Eastgroup Properties Inc (EGP) 2003 Q4 法說會逐字稿

Good day ladies and gentlemen and welcome to the EastGroup Properties conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, President and CEO, Mr. David Hoster.

Thank you. Good afternoon and thanks for calling in for our fourth quarter and year-end 2003 conference call. We appreciate your interest in EastGroup. Keith McKey, our CFO, will also be participating in the call. Since we will be making forward-looking statements today, we ask that you listen to the following disclaimer covering these statements.

The discussion today involves forward-looking statements. Please refer to the safe harbor language included in the Company's earnings release announcing results for this quarter that describes certain risk factors and uncertainties that may impact the Company's future results and may cause the actual results to differ materially from those projected. Also, the content of this conference call contains time-sensitive information that is subject to the safe harbor statement included in the news release, is accurate only as of the date of this call.

Thank you. In 2003, EastGroup continued its track record of creating value for its shareholders in both the short and long-term. This past year, our shareholders experienced a 35.8 percent total return. Our total average annual return over the last three years was 21.8 percent, over 5 years 20.7 percent and for 10 years, 18.6 percent per year. During last year, we took advantage of the attractive capital markets and improved an already strong balance sheet. We completed two direct placements of common stock for total of $40 million and a direct placement of $33 million of perpetual preferred. We redeemed 43 million of perpetual preferred, closed a $45.5 million nonrecourse first mortgage loan and obtained an investment-grade issuer rating from Fitch. In addition, the holder of our $70 million of convertible preferred stock converted its investment to 3.2 million common shares which were sold, increasing our market liquidity. At December 31, EastGroup's total market capitalization was over $1 billion. Our common equity capitalization was 675 million and our debt to total market capitalization was 32.3 percent.

From a property operation standpoint, 2003 was a transition year. Same-property results turned positive for the third quarter on a GAAP basis which included straight-lining of rents and turned positive in the fourth quarter without straight-lining of rents. Operating results for the fourth quarter and the full-year met our guidance. Funds from operations for the fourth quarter were 62 cents per share, compared with 64 cents a share for the same period last year, a decrease of 3.1 percent. For the year, FFO was to 2.36 per share compared with 2.57 per share for '02, a decrease of 8.2 percent. Keith will go into a little bit more detail on those differences in a few minutes. Please note that we continue to calculate funds from operations based on NAREIT's definition of FFO, which excludes gains on depreciable real estate.

In the fourth quarter, same property operating results were up 0.4 percent on a GAAP basis, which included straight-lining of rents and were up 3.1 percent without straight-lining of rents. For the year, same property results on a GAAP basis were down 0.2 percent and down 0.6 percent on a cash basis. On a same property GAAP basis for the fourth quarter, our best major markets were Tampa, which was up 18.4 percent, New Orleans up 9.2 percent and Orlando, up 9.1 percent. The markets significantly down for the quarter were Hayward, California 17.4 percent, Memphis 11.1 percent and Los Angeles and El Paso where both down 6.5 percent. Changes in occupancy were the primary reasons for both the increases and decreases in these same property results.

For the year, our most improved major markets were New Orleans, Dallas, Jacksonville and Tampa. We experienced a flourish of leasing activity in December which is unusual for the holidays and as a result ended the year at 92 percent occupied and 94 percent leased. These figures represent a 100 basis point gain in occupancy and a 240 basis point pickup in leased space as compared to September 30th. After our strong December, leasing activity slowed in January but appears to be picking back up in February. Our development properties are also experiencing an increase in serious prospects after an extended quiet period. We project that occupancy will decrease back below 92 percent in the first quarter due to the end of several short-term leases related to the holidays and anticipated moveouts of scheduled expirations. Our guidance for the year assumes an average occupancy of 89-91 percent, but our stated goal is to be at 93 percent occupancy or better by the end of the year.

At December 31, we had 14.5 percent of the square footage in our portfolio scheduled to expire in '04. This total now stands at 12.0 percent. Occupancy in our four core states of Florida, Texas, Arizona and California was 93.5 percent as compared to 85.0 percent in our non-core market. Looking at fourth quarter leasing statistics, we renewed or released 68 percent of the 1.7 million square feet that expired and at leased another 365,000 square feet of vacant space. Combining both renewals and new leases, we experienced the following -- average least length was 3.2 years, average least size 13,500 square feet, there was an average decrease in rents of 10.6 percent consisting of an 18.6 percent decrease on new leases and a 0.4 percent increase on renewals. And the average cost of tenant improvements was $1.10 per square foot over the life of the lease.

An analysis of the reasons customers do not renew their leases shows that in the fourth quarter, approximately 28 percent of the square footage vacated was due to changing space needs, 23 percent vacated due to bankruptcy or closing of the business and 17 moved from the sub market. For the year, approximately 30 percent of the square footage vacated was due to the customer leaving the sub market and 28 percent have (ph) changed space needs. From a statistical standpoint, five of our markets reported improved industrial occupancy figures for the fourth quarter. Five were slightly worse -- Houston, Memphis, Tampa, San Francisco and San Diego -- two unchanged and one has not yet reported results.

Looking at direct experience in the field, our best fourth quarter activity was in Phoenix, Houston, El Paso, Jacksonville and Hayward. The only market not experiencing improvement over the third quarter was Fort Lauderdale. Memphis continues to be our weakest city for both our portfolio and its overall industrial market conditions. Comparing year-end '03 to year-end '02, there were four markets that did not improve statistically -- Houston, Memphis, San Diego and Dallas. At December 31, our development program consisted of eight properties. Six properties containing 473,000 square feet were in lease-up and two with 131,000 square feet were under construction. These eight developments contained 604,000 square feet with a projected total cost of 33.5 million. This represents an average cost of $4.2 million and 76,000 square feet per property. Our average projected cost per square foot is $55. The eight properties are currently 36 percent leased and are geographically diversified in three states in five different cities.

Looking at the fourth quarter development activity, we did not transfer any development properties into the portfolio. We did, however, begin construction of World Houston 17 (ph) at our World Houston International Business Center development. This 66,000 square foot building is a build to suit facility for (indiscernible) energy production company and has a projected total cost of $3.4 million. For the year, we transferred three development properties and an expansion to the portfolio. They totaled 241,000 square feet with an investment of $10.2 million and are currently 83 percent leased. Our total investment in '03 in our development program was $22.2 million, about half of where we would like to be. In 2003, we acquired 9.9 acres at World Houston and 72 acres in Orlando for new development, increasing our investment in land by $6 million. We sold 2.6 acres in Orlando and placed 19.6 acres into development which reduced our land inventory by 22.2 acres and $3.9 million.

Looking at 2004 we have identified approximately $34 million of new development opportunities. The timing of these potential development starts will depend on specific sub-market conditions and will primarily contribute to 2005 FFO due to the timing of construction and lease-up. Other than our new Southridge Commerce park development in Orlando, all of our projected building starts represent additional phases of existing developments in Tampa, Fort Lauderdale, Orlando and Houston. As we repeatedly state, our development program has been and will continue to be a major contributor to FFO. Over the past seven years, we have developed 50 properties containing 3.5 million square feet. Development provides us the opportunity to add new state-of-the-art properties to existing clusters of assets in targeted submarkets. The impact of our development program is illustrated by the fact that, including properties in lease-up and under construction, we have developed over 20 percent of EastGroup's current total portfolio.

Turning to fourth quarter, we acquired two properties in separate transactions in Tampa. The first, Crown Park Commerce Center, which has since been renamed Expressway Commerce Center II, is located in the Tampa International Airport submarket and was purchased for $4.9 million. It has 72,000 square feet, was built in 2001 and is 100 percent least to five tenants. The second, Oak Creek Distribution Center, contains 127,000 square feet and was acquired for $4.7 million. Oak Creek was also constructed in '01 and is in the East Tampa I-75 submarket. At closing, it was 46 percent occupied. It is now 100 percent leased to four tenants. In January of this year, we acquired the 100,000 square foot Blue Heron Distribution Center II in West Palm Beach for a price of 5.7 million and an adjacent 1.56-acre parcel for $450,000. This acquisition had been scheduled for December but was pushed into this year. The property is currently 50 percent leased. For '03, we acquired in total five properties, not including Blue Heron, containing 442,000 square feet for a total investment of 20.2 million. If you include Blue Heron II, all six acquisitions increase our clusters of assets and targeted submarkets and two are literally adjacent to existing EastGroup buildings. Three of the six are value-add opportunities with at least 50 percent vacancy at closing. And as a result, we believe we will achieve approximately 25-125 basis point higher yields for taking on the leasing risk in submarkets in which we have extensive operating experience.

Sales in 2003 totaled only $900,000 a small warehouse in Memphis and a parcel of land in Orlando. For 2004, our projections assume $10 million of acquisitions at midyear and no dispositions, although we do plan and hope to sell several properties in Memphis. I would now like to turn the call over to Keith to discuss our financial statements.

Good afternoon. Earlier, David summarized our capital activities for the year. As a result of these transactions, the number of shares of outstanding common stock increased by 4.7 million shares. The increase in the number of outstanding common shares and our stock price caused the market value of common stock to increase by $265 million, or 64 percent for the year. Debt to total market capitalization was 32 percent at December 31, 2003, compared to 38 percent for 2002. For the year, the interest coverage ratio was 3.8 times and the fixed charge coverage ratio was 3.2 times. Also for the year, floating-rate bank debt decreased $21 million to 53 million and was only 5 percent of total market capitalization at year end.

In looking at FFO, FFO per share for the fourth quarter was 2 cents per share below last year's result. One cent was due to the $25 million stock offering in November of 2003 and the timing on investing the proceeds. The other 1 cent was due primarily to increased overhead. FFO for the year decreased 21 cents per share, 9 cents per share was due to the costs on the redemption of the series A preferred stock, 7 cents per share was due to lower gains on securities and 2 cents per share was due to income recorded in 2002 from collection of a mortgage loan that had been written off in a prior period.

In December, we paid our 96th (ph) consecutive quarterly dividend. The quarterly dividend of 47.5 cents per share equates to an annualized dividend of $1.90 per share. This represents an FFO payout ratio of 77 percent for the quarter and 81 percent for the year. Total bad debt expense for the fourth quarter was 266,000 and 1 cent per share, down a good bit from last year which was 4 cents per share in the same period of '02. Lease termination fee income was small at $73,000, less than 1 cent per share in the fourth quarter of '03 and 54,000 in the fourth quarter of last year.

During 2003, there were many accounting clarifications, new guidance and new pronouncements. I know it is confusing, because I have a hard time in comparing results with our peers. The only effect on EastGroup's FFO from these statements was to record an expense for the original issuance costs on the preferred stock we redeemed in the third quarter of 2003 of 9 cents per share for both FFO and earnings per share. There were no restatements of prior financial statements. FFO guidance for 2004 was initially given in a press release in December of 2003 and we reaffirmed the prior guidance in our fourth quarter earnings release. FFO per share for 2004 is estimated to be in the range of $2.42-$2.54 and earnings-per-share is estimated to be in the range of 85 cents to 97 cents per share. Now David will make some final comments.

In summary, we believe that EastGroup is well positioned to take full advantage of the growing U.S. economy. Our 2003 capital transactions have improved an already strong and flexible balance sheet. Leasing activity has generated positive same-property operating results and our development program is poised to make an increased contribution to FFO growth. Our strategy is simple and is working -- quality multitenant the buildings clustered around transportation features in growth markets. Keith and I are now happy to answer any questions that you may have.

(Operator Instructions). Paul Puryear, Raymond James.

Good afternoon, guys. A couple of things. David, could you comment on -- I know you have talked about this before, but sort of the performance of the different property types within the new markets, the bulk versus distribution versus flex? And just pick a market if you want to as an example. I'm just curious as the recovery unfolds here, how you see the performance of the three?

Our primary property type is as we describe, business distribution really (indiscernible) we think the sweet spot in the middle of the warehouse market. It seems to be where the most activity is right now, and especially it's in the smaller users. Also, those are the type users, the size spaces were we are experiencing a little bit of an increase or at the worst, limited rent decrease. The bulk distribution tends to be your more from a customer standpoint, a more price sensitive user. There is much more competitive, and as a result, that is where we are experiencing our biggest drops in rent. West side of Jacksonville is an example, our bigger spaces in Hayward, our bigger spaces in the west side of Phoenix where it is just so competitive you have to do whatever it takes to take on the tenant.

Fortunately, we don't have much of the service center space and we done a pretty good job of renewing tenants there. The issue that you have to face with that type user is the tenant improvements, and fortunately, most of our spaces are smaller, so there is not a lot that has to be done for that space. When you look at the largest capital TI investments that we've made in the last year, it's in our higher buildout buildings like in Santa Barbara and we do sell one office building in Los Angeles and we renewed the county there and had to invest a lot in a longer-term lease for them. But the bulk is the most difficult of the three at this point in time for us anyway.

How would the cap rates compare across the three in the same market?

I would say the cap rates are probably lower for the newer state-of-the-art bulk buildings because that is where the institutional money is going, particularly the pension fund advisors where they go aggressively after the larger packages of the larger buildings.

And the flex is the highest cap rates?

Yes.

Also, you've touched on it a little bit. Could you just comment on Hayward and the outlook for that market and sort of what is taking place?

We have just under a million square feet there, so it's not a huge sample but we had a real dip with a loss of a couple of tenants I guess at the end of last year and the beginning of this year. As the year went on, activity has picked up and if I'm correct, I think we might even be 100 percent there right now, although we're going to have some turnover I think it's in the second quarter. Rents dropped precipitously. Part of that was because they have gone up so high during the boom times in Northern California, but it is our impression that the rents have bottomed out and maybe inching up just a little, but we don't see rents really starting to climb anytime soon. There's still too many vacant spaces of people willing to lease at significantly lower rents than where they were before. And Hayward is a very different market than Silicon Valley. Even the more bulk or the dock-high (ph) buildings in Silicon Valley, (indiscernible) experiences is suffering as much as the R&D over there, but that has not had as big an effect in Hayward.

Thanks.

Thank you.

Keith Mills, UBS Warburg.

Good afternoon, it's John Kim (ph) with Keith. I have a few questions for you. First of all, could you review with us the development opportunities you have in both Houston (inaudible)?

Okay. World Houston 17 that we announced last fall is a build to suit. It was a building we designed for multitenant use. Devon (ph) came in and we had to do some reengineering (indiscernible) to make the slab thicker to hold all of the records they wanted to put in it. We have two other buildings there in lease-up. One has got a lot of activity right now, the other one doesn't. The first one I mentioned, 19, is that signed one or two more leases, we will be in a position to start referring to as World Houston 16. We numbered all of the sites and then did not build them in the right order, I guess. Wild Houston 16 is probably our next building to do there and there's even been a possibility of a small build to suit at the same time. We are significantly outperforming industrial market on the north side of Houston, simply because we have the best location and the nicest park. We're now in leasing of Techway II, which is down around the Beltway 8, Sam Houston toll road, almost down to the Southwest Freeway. We have prospects out there. If they all signed, then these are the ones we've made proposals to, that that building would be full in 90 days. We need one or two more small leases there and we will kickoff Techway III, which will share a truck court with Techway II. Although the Houston market is over 10 percent vacant, there's some pockets where there is some pretty good activity.

David, how (indiscernible) you expect World 16 to be and do you think it will be delivered this year?

We would probably bring it online about the end of the year so that -- we have a permit, but hat it is going to take 5-6 months to build it. So it would be right at the end of the year and any new tenancy would be a contribution to '05 rather than this year. I would have to check how big it is. It's 92,000 square feet and Techway III is 99,000 square feet. Again, Techway III would probably have little or no contribution to '04's FFO.

In California, you had some rent rolldown, so I'm assuming this is from leases that were signed 3-5 years ago. What do you expect as far as this year? It looks like there's 17 percent that is due to expire this year in California.

I'm afraid it will probably be around the 15 percent range, coming down.

Most of that coming from San Francisco?

From Hayward, and then we have a building in Milpitas where a tenant moved out of the market with a little over 100,000 square feet and that is pretty much dead market right now. So we don't even budget leasing any of that in '04.

My last question is for Keith. One of your assumptions to 2004 is $25 million of the new fixed-rate debt coming in at 5.6 percent. Can you review with us what that (indiscernible) to be? (indiscernible) expiring mortgage debt, but what else that could be?

We have about 12 million of mortgage debt amortizing now, so it will be replacing some of that, and then we would use the rest probably to reduce bank debt at the time. And depending on how leasing goes, development can go from up some on that also. But we may be looking at trying to going to go ahead and get started on getting some fixed-rate debt now.

Historically, what we do is use our bank line to fund balloon payments on debt maturing, to acquire properties and primarily for new development, and then every year put together a package of assets and go to a group of insurance companies directly to obtain a nonrecourse generally ten-year first mortgage and then use that to pay down the bank line, which in fact has funded all of the other uses that we just mentioned.

We have two loans maturing this year -- Eastlake 3 million that we can pay off February 17 at 8.5 percent, 56th Street at 1.7 million and 8.875 percent, we can pay off on August 1st. And then there's a chance we can pay off one of the '05 mortgages earlier this year also and then we have about 8 million of principal amortization.

Okay, great. Thanks a lot.

Tony Howard, Hilliard Lyons.

Good afternoon. Clarification, Keith. I think it was the second or third quarter, there was a cause for the redemption of the Series A, but there was no initial call set up for the Series B. You using that to amortize that or when it was finally converted in the fourth quarter?

No, because they converted it. So if you redeem it is when you generate that cost. If they convert, you don't have the cost on it.

So there wasn't any origination cost?

Yes, there were costs involved with it, but it's just a difference in accounting.

Alright. The fourth quarter as far as I can tell, was the fourth sequential quarter where new leases have deteriorated percentage-wise. Now it is like 18 percent (indiscernible). David, where do you see the bottom from those?

I hope that on an average when we're looking at new leases and renewals that somewhere in the 10 percent reduction range is the bottom. And we are still going to be experiencing greater than 10 percent loss in rent value in Northern California. We're doing that on the larger spaces in some of the Florida cities. But on smaller and medium sized leases in Dallas, Tampa and some of Orlando, we are breaking even or gaining a little bit? So it is a real mixed bag market by market, but I am hopeful that around the 10 percent figure is the bottom and that we won't go any lower and that everybody talks about things always going to be better than six months, but I would hope that some of the vacancies absorbed in various markets that that average would fall below 10 percent in the third and fourth quarters.

What kind of numbers are you using for your 2004 guidance?

What we have done is we assumed less of a loss in rent than the 10 percent. And so we think we're going to be a little bit behind there, but we're doing better in our leasing and so we think right now we're about even.

Okay. On your calculation for same-store NOI, in the third quarter, it was flat if I remember correctly but the straight line (indiscernible) helped us to make it to a positive number whereas this time around, your straight line or your same store was up a fairly solid 3 percent, but then it was basically slightly flat because of the straight line. What was the difference between the third and fourth?

It's just the nature of the types of leases that were signed, and then there were two big differences that you should note. Our Tower Automotive building just outside of Jackson here, was turned to cash, started paying in '03, so that was the big improvement over the fourth quarter of '02.

Fourth quarter, we were recording straight-line rent, but no cash and then they started paying cash in '03.

And then we signed a big lease at Eastlake in San Diego, which also contributed to that with that tenant paying over when the space had been vacant before.

As far as the particular market (indiscernible), I'm not sure if you got the cap rates for the two Tampa acquisitions?

On a straight-line GAAP basis with 100 percent occupancy, it's approximately 9.5 percent at Expressway Commerce Center II, which was originally called Crown Park. And at Oakcreek it is between 10.75 and 10.8 percent.

David on Oakcreek, you said it was forty-something percent (inaudible).

100 percent leased. We have added two tenants. One has moved and the other to bring it to 100 percent occupancy, the TIs are under construction right now.

So that happened like second quarter, so 2004?

I think (indiscernible) I think there's some free rent in there I think, but from a GAAP basis, we will start to achieve that good yield before the end of the quarter. We would love to have some investments work out that way.

I think we have before. What are you going to do about Memphis?

Our approach there is to be very aggressive on our marketing and lease rates. And as buildings reach 90-100 occupancy, offer them for sale. We have one building where there's a package out right now, another one we hope to have out in 30-45 days. And as we make progress on individual buildings, we will offer them for sale and step-by-step, exit the market.

Okay. Final question is as far as your assumptions for 2004. It appears you have a pretty wide range for same-store NOI from zero to 3.6. Is there a particular reason why the range is --?

Give us some room so we don't have to give guidance change downward during the year. We did this last fall. And leasing as you've heard me say several times seems to go in fits and starts and we're optimistic today. We were not in January but we were in December. So with those kinds of changes in the marketplace that seem to happen almost overnight, we don't have a lot of confidence in a tighter (indiscernible).

That kind of implies as far as your occupancy you are expecting a down a percent or two?

The guidance assumes that occupancy for the year will average less than the 92 percent we finished at the end of the year. We're a little bit ahead of where we had originally projected on occupancy. But as I mentioned earlier, rents are off more than we had hoped. And so right now, it is pretty much a wash, although we have set a good goal for ourself on leasing and occupancy, we're not in a position yet to make any kind of changes to guidance.

Thank you David and Keith.

(Operator Instructions). Gary Boston, Smith Barney.

A couple of questions on the acquisition front. The West Palm assets -- what is the prospects for getting that up to a more stabilized occupancy?

It was 100 percent until the end of December when a 50 percent tenant moved out who went into a build to suit. We have surprisingly good activity on it right now. It started as soon as we announced the closing and put up a new leasing sign. I think brokers knew that it was under contract and did not want to do anything until the new owner was in place. We have not budgeted any lease-up during the year. Our goal is certainly to outperform that. So any leasing of that space between now and December will be a benefit to projected FFO.

If you got it back up to 100 or high 90s, do you think you would go ahead and pull the trigger on the adjacent land?

We're actually now starting the planning process for that. The 25,000 square foot building that could go next door is a service center type building, so it would not compete with what is the current vacancy, which is dock-high (ph). So we are starting with that process. But even if we move quickly on it, it won't make any contribution to '04 earnings.

In terms of the guidance, I believe your guidance is for in terms of acquisitions, $10 million midyear. Given what you did this year in what was a tough environment to source deals, why are you looking for an even smaller number next year?

Just to be conservative. And we found that probably 70 or 80 percent of what we bought this year was in September through December. We had a number of properties on the rebound or that just took a long time to tie up. So we're just being conservative.

Is there an active pipeline of deals that you're looking at currently, or is it pretty quiet right now?

We're looking at about half a dozen deals, but we don't even have anything under a letter of intent. We are not very good or successful at bidding on the big packages that are widely marketed because the institutional dollars run the prices up and the cap rates down. And we have found our best purchases have been in direct negotiations with owners or where a broker has brought us the deal without going through a widespread marketing of it. All six of our last twelve-month acquisitions were not widely shopped. And we think we have done better and have been able to buy some well above average quality properties because we have been willing to take the vacancy lease up risk and really have a value-add type on at least on 3 of the 6 that we have bought this year.

In terms of the '04 roll I thought you referenced something like 12 or 13 percent and the lease rollover schedule that I'm looking at has more like 15.5 percent. Is this reflective of deals that have been signed but not executed?

That was as of 12/31. When I mentioned the lower number, that reflects through today. And some of that is signed leases and some of it is a little higher vacancy.

On the leases rolling this year, what is your expectations in terms of mark-to-market?

That's (indiscernible) we've talked a lot about internally. We've not gone back and tried to do any kind of exact calculation on it, because it seemed to be such a moving target. The analogy I would like to use is that four or five years ago, everybody talked about embedded rent growth and we all saw what happened to a lot of that. So with markets changing fairly quickly, we estimated that it would be negative, but by just a little bit. And as I said before, we are experiencing a higher negative than we had anticipated, but we seem to be offsetting that with a little bit of higher occupancy.

So are rents still falling in markets -- I mean market rents actually still declining in your markets?

I would say market rents are not declining, but we have leases rolling that are above market so that the renewal rates are declining.

I was trying to get a -- it sounded like you're having trouble forecasting what that would be.

We have not tried to put in the time and effort on that, because when we've tried to do that in the past, we usually miss by so much. We're putting in the time and effort on trying to lease the space and renew the current customers. All it takes in a market is one competitor with a quality product who feels desperate that drops his rent and you have to drop with it, in other cases even a whole lot better than you have anticipated. So as I said, just whether it was embedded rent growth or rent declining, we've just never done a very good job of trying to identify it and actually have it come out that way. In the good old days when we were trying to identify rent growth embedded, we kept determining we did not have any, and then we kept achieving it. So we decided we'd put in our time doing other things and see that would shake out in the individual submarkets.

Alright, thanks a lot.

Thank you.

I'm showing no further questions.

Thank you very much for calling in. We appreciate your interest in EastGroup, and as always, if any other questions come up, please don't hesitate to call Keith or me. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference.