 年幾乎翻倍。隨著我們的開發案交付後逐步穩定，加上成熟投資組合持續表現優異，我們預期明年物業 NOI 將再度出現兩位數成長。雖然我們將於明年初提供 2019 年指引，但初步預測顯示，我們所有創收領域都將迎來非常強勁的一年。

This morning, we reported $0.24 of normalized FFO per share for the third quarter. Same-store NOI was positive across all product types on both a cash and GAAP basis. Occupancy was higher portfolio-wide and now stands at 96%. Re-leasing spreads in the retail sector were quite a bit higher as well. As you know, our retail portfolio is dominated by strong grocery anchors, home improvement stores, restaurants, entertainment and discounters. We expect continued high occupancy, positive spreads and strong sales performance in our centers over the coming quarters. Overall, across all property types, our stable portfolio continues to perform at a very high level.

今天早上，我們公布第三季每股標準化 FFO 為 0.24 美元。同店 NOI 在所有產品類型上，無論以現金或 GAAP 基礎計算皆為正成長。整體投資組合的入住率更高，目前為 96%。零售部門的續租租金價差也明顯提高。如各位所知，我們的零售投資組合以強勢的生鮮超市主力店、居家修繕商店、餐廳、娛樂業態與折扣零售商為主。我們預期未來幾季我們的商場將維持高入住率、正向租金價差與強勁的銷售表現。整體而言，跨所有物業類型，我們的穩定型投資組合持續維持非常高水準的表現。

As we announced earlier this month, we've reached an agreement to sell our at-cost purchase option to the developer of the multifamily project, The Residences at Annapolis Junction. As many of you saw in our previous press release, we are allowing the developer to refinance the project and extend the mezzanine loan. This will allow the project to achieve stabilization prior to the ultimate sale, enabling him to recognize the full value of the project. We expect the option payment to be received in the fourth quarter. However, the $5 million of profit will be recognized over the next 4 quarters. This effectively moves approximately $4.5 million of FFO into 2019 and also gives us the opportunity to earn additional fees and interest. Overall, this change in profit recognition has caused our 2018 full year guidance to be updated to a $1 to $1.03. Mike will give you the details on our updated guidance.

如同我們本月稍早宣布的，我們已達成協議，將我們以成本價購買選擇權出售給多戶住宅專案 The Residences at Annapolis Junction 的開發商。正如許多人在我們先前的新聞稿中所見，我們允許開發商為該專案再融資並延長夾層貸款。這將使專案在最終出售前達到穩定狀態，讓他能夠實現該專案的完整價值。我們預期選擇權款項將於第四季收取。然而，5 百萬美元的利潤將在未來 4 個季度認列。這等同於將約 450 萬美元的 FFO 移至 2019 年，同時也讓我們有機會賺取額外費用與利息。整體而言，這項利潤認列時點的變更，使我們更新 2018 年全年指引至 1.00 至 1.03 美元。Mike 將向各位說明更新後指引的細節。

As we have said on many occasions, we expect the multifamily segment of our overall portfolio NOI to grow significantly over the next couple of years. The sale of our purchase option on this project should be viewed as a one-off opportunity that we chose to take advantage of as opposed to any shift in overall strategy.

我們多次提到，預期未來幾年我們整體投資組合 NOI 中的多戶住宅（multifamily）板塊將顯著成長。出售本專案的購買選擇權應被視為一次性的機會，我們選擇加以把握，而非整體策略的任何轉變。

With over $60 million raised year-to-date under the ATM program, the $5 million of profit on the option sale and the anticipated partial repayment of our mezzanine loan, we remain confident in the overall strength of our balance sheet. We continue to believe that the company is well positioned to execute on the opportunities in our development pipeline.

今年迄今透過 ATM 計畫募得超過 6,000 萬美元，加上選擇權出售的 500 萬美元利潤，以及預期夾層貸款的部分償還，我們仍對資產負債表的整體強度充滿信心。我們持續相信，公司已具備良好條件，可把握並執行我們開發管線中的各項機會。

Starting with Town Center for the development updates. The Premier, previously referred to as Phase VI, is leasing very quickly in both the retail and multifamily segments. Despite only being open since August, retail is leased or under letter of intent at 75% and multifamily at 50%. Also, the second floor performing arts theater celebrated their grand opening bringing additional activity to this newest space of Town Center.

先從 Town Center 的開發更新開始。The Premier（先前稱為第六期）在零售與多戶住宅兩個板塊的出租進度都非常快速。儘管自 8 月才開始營運，零售已出租或已簽署意向書（LOI）達 75%，多戶住宅達 50%。此外，二樓的表演藝術劇院也舉行盛大開幕，為 Town Center 這個最新空間帶來更多人潮與活動。

Point Street Apartments at Howard Point continues its upward trajectory with no sign of slowing down and now stands at 82% leased. We are projecting stabilization in the first quarter of 2019, which is also the timeframe that we anticipate bringing the project on balance sheet through execution of our purchase option.

Howard Point 的 Point Street Apartments 持續上升且沒有放緩跡象，目前出租率達 82%。我們預估將於 2019 年第一季達到穩定狀態；這也正是我們預期透過執行購買選擇權，將該專案納入資產負債表的時間點。

The option portion of City Center in downtown Durham is complete and leased at nearly 90%, and the retail is leased or under letter of intent is 66%. We are in conversations with multiple tenants for the last few available spaces.

位於 Durham 市中心的 City Center 之選擇權部分已完工，出租率接近 90%；零售部分已出租或已簽署意向書（LOI）的比例為 66%。我們正與多位租戶洽談最後幾個可用空間。

The Greenside Apartments in downtown Charlotte, formerly known as Harding Place, have begun delivery and stands at 31% leased. This product is ramping in line with our expectations.

位於 Charlotte 市中心的 Greenside Apartments（原名 Harding Place）已開始交付，目前出租率為 31%。該產品的爬坡進度符合我們的預期。

Our 325,000-square foot Wills Wharf office development at Baltimore's Inner Harbor has started vertical construction and stands at nearly 60% preleased with several strong prospects interested in the additional space.

我們位於巴爾的摩內港、面積32.5萬平方英尺的 Wills Wharf 辦公室開發案已開始進行主體結構施工，目前預租率接近60%，且有數個具實力的潛在客戶對額外空間表達興趣。

All other previously announced pipeline projects are on track for that's scheduled 2019 deliveries.

其他先前公布的所有在建管線專案均按計畫推進，預計於2019年如期交付。

This morning, we announced our fourth project in the greater Charleston MSA, Nexton Square. This $45 million open-air lifestyles center is expected to contain up to a 148,000 square feet of the area's best restaurants, retailers and service providers. Nexton Square sits at the entrance of a large master plan development of more than 10,000 homes. It is strategically located between the Boeing facility and the new Volvo assembly plant. The project is nearly 65% preleased or under a letter of intent with the first tenants opening in the second quarter of 2019. We will provide mezzanine financing as well as development and construction management.

今天上午，我們宣布在大查爾斯頓都會統計區（MSA）的第四個專案 Nexton Square。這座耗資4,500萬美元的露天生活風格中心，預計可容納最多14.8萬平方英尺的區域頂尖餐廳、零售商與服務供應商。Nexton Square 位於一個大型總體規劃開發案的入口，該開發案包含逾10,000戶住宅。其地點策略性地位於波音設施與新的沃爾沃組裝工廠之間。該專案目前近65%已預租或已簽署意向書（LOI），首批租戶預計於2019年第二季開幕。我們將提供夾層融資，並負責開發與施工管理。

In addition, we will receive a below-market option to purchase the project upon completion, which we ultimately intend to exercise. Furthermore, the asset would be available as a candidate in a tax-free exchange in order to potentially cycle out of an older center.

此外，我們將取得一項低於市價的選擇權，可於完工後購買該專案，而我們最終打算行使該選擇權。再者，該資產亦可作為免稅交換（tax-free exchange）的候選標的，以便可能汰換一處較老舊的中心。

Last quarter, we announced the Interlock, a partnership with Georgia Tech and S.J. Collins to develop 300,000 square feet of office and retail space in West Midtown Atlanta. In addition, we are in negotiations with Terwilliger Pappas to be the investor and general contractor for the multifamily portion of this project, Solace Interlock. We expect this upscale product to contain approximately 350 apartment units with an anticipated completion in the fourth quarter of 2020. In addition to our construction company's participation in the project, we will provide approximately $20 million of mezzanine financing. We expect the finalized negotiations with Terwilliger Pappas over the next few weeks and expect groundbreaking on the entire Interlock complex in the current quarter.

上季我們宣布 Interlock 專案，係與喬治亞理工學院（Georgia Tech）及 S.J. Collins 合作，於亞特蘭大西中城（West Midtown）開發30萬平方英尺的辦公與零售空間。此外，我們正與 Terwilliger Pappas 洽談，由其擔任本專案多戶住宅部分（Solace Interlock）的投資人與總承包商。我們預期此高端產品約包含350戶公寓單位，預計於2020年第四季完工。除我們營造公司參與該專案外，我們亦將提供約2,000萬美元的夾層融資。我們預期未來幾週內完成與 Terwilliger Pappas 的最終協商，並預計於本季為整個 Interlock 綜合體動工。

We are currently working on a few other opportunities to round up the current pipeline. These are exciting, large, CBD infill opportunities in Charleston, Charlotte and Nashville. This opportunity set is primarily weighted towards Class A office followed by multifamily with a small amount of ancillary retail. We hope to have further announcements regarding these projects in the not-too-distant future.

我們目前也在推進其他幾個機會，以充實現有的開發管線。這些是令人振奮、規模較大且位於中央商業區（CBD）的填充式（infill）機會，分布於查爾斯頓、夏洛特與納什維爾。此機會組合主要偏重於A級辦公，其次為多戶住宅，並搭配少量附屬零售。我們希望在不久的將來就這些專案發布更多公告。

Despite this increase in development activity, be assured that we continue to be extremely selective with regard to the projects we pursue. The vast majority of the opportunities that present themselves do not meet our criteria and are quickly removed from consideration. Beyond the aforementioned opportunities, I would not expect any further significant development engagements until we open a number of our 2019 deliveries.

儘管開發活動增加，請放心，我們對於所追求的專案仍維持極為嚴格的篩選。絕大多數出現的機會不符合我們的標準，並會迅速自評估名單中剔除。除上述機會外，在我們啟用並交付多個2019年完工專案之前，我不預期會再有任何重大的新增開發投入。

Our construction company continues to perform at a very high level. We expect to finish construction and close on the sale of the build-to-suit distribution center in the current quarter. Our backlog of third-party contracts stands at $25 million and we expect to execute another $80 million to a $100 million of contracts this quarter, which we will leave this division in a very comfortable position looking forward to next year.

我們的營造公司持續維持非常高的表現水準。我們預期於本季完成施工並完成該量身打造（build-to-suit）配送中心的出售交割。我們第三方合約的在手訂單（backlog）為2,500萬美元，且預期本季將再簽訂8,000萬至1億美元的合約，這將使該事業部在展望明年時處於非常穩健的狀態。

Remember, Armada Hoffler is first and foremost an opportunistic real estate company that employs multiple strategies to enhance profitability and create value. These have been our central tenants for nearly 40 years, and investors can count on this to remain our primary focus. As the company's largest equity holder, management will continue to operate a business model that includes a variety of deal structures as well as the disposition of development projects, at-cost options and stable assets. We are extremely optimistic about the company's prospects for the rest of 2018 and 2019 as well as our ability to deliver in our promises over multiyear of timeframe.

請記得，Armada Hoffler 首先且最重要的是一家機會型不動產公司，透過多元策略提升獲利能力並創造價值。這些核心宗旨近40年來一直是我們的根本，投資人可期待我們仍將以此為主要重點。作為公司最大的股權持有人，管理團隊將持續採行包含多種交易結構的商業模式，並進行開發專案、按成本選擇權（at-cost options）及穩定資產的處分。我們對公司在2018年剩餘期間與2019年的前景，以及在多年期時間範圍內履行承諾的能力，均極為樂觀。

As we begin to look forward towards 2020 and the number of projects we intend to deliver and stabilize at that time, we feel strongly that our investors will recognize continued great value well into the future. As we gauge the ultimate size and construction schedules of the pipeline projects, we will be evaluating further dispositions and use of the ATM as a part of a continuing strategy to maintain a strong balance sheet and grow NAV over the long term.

當我們開始展望2020年，以及屆時我們計畫交付並使其穩定營運的多個專案時，我們深信投資人將在未來很長一段時間內持續看見可觀價值。在評估開發管線專案的最終規模與施工時程之際，我們也將評估進一步的資產處分，以及將 ATM（隨市發行機制）作為持續策略的一部分，以維持強健的資產負債表並在長期提升每股淨資產價值（NAV）。

At this time, I'll turn the call over to Mike to discuss our third quarter results.

接下來，我將把電話會議交給 Mike，請他說明我們第三季的業績。

Thanks, Lou. Today I want to cover the highlights of the quarter, thoughts on our balance sheet and our updated 2018 guidance.

謝謝你，Lou。今天我想說明本季重點、我們對資產負債表的看法，以及更新後的2018年財測指引。

This morning, we reported FFO -- a normalized FFO of $0.24 per share for the third quarter. On October 4, we issued a press release regarding the anticipated $5 million third quarter gain from the Annapolis Junction purchase option sale and its effect on our 2018 guidance. We anticipated the property being sold, our loan being paid off in full and recognizing a $5 million gain during the third quarter. During the quarter, we agreed to allow our partner to refinance the project and extend the maturity of the mezzanine loan in order for him to realize the full potential value upon expected stabilization in 2019. In addition, we have the opportunity to earn additional fees and interest income. The expected restructured loan is for approximately $35 million at 10% for 12 months. Loan includes two 1-year extension options to coincide with the new senior loan. With the loan being restructured instead of being paid off in full, the accounting of the $5 million gain from the sale of the purchase option changes. The GAAP treatment of the $5 million payment to the purchase option is now considered as part of the loan restructure, not a sale, therefore, it will be recognized as interest income over the term of the new loan, which is 12 months. Assuming a mid-November closing, $500,000 of interest income will be recognized in 2018 with the remaining $4.5 million in 2019 prorated through October.

今天上午，我們公布第三季每股0.24美元的FFO——即標準化FFO。10月4日，我們發布新聞稿，說明安納波利斯交匯處（Annapolis Junction）購買選擇權出售在第三季預計產生500萬美元收益，以及其對2018年指引的影響。我們原先預期該物業將被出售、我們的貸款將全數清償，並於第三季認列500萬美元收益。本季期間，我們同意讓合作夥伴為該專案再融資並延長夾層貸款到期日，使其可在預期於2019年達到穩定營運時實現完整的潛在價值。此外，我們也有機會賺取額外費用與利息收入。預期重整後的貸款約為3,500萬美元、利率10%、期限12個月。該貸款包含兩個各為1年的展延選擇權，以配合新的第一順位貸款。由於貸款改為重整而非全數清償，購買選擇權出售所產生的500萬美元收益之會計處理將有所改變。依GAAP，支付給購買選擇權的500萬美元款項現在被視為貸款重整的一部分，而非出售，因此將在新貸款期限（12個月）內以利息收入認列。假設於11月中旬完成交割，2018年將認列50萬美元利息收入，其餘450萬美元將於2019年按比例分攤至10月。

Now turning to our property portfolio. We are happy to report that our properties and development projects did not sustain any damage from the recent storms. As anticipated, same-store NOI continues to improve, but this being the second consecutive quarter being positive in all 3 property types. The negative impact on these metrics from the Town Center relocation and construction activity is over.

接著談我們的物業投資組合。我們很高興報告，我們的物業與開發專案未因近期風暴而遭受任何損害。如預期，同店NOI持續改善，且本季為連續第二季在三種物業類型中皆呈現正成長。Town Center 搬遷與施工活動對這些指標造成的負面影響已結束。

Our core operating portfolio occupancy in the third quarter was 96% with office at 94%, retail at 97% and multifamily at 97%. Additionally, our re-leasing spreads were positive 6.2% on cash and 7.8% on a GAAP basis in the retail portfolio. There were no renewals in the office portfolio. All these positive metrics are a reflection of the strength of our properties.

第三季我們核心營運投資組合的出租率為96%，其中辦公為94%、零售為97%、多戶住宅為97%。此外，我們零售投資組合的續租租金價差（re-leasing spreads）在現金基礎為正6.2%，在GAAP基礎為正7.8%。辦公投資組合本季沒有續約。這些正向指標皆反映出我們物業的強勁表現。

During the quarter, we closed on the Lexington, South Carolina Lowes Foods shopping center for $27 million. This transaction is with a strategic partner who has taken back all their equity in OP units, which is consistent with our historic OP unit acquisition strategy.

本季期間，我們以2,700萬美元完成收購位於南卡羅來納州列星頓（Lexington）的 Lowes Foods 購物中心。此交易與一位策略夥伴共同進行，該夥伴已以OP單位（Operating Partnership units）形式取回其全部股權，這與我們歷來以OP單位進行收購的策略一致。

On the construction front, we reported a segment gross profit in the third quarter of $1 million on revenue of $20 million. At the end of the third quarter, the company had a third-party construction backlog of $25 million. As Lou said, we expect the construction backlog to increase over the next few months.

在營造方面，我們第三季該部門營收2,000萬美元、分部毛利100萬美元。截至第三季末，公司第三方營造在手訂單為2,500萬美元。如 Lou 所言，我們預期未來幾個月營造在手訂單將增加。

Today, we announced a new mezzanine loan development project, Nexton Square, in Summerville, South Carolina. This project is being structured utilizing our mezzanine loan structure, which includes a below-market purchase option. It is our intent to exercise this option upon completion. We are using this structure for 2 reasons. First, our involvement in this project was late in the process. The project began construction this spring before we were involved. We prefer not to take development risk and have ownership position in a project this late in the development process. And second, we have the optionality of using the property as a 1031 tax-free exchange candidate for future disposition.

今天，我們宣布在南卡羅來納州薩默維爾（Summerville）推出一個新的夾層貸款開發專案 Nexton Square。本專案將採用我們的夾層貸款架構來進行安排，其中包含一項低於市價的購買選擇權。我們的意圖是在完工後行使該選擇權。我們採用此架構有兩個原因。第一，我們介入此專案的時間點較晚。該專案在我們參與之前，已於今年春季開始施工。在開發流程已進行到這麼後期時，我們傾向不承擔開發風險，也不希望在專案中持有所有權部位。第二，我們可選擇將該物業作為未來處分時 1031 免稅交換的候選標的。

As discussed, we are in final negotiation with the developers of the multifamily portion of the Interlock mixed-use project in West Midtown Atlanta. We are partnering with Terwilliger Pappas who are longtime multifamily developers. We'll be using our mezzanine loan structure and we'll be the contractor of the project. At this point, we do not intend on purchasing this project and bring it on balance sheet. In addition to substantial income from construction fees and mezzanine interest, our involvement allows us to manage the entire construction progress, ensure the timely completion of the $250 million Interlock project.

如先前所述，我們正與亞特蘭大西中城（West Midtown Atlanta）Interlock 複合式開發案中多戶住宅部分的開發商進行最後協商。我們將與 Terwilliger Pappas 合作，他們是資深的多戶住宅開發商。我們將採用夾層貸款架構，且我們將擔任該專案的承包商。就目前而言，我們無意購買此專案並將其納入資產負債表。除了可從施工費用與夾層利息取得可觀收入外，我們的參與也讓我們能管理整體施工進度，確保總投資額 2.5 億美元的 Interlock 專案如期完工。

Now turning to our balance sheet. Over the past quarter, we continue to take actions to enhance the flexibility of our balance sheet and work on loan maturities. We are making several moves to position the balance sheet for the new projects and future growth. This quarter, we raised $10.6 million through our ATM program at an average price of $15.66 per share. We raised more than anticipated as we took advantage of the stock trading at or near all-time highs. Year-to-date, we have raised $60.6 million at an average share price of $14.36.

接著談談我們的資產負債表。在過去一季，我們持續採取行動以提升資產負債表的彈性，並處理貸款到期事宜。我們正進行多項調整，使資產負債表能因應新專案與未來成長。本季我們透過 ATM 計畫以每股平均 15.66 美元的價格募集 1,060 萬美元。由於股價在歷史高點附近交易，我們把握機會，因此募資金額高於原先預期。年初至今，我們已以每股平均 14.36 美元募集 6,060 萬美元。

We anticipate receiving approximately $17 million in November from the sale of our Annapolis Junction at-cost purchase option for $5 million, along with an approximate $12 million loan payment.

我們預期將於 11 月收到約 1,700 萬美元，來源包括以 500 萬美元出售我們在 Annapolis Junction 的按成本購買選擇權，以及約 1,200 萬美元的貸款償付。

And lastly, we expect to continue our activity in the ATM program assuming favorable market conditions. If not, we'll pursue other sources of capital including dispositions.

最後，在市場條件有利的前提下，我們預期將持續透過 ATM 計畫進行相關操作。若條件不利，我們將尋求其他資金來源，包括資產處分。

With the lengthy construction schedules of all these development projects, we have considerable time to access the necessary capital to maintain a strong balance sheet. We've addressed all of our 2018 loan maturities. This past month, we closed on the last remaining loan of 2018, Lightfoot Marketplace. The new loan is for a 5-year term at a rate of LIBOR plus 175 basis points. We entered into a swap lock to fixed LIBOR with an initial loan proceeds of $10.5 million at 3% for the 5-year term.

由於這些開發專案的施工期程都相當長，我們有充裕時間取得所需資金，以維持穩健的資產負債表。我們已處理完所有 2018 年到期的貸款。上個月，我們完成了 2018 年最後一筆尚未結清的貸款——Lightfoot Marketplace。新貸款期限為 5 年，利率為 LIBOR 加 175 個基點。我們簽訂了利率交換鎖定（swap lock）以將 LIBOR 固定化，初始貸款撥款金額為 1,050 萬美元，5 年期固定利率為 3%。

At the end of the quarter, we had total outstanding debt of $661 million including $102 million outstanding under the $150 million revolving credit facility. We continue to evaluate our exposure to high interest rates and look for opportune times to hedge our interest rate exposure. At quarter and, 97% of our debt was either fixed or hedged.

截至本季末，我們的未償還總負債為 6.61 億美元，其中包括在 1.5 億美元循環信用額度下已動用的 1.02 億美元。我們持續評估高利率環境下的曝險，並尋找適當時點對利率曝險進行避險。截至季末，我們 97% 的債務為固定利率或已避險。

This quarter, we entered into a $53 million swap lock on the JHU Village loan and purchased a 2-year $50 million interest rate cap at 2.5%. Subsequent to quarter end, we entered into $10.5 million swap lock on the Lightfoot Marketplace loan.

本季我們就 JHU Village 貸款簽訂了 5,300 萬美元的利率交換鎖定（swap lock），並購買了一筆 2 年期、名目本金 5,000 萬美元、上限利率 2.5% 的利率上限（interest rate cap）。在季末之後，我們就 Lightfoot Marketplace 貸款另簽訂了 1,050 萬美元的利率交換鎖定（swap lock）。

Today, we updated our 2018 full year normalized FFO guidance to a $1 to $1.03 per share, which is unchanged from our guidance in our October 4 press release. This includes the expected sales of the distribution center by the TRS. The distribution center is a construction project that evolved from our cross-selling platform. We intend to sell this asset before it's placed in service and include a profit and normalized FFO. We included this expected gain from the sale on both the construction company gross profit and normalized FFO guidance. This transaction will have an impact on debt-to-EBITDA in 2018 as our balance sheet will carry the debt with no corresponding EBITDA. Because of the short-term nature of this project and associated debt, we did not issue any equity for this project.

今天，我們將 2018 全年標準化 FFO 指引更新為每股 1.00 至 1.03 美元，與我們 10 月 4 日新聞稿中的指引一致。此指引包含 TRS 預期出售配送中心的交易。該配送中心為一項由我們交叉銷售平台發展而來的建設專案。我們計畫在該資產投入使用前出售，並認列利潤與標準化 FFO。我們已將此預期出售收益同時納入營造公司毛利與標準化 FFO 指引。由於資產負債表將承擔該債務但沒有相對應的 EBITDA，這筆交易將影響 2018 年的負債對 EBITDA 比率。鑑於此專案及其相關債務屬短期性質，我們未為此專案發行任何股權。

Now I'd like to go through the details of the updated 2018 guidance, first starting with our assumptions: a gain of $2.9 million to $3.3 million from the sale of the distribution centers in the fourth quarter; additional activity in the ATM program assuming favorable market conditions; interest expense is calculated based on the forward LIBOR curve, which forecasts its rates rising to 2.4% by year-end.

接下來我想說明更新後的 2018 年指引細節，先從我們的假設開始：第四季出售配送中心帶來 290 萬至 330 萬美元的收益；在市場條件有利的前提下，ATM 計畫將有額外操作；利息費用係依據遠期 LIBOR 曲線計算，該曲線預測利率將於年底上升至 2.4%。

2018 guidance of $1 to $1.03 per share is predicated on the following updated components: total NOI in the $78.7 million to $79.2 million range; third-party construction company gross profit in the $5.9 million to $6.4 million range, which includes the expected profit from the sale of the distribution center; general administrative expenses in the $10.8 million to $11 million range; interest income from our mezzanine financing program in the $10.1 million to $10.5 million range, this includes $500,000 from the amortization of the Annapolis Junction purchase option gain, at quarter end, the aggregate loan balance of these mezzanine loans was $99 million; interest expense in the $19 million to $19.2 million range; and 64.8 million weighted average shares outstanding.

每股 1.00 至 1.03 美元的 2018 年指引係基於以下更新後的組成項目：總 NOI 為 7,870 萬至 7,920 萬美元；第三方營造公司毛利為 590 萬至 640 萬美元（包含預期出售配送中心的利潤）；一般及行政費用為 1,080 萬至 1,100 萬美元；夾層融資計畫的利息收入為 1,010 萬至 1,050 萬美元，其中包含因 Annapolis Junction 購買選擇權收益攤銷而認列的 50 萬美元；截至季末，這些夾層貸款的合計貸款餘額為 9,900 萬美元；利息費用為 1,900 萬至 1,920 萬美元；以及加權平均流通股數為 6,480 萬股。

Now I'll turn the call back to Lou.

現在我把電話交回給 Lou。

Thanks, Mike. As some of you already know, Mike and I will not be attending the NAREIT conference in San Francisco next week. We are at a critical juncture on several pipeline and unannounced developments, which require our presence for final negotiations, loan closings and lease executions. The timing required for these agreements makes travel to the West Coast for the better part of the week not in the best interest of the company.

謝謝，Mike。如各位部分人士已經知道的，下週我們（Mike 和我）將不會出席在舊金山舉行的 NAREIT 會議。我們在多個管線中及尚未公布的開發案上正處於關鍵節點，需要我們親自處理最後協商、貸款結案以及租約簽署。這些協議所需的時程安排，使得我們在一週大部分時間前往西岸出差並不符合公司的最佳利益。

We are happy to take your questions on this or any other topic this morning. Operator, we would like to begin the question-and-answer session.

今天早上我們很樂意回答各位對此或任何其他主題的提問。接線員，我們想開始問答環節。

(Operator Instructions) Our first question is coming from John Guinee of Stifel.

(接線員指示) 我們的第一個問題來自 Stifel 的 John Guinee。

Great. Two questions, one is what do you anticipate your mezz loan balance to run in 2019? And second, can you talk a little bit more in depth about the CapEx associated with your retail leasing for 3Q '18?

很好。兩個問題：第一，你們預期 2019 年的夾層貸款餘額大概會落在多少？第二，能否更深入談談你們在 2018 年第三季零售租賃相關的資本支出（CapEx）？

Sure. Thanks, John. With this past quarter's re-leasing, that represented about 37,000 square feet and it was not a significant amounts of CapEx involved there. It was primarily small shops. I don't think -- we're not anticipating a whole lot in terms of rollover in the retail for the rest of the year. We do have some more significant rollovers next year that are going to require some pretty substantial tenant improvement investments, that's primarily at Columbus center, the 2 shopping centers here adjacent to Town Center, as well as some re-leasing in Town Center. But so far, it's been pretty light.

當然可以。謝謝你，John。就上一季的續租而言，面積約 37,000 平方英尺，涉及的資本支出金額並不大。主要是一些小型店鋪。我認為——我們不預期今年剩餘時間零售端會有太多到期換約。明年我們確實會有一些較重要的到期換約，將需要相當可觀的租戶改善（tenant improvement）投資，主要在 Columbus Center、這裡緊鄰 Town Center 的兩座購物中心，以及 Town Center 的部分續租。但到目前為止，整體仍相當輕。

On the mezzanine program, we're expecting it to top out, I'm going to say, in the $140 million range, but it's all going to depend on timing. Next year, like in the first quarter, we’re expecting a Decatur Whole Foods center loan to be paid off. I believe that opens next month. And also, it'll be around the timing of the ultimate payoff of the Annapolis Junction loan.

關於夾層融資（mezzanine）計畫，我們預期規模最高大概會落在1.4億美元左右，但這完全取決於時點。明年，例如在第一季，我們預期一筆位於迪凱特（Decatur）的 Whole Foods 中心貸款會被清償。我相信那個中心下個月開幕。另外，也會取決於安納波利斯交匯處（Annapolis Junction）貸款最終清償的時間點。

Great. Okay. A just little follow-up here. What it looks like is you're getting pretty healthy gap and cash spreads on your new leases. I'm assuming these are net rents, but correct me, without spending much at all for TIs and leasing commission. But you've got to come in to the tune about $6 per square foot per year for new leases. Any idea as to what the expiring rents might be on the new leases you're signing versus the renewals?

很好。好的。這裡再追問一下。看起來你們新簽租約的價差（gap）與現金利差（cash spreads）相當健康。我假設這些是淨租金（net rents），但如果不對請指正，而且幾乎沒有花什麼租戶裝修（TI）與租賃佣金。但你們新租約大概每平方英尺每年增加約6美元。你們是否知道，你們正在簽的新租約，相較於續租，原本到期租金大概是多少？

John, are you speaking...

John，你是指……

Retail.

零售。

Good. Retail, okay.

好的。零售，了解。

Said another way is renewing your tenant seems like pretty good economics. But when you deal with a new lease, it seems like pretty challenging economics. You don’t provide the old cash rep so you are not providing the mark-to-market so we're looking for a little more detail on when you have to replace the tenant.

換句話說，續租你們的租戶看起來經濟效益相當不錯。但當你們面對新租約時，似乎經濟效益就相當具挑戰。你們沒有提供舊的現金租金（cash rent），也沒有提供市價調整（mark-to-market），所以我們想更了解當你們必須更換租戶時的情況。

Yes, John, on that, the first is on a renewal -- one thing on then depends on how the renewal comes about and we don't have a leasing commission on a lot of our renewals. And the other thing is, as we've talked about, we have tenants who are doing well who don't need a lot of TIs especially in the -- they're happy with the space. You don't have to redo anything. With new tenants, a lot of time it's the TI to get them up and going, which they've already paid for in the renewals.

是的，John，關於這點，首先在續租方面——有一件事取決於續租是如何促成的，而我們很多續租其實不需要支付租賃佣金。另外，如同我們談過的，我們有一些經營狀況良好的租戶不需要太多租戶裝修（TI），尤其是——他們對空間很滿意。你不需要重新整修任何東西。但對新租戶而言，很多時候需要 TI 讓他們能開始營運，而這些成本在續租時其實已經投入過了。

And any idea on the prior cash contractual rent on the new leases, i.e., is it a rent roll-up or rent roll-down on your new leases, not your renewal?

那你們是否知道新租約先前的現金合約租金（cash contractual rent）是多少？也就是說，你們的新租約（不是續租）是租金上調（roll-up）還是下調（roll-down）？

On the new rate?

你是指新租金水準？

Yes, it's typically higher, John. We haven't seen much compression. And I think the only exception to that would be in some of the nooks and crannies in Town Center where we're after specific tenants basically to add to the mix. That would be about the only time that we would see rents contract and that happens fairly regularly here in Town Center as we try to keep the mix as fresh as possible and add new offerings.

是的，通常會更高，John。我們沒有看到太多壓縮（compression）。我想唯一的例外是在 Town Center 裡一些角落地段（nooks and crannies），我們會鎖定特定租戶，基本上是為了豐富業態組合。大概只有在那種情況下我們才會看到租金收縮，而在 Town Center 這種情況相當常見，因為我們希望讓組合盡可能保持新鮮並加入新的業態。

Then the last question, Lou. You provided 2019 guidance of a very strong year. Can you elaborate?

最後一個問題，Lou。你們給了2019年的指引，說會是非常強勁的一年。可以再多說一些嗎？

Well, as I said, we will be providing guidance on the next conference call. But John, you followed us for a while as has several people on the phone. We've been saying for 1.5 years that pointing to 2019 as the show-me year for this current pipeline that we are in the process of delivering. And that's -- we plan on doing just that and all systems are go. You heard the updates on the deliveries and on the lease-up schedules, so I think the math is going to be pretty compelling. And we're really looking forward to that call. There are still a few pieces to put in place, few leases to sign, and as I suggested, Mike and I really have a tough couple of weeks coming up with finalizing a couple of projects and loans. But we're looking forward to a very strong 2019 and I think an even stronger or 2020.

嗯，如我所說，我們會在下一次電話會議提供指引。但 John，你跟蹤我們一段時間了，電話上的幾位也是。我們已經講了1年半，指出2019年會是我們目前正在交付之開發管線的「驗證之年」（show-me year）。而那就是——我們計畫做到這點，一切系統都已就緒。你也聽到關於交付進度與出租（lease-up）時程的更新，所以我認為數字會相當有說服力。我們非常期待那通電話會議。目前仍有幾個環節要到位、還有幾份租約要簽；如我所提，Mike 和我接下來幾週會很忙，要完成幾個專案與貸款的定案。但我們期待2019年會非常強勁，我想2020年會更強。

Our next question is coming from Dave Rodgers of Baird.

下一個問題來自 Baird 的 Dave Rodgers。

Lou, wanted to start off with the Nashville, I think Charleston and Charlotte projects, I think that's what you had mentioned in terms of Class A CBD office opportunities, correct me if I was wrong there. But 2 things around that, one would be would you anticipate those being similar type mezz investments? And what would be the peak -- not that you said 140 is a peak, but what would be your kind of max that you'd be comfortable within mezz? And then maybe a second broader question to that, just in terms of that pipeline, you said maybe nothing to be added to the pipeline after that. Is that just that things may be starting to quiet down? Or that just takes you guys to capacity where you just don't feel comfortable adding anything else?

Lou，我想先從納許維爾（Nashville），以及我記得你提到的查爾斯頓（Charleston）和夏洛特（Charlotte）專案談起；就你所說的甲級（Class A）CBD 辦公機會而言，是這些對吧？如果我理解錯了請指正。但有兩點想問：第一，你是否預期那些會是類似的夾層投資（mezz）？以及你們的峰值——不是說你提到的1.4億是峰值——但你們在 mezz 方面可接受的上限大概是多少？第二個比較宏觀的問題是，關於那條管線，你說之後可能不會再把新案子加進管線。這是因為市場可能開始趨於平靜？還是因為你們已接近產能上限，不太願意再增加任何案子？

Yes, it's -- I'll start with that second question first, and it's the latter. An easy way to get in trouble in this business is to get way out over your skis. There are -- the opportunities are accelerating. We're not seeing any slowdown in that. However, we've practiced discipline here for nearly 40 years and we really don't want to get further out than where either our balance sheet or our personnel will take us. We've got really strong development partners in the locations that we are discussing to round out the pipeline. But that's really the limit of our comfort level until we deliver some of the projects that we're talking about. We have 3 or 4 deliveries in 2019 that we really want to see done successfully and execute it well before we start shopping again. Of course, you never say never. Something really compelling could come along, but the 3 projects that you mentioned, they would be a mix of projects that would be done on balance sheet as well as on the mezz side. We're comfortable where the mezz program is now. As Mike suggested, there's a lot that's going to get paid off or paid down here in the not-too-distant future. And remember, these are large, lengthy projects and so you have an awful lot of a runway before these things ramp into any kind of significant dollars.

是的——我先回答第二個問題，是後者。在這個行業裡，最容易出事的方式之一就是把自己推得太超過能力範圍。機會其實正在加速出現。我們沒有看到任何放緩。不過，我們在這裡實行紀律將近40年，我們真的不想走得比我們的資產負債表或人力所能承受的更遠。在我們討論的這些地點，我們有非常強的開發合作夥伴來完善管線。但在我們交付一些正在談的專案之前，這就是我們舒適圈的上限。我們在2019年有3到4個交付案，我們真的希望先把它們成功完成並良好執行，之後再開始尋找新案。當然，凡事沒有絕對。如果出現非常有吸引力的機會也可能會做，但你提到的那3個專案，會是資產負債表內投資與 mezz 端投資的混合。我們對目前 mezz 計畫的規模感到舒適。如 Mike 所說，不久的將來會有不少款項被清償或償還一部分。而且請記得，這些都是大型、週期長的專案，所以在它們逐步放大到任何顯著金額之前，你有很長的跑道。

Okay, that's helpful. One of the other comments that you had made was about recycling out of an older center to help fund this. Can you start to give us an idea of maybe how much assets you're willing to sell into that bottom portion of the portfolio, get a little bit bigger if the development pipeline gets a little bit bigger and how are you thinking about asset sales relative to kind of what you've been doing?

好的，這很有幫助。你提到的另一個評論是，透過把較老的中心資產回收（recycling）退出來協助資金來源。你能否開始讓我們了解一下，你們願意在投資組合底部那一段出售多少資產？如果開發管線變大一些，你們是否會賣得更多？以及你們如何看待資產出售，相較於你們過去的作法？

Sure. Actually, there is not much down there at the bottom. You heard us talk about in years past how we may cycle out of the 3 food lines that we have. We also have a Bi-Lo center. Those projects are doing really well, those assets. Food line is actually gaining market share in our area and so not sure that's going to happen. However, as you know, we do like to regularly go through that portfolio and recycle. That's why this Nexton opportunity that came up was perfect for us. We love lifestyle centers, we love Charleston and there certainly will be something in our portfolio that we will be desirable -- less desirable of. But I don't think, you're looking at a change in strategy, Dave. It's going to be one-off at best in terms of dispositions.

當然。其實在底部那一段並沒有太多資產。你們過去幾年聽我們談過，我們可能會把我們持有的3個 Food Lion 賣場型中心輪替退出。我們也有一個 Bi-Lo 中心。那些專案、那些資產表現都很好。Food Lion 在我們的區域其實正在提升市占，所以不確定那是否會發生。不過，如你所知，我們確實喜歡定期檢視投資組合並進行資產汰換／回收（recycle）。這也是為什麼這次出現的 Nexton 機會對我們來說很完美。我們喜歡生活風格中心（lifestyle centers），我們喜歡查爾斯頓，而我們的投資組合裡肯定會有一些資產是我們會覺得——相對沒那麼理想、較不想持有的。但我不認為你會看到策略改變，Dave。就處分（dispositions）而言，最多也就是個案（one-off）。

Our next question is coming from Rob Stevenson of Janney Montgomery Scott.

我們的下一個問題來自 Janney Montgomery Scott 的 Rob Stevenson。

Lou, why do mezz on Interlock if you don't want to buy it or don't have a purchase option? I mean, what's the incentive for you guys to do mezz without path to ownership?

Lou，如果你們不想買下 Interlock，或是沒有購買選擇權，為什麼還要在 Interlock 做夾層融資（mezz）？我的意思是，你們做 mezz 卻沒有通往所有權的路徑，誘因是什麼？

Essentially, it's a moneymaking opportunity. It's a -- we have an opportunity to take substantial interest above our cost of capital and still control things with our construction company. So we're looking that as basically an income stream that's very healthy. It's not too dissimilar to the 2 Whole Foods that we're involved in right now where those are going to trade far below our cost of capital. We expect Interlock would do the same thing. And so we'd be more desirous of taking current profits as opposed to bringing something on balance sheet that is below our cost to capital.

基本上，這是一個賺錢的機會。這是——我們有機會在資金成本之上取得可觀的利息，同時仍能透過我們的營造公司掌控相關事項。所以我們把它視為一條非常健康的收入來源。這和我們目前參與的兩個 Whole Foods 專案並沒有太大不同，那些專案的交易價格將遠低於我們的資金成本。我們預期 Interlock 也會是同樣的情況。因此，相較於把一個低於我們資金成本的資產納入資產負債表，我們更傾向於取得當期利潤。

Another thing on that, Rob, is on the first part that we talked about last time on the mixed use of office and retail, we do get participation in cash flow and a capital transaction on that over and above our mezz, so we will have some participation on that. As we've talked about before on these mezz projects, we love these projects. And reason involved, if these people defaulted, we'd love to own them for what we've been informed.

另外一點，Rob，關於我們上次談到的辦公與零售混合用途的第一部分，除了我們的 mezz 之外，我們也能參與其現金流以及資本交易，因此我們會有一些參與。如同我們先前談過的這些 mezz 專案，我們很喜歡這些專案。而且我們之所以參與，是因為如果這些人違約，依我們所了解的價格，我們會很樂意擁有這些資產。

Okay. And then, if I'm doing the math right, on the supplemental, looks like during the quarter are about 56% of your ABR came from retail. And then if I take a look at the development pipeline, I mean, you've got the 2 Charleston multifamily projects that'll come online next year and assuming that you guys will buy in the Point Street Apartments purchase option, but there's still a lot of retail sort of coming behind that as well and any of this office looks like it's a 2020 or 2021 or beyond sort of delivery, how comfortable are you in seeing retail ratcheting up to north of 60% of ABR for some period of time here before other asset types come in to dilute it back down?

好的。然後，如果我算得沒錯，從補充資料來看，本季大約有 56% 的 ABR 來自零售。再看開發管線，你們有兩個查爾斯頓的多戶住宅專案明年會投入營運，並且假設你們會行使 Point Street Apartments 的購買選擇權，但後面似乎也還有不少零售；而且任何辦公看起來都是 2020 或 2021 甚至更晚才交付。你們對於在其他資產類型進來把占比稀釋回落之前，零售占 ABR 在一段時間內拉升到 60% 以上，會有多安心？

Yes. So Rob, on the retail, on the development side, there's not a lot of retail. We've got the Market at Mill Creek, which is a $23 million project, not a large one then just the retail piece here at Town Center. But outside of that, on the office side, we've got the Brooks Crossing office coming online, which is a 100% -- obviously 100% office. And then we also have Greenside Harding Place in Charlotte on the multifamily coming in next year.

是的。Rob，就零售而言，在開發端其實沒有很多零售。我們有 Market at Mill Creek，這是一個 2,300 萬美元的專案，不算大；然後就是 Town Center 這裡的零售部分。但除此之外，在辦公端，我們有 Brooks Crossing 辦公專案將投入營運，這是 100%——顯然是 100% 辦公。另外我們在夏洛特也有 Greenside Harding Place 的多戶住宅，明年會進來。

Yes, we think that percentage is topped out, Rob. But to answer your question whether it grows by couple of percentages or starts to go down significantly like we believe it will, as I said earlier, we're very comfortable with that retail portfolio. It continues to perform, sales are strong, our grocers are strong, at 97% occupancy and re-leasing spreads as high as they are, we're very comfortable with what we own. And we intend on adding to it. We don't -- I don't think it's going to add materially because we're not involved in large-scale retail projects. But it is going to -- we are going to add to that portfolio.

是的，Rob，我們認為那個比例已經到頂了。但要回答你的問題：它是再增加幾個百分點，還是如我們所相信的那樣開始明顯下降——如我先前所說，我們對這個零售投資組合非常有信心。它持續表現良好，銷售強勁，我們的生鮮雜貨租戶很強，入住率 97%，續租租金價差（re-leasing spreads）也很高，所以我們對我們持有的資產非常放心。而且我們打算繼續增加。我們——我不認為它會有實質性的增加，因為我們沒有參與大型零售專案。但它確實會——我們會增加那個投資組合。

Okay. And then last one for me. I mean, when you sit here in terms of the projects that you have underway and the stuff that you're looking to tee off over the next month or so, how should we be thinking about the general contracting company going forward? I mean, does that get bolstered by the continued expansion of mezz, something similar to what you're doing at Interlock? Does it retreat? Does it sort of maintain the sort of current size going forward? How best should we be thinking about the size and scope of the contracting business going forward?

好的。然後我最後一個問題。我的意思是，從你們目前在建的專案，以及接下來一個月左右你們打算啟動的項目來看，我們應該如何看待未來的總承包公司（general contracting company）？我的意思是，它會因為 mezz 的持續擴張（像你們在 Interlock 做的那樣）而被強化嗎？還是會縮減？或是大致維持目前的規模？我們應該如何看待未來承包業務的規模與範圍？

Sure, good question. So our company works best at between $200 million and $300 million worth of work in any given year. I think we're going to hit that target. It's going to be in that range in 2019. What we don't know yet is the mix of third-party versus in-house and that mainly is going to revolve around a couple of big engagements that are coming up on both sides and there is still being a chance that they don't come to pass. However, I think you can expect the construction company to be in a range that it was last year. This year was little bit less in volume and it's kind of artificially lower based on the distribution center and the fact that, that's all being recognized as a gain on sale as opposed to the fee income. But we're going to be in that same range that Mike has guided you to, we believe, for next year.

當然，這是個好問題。所以我們公司在任何一年承接 2 億到 3 億美元的工程量時運作得最好。我認為我們會達到那個目標。2019 年會落在那個區間。我們目前還不確定的是第三方案源與自有案源的組合，而這主要取決於雙方各有幾個即將到來的大型合作案，而且仍有可能最後不會成案。不過，我想你可以預期營造公司會維持在與去年相近的區間。今年的量稍微少一些，而且因為配送中心的關係，數字被人為地壓低了，因為那部分是以出售收益（gain on sale）認列，而不是以費用收入（fee income）認列。但我們相信明年會落在 Mike 先前給你們指引的同一個區間。

And our next question is coming from Jim Lykins of D.A. Davidson.

我們的下一個問題來自 D.A. Davidson 的 Jim Lykins。

Just couple of things from me. First of all, for Nexton Square, can you provide the rate on the mezz loan? And also when will that begin to impact FFO? Is that in 2018 guidance?

我這邊有幾點。首先，關於 Nexton Square，你們能提供 mezz 貸款的利率嗎？另外，這會在何時開始影響 FFO？這有包含在 2018 年的指引中嗎？

Okay. Nexton, okay. Yes, that's going to -- we currently have a bridge loan, it's at 10%. We're anticipating going into the full loan here and closing on that here in the next 2 weeks and that's going to start at 15%. And then when they hit certain performance thresholds, it will drop to 10%.

好的。Nexton，好。是的，我們目前有一筆過橋貸款（bridge loan），利率是 10%。我們預期在接下來兩週內轉入完整貸款並完成交割，起始利率會是 15%。之後當他們達到特定的績效門檻時，利率會降到 10%。

Okay. And also for the acquisition in Columbia, can we get the cap rate for that one?

好的。另外，關於在 Columbia 的那筆收購，我們可以知道那一筆的資本化率（cap rate）嗎？

It's in the high 6s, Jim.

大約在 6% 後段，高 6% 左右，Jim。

Yes, 6.75%.

是的，6.75%。

Our next question is coming from Craig Kucera of B. Riley FBR.

我們的下一個問題來自 B. Riley FBR 的 Craig Kucera。

I'd like to follow up on Nexton Square. You have an option to purchase below market. Can you kind of walk us through how that agreement is constructed? Is that based on appraisal at the time of completion or just some additional color, how we should think about sort of the spread at what you're buying it versus what you think it's going to be worth or anticipated worth?

我想追問 Nexton Square。你們有一個低於市價的購買選擇權。你們能否帶我們了解一下那個協議是如何設計的？是以完工時的估值為基礎，還是其他方式？能否再補充一些說明，讓我們理解你們的買入價格相對於你們認為（或預期）它的價值之間的價差應該怎麼看？

Yes, we've negotiated a purchase option based on a cap rate times at NOI that'll be in place at the time. And the spread between what we believe to be market and what that options add is around 50 basis points. But mind you, in the interim, we'll be collecting significant development and construction management fees as well as $2 million to $3 million worth of interest income. So inclusive of all that profit that will come our way, we still will be purchasing the project below market.

是的，我們談妥了一個購買選擇權，定價方式是以當時可實現的 NOI 乘上一個資本化率。我們認為市價與該選擇權價格之間的利差（spread）大約是 50 個基點。但請注意，在此期間，我們也會收取可觀的開發與施工管理費，另外還有約 200 萬到 300 萬美元的利息收入。把所有將流向我們的利潤都算進去之後，我們仍會以低於市價的價格買下該專案。

Got it. And going to Lexington Square, we appreciate that about 10% of the purchase price was paid in OP units. But can you tell us what the pricing was or the number of units issued in that transaction?

了解。再談 Lexington Square，我們知道大約有 10% 的收購價款是以 OP 單位支付。但你們能告訴我們該交易的定價是多少，或是發行了多少單位嗎？

14-something weren't they, Mike ?

14點多左右，不是嗎，Mike？

Yes, yes. They were in the mid-14s.

是的，是的。大約在14點中段。

Got it.

了解。

There's a bit in place for quite a while.

這個情況已經維持了一段時間。

Right. And going to the construction business, I know earlier in the year, you had anticipated that backlog was going to pick up, I think, a little earlier than have sort of come together and sounds like you're quite busy here in the fourth quarter. But is that just really a function of just kind of other things taking precedence? Or did you have any potential deals that fell pipeline out of that pipeline? Or just some additional color on maybe why that slipped a quarter or so or even 2 quarters from what we saw it earlier in the year?

對。回到營造業務，我知道今年稍早你曾預期在手訂單會回升，我想會比實際發生的時間更早一些，而且聽起來你們在第四季相當忙。但這是否只是因為其他事情優先處理？還是有任何潛在案子從那個案源管線中掉出來？或能否再補充一些背景，說明為什麼相較於今年稍早我們看到的情況，會延後了一季左右，甚至延後1到2季？

Thanks for the question. Nothing has fallen out. Where our expectation is that we're going to be -- it's going to be a very robust backlog going into the first year. But what we're seeing the results of and I would imagine you guys have heard this on a number of conference calls, it's very difficult to find labor. It's very difficult to confirm pricing. Schedules have elongated and so the businesses, we're proceeding very cautiously before we execute contracts. The great thing about being in the development business, either working for other developers or working for ourselves, is that you have the time to set your cost pro formas before having to commit to tenants, and that's kind of where we are. So our construction company has been working the same projects that we had anticipated being under contract by now. They've been working on them for several months. But finalized hopefully in the next month or two, but it's really a function of what's going on in the marketplace.

謝謝你的提問。沒有任何案子掉出來。我們的預期是——進入第一年時，在手訂單會非常強勁。但我們看到的結果，而且我想你們在很多場法說會上也聽過，現在非常難找到勞工。也非常難確認價格。工期被拉長，因此在簽約執行之前，各個業務都非常謹慎地推進。做開發業務的好處，不論是替其他開發商做或是替自己做，就是在必須對租戶做出承諾之前，你有時間先把成本的財務預估（pro formas）設定好，而我們目前正處於這個階段。所以我們的營造公司一直在做那些我們原本預期到現在應該已經簽約的專案。他們已經在這些專案上工作了好幾個月。希望在接下來一兩個月內能夠定案，但這真的主要是市場現況所致。

Got it. Wanted to circle back to one of your retail tenants that has 4 leases, Bed Bath, kind of had a tough quarter they announced earlier this month. Can you give us some color on how you feel those stores are performing? And any update on discussions you've had with them?

了解。我想回到你們其中一個零售租戶，他們有4份租約，Bed Bath，本月稍早公布的那一季表現不太好。你能否提供一些背景，談談你們覺得那些門市的營運表現如何？以及你們與他們討論的最新進展？

Yes, that's interesting. We have a few people kind of in that same category, Bed Bath being one of them. Their business is still very healthy, and in particular, our centers are doing great. We understand that a center that we have here, next to Town Center is one of their best-performing stores in the state. We're watching that very closely from a couple of standpoints, one is Bed Bath is not a very strong rent payer. Those are fairly below-market deals, so it wouldn't be the worst thing in the world if we got some space back. But perhaps, more importantly, we're looking for them to update their concept. They've got a tremendous amount of goodwill, great name and if they can just get going in a direction, we think they can probably turn it around. They may need to shrink their stores. But we are -- we're very much engaged in watching that process. We got the same -- a similar situation with Barnes & Noble who's in a couple of our centers. Again, they're working. They're a little bit further along working a new concept that seems exciting and seems like it's going to be well received. And we're going to work with them here at Town Center and help them pull it off. But that environment changes -- is changing quickly, as everybody knows. We are, like I said, we're very happy with our retail portfolio. That doesn't mean that we're not vigilant and worried about various things that are happening in the marketplace. It's particularly in soft goods, there's a lot of winners and losers out there and you've got to be careful. But when you operate lifestyle centers, you're going to have tenants that come in and out of favor. But that's why we get paid, is to stay on top of these sorts of things.

是的，這很有意思。我們有幾個租戶屬於同一類型，Bed Bath是其中之一。他們的業務仍然非常健康，尤其是在我們的商場表現很好。我們了解到，我們這裡靠近Town Center的一個商場，是他們在該州表現最好的門市之一。我們從幾個角度非常密切地觀察：第一，Bed Bath並不是很強的租金付款方。那些合約的租金水準相當低於市場，所以如果我們能收回一些空間，也不會是世界末日。但也許更重要的是，我們希望他們更新他們的店型概念。他們累積了大量商譽，品牌名稱很好；如果他們能朝某個方向推進，我們認為他們很可能可以扭轉局面。他們可能需要縮小店面。但我們——我們非常積極地參與並關注這個過程。我們也有類似情況，Barnes & Noble在我們幾個商場裡也有店。同樣地，他們仍在運作。他們在推動一個新的概念上走得更前面一些，看起來很令人興奮，也似乎會受到市場良好接受。我們會在Town Center與他們合作，協助他們把它做成。但如大家所知，那個環境變化——正在快速變化。如我所說，我們對我們的零售資產組合非常滿意。但這不代表我們不保持警覺、也不擔心市場上正在發生的各種事情。特別是在軟性商品（soft goods）領域，贏家和輸家很多，你必須小心。但當你經營生活型態商場（lifestyle centers）時，租戶的受歡迎程度會起起落落。但這也是我們獲得報酬的原因——就是要持續掌握並處理這類事情。

Got it. One more for me. There seems to be rising concerns about global growth just due to higher interest rates and even maybe another round of tariffs. Doesn't sound like you guys are seeing anything on the ground. But after going through a number of cycles, I guess what are the triggers, Lou, that you look at to sort of say, hey, we need to maybe start pulling back on development. I know you sort of outlined you have 3 new potential -- or 3 new markets with new projects. But kind of what are you looking for to say maybe, hey, let's pull back and slow things down and just finish what we have.

了解。我最後一個問題。由於利率上升，甚至可能再來一輪關稅，市場對全球成長的擔憂似乎正在升高。聽起來你們在第一線並沒有看到什麼影響。但經歷過多個景氣循環之後，我想問Lou，你會看哪些觸發因素，來判斷說，嘿，我們可能需要開始收斂開發步伐？我知道你提到你們有3個新的潛在——或3個新市場的新專案。但你們會看什麼訊號來決定，也許該放慢腳步、先把手上的案子做完？

Sure. I tell you, for us, the precursor is always the slowdown with our tenants. We've got a lot of architects, engineers, money managers, insurance companies and the like. And as you might imagine, all those people are on the front end of expansion in the economy and so it gives us a good gauge of what's going on out there. That has been -- it's been a great bellwether for us. The second piece of that is, remember, we're not a large -- on a relative basis, we're not a large company. And so we really can have a rifle approach to where we want to play and where we don't. When you do the types of public-private ventures or ventures with well-heeled tenants that we do, you're really not looking at a macroeconomic situation, you're looking at specific markets, and more specifically, even a specific submarket where you can do a really good deal in really just about any kind of environment. So the macroeconomics are important for our overall tenant expansions and in our construction company and the like. But in terms of development opportunity, short of something like the Great Recession, the opportunities in the good markets are there, and like I said before, we feel really strongly about Charlotte and Charleston and Nashville, Atlanta and the like.

當然。我跟你說，對我們而言，前兆永遠是租戶端開始放緩。我們有很多建築師、工程師、資金管理人、保險公司等等。如你所想像，這些人都處在景氣擴張的前端，因此能讓我們很好地衡量外部正在發生什麼。這一直——一直是我們很好的領先指標。第二點是，請記得，我們不是一家大型——相對而言，我們不是一家大型公司。因此我們真的可以用「步槍式」的方法，精準選擇我們要參與的地方，以及不參與的地方。當你做我們這種公私合營的案子，或與資金雄厚的租戶合作的案子時，你看的其實不是總體經濟，而是特定市場，更具體地說，甚至是某個特定次級市場；在那裡你幾乎在任何環境下都能做出很好的交易。所以總體經濟對我們整體租戶擴張、以及我們的營造公司等確實重要。但就開發機會而言，除非出現像大衰退那樣的情況，好的市場仍然有機會；而且如我先前所說，我們對夏洛特、查爾斯頓、納什維爾、亞特蘭大等市場都非常有信心。

Okay. Thank you, ladies and gentlemen. We appreciate your interest in our company. We look forward to updating you on our activities and results in the coming quarters, and then we look forward to 2019 guidance. Take care.

好的。謝謝各位女士、先生。感謝各位對本公司的關注。我們期待在接下來幾個季度向各位更新我們的活動與成果，並且也期待提供2019年的指引。保重。

Ladies and gentlemen, thank you for your participation. This concludes today's teleconference. 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。