CubeSmart (CUBE) 2010 Q1 法說會逐字稿

Welcome to the U-Store-It first quarter 2010 earnings conference call. (Operator Instructions). I would now like to turn the conference over to Mr. Dean Jernigan. Mr. Jernigan, please go ahead.

Thank you. Good morning to you all. As a reminder, the Company's remarks will include certain forward-looking statements today regarding earnings and strategy that involve risks and uncertainties, and other factors that may cause the actual results to differ materially from these forward-looking statements. The risks that could cause actual results to differ materially from these statements are provided in documents the Company files with the SEC, specifically our 8-Ks and our 10-K. In addition the Company's remarks include non-GAAP measures. The reconciliation between GAAP and non-GAAP can be found on the Company's website. Starting off today will be Tim Martin, our Chief Financial Officer. Tim will turn it over to Chris Marr, our President and Chief Investment Officer, then I will follow along after that with some comments on performance, fundamentals, and then we'll open it up for Q&A. Tim?

Thanks, Dean. And thanks to everyone for joining us for this morning's call. We appreciate your continued interest and support of U-Store-It Trust. We had a very good first quarter. Our reported $0.12 of FFO per share was a penny better than the high end of our guidance range of $0.10 to $0.11. The primary driver of the outperformance versus our expectations was top line performance from our same store portfolio. While we see pockets of increasing demand what made our same store revenues exceed our plan was a further continuation of the trend that our existing tenants are staying with us for longer than they historically have. We believe this is a very positive sign as while we do in fact have fewer customers and lower occupancy levels than we did before the economic slow-down, our existing customers need our storage units for longer periods of time. We've seen our average customers' length of stay increase by 24% from 352 days in the first quarter of 2009 to 435 days during the first quarter this year.

During the quarter we used available cash to repay an $83.3 million CMBS loan in advance of the loan's scheduled maturity of May of 2010. Also during the quarter we received proceeds of $17.6 million that satisfied a mortgage note receivable associated with seller financing we provided in connection with property dispositions during 2009. At quarter end, we had $41.5 million of available cash. This cash is well in excess of our remaining 2010 debt maturities which total $23.4 million. Additionally we have no amounts drawn on our $250 million revolving credit facility. Overall a solid and clean first quarter, so I'll look forward now and comment on our expectations for the second quarter and the balance of 2010. As detailed in our earnings release we've increased our guidance range of FFO per share for 2010 of by a little bit more than 4% at the midpoint.

We've increased our range from $0.43 to $0.49 up to a range of $0.45 to$0.51. The $0.02 increase at the midpoint reflects our first quarter outperformance as well as the impact of our acquisition of third-party management contracts. Our earnings release details the underlying assumptions for same store operating fundamentals. In short, we've adjusted our previous guidance to reflect an expectation for higher revenues, lower expenses, resulting in better net operating income than we previously forecast. In just a few minutes Chris will walk through some details on our transaction to acquire third-party management contracts from United Stor-All. From an earnings perspective the transaction is accretive and we expect it to provide an additional penny per share of FFO over the balance of 2010. Embedded in that $0.01 per share are the both revenues we'll derive from managing the properties, as well as the incremental costs, including additional personnel, causing an upward adjustment to our estimate for general and administrative expenses to a range of $23.6 million to $24.4 million. We introduced FFO per share guidance for the second quarter of $0.10 to $0.11, and when comparing our reported $0.12 of first quarter FFO per share to our second quarter guidance there are a few items of note.

Consistent with 2009, we focus a large portion of our annual marketing spend on television and digital media that coincides with our peak rental months. The marketing expense will be significantly higher in the second quarter as compared to the first quarter. Also during the second quarter, we anticipate incurring additional general and administrative expenses related to the integration and startup of the third-party management business. Sequentially from the first quarter to the second quarter, the additional marketing spend and G&A expense have an approximate $0.03 per share impact to FFO. Positive items of note going sequentially from the first quarter to the second quarter are increased revenues from our core portfolio as we enter our peak rental season, decreases in nonmarketing expenses, and less interest expense as a result of the first quarter repayment of the $83.3 million CMBS loan. These positive items are expected to provide an incremental $0.01 to $0.02 of FFO sequentially when you compare the first quarter to the second quarter.

So to wrap up today, I have all positive news to report. We outperformed our expectations due to solid top line performance, and we increased our guidance as a result of improving expectations from our core portfolio and the accretive impact of our third-party management business. Our team is energized as we've entered our sector's peak rental system season, and we will continue to work hard to capture more than our share of what we see as improving yet still challenged demand from the self-storage consumer. With that, Chris, I will turn it over to you.

Okay, thanks, Tim. This morning I will discuss the United Stor-All transaction with you, and also provide some color on what we are seeing in the investment market. As regards to the acquisition of the management contracts, as Tim referred to, the United Stor-All transaction, United Stor-All, according to the 2009 top operators list compiled by the Mini Storage Messenger, was the 11th largest operator of self-storage in the United States. We entered into an agreement to acquire the management contracts for 85 self-storage facilities. These assets are in 16 states. Concentrations are in the mid-Atlantic. 42 of the properties are in Virginia, Maryland, Washington, D.C., Delaware, New York, New Jersey and Pennsylvania. 11 are in Florida. And 10 are in Illinois, primarily Chicago. In connection with the transaction, we have added Carol Shipley, who was the President of United Stor-All management to our management team as a Vice President, and she will head up our third-party management business.

In addition we've brought to our team three other corporate employees who will be in revenue management and marketing, as well as four of the United Stor-All district managers who will retain most of the assets they had previously been responsible for overseeing. Once we had a deal and we were under contract, in order to close the transaction we required owner consent to the assignment of the management contracts, and also lender consent in those cases where the assets had debt on them and the loan documents called for lender consent to changes in the manager. When we went to the owners to discuss our agreement, they universally and immediately saw the value in the transaction and we quickly received owner consent for each of these 85 contracts.

The owners realized in most cases, before we even began our presentation, the power in combining the boutique personalized property management philosophy that Carol and team have been delivering over the last 10 years with the operating, marketing, human resources, accounting and information technology, personnel and systems we've put in place at U-Store-It over the last few years. We closed on the transaction on April 28th and have been seamlessly integrating the management of these 85 assets. At closing, we also added approximately 178 facility level employees to the U-Store-It team.

The consideration paid for the contracts has been structured in the form of an earn-out with an upfront payment of approximately $4.1 million, and there's the possibility for additional payments over the next three years totaling a maximum of an additional $3.8 million. Those earn-out payments are subject to being proportionally reduced should there be a cancellation of any of the 85 contracts under certain circumstances. Economically the transaction is expected to be accretive, as Tim mentioned, approximately $0.01 per share for the balance of 2010. In the accretion for the eight months remaining this year are some nonrecurring integration costs, so as we look to 2011, we expect that the combination of revenue growth at the managed properties, especially those in lease-up, along with the absence of the integration costs we will have, especially next quarter, we expect the accretion to increase to approximately $0.02 per share in 2011.

Strategically, the transaction achieves three objectives. One, it allows us to grow our earnings by leveraging the infrastructure we have put in place over the last few years. Two, it accelerates our entry into the property management business by adding a platform and very strong people to run it. And third, it creates a pipeline of future opportunities, both to grow the third-party management business with the existing institutional and individual owners, as well as to be in the best position should the owners decide to sell the assets down the road. We viewed this as a very creative way to invest capital with a very high cash on cash return and a deal that has numerous residual benefits going forward. To give you a little bit of color on what we're seeing in the investment market, and I'll approach this having had the benefit of hearing your questions and answers from the other two public companies that have already reported, so I'll try to take a little bit of a different approach here and perhaps add a little bit at the margin.

There are brokered deals in the market, some are retreads, some are distressed assets with the brokers being directed by the lenders or the owners with the lender behind the scene, but we still have very few data point, because as far as we can tell less than a handful of assets have actually closed. From our perspective, we've had approximately 160 properties come across our desk thus far this year. We categorize those deals we've looked at in four buckets. Roughly 12% of the deals are recently developed properties, often in Florida and Arizona, where the asset is between zero and 30% physically occupied after up to 2 1/2 years after CO, and almost all the cases, almost meaning 100% where there was debt, the asset is worth less than the in-place debt, and in many cases you have to question if the asset should ever have been built.

About 23% of the deals we would describe as under mild distress, either the owners are experiencing stress elsewhere in their portfolios or the lender is putting some pressure open the owner in advance of a maturity. In these cases, after going through some amount of price discovery, we've almost always seen the lender generally pushing the problem down the road, cutting some sort of a deal for an extension with the owner and hoping for better results in the future. About 45% of the deals we've seen are what we would describe as full distress. Asset is either own controlled by the lender and the lender is trying to sell. We're seeing these both through brokers and on a direct basis.

Many of this first round we're seeing tend to be in tertiary markets or were built in poor locations within their submarket. The remaining 20% are stabilized, fully marketed assests, the owner is seeking full retail pricing, often pricing them as if they are fully occupied on future market rents, though trying to get -- I think you've heard this from the other two companies -- trying to get kind of tomorrow's pricing today, and those have generally sat as it's been challenging to get to those numbers. The volume of opportunities has steadily increased over the last two months, and we see more deals coming. We're being patient and sticking to a disciplined underwriting. That being said, we do believe that there will be opportunities that make sense for us, and we continue to expect those opportunities to manifest themselves later in the year. At this point it's impossible today to predict the magnitude of those opportunities, but we're very encouraged by what we're seeing.

We think there will be some creative opportunities to invest capital as we move forward, and we will continue to think outside the box as we did in the United Stor-All transaction and find ways to add value, not only in immediate cash on cash returns but value over time in the portfolio. With that, I thank you for listening. I will turn the call over to Dean.

Okay. Thanks. I would like to talk a little bit this morning about fundamentals. A year ago some of you, most of you were on this call, as a matter of fact, I think, and I was very hesitant to talk about April results. You see March results, first quarter results in the release supplemental information we provide you, but I think it's very critical when we can talk about April, because it is -- to talk about it, because it is the beginning of our rental season. Our rental season, in my eyes, kind of starts tomorrow. Seriously.

The first Saturday, in this case the second Saturday, in the month of May, the first Saturday was the first day of the month, and was not the beginning of the rental season, but last year at this time, almost to the day, I was very hesitant to talk about April results because the crystal ball was very unclear at the time. We had, of course, a precipitous drop in occupancy, physical occupancy from January that continued through April, and I was quite concerned at the time as to what our rental season was going to look like. This year the crystal ball is quite clear, and I'm happy to share some April results with you to tack on to Q1 results to give you a picture of what I think looks quite promising as it relates to the upcoming rental season.

We started 2010 year-over-year on the same store basis with a physical occupancy that was 350 basis points less than the beginning of the year of 2009. Year-over-year we were down 350 basis points when we started this year. Today, through April, we're now up 110 basis points on a year-over-year basis. I think that is dramatic improvement for two different reasons. One, of course, we were dropping and losing occupancy last year through the first four months. This year we've actually turned it around in two different respects.

Marginally we've increased rentals. Our rentals are up on the same store basis for the first four months this year over the first four months last year of 4.6%. But more importantly, our vacates are down dramatically. Our vacates are down 19.9% year-over-year. I think you hear that as a trend from all the companies reporting, that we are -- our people are staying longer, we don't have the discretionary customer moving in, moving out on a quick basis. And we have better stability in our customer base this year than last year. So vacates being down dramatically, same store rentals being up marginally has given us that tremendous, terrific turnaround in same store occupancy.

Also with that increased occupancy, I think all the companies are starting to get encouraged to increase rental rates, asking rates. Our street rates last year, we cut street rates in the middle of March to try to be competitive with the market. In the first quarter of this year we had an average street rate of being down year-over-year, but now as we get into April our street rates are only down 1.5% year-over-year. What we're saying is that April this year versus April last year, our street rates are only down 1.5%, which means that after we took our rate decrease in March of last year, we were able to more or less maintain our street rates, our asking rates, for the balance of the year on through and actually picked up some the first part of this year. I think what you're going to see, not only from us, but from the other companies going forward into this rental season is we're getting our pricing power back. We're all very excited about that.

Another positive trend that gives us that comfort that we are getting our pricing power back is that discounts are down. Our April discounts for the month are down as low as any for the year of 2010. Lowest level for 2010 are our April discounts. We're feeling good that we're cutting discounts, adding occupancy, and are able to start raising street rates as we get into the rental season. One last positive trend are our web inquiries, our inquiries are up overall. Our web inquiries are up 35% year-over-year. All very positive trends as we go into the rental season. We typically get about 300 basis points from April to July in gain in occupancy during the rental season. Last year, even in the awful season that we had, we still were able to get 280 basis points. So we're expecting this year to be a little bit better than last year. We will, of course, be reporting back to you at the end of Q2 as to how those results went, but we're very optimistic going into the rental season.

With that I will stop and take questions.

Thank you. We will now begin the question and answer session. (Operator Instructions). The first question comes from Todd Thomas with KeyBanc Capital Markets. Please go ahead.

Hi. Good morning. I'm along with Jordan Sadler as well. Just had a quick question on your pricing strategy. Dean, you just mentioned that, as you head into the peak leasing season here, you think that some -- that there's going to be some pricing power that comes back in owners' directions here. How do you think about your pricing strategy? Do you think you'll perhaps try to remain a bit more competitive and really take advantage of trying to increase occupancy or are you going to raise rates, sort of stay within the market?

Well, just like always, Todd, you know there are multiple levers to push and pull when you're trying to increase your revenue. And that of course is what we're focused on. So it will be across the board. It will be -- those levers include asking rates, includes discounting promotions, and we will use all of those tools available to us. But to answer your question is that, yes, we do think with the runway we have on occupancy in front of us, we do think this is the time to focus on some occupancy as we will -- as we have it available to us. So if there's a tendency to lean one way or another this time I think we will be focused a little bit more on occupancy now that rents have stabilized, but we do not expect to cut rates at all from this point. We do think we will raise rates as we go forward, but to your point, it could be a little bit more in moderation as we look to build occupancy.

The next question comes from Christy McElroy from UBS. Please go ahead.

Hey, good morning, guys. Dean, just to follow up on the revenue management line of questioning, you talked about the occupancy improvement. I get the decrease in vacates, but on the increase on rentals, the 4.6% I believe you said, just wondering what you think is driving that? Is there anything you're doing differently to get more people in the door?

No. I mean, we're using -- discounts are down, so we're not overdiscounting. Our asking rates are quite good, only being down 1.5% year-over-year, so it's certainly not that. I guess we have to give credit to our new and improved website, our sales center, and our wonderful sales agents that we do have out in the field managing our properties for us. So as I've said in the past, Christy, I think all four of the public companies should be able to outcompete in an environment like this. So I think we're starting to see a trickle of demand coming back, but at the same time I do think we're outcompeting the smaller players.

You didn't make any effort to decrease rate or increase incentives that would drive that?

Not at all. I mean I've given you the numbers here.

Right.

Discounts are down, rates are up relative to last year. No, I think we're holding fast on all those efforts. I just think we're doing a better job of capturing the customer.

Okay. And then sorry if I missed this. I know you went into some detail earlier on the transaction. What was the price for United Stor-All and what's the EBITDA multiple on that?

Hey, Christy, it's Chris. From a pricing perspective the consideration that we paid for the contracts is in the form of an earn-out. There was an upfront payment of approximately $4.1 million, and then the possibility for additional payments over the next three years, totaling a maximum of an additional $3.8 million. Those earn-out payments are subject to being proportionally reduced should there be a cancellation of any of those 85 contracts under certain circumstances. From a specific multiple perspective, frankly, I'd rather not get into that. This is a business that we really like, and I think there's other opportunities out there. I'd hate to have a bench mark out there for the other owners of management companies that we have to continue to come back to. So from our perspective, as we said, we're at about a penny of FFO for the balance of 2010 from the transaction, so wonderful return on invested capital. And we think that grows to $0.02 in 2011.

I guess going forward as you add additional properties, given that now that you have the cost infrastructure in place, how accretive, or can you give us a sense of the potential growth of this platform?

Sure. I think every time you add a managed property, again, you get into the unique circumstances of where they are, but if you assume that they match up with the existing footprint, little to no back office costs, no additional field level personnel in terms of the district manager level, so your 6% of revenues on a go-forward basis I would say generically the lion's share of that flows right to your bottom line.

Okay. Then I'm on with Ross as well. He has a question.

Hi, guys. Are you rebranding these properties?

We are not in the near term. They will continue to be branded as they were at the date of close. That is something, though, that we will continue to look at as we move particularly into next year. They will be obviously brought into our website. They will be managed identically to as if we owned them, but in terms of actually rebranding them at this time we will not be doing that.

If you did that in the future, who would pay for that?

Yes. That's always the proverbial million dollar question, and so, again, that's something that we will continue to evaluate as we go into next year.

Got it. Okay. Last question, advertising expense. It was down year-over-year, you spent about $743,000 in the first quarter. If I look at what you did in the second quarter of last year, you guys spent a ton of money. You spent $2.8 million. It's a pretty easy comp on the expense side. What are you doing in advertising in the second quarter here?

Hey, Ross, it's Tim. In my commentary, when I was trying to roll forward our $0.12 first quarter to our $0.10 to $0.11 range embedded in that discussion was clearly an expectation that we are going to, again, this year have heavy spend in our marketing efforts in the second quarter, and that represented between $0.02 and $0.03 of FFO incrementally, additional in the second quarter over first quarter levels.

Got it. Missed that. Thanks.

You're welcome.

The next question is from Michael Bilerman from Citi. Please go ahead.

Hi. Just had a question on the management, United Stor-All. I was wondering, you said you're seeing more opportunities like this. Obviously the attractive going-in yield is very accretive for your business. Wondering what the size is of the pipeline that you potentially see acquiring?

Well, I think in general, as Dean's been talking about over the last several quarters, the smaller owner operators are increasingly figuring out what we figured out a while back that slapping a Yellow Page ad in and being able to compete is harder and harder every day, so we do see a trend towards consolidation in the ownership and management, and so I think the pipeline, you know, at one extreme is really all the assets out there in the states that are owned by the private owners or managed by some of the smaller management companies. In terms of our efforts, which really launched here in April, we'll give you a better idea as we get into June as to how things are progressing. I think to give you some flavor, very exciting, we've already added two new properties to management that will come online here over the next month. So it's happening. And we're very encouraged by the quick start.

Okay. And then you mentioned that a lion's share of those properties are coming from the mid-Atlantic, the Northeast region. And looking at your recent results, it would appear that that's a market where you're performing better than some others. Are you looking to shift exposure into these regions going forward or is it just the nature -- just one off with the deal, you weren't really looking to strategically move in that direction?

No, we have -- when you really go all the way back to 2007, 2008 and 2009, and our disposition efforts, we were selling out of the Gulf Coast, selling out of some of those more secondary markets, and over time our objective is to redeploy capital into those core preferred self-storage markets. Again, you know, simplistically metro New York all the way down to Virginia, Washington, D.C. suburbs, that whole mid-Atlantic area, very attractive for self-storage. So we're very encouraged by where we're managing, and as I said hope that over time that puts us in a good position to be very competitive on acquiring assets should the owners decide to monetize.

Okay. Great, thank you.

The next question is from Todd Stender of Wells Fargo Securities. Please go ahead.

All right, thanks. The note receivable that was repaid in the quarter, what was the note on that and was that repaid early?

Todd, it's Tim. The rate on that was 8% to us, and there wasn't -- I think it had a three-year term to it, but it was always prepayable without penalty from the acquire of those properties back to us. So they elected -- and I assume they found alternative financing that was more attractive than our 8% loan, so they elected to go ahead and pay that off.

Okay. Thanks, guys.

You're welcome.

The next question is from Todd Thomas from KeyBanc Capital Markets. Please go ahead.

Yeah, hi. Just two quick follow-ups. I think we got disconnected earlier. The affiliate network that you're working on, can you give us an update on where that's at? And also with regard to the advertising expenses. So will we be able to -- is there any way you can quantify with the affiliate network? I know you've discussed in the past that you would look to redeploy some of the income from the affiliate network into advertising. So might be a little tough for us to sort of quantify that. Is there any help you can give us in looking at that program right now?

Todd, it's Dean. We're still redeploying. We're excited about the network program. We're up to almost 800 stores in it now. It makes for a nice footprint when you add that to our Company-owned stores, and now the United Stor-All stores. But we're still using those funds in our marketing program, and as we go on through the year maybe we can make it a little bit more visible for you, but we want to get through this rental season and see how well we do for our network partners, but we still feel, yes, very good about our program.

Okay. And then just -- I'm sorry.

From an advertising spend perspective that was the second part of the question, I believe, as go into Q2, and Tim pile on, the expectation is that the levels of expenditure that we saw in 2009 will be in that range in 2010 as well.

Yeah. A lot of it depends on timing. But we talked about the number incrementally increasing from the first quarter to the second quarter, but if you look at the second quarter of 2009 compared to the second quarter of 2010 in marketing spend, we expect there to be an increase there as well. So a little bit more marketing dollars spent this second quarter than last year's second quarter.

Okay. So we might be able to see how that's translating to some extent after a couple more quarters perhaps on a year-over-year basis, or it wouldn't be fair to make that comparison?

No, I think that's right. I think that's the way we'd look at it, Todd.

Okay. And then just lastly, any thoughts or update on the dividend at this point?

No updated thoughts. Our board continues to evaluate it quarter by quarter, and things feel a lot better in the capital markets, and our balance sheet is better than it was. But we still view that the cash that we can retain to use it to either to moderately delever a bit or to use that to fund what would end up being the equity portion of an investment should we find some compelling opportunities. We do feel that's a good use of the capital, but our board evaluates that decision quarterly.

All right. That's helpful. Thank you.

The next question is from Lukas Hartwich of Greenstreet Advisors.

Hey, guys. Tim, quick question for you on that same-store guidance. Seems to me like the first quarter would have been the toughest comp for the year, and yet that was ahead in guidance. So I'm trying to reconcile that with your full-year guidance. Can you give me color on that?

When you're looking at same-store, are you looking at revenues, expenses, NOI or --

NOI.

NOI. Part of that is due to the expenses. Again, it's back to the marketing question, because the marketing spend over the course of the year -- if you look at marketing dollars on our same-store portfolio last year, roughly $6 million of marketing spend on our same-store pool. I'll give you last year's numbers, because they're at least somewhat indicative of this year and how lumpy it can be. So that $6 million last year was $1.2 million in the first quarter, $2.8 million in the second quarter, $900,000 in the third, and $1.2 million in the fourth. So when you have a marketing line item that moves that much from quarter to quarter, you can get some interesting results. If you look at our annual guidance for same-store expenses, you know, we entered this quarter with an expectation that for the year, same-store expenses would increase 2.5% to 3.5% yet this quarter we reported they were down quarter over quarter. So we still expect, and we've modified our annual same-store expense guidance to be up 2% to 3%, so implied in there is that obviously for the balance of the year, to get that average up to 2% to 3% from our first quarter reporting a decline makes the NOI a little bit lumpy and looking at quarterly results versus our annual guidance range can often be tricky because of it.

All right. Thanks.

You're welcome.

(Operator Instructions.) Our next question is from Paula Poskon from Robert W. Baird. Please go ahead.

Thanks very much. Good morning, everyone.

Good morning.

Still back on the new third-party contracts, so given that the managed assets won't be rebranded in the near term, how do the call center agents handle incoming calls across YSI-owned properties versus third-party managed assets that compete in the same market?

(inaudible) When a call comes in, or a web inquiry comes in, the system is looking at the zip code from where that customer is seeking self-storage and identifying the store, whether it be owned or managed, that is basically closest to the post office in that particular zip code from a distance perspective, and that's the first store that will pop up. So one of the other beauties of this transaction is we have very few stores that overlap between the owned portfolio and the managed portfolio within a trade ring. So the competition is very minimal to begin with, and then specifically how they'll be handled is proximity.

Okay. Thanks. And what cancellation terms are in the contracts between the owners and the contracts that have been transferred to you?

It varies contract by contract. Some are multi-year, three-year, I think, is at the longest. Some are one-year contracts. The longer-term deals have cancellation provisions more designed toward us doing some something wrong. The shorter-term ones, some have 60-day cancellation for really no cause. So it varies depending upon the owner and the contracts. For the most part our experience with many of these owners goes all the way back to 1994, and we feel we've got a very good relationship where should be any issues that need to be worked out, we're confident that they can be worked out in an amicable way.

Okay. And what is the management fee that you collect? I assume it's based on revenue?

It is. It's revenues, and it tend to be between 5% to 6% of revenues.

Okay. And then separately, are you thinking at all of ramping up dispositions?

You know, we did an awful lot back when we were selling things in the seven cap range opposed to 8.5, so it is largely completed by the end of last year. So as we look right now, we don't have anything of size that's on the list, but we continue to be opportunistic about looking at the portfolio.

Where do you think cap rates are generally right now?

As I said, there's literally less than five transactions that we've seen that have actually closed. So it's hard to put a range out there with very little volume. And then when you look at how people are even going to quote that, is it a cap rate on a 75% in place, is it on somebody's future expectations? I think if I had to pick one, and certainly there is a large transaction out there, although I'm not sure they've specifically said where it is, that one, I believe, traded in the in the mid to low sevens. That's probably the best data point we have.

Okay. Thanks very much.

This concludes our question and answer session. I would like to turn the conference back over to Mr. Jernigan for any closing remarks.

Okay. Thank you very much for your continued interest in our Company. We look forward to seeing you or talking to you soon. Good day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.