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Operator
Good day and welcome to the CommonWealth REIT third quarter 2011 financial results conference call. This call is being recorded. At this time for openings remarks and introductions, I would like to turn the call over to Vice President of Investor Relations, Mr. Tim Bonang. Please go ahead, sir.
Tim Bonang - VP, IR
Thank you, and good afternoon. Joining me on today's call are Adam Portnoy, President and Managing Trustee, and John Popeo, Chief Financial Officer. The agenda for today's call includes a presentation by management, followed by a question-and-answer session. I would also note that the recording and retransmission of today's conference call is strictly prohibited without prior written consent of CommonWealth REIT.
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 and Litigation Reform Act of 1995, and other Securities Laws. These forward-looking statements are based on CommonWealth's present leads and expectations as of today, November 2nd, 2011. 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, or SEC, regarding this reporting period.
In addition, this call may contain non-GAAP numbers including funds from operations, or FFO. Normalized FFO and cash available for distribution, or CAD. A reconciliation of FFO, normalized FFO, and CAD to net income, is available in our supplemental package found in the Investor Relations section of the Company's website.
Actual results may differ materially from those projected in any forward-looking statements. Additional information concerning factors that could cause those differences is contained in our Form 10-Q, which we expect to file in a few days with the SEC, and in our Q3 supplemental operating and financial data, found on our website at www.cwhreit.com. Investors are cautioned not to place undue reliance on any forward-looking statements. And now I would like to turn the call over to Adam Portnoy.
Adam Portnoy - President, Managing Trustee
Thank you, Tim. Good afternoon everyone. Let me just start by saying I apologize to everyone, I am getting over a little bit a chest cold, so I may not sound exactly like myself. And second, I want to thank everyone for accommodating the last minute time change, we had to move the call from 1.00 to 5.00 today.
For the third quarter of 2011 we are reporting fully diluted normalized FFO of $0.86 per share, compared to $0.92 per share during the same period last year. As of September 30th our consolidated occupancy rate was 87%, compared to 87.5% at the end of last quarter. During the quarter we signed leases for almost 1.9 million square feet, 78% of our third quarter leasing activity were renewals, and 22% were new leases.
Leasing activity this quarter resulted in a 1% rollup in rents, and $15.05 per square foot in capital commitments. The average lease term was 8.1 years, and the average capital commitment per lease year was $1.86. As of September 30th, 2011, we currently believe there our consolidated occupancy rate for year end 2011 may be at or around 87%. However, because of the challenge in leasing market conditions, we expect that same store NOI may continue to decline further, until the economy begins to show sustainable growth, and the unemployment rate starts to decline significantly.
In October 2011 we declared a dividend of $0.50 per share, which represents 52% of our third quarter normalized FFO. During the quarter we spent $21 million on tenant improvements and leasing costs, and $4.9 million, or $0.07 per square foot for recurring building improvements. We generated approximately $42 million of cash available for distribution, or CAD, during the third quarter. Resulting in a CAD payout ratio of 86.5%. As most of you know, for the last couple of years we have been aggressively trying to reposition CommonWealth's portfolio into high value CBD office properties, since the beginning of 2008, CommonWealth has acquired $3.1 billion worth of properties, and the majority of these acquisitions have been CBD office properties.
We have partially funded these acquisitions through the sale of $1.4 billion of largely suburban office properties. And the remainder of these acquisitions have been funded through a combination of both debt and equity financings. In the third quarter of 2011, our business strategy is starting to show real results. This is the first quarter where the largest percentage of our consolidated NOI came from CBD office buildings, representing 41% of consolidated NOI during the third quarter.
Also this is the second quarter in a row where our CBD office portfolio was our only operating segment which generated positive same store NOI growth, with 5.7% growth in same store NOI in the third quarter. However, during the quarter our pace of acquisitions has slowed considerably, but we have increased our sales activities. Since the time when we reported second quarter results, we have sold 13 suburban properties, with approximately 1.3 million square feet, for an aggregate sale price of $167 million. We also currently have under agreement to sell 16 industrial properties located in Dearborn, Michigan, with a combined 570,000 square feet for $6.5 million.
We currently have two downtown office towers located in Chicago and Hartford Connecticut, with a combined 1.9 million square feet under agreement to purchase, for an aggregate purchase price of approximately $250 million, including the assumption of $148 million of mortgage debt. Of course these pending sales and acquisitions are subject to customary closing conditions, and no assurance can be given that they will occur. Also during the quarter we terminated a previously reported agreement to acquire property in Portland Oregon with 107,000 square feet for $34.1 million.
Before I turn the call over to John Popeo, I want to point out that as of today we have nothing outstanding on our $750 million revolving credit facility, and approximately $100 million of excess cash on hand. This liquidity provides us with the financial flexibility to close on pending acquisitions, as well as fund internal growth in the future. I will now turn the call to John Popeo, our CFO.
John Popeo - CFO
Thank you, Adam. Looking first to the income statement, net income available for common shareholders for the third quarter of 2011 was $14.7 million, compared to $53.1 million for the third quarter of 2010. Rental income increased by 23.7%, reflecting rental income from properties acquired since July 2010, offset by the decline in same store rents and properties sold between July and September 2010.
Total expenses increased by 26.6% primarily reflecting property acquisitions. Current quarter EBITDA increased by 13.5%. Interest expense increased by 11.8% reflecting property acquisitions. Our percentage share of Gov's net income and normalized FFO for the third quarter totalled $2.7 million and $5.1 million respectively. We received over $4 million in Gov dividends during the third quarter of 2011. In July 2011 Gov issued $6.5 million new common shares in a public offering for $25.40 per share.
As a result of this transaction our ownership interest in Gov was reduced were 24.6% to 21.1%, and we recognized a gain under the income method of accounting totaling $11.2 million. This gain represents a partial mark-to-market value adjustment under GAAP, that reduces the spread between our carrying value and the price of newly issued Gov shares. The carrying value of our 9,950,000 Gov shares was around $16.82 per share, prior to Gov's recent common equity offering, and $17.43 per share as of September 30th, 2011.
Income from discontinued operations reflects operating results from 43 properties sold in 2010 and 2011, and 27 properties classified as held-for-sale as of September 30th, 2011. In addition we recognized an impairment loss of $9.2 million, reflecting the decline in estimated market value of these 27 properties. In September we closed on the sale of 13 properties with approximately 1.3 million square feet for $167 million, excluding closing costs, and recognized gains totaling $7 million. We sold one office property in the prior year with approximately 310,000 square feet for approximately $9.8 million, excluding closing costs and seller financing, and recognized a gain of $4.6 million.
We recognized $22.8 million of gains in the prior year from properties sold to Gov during the quarter ended September 30th, 2010. Properties sold to Gov are not considered discontinued operations under GAAP, because of our retained equity interest in this former subsidiary. The increase in preferred distributions reflect distributions on $11 million of our 7.25% Series E preferred shares issued in June 2011, offset by the redemption of $7 million of our 8.75% Series B preferred shares in October 2010. Normalized diluted FFO available for common shareholders was $0.86 per share for the third quarter of 2011, compared to $0.92 per share for the third quarter of 2010. Year-over-year per share results primarily reflect a decline in occupancy in same store NOI, and the issuance of new common shares in 2010 and 2011.
Turning to the balance sheet, on September 30th we held $211 million of unrestricted cash reflecting proceeds from the $167 million portfolio sale on September 30th. We used these sales proceeds to reduce the $235 million outstanding on our revolving credit facility in early October. Rents receivable includes approximately $182 million of accumulated straight-line rent accruals as of September 30th. Other assets include approximately $102 million of capitalized leasing and financing costs.
In July we issued 11.5 million new common shares raising net proceeds of approximately $264 million. We used the net proceeds from this offering to repay amounts outstanding on our revolving credit facility, and to fund acquisitions. In July we prepaid $23.2 million of 8.05% mortgage debt due in 2012. On September 30th we had $635 million of floating rate debt, $622 million of mortgage debt, and $2.3 billion of fixed rate senior unsecured notes outstanding. The weighted average contractual interest rate on all of our debt was around 5.5% at the end of the quarter, and the weighted average maturity was around five years. Our senior unsecured notes are rated BAA2 by Moody's, and BBB by Standard & Poor's, the undepreciated book value of our unencumbered property pool totalled about $7 billion at the end of the quarter. Our secured debt represents 9% of total assets, and our floating rate debt represents 18% of total debt. At the end of the third quarter, our ratio of debt-to-book capitalization was 50%. Our EBITDA and fixed charge coverage ratios were 2.7 times and 2.1 times respectively. As of the end of the quarter ,we were comfortably within the requirements of our public debt and revolver covenants.
In October 2011 we amended our existing $750 million credit facility to extend the maturity date to October 19th, 2015, and reduce the interest rate to LIBOR plus 125 basis points. The amended facility provides us the option to extend the maturity date for one year to October 19, 2016. In October we also amended our existing unsecured term loan to increase borrowings from $400 million to $557 million. The amendment extends the term to December 15th, 2016, and reduces the rate of interest on $500 million to LIBOR plus 150 basis points.
As of September 30th we had $235 million outstanding on our credit facility. The $157 million of new proceeds from the term loan amendment, and proceeds from the sale of properties on September 30th were used to reduce the amount outstanding on our credit facility to zero as of today, and unrestricted cash balances today amount to approximately $100 million.
In summary despite a very challenging market environment, we continue to make meaningful progress towards repositioning our portfolio to be more heavily weighted to high value CBD properties. Our strong balance sheet, solid annual dividend payout ratio, excess cash, and $750 million of availability on our revolving credit facility, position us to opportunistically grow cash flow as the economy improves.
That concludes our prepared remarks. Operator, we are now ready to take questions.
Operator
Thank you. (Operator Instructions). Our first question today comes from the line of Mitch Germain with JMP Securities. Please go ahead.
Mitch Germain - Analyst
Good afternoon, gentlemen. Just curious about an update on Portland, and the terminated acquisition?
Adam Portnoy - President, Managing Trustee
Mitch, this is Adam. It was just something we found the diligence, and we tried to reconcile it with the seller. It was typically when you do due diligence, you do a lot of property environmental engineering, do the non-disclosure agreement we signed with this seller. I can't tell you exactly what happened. I can just tell you that we found something in diligence, and we couldn't reconcile it with the seller, and so therefore, we terminated.
Mitch Germain - Analyst
And update on Chicago. I guess you guys have acquired three properties in that market. I know you own several others. Is this the start, are you considering additional investments, or do you think you are full at this point in that market?
Adam Portnoy - President, Managing Trustee
Well, we have one more building under agreement in that market.
Mitch Germain - Analyst
Yes. I have included that one. I am sorry. Go ahead.
Adam Portnoy - President, Managing Trustee
Okay. Yes. I think we would look at other opportunities in Chicago, but the question is, as I said in our prepared remarks our pace of acquisitions has clearly slowed. The amount of things that we have under contract now is much smaller than I think we have had for any quarter, than we have reported for several quarters now, and it is a combination of there's a little less product of CBD, CBD grade A product out in the market that there has been in the past, and there is a lot more competition for that product. So the short answer is yes, we would look at other properties in Chicago, but there is a more, longer answer which is, I am not sure of the overall acquisition pace that we are going to have going in the short to medium term, simply because of what is going on in the market generally.
Mitch Germain - Analyst
Can you put a figure either square feet or dollars of what your pipeline is today, versus where it was three months ago?
Adam Portnoy - President, Managing Trustee
I can just tell you it is a lot smaller.
Mitch Germain - Analyst
Okay.
Adam Portnoy - President, Managing Trustee
I don't know how to put a dollar or a square footage on it, because there is a lot of things we look at very quickly and discard, and there are a lot of things we might dig in and do a lot of work on, and still may not get there, or may place a bid and not get there, but I would say that we are probably putting one-third as many bids, actually writing bids as we were let's say six months ago. So that is maybe a good metric. How many times we are actually getting to the point where we write a written offer, probably one-third of the number of times today as we probably were doing I would say six months ago.
Mitch Germain - Analyst
Okay. Thanks, gentlemen.
Operator
Line of Dave Rodgers representing RBC Capital Markets. Please go ahead.
Dave Rodgers - Analyst
Yes Adam. I was wondering you gave some good spread detail on your leases for the quarter. Could you break that out or at least give us some sense of the performance between CBD and suburban during the quarter, or what you have been seeing?
Adam Portnoy - President, Managing Trustee
Well, generally the CBD stuff is a little longer, a little more expensive, but we are getting better net effectives. I mean look the short answer is, that in the suburban markets is, you don't have, it is not a landlord's market, and we have to work a lot harder to get tenants, and the returns on those deals are much skinnier. Especially when you are looking at large square footage tenants in suburban markets. They have enormous amounts of, they have a enormous amount of options. When you are dealing with smaller let's say, I don't know 15,000 square feet, maybe and smaller tenants in suburban markets, they really are very focused on their costs, and the cost to move for them is significant, and you have a little bit more I would say a little bit more leverage with them in the sense that they might be telling you that they may have, they might have a tenant rep broker really pushing them.
The truth is they don't really want to leave. This is for I call it sort of small to medium sized tenants, and you can often find that you don't have to give away the total store to keep them, but with the larger suburban tenants, they clearly are looking at much more like it is a business decision, and they are just trying to get the best deal possible, and there the deals are quite skinny, whereas in the CBD markets, especially many of the properties we have bought in the last two years, we have enjoyed very good returns, high single-digits, low double-digit, net effective rates of returns, on leases that we are signing up.
So I am saying that is the return after you amortize the capital including after you, went in an improvement over the life of the lease. I mean we are getting pretty good deals in most of our CBD office towers that we have bought, and I think that is proving, it is coming through in the occupancy numbers, it is coming through in the same store NOI numbers. I mean we are able to do better in our CBD office buildings, even in second and third deal markets, we hold the top two, top one, two, or even third building in a second or third tier market, there is just so many, that is a very, usually own one the best buildings in that market, and there is a certain group of tenants in that market, they aren't going away, and they need to stay, they want to be in the best buildings in that market, and we tend to be able to charge a little bit of a premium, have a little bit more leverage over those tenants in those situations, than we do in most of the suburban markets. So that gives you a general feel for what is going on.
Dave Rodgers - Analyst
Okay. Thanks for that color. We have clearly seen a good bid for primary CBDs you are saying that the bid is getting a little bit stronger it sounds like, offering lower force secondary CBDs. Is there any decent bid out there for suburban office assets in particular, that we could see you accelerate beyond the $43 million in held for sale bucket, or should we expect to see that slow a bit here in the near term, consistent with what you said about acquisitions?
Adam Portnoy - President, Managing Trustee
There are not a lot of bidders for suburban product, and most of the stuff that is in our discontinued operations is also either vacant or close to vacant, or going to become vacant, and there are even less buyers for that type of product. The buyers are typically owner occupiers, owner users for the buildings that we are typically selling, or it is a local player that just had some vision about what is going to happen that we don't share basically. That is sort of the only buyers for that type of product. I mean if we had let's say, we have none of the buildings in discontinued ops are fully leased for example. The fully leased suburban office buildings, I think there are buyers for. Unfortunately, there are not many, and the price I believe that people are willing to pay for suburban office today is so far below the real value of those buildings, that it is just hard to justify selling them at such a discount, and so that is what I think is going on.
Dave Rodgers - Analyst
Thank you.
Adam Portnoy - President, Managing Trustee
Yes. Okay.
Operator
Next question comes from the line of John Guinee from Stifel Nicolaus. Please go ahead.
John Guinee - Analyst
Hi, guys. Well, obviously you want to continue to apply your CBD office, you have got a few arrows in the quiver, undrawn credit facility, equity preferred shares spinning off, Hawaii spinning off the industrial portfolio. What sort of, how do you rank those?
Adam Portnoy - President, Managing Trustee
Well, in terms of continuing to change the portfolio composition, how do we do it I think is the question, and I think in the ranking it is awfully hard to look at equity today to fund your growth, because back in July we just did a deal of $24, and it is hard to imagine us being able to be comfortable raising equity at the levels we are trading add today, when we just raised equity at $24. And so that is probably one of the last items on the list.
Moving up, preferred, unfortunately the pricing while it is a market that is definitely available to us and to other REITs, the pricing isn't particularly attractive, and it is not a particularly deep market in my personal opinion, and then if you go up the curve, you have unsecured debt. That market, it is questionable only because nobody in the REIT space has done an unsecured bond deal I think since the mid-summer, and so there is a lot of price discovery that would occur if you went out and tried to do an unsecured bond deal. Which leads us to probably the next thing is probably, I guess the bank market you could look at bank loans. We already have, and we just upped our bank line, so I am not sure there is much more appetite to put more bank leverage on the Company. And you would have to start having a look at asset sales, and we have been doing a little bit about that, and then you mentioned spin outs, I think you said Hawaii or industrial. I mean I suppose we could think about something like that.
As you know there is a lot of work that goes into doing something like that. If we could get compelled, we would look at something like that if we felt, if we could take a group of assets, for example, that we didn't think we get a particularly great value for selling outright today, but maybe could get a decent value in the equity markets, and the equity markets might value that group of assets, at a better multiple, better cap rate than where CommonWealth trades today, and if we didn't sell meaning we kept a large percentage of that entity after we did the spin out, I suppose we could look at doing something like that, but the problem with that strategy is that the IPO market for REITs is pretty tough.
So that gets us to, how do we keep growing, and I think what you are seeing is we are going to look at all of those options, but at the same time we realize how difficult it is, and we have slowed down, and so our growth is clearly starting to slow, in terms of acquisitions, and until we find a way, one of the ways you have mentioned, John, to find value in terms of doing something that isn't going to destroy shareholder value in the process, we will probably have to take a little bit of a wait and see. We have some capacity on the revolver, with excess cash, so we can do a little bit without having to do anything, meaning we could just, we could buy $300 million or $400 million more of properties if we wanted to, and just leave it on the revolver. So we do have some runway in front of us, but your question is a good one, and I don't have a specific answer for you at this point.
John Guinee - Analyst
I guess second question, hey John, what do you think your taxable income will be for 201, and why keep the dividend this high, because you are clearly not getting credit for it?
John Popeo - CFO
That is a good question. I mean currently we are projecting some level of a return of capital, John. As far as the dividend goes, I mean as you know, the Board reviews the dividend level every quarter, they are comfortable with the current level as we mentioned in our prepared remarks, we are hoping we can hold the payout ratio right at around 100%. I mean our ultimate goal is to raise the dividend, that is sure not going it happen any time soon. It is going to mean a meaningful improvement in the economy, and unemployment, and occupancy throughout the US, but again there is no dividend cut on the table or imminent at this Company at this point.
John Guinee - Analyst
Okay. Then the last question the assets you are selling up in Michigan, of 500,000 or 600,000 square feet of industrial, looks like those will sell for $11 or $12 a square foot, and I think you did the same thing last year with a building, 300,000 square foot building. How many more assets are there like that in the portfolio, which are sort of, whether they are office or industrial they are sub-$20 a square foot assets when sold into the marketplace?
John Popeo - CFO
I think generally speaking most of the assets in held for sale fit that category.
Adam Portnoy - President, Managing Trustee
Yes. I was just going to say the same thing. That is right.
John Guinee - Analyst
Okay. Thanks.
Adam Portnoy - President, Managing Trustee
Yes. Okay.
Operator
Our next question comes from the line of Jamie Feldman with Bank of America Merrill Lynch. Please go ahead.
Jamie Feldman - Analyst
Thank you. I was hoping you guys could comment on when you think the portfolio might be able to return to generating same store growth?
Adam Portnoy - President, Managing Trustee
Jamie, that is a good yes question. I wish I could tell you exactly when it was going to happen. I think it depends more on when there is real employment growth. I think we have gotten so big and so diverse, that it is largely dependent on what is going on generally in the economy, in terms of employment growth and job creation. So until we see some real job creation in this country, and real employment growth, I think it is tough to say that we will see on the overall portfolio, meaningful growth in same store results. That said, I am very pleased that we bought the CBD assets that we did buy in the last three years, because if we hadn't, the results would be a lot worse, then we would be looking at for the Company. Those assets, everything we have been buying for the last few years is really lessening the blow to the Company, is really where we are finding a sort of growth in both occupancy, and in rents, or same store NOI. So that is really what is going on.
I mean look, there are pockets in the Company that are doing quite well. I mean Austin is a market because of the technology sector, is actually doing quite well. Honolulu, Hawaii is a market that continues to do exceptionally well, unfortunately we didn't have a lot of leasing activity in the last quarter, but I think we will have some pretty good rollups in rents over the next 12 to 18 months in that segment. So there are definitely pockets within the Company that are doing well given what is going on, sort of in their specific markets, but generally speaking I think you are going to have to see real employment growth across the, generally across the US, before you are going to start seeing meaningful improvement in same store NOI.
Jamie Feldman - Analyst
Okay. And then following up on your thoughts on kind of the environment we are in, if you look at the occupancy slippage in the quarter, I mean is that more a sign of that is kind of the environment we are in, where occupancy could continue to slip until things get better, or was that more kind of lease specific, and it is not really a read through for what is to come?
Adam Portnoy - President, Managing Trustee
Yes. I would like to believe it is lease specific. I think we are still on track to hold occupancy right around where we did occupancy this quarter. Where we sit right now, one-third of the way through the fourth quarter, I am expecting that we will come in around where we are right now for occupancy for the end of the year. Of course that could change, but that is what we currently expect.
Jamie Feldman - Analyst
Okay. And then what are your latest thoughts on, given it sounds like you are tempering your acquisition expectations. What are your latest thoughts on Gov shares, and that as a source of capital?
Adam Portnoy - President, Managing Trustee
It is an excellent question. It is another source, another arrow in our quiver, it is another source of capital we could tap into. It depends a little bit on, we have to think about how we could do that. Typically the way we have sold shares in the past, when we have had shares of affiliate, we have often waited for those companies to do an equity offering, and then we have sold in that equity offering. That doesn't mean that is the only way we could do it, but that is the way we have historically done it with the other companies that we have held shares in in the past. We also have to gets comfortable with the share price. Watching Gov share price has been a little disappointing for the last couple of months, and it has gotten better a little bit lately, but our hope would be that it would, we think this may not be the best time to be thinking about selling Gov shares, just given the share price as well. So that also has to be taken into account. But it is absolutely something that we could consider to raise additional capital. You are right.
Jamie Feldman - Analyst
I guess what I am trying to ask on last call, you guys sounded a little more optimistic about acquisition opportunities, and needing it as source of capital. On this call you sound a little bit more tempered, in terms of what you think you can get done, so that does that mean it is less likely, or really more about the share price than anything at this point?
Adam Portnoy - President, Managing Trustee
No. I think you are correct, we are picking up on some stuff, Jamie, which is that we are a little less bullish on the acquisition side, and so I am not sure we are going to even need to do something like that. We may not even need the capital, but you are also right that, we are not crazy about the share price either, and so it is sort of both things I would say. You have picked up on both correctly.
Jamie Feldman - Analyst
Alright. Well, thank you.
Adam Portnoy - President, Managing Trustee
Thanks, Jamie.
Operator
Our next question comes from the line of Michael Aryan with Sun Life Financial, please go ahead.
Michael Aryan - Analyst
My question was partially answered by the last question, but just in regards to occupancies and the decline, I know you said it was lease specific, but was any part of that due to trying to push rates?
Adam Portnoy - President, Managing Trustee
No. No. It is not specifically because we are trying to push rates. Generally the philosophy for the bigger leases, which go through a very competitive RFP process, we are typically very close to, if we lose the process we are typically very close to the winning bid's lease rate or effective rents. It is really at that point it comes down to the tenant's preference for location, really what drives it at that point. I would tell you that where we do, it is very rare that we lose a lease purely over economics. It does happen occasionally on the smaller lease deals, because in the smaller lease deals as I was talking about before some of the smaller tenants, they might have a very aggressive tenant rep. At the end of the day there is not a lot of enthusiasm for moving from the owner, and we find that nine times out of ten we can hold the line, but every once in a while, one time out of ten, we might pick wrong, we might pick wrong, lease over the rate but those are usually smaller leases where we play that game. It is very rare that we play that game with the bigger leases.
Michael Aryan - Analyst
Okay. Alright. Thanks.
Adam Portnoy - President, Managing Trustee
Yes.
Operator
(Operator Instructions). We do have a follow-up question from Mitch Germain, JMP Securities. Please go ahead.
Mitch Germain - Analyst
I am sorry guys. It was answered. Thanks.
Operator
There are no other questions queuing up. I will turn the call back over to Mr. Portnoy for closing remarks.
Adam Portnoy - President, Managing Trustee
Thank you all for joining us on our third quarter conference call. We look forward to seeing many you at the NAREIT Conference in Dallas later this month. Thank you.
Operator
Ladies and gentlemen, that does concludes our conference for today. Thank you for your participation, and for using the AT&T Executive Teleconference Service. You may now disconnect.