Equity Commonwealth (EQC) 2005 Q4 法說會逐字稿

[OPERATOR INSTRUCTIONS].

Good day and welcome, everyone, to the HRPT Properties fourth quarter 2005 earnings results conference call. Today's call is being recorded and at this time for opening remarks and introductions, I would like to turn the call over to the manager of Investor Relations, Mr. Tim Bonang. Please go ahead, sir.

Thank you.

Joining me on HRPT Properties Trust's call today are Adam Portnoy, Executive Vice President and John Popeo, Chief Financial Officer. The agenda for today's call includes a presentation by management followed by a question and answer session.

Before we begin today's call, I would like to read our Safe Harbor statement. Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and federal securities laws. These forward-looking statements are based on HRPT's present lease and expectations as of today, February 15, 2006. The Company undertakes no obligation to revise or publicly release the results of any revisions to the forward-looking statements made in today's conference call, other than through filings with the Securities and Exchange Commission regarding this reporting period.

Actual results may differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause those differences is contained in our forms 10K and 10Q filed with the Securities and Exchange Commission and in our Q4 supplemental operating and financial data found on our website at www.HRPREIT.com. Investors are cautioned not to place undue reliance upon any forward-looking statements.

And with that, I would like to turn the call over to Adam Portnoy.

Thank you, Tim. Good morning and welcome to HRPT's fourth quarter and year-end 2005 investor conference call.

For the fourth quarter of 2005, we are reporting FFO of $0.30 per share versus $0.32 per share for the same period last year. The decline in FFO per share was primarily a result of lower lease termination fees by about $0.01 per share and an increase in the number of shares outstanding. Our fourth quarter FFO per shares also roughly equal to our results for the last two quarters, after excluding lease termination fees and nonrecurring recovery income in the second and third quarters of 2005. For the fiscal year ended 2005, FFO was $1.26 per share, which is $0.04 higher than the $1.22 per share reported in the fiscal year 2004.

Overall, we continue to see improvements in real estate fundamentals across our portfolio. During the fourth quarter and year ended 2005, we generally saw positive net absorption, limited new development activity, and increasing or stable occupancy levels within each of our major markets. These improving market conditions translated into solid leasing activity across our portfolio in 2005.

During the year, we signed leases for over 5 million square feet, which more than offset the 4.5 million square feet that expired during the year. 54% of the square feet leased during the year were renewals and 46% were new leases. The fourth quarter was also one of our strongest with regards to leasing activity. During the quarter, we signed leases for over 1.3 million square feet, which was 151,000 square feet more than expired during the quarter. 59% of the square feet leased during the quarter were renewals and 41% were new leases. Largely as a result of our strong leasing activity, we ended the year at 94.3% leased, which is 130 basis points greater than the percentage leased at the end of 2004 and 40 basis points greater than the percentage leased at the end of the third quarter.

Not only did we sign many leases during the quarter, but the terms of these leases continue to improve. Leases signed during the quarter resulted in a 5% roll-up in rents and tenant concessions continue to decline. Overall up front capital commitments for tenant improvements and leasing commissions for leases signed during the quarter were only $10.23 per square foot.

Because we signed a large number of leases in Oahu, Hawaii during the quarter, the overall average lease term was 9.4 years, and the overall up-front capital commitments per square foot per lease year was a very low $1.09. 34% of the total square feet leased during the quarter represents long-term land leases signed in on Oahu. Because of the strength of our industrial and commercial land holdings in Hawaii, the leases signed there generally have higher rent roll-ups, longer lease terms, and lower up-front leasing costs than the typical office lease signed in other markets.

Excluding the Oahu leases, fourth quarter leasing activity was still very good. Rents remained unchanged, and up-front capital commitments were about $15 per square foot and $2.45 per square foot per lease year.

As we've discussed in the past, our leasing costs have declined significantly in 2005 over 2004. Even though we signed leases for about 500,000 more square feet in 2005 than 2004, total up front capital commitments declined by almost 45% to $69 million in 2005 versus $126 million in 2004. Up-front capital commitments per square foot also declined by over 50% from over $28 per square foot in 2004 to less than $14 per square foot in 2005. More importantly, up-front capital commitments per square foot, per lease year, declined by 32% from $3.24 in 2004 to $2.22 in 2005.

As a result of improving market fundamentals and strong leasing activity, our overall same-store NOI increased 2.3% fourth quarter. This increase was largely driven by a 120 basis point growth in same-store occupancy to 94.4% leased during the same time period.

With regard to our major markets, Washington, D.C., Southern California, and Oahu, Hawaii, continue to be our strongest areas. These markets have very strong underlying real estate fundamentals, which is leading to increasing occupancy and rising net effective rents.

During the fourth quarter, the performance of our Oahu, industrial and commercial land stood out with a 13% increase and same-store NOI, as a result of significant rental increases associated with lease renewal activity. As you can see from the results, we continue to successfully implement our stated business plan of increasing the yield on this investment through active management of this portfolio.

Also during the quarter, our Philadelphia portfolio finally turned the corner and posted a 14.9% increase in same-store NOI as a result of increased occupancy and the eventual burn-off of rent roll downs from our 2004 leasing activity. Our Austin portfolio also performed well, with a 10% increase in occupancy during the last year to 90.6% leased today. Unfortunately, we are still experiencing rent roll-downs in this market, which more than offset the increase in occupancy, resulting in a modest decline in same-store NOI.

Boston and Atlanta continue to be our two most challenged market areas with modestly-improving real estate fundamentals. As a result, these markets generate negative same-store NOI in the fourth quarter because of declining occupancy in Atlanta and rent roll-downs in Boston. In our other markets located throughout the country, our portfolio has generally experienced modest increases in occupancy, offset by some lease roll-downs.

With regards to acquisition and disposition activities, we acquire 10 office properties with 29 buildings and 2.9 million square feet for a total of $360 million in 2005. We also acquired 8.2 million square feet of additional industrial lands in Oahu, Hawaii for $115.5 million in June and sold three properties for 237,00 square feet for $20.5 million in May.

During the fourth quarter, we acquired four office properties with eight buildings and 903,000 square feet for $162 million. The largest of these acquisitions was the purchase of five buildings with 655,000 square feet, located in the northern metropolitan Chicago market for $131 million. This is our first acquisition in this market, and we consider this to be a strong market entry investment for HRPT. These are class "A" suburban office properties, which are 100% leased for an average of 5.4 years to good credit tenants and our going in cap rate was 9.2%.

As we end 2005, we continue to have one of the most stable, well-occupied office portfolios in the industry. As of December 31, we were 94.3% leased for an industry-leading average remaining lease term of 9.8 years, based on square feet and 6.5 years, based on annualized rents. We continue to have one of the most secured portfolios of properties in the industry, with 65% of our annualized rents coming from government tenants, medical-related tenants, long-term land leases, and other investment-graded companies.

Looking forward to 2006, we are optimistic that the improvements we saw in the office real estate market during 2005 will continue throughout the year. We have 4.3 million square feet expiring this year, which represents about 8% of our total square feet and 10% of our annualized risk. This lease roll is spread evenly throughout our portfolio, with about 28% of our 2006 lease expirations occurring in Washington, D.C., Southern California, and Oahu, Hawaii. These are some of the strongest leasing markets in the country. The majority of the remaining exposure is located in our other markets. Generally we feel good about the leasing environment in these markets as we head into 2006.

With regards to future growth activities, subsequent to year-end, in January, we purchased a property with about 460,000 square feet for $51.6 million. We will discuss this acquisition in more detail during our first quarter 2006 investor call.

I will now turn the call over to John Popeo, our Chief Financial Officer, to provide some more details regarding our financial results.

Thank you, Adam.

Looking first to the income statement, rental income and operating income increased by 11% during the fourth quarter of 2005. The year-over-year quarterly increase in rental and operating income reflects over $550 million of properties acquired between October 1, 2004, and December 31, 2005, plus the 2.3% increase in same-store NOI.

Current quarter EBITDA increased by around 9% over the same quarter last year.

Net income available for common shareholders for the fourth quarter of 2005 was $32.2 million, a 6% increase from the fourth quarter of 2004. The increase reflects property acquisitions in 2004 and 2005, offset by the increase in interest expense from additional debt.

FFO available for common shareholders was $0.30 per share for the fourth quarter, compared to $0.32 per share for prior year and the last couple of quarters. The year-over-year decline in FFO per share reflects the decrease in lease termination revenue and additional shares outstanding. The decline in FFO per share from the last two quarters reflects lease terminations and nonrecurring recovery income received during the second and third quarters of 2005. Excluding these lease terminations and recovery income, FFO per share for the last three quarters was roughly the same, despite an increase in the number of shares outstanding.

FFO was $1.26 per share for the year ended December 31, 2005, compared to $1.22 per share for 2004. The $0.04 increase in annual FFO per share reflects property acquisitions and the increase in same-store NOI in 2005. In January of 2006, we declared a dividend of $0.21 per share, which represents 70% of our fourth quarter FFO. Our board considers the dividend level on a quarterly basis and they're comfortable with the current payout ratio.

During the quarter, we spent $30.6 million on tenant improvements and leasing costs, which include costs related to deals signed in 2004 and 2005. As of December 31, 2005, we had $51 million of total committed but unpaid tenant improvements and leasing costs, compared to $72 million of unpaid commitments as of September 30, 2005. Leasing costs for leases signed during 2005 averaged less than $14 per square foot, which is less than half of the amount for leases signed during 2004. As a result, we expect that capital expenditures related to tenant improvements and leasing costs in 2006 may be less than in 2005. During the fourth quarter, we paid $9 million or $0.16 per square foot for recurring building improvements, including lobby renovations, an elevator and other systems upgrades throughout the portfolio.

Turning to the balance sheet, on December 31, we held $19 million of unrestricted cash. The combined market value of our equity investments and former subsidiaries was $291 million, which is about $100 million more than their book value. In December, we sold 950,000 of our Senior Housing shares for $18 million, and we recognized gains of $5.5 million.

The $31.9 million increase in rents receivable reflects about $30 million of straight line rent accruals during 2005. Rents receivable includes approximately $112 million of cumulative straight-line rent accruals as of December 31. The $33 million increase in other assets reflects leasing commissions paid during 2005, financing fees related to our January revolver amendment and prepaid operating expenses. Other assets includes approximately $75 million of capitalized leasing and finance costs.

The changing in our revolving credit facility reflect property acquisitions and capital expenditures during 2005 and the repayment of $185 million of senior notes in mortgage debt during the same period. These activities were offset by proceeds from properties sold in May and proceeds from the sale of 950,000 of our Senior Housing shares in December and the issuance of common shares in March and September of 2005.

On December 31, 2005, we had $606 million of floating rate debt, $375 million of mortgage debt, and $1.55 billion of fixed rate senior unsecured notes outstanding. The weighted average contractual interest rate on all of our debt was 5.9% at the end of the quarter, and the weighted average maturity was 7.4 years. Our senior unsecured notes are rated BAA2 by Moody's and BBB by Standard and Poors. The book value of our unincumbered property pool totaled almost $4.6 billion at the end of the quarter. Our secured debt represents 7% of total assets, and floating debt represents 24% of total debt. At the end of the fourth quarter, our ratio of debt to book capitalization was about 49%, and debt to market capitalization was about 48%.

Our EBITDA and fixed charge coverage ratios were 3.0 times and 2.3 times respectively. As of the end of the fourth quarter, we were comfortably within the requirements of our public and bank loan covenants -- public debt covenants.

Subsequent to the quarter-end, in February, we called for redemption, all $200 million of 9 7/8% series 8 preferred shares on or about March 2, 2006. We plan to fund this redemption with proceeds from the issuance of $150 million of new 7 1/8% series "C" preferred shares in February and by drawing on our revolving credit facility.

As Adam mentioned, in January, we also acquired one property for $51.6 million. We funded this acquisition by drawing on our revolving credit facility. As of today, we have $173 million outstanding on our revolving credit facility with $577 million of additional borrowing capacity. In addition, our unincumbered property pool has increased from $4.5 billion to $4.6 billion between September 30 and December 31, 2005.

In summary, we completed $162 million of acquisitions in the fourth quarter, including a $131 million portfolio acquisition in suburban Chicago. We continue to maintain one of the industry's strongest occupancy rates at over 94%. And leasing costs have decreased by around 50% from the $28 per square foot level that we reported for the year ended 2004.

Overall, we continue to believe HRPT strong tenant base, limited near-term lease expirations, strong balance sheet, and current annual dividend yield of around 8% make HRPT a logical choice for long-term investors.

That concludes our prepared remarks. Operator, we are not ready to take questions.

Thank you.

[OPERATOR INSTRUCTIONS].

Our first question comes from Scott Sedlak, A.G. Edwards.

Good morning, guys. I was wondering if you could talk about what's driving the occupancy growth in Austin? I mean is it really that much absorption? Or is it a function of something else?

There's no magic bullet other than to say that yeah, the market's definitely turned there. If you go down to the Austin market, it's not a lot new development happening, and the tech industry has come back a little bit, and it's just a natural cycle that you see. Austin is a good market, it's a state capital, it's got the university there. It's a pretty -- it's got a young, dynamic workforce. It's a good place for a lot of companies that want to relocate to that area of the country. So, it's -- demographically we like the market because there's always people moving there. Moving into that market. And at the same time, you have limited new development.

Texas generally is not known as a state that has tough zoning that limits development, but Austin is sort of a little island within the state where there is some pretty tough zoning. It is tough to do some building there. So, there's nothing specific to point to other than generally the market is just doing better.

In terms of the mark-to-mark of your portfolio, where do we stand -- or where do you stand currently with regards to rents?

Generally across the portfolio, we feel pretty good. I mean in terms of the major markets, the only place I would argue we have some exposure to maybe some rent roll-downs is Boston. We started to see that a little bit in 2005. We don't have much expirations there in 2006 but expect whatever we do renew will have roll downs there. The good new is, the big markets like D.C. and Southern California and Oahu, we're going to see roll-ups, I hope, in 2006, like we did in 2005. Places lake Philadelphia we're largely flat to the market.

Atlanta, we're largely flat to the market, too. There I'm just worried more about maintaining the occupancy level, which is what some of the problems we had in 2005 in that market. Luckily, it's one of our smaller markets, less than 5% of our NOI, but it's still something -- like anything, you spend more time on the areas that are not doing as well, places like Hawaii, Southern California, and Washington, we spend less time on because they sort of just keep going in the right direction. We spend more of our time trying to figure out how to make the Boston portfolio and the Atlanta portfolio work better.

In terms of your total portfolio, are we still roughly 5% below -- or above market, I mean?

I'd say we're pretty much somewhere within 5% either way in every market except maybe Boston.

And how far below is -- or above is Boston?

Boston is more than probably, it's not 20%, but it's between 5 and 20%.

Okay. And then, I know you guys can't really probably comment much on the January acquisition, but can you tell us where it's at?

Upstate New York.

Okay. And then finally, what is the cash cap rate on the acquisitions in the fourth quarter?

John, what is that?

8.7 --

8.7, 8.8.

Okay, thank you, guys.

And our next question comes from Charlie Place with Ferris Baker Watts.

Good morning.

Good morning, Charlie.

If you could take a second here and comment a little about the NOI margin for the office properties. They seem to have declined quarter-over-quarter. I want to see if I can get a better sense of if that's a fourth quarter occurrence, or what else is going on that is kind of driving the decline in your overall margin?

Well, one contributor is the fact that in the third quarter of 2005, we recognized around $3.2 million of lease termination revenue in one of our other markets. That's the main driver, Charlie.

Let me -- then real quick, John, and that's one of my questions, when I look at quarter-over-quarter rental revenue by market, that does include your lease termination fees?

That's correct.

That's correct?

Yep.

Okay. And so -- and then -- and, again, continuing that thought, I guess in continuing your comment then, is that the margins for the third quarter of '05 were helped by that lease termination.

That's correct.

But was it market specific? Or was it kind of blended across many markets?

That was market-specific. That was in the other market area.

So, when I look at, just looking at the individual -- okay, so it's in the other markets --

Specifically in Denver.

Okay. That, looking at the Philadelphia margin is down from 55.2% to 52.9 in the fourth quarter, kind of right across the board, they're all lower in the fourth quarter, Atlanta, Austin, so it's not just the other markets, but every one of your seven identified markets, with the exception of D.C. and Hawaii had negative margin quarter-over-quarter. I mean is that --

Well, I can tell you in a couple of specific markets, Charlie, like in Austin, Texas, we saw a spike in real estate taxes.

Yeah, I mean -- I guess that's what I'm getting to. Is there a tax function? A utilities --

Yes. In utilities, we were affected by an increase in utilities in the Boston Market. Again, most of that increases would be covered by tenants, but it doesn't affect that NOI margin.

Does it affect it more for that specific quarter, or is it for a long-term? The simple direct question is that you have 62% NOI margin for the year but 60.4% for the fourth quarter. And I'm trying to get a sense of what's a better --

I can tell you specifically, in the Austin market, the spike in real estate taxes is a fourth quarter phenomenon because that's when the assessor's office comes out with the final tax bills.

Okay.

Otherwise, utilities can be seasonal. So, you will see -- it will be somewhat lumpy in different markets.

Okay.

On the time of the seasons and stuff.

Okay. Very good. One of the other questions that I had was -- how again is the G&A allocation determined quarter-to-quarter? Because you had reported much less than I was expecting?

Okay, in the third quarter of 2005 --

Yep.

-- we recognized an incentive advisory fee, and that incentive fee is based on increase in FFO per share year-over-year. In the fourth quarter -- the fourth quarter really represents more of a run rate. That $7 million you see coming through in the current quarter. Around 92% of that G&A number is advisory fees.

Is there an incentive advisory fee every quarter?

No it's something that we gauge -- we try to gauge what the actual increase in FFO per share is going to be on a quarter-by-quarter basis. Take into account the fact that, what the capital requirements are, whether we're going to issue shares, things like that.

Okay. Let's see if I have any other -- I think that's pretty much the question I had. I will let other people step in. Thank you.

No problem.

Our next question will come from Steve Benyak with Merrill Lynch.

Hey, guys, my first question is for John, regarding rents receivable. How much of that was straight-line rents?

112 million.

And of your other assets, what was the deferred leasing and financing costs?

It was around 70 million.

And regarding the SNH sale, I see you have 950 less this quarter. Is there any shift in strategy or any reason for that sale?

No, that's just implementing the strategy we've been outlying for the last couple of years, where we are slowly selling down those ownership stakes but primarily selling them when SNH -- we're doing it primarily as secondary offerings when SNH or HPT does their own offering.

We can expect more of that in the coming year, as well?

It depends on what SNH and HPT probably if they engage in an equity offering, for example, last year we did it with SNH, but HPT did an equity offering, and it wasn't an opportunity for HRPT to sell any shares in that offering. We try to do it when they are doing an equity offering. We try to sell them as part of the excess demand to fill the excess demand above and beyond what SNH or HPT might need to raise. So, that's typically the way we've been doing it. The short answer to your question is better than 50% chance you will see it if those companies do equity offerings in 2006.

Got it. And finally, I know last quarter we discussed the possibility of a share repurchase program. You had mentioned that since it wasn't down for a prolonged period, that wouldn't be something you guys would look at yet, but given that the stock is still at 8.5% implied cap, can you share your guys' views on that as of today?

The board thinks about these types of issues every time it meets. Currently, we're still able to buy properties and grow and increase shareholder value through some acquisitions. That's what we're able to do in the fourth quarter. I think the bias today is still towards leaning away from a share repurchase program, but, we don't rule anything out. We did one back in 2000. If the stock were to stay down for a prolonged period of time, I think we would consider it again.

What would prolonged be?

I don't know what -- it's more than the time that's elapsed to date and I just -- I can't comment specifically.

Okay, thanks.

[OPERATOR INSTRUCTIONS].

We will go now to Ely [Flamingas] with Stifel Nicolaus.

Hi, John Guinee here from Stifel Nicolaus.

Hi, John.

Hi there. Just kind of a policy. Can you maybe limit it to two questions so we don't go asset-by-asset operating margins in the future?

No problem.

Okay. Second, you raised $403 million last year at about $12.40 per share on average. At what price are you interested in issuing equity, and at what price is it no way no how in terms of issuing new equity?

That's a great question, John, it's something that we think about a lot. And I will tell you, today, with the last -- we -- instead of looking at the average of what we did last year, we actually look at what was the last equity offering and that was at $13.12. And in terms of raising additional equity, it's pretty tough for us to go back to the market with -- in a short period of time after you've raised equity at one price and try to raise equity at a lower price. In fact, it's something I think we strongly discourage or don't want to do.

We typically, there's lots of factors that go into it, but in terms of specifically looking at the share price we definitely look at where the last equity price was, where we did the offering, how much time has elapsed and, I would tell you -- I have no problems saying to you today that I'm not comfortable doing the equity offering -- I'm not comfortable doing an equity offering today at $10.80 a share when the last equity price was at $13.12 in September.

Okay, guys, it's Dave Fick here. John is too nice a guy. So, I am going to ask the hard question. As you know, the remarket has been performing very well, and most companies, including office companies are up significantly year-over-year, I think the average is about 23% year-over-year up. You guys are down. Can you just give us your view on why you think the market is treating your shares without respect at this point?

Sure, David. It's interesting, we spend a lot of time thinking about that, too. In 2004, as you remember, we were probably the fourth or best overall performance in the whole [REIT] sector, not just office. We had a great year in 2004. And to the first nine months of 2005, if you watched our stock, it really pretty much performed in line through September. And as you guys more than remember in October there, was sort of a dip in the RMS. A lot of the stocks took a beating. We went down with everybody else. And for some reason, we have just not come back the same way that our peers have since then.

So, really I think of this phenomenon as really since about October of 2005. I feel like we're pretty much performing in line or exceeding the peers through September for the prior 18-month period. And I'm not, we've banged our head a lot, trying to figure out what it is. We have a very large percentage of our ownership is retail-held. Maybe retail investors are more interest-rate sensitive or react to movements in the Fed fund rates -- or treasuries more than maybe institutional holders do. So, that might be a factor of what's going on. I will tell you that I've been a little -- since, really, the beginning of January, HRPT stock has been performing more in line with its peers, but, you're right, it's because of the hit we took in October, November, December, and we haven't really pulled out of that hole yet.

But I think the first couple of months -- the first six weeks of the year, we're performing better. I can't -- there's no magic bullet I can point to that says what's going on. I can just theorize based on looking at the share volume and looking at the shareholders and the competition and seeing what's going on, that's about the best answer I can give.

Okay. If you put John's question together on where you would issue equity and sort of the relative underperformance and absolute price where you sit today, you guys clearly do need equity at some point in the next 12 months to execute your overall strategy. Does it make sense for you to perhaps release some of the value? You have a huge unincumbered existing portfolio. You've got a lot of "C" assets in some markets that aren't particularly attractive. Would you consider being more aggressive on the SSL side?

Dave, that's exactly some of the things we're thinking about. One, we don't have to do an equity offering in the next 12 months. I mean our leverage levels are on the higher end of where they've been historically, but they're not exceeding those levels. We don't have to do an equity offering -- you're right, if we acquired a large amount of property in 2006, and we financed it on the revolver, yes, I'd agree with you, probably looking at needing to think seriously about equity offering. So, it's a little bit in our own control in terms of whether or not we have to do an equity offering.

To answer the second part of your question, when we think about dispositions. Look, I will tell you right now we're looking at dispositions, and there's properties today we're thinking about selling, we're at the different stages in that process with those properties. I'm not going to commit to a number or where those properties are. But I will tell you that it's probably a -- it's better than a 50% chance we're going to sell something in 2006. But I don't know -- it could be one or it could be many assets, and I'm not going to commit to how many or where they are, but, yes, David, we are thinking about dispositions.

All right, thank you very much.

Our next question comes from Ken Avalos with Raymond James.

Hey, guys. I'm sorry if I missed this, did you give the rent spreads in the same-store NOI numbers on a cash basis?

No. We did not give it on a cash basis.

Do you have that handy?

It's not something we've historically disclosed. I guess you could figure it out with the pieces of, you've got the pieces of the puzzle, you've got our straight line rents and, we don't -- you can figure it out basically taking the pieces of the puzzle, looking at our NOI, looking at the straight-line rents, you can probably get a pretty good idea of what the number is.

How about on the rent spreads, do you have any idea of what that might have been on a cash -- fully expiring to new leases?

Yeah, overall they're probably about -- the total portfolio, a little -- probably 2, 3% down. Negative.

And that's including Hawaii?

With Hawaii.

Okay. And then, I just hate to beat up the G&A question, but I think John said that the Q4 run rate was more appropriate. That's ex the comp plan, right?

That's right. The Q4 number does not have any incentive share expenses running through it.

Okay, thanks.

And at this time, we have no other questions standing by. I'd like to turn the conference back to Mr. Portnoy for any closing remarks.

Okay, thank you for joining our Q4 conference call. We will be presenting at the CSFB credit conference in New York City at the beginning of April, and we look forward to seeing you at this event or speaking with you on our first quarter conference call. Thank you.

Thank you for your participation in today's conference call. You may disconnect at this time.