First Industrial Realty Trust Inc (FR) 2015 Q3 法說會逐字稿

Good morning. My name is Holly and I will be your conference operator today. At this time we'd like to welcome everyone to the First Industrial third-quarter earnings conference call. (Operator Instructions)

I'd now like to turn today's conference over to Art Harmon, Vice President of Investor Relations. Please go ahead, sir.

Thanks, Holly. Hello, everybody, and welcome to our call. Before we discuss our third-quarter 2015 results, let me remind everyone that our call may include forward-looking statements as defined by federal securities laws. These are based on management's expectations, plans, and estimation of our prospects.

Today's statements may be time-sensitive and accurate only as of today's date, October 29, 2015. We assume no obligation to update our statements or the other information we provide. Actual results may differ materially from our forward-looking statements; and factors which could cause this are described in our 10-K and other SEC filings.

You can find a reconciliation of non-GAAP financial measures discussed in today's call our supplemental report and our earnings release. The supplemental report, earnings release, and our SEC filings are available at FirstIndustrial.com under the Investors tab.

Our call will begin with remarks by Bruce Duncan, our President and CEO, as well as Scott Musil, our CFO, after which we will open it up for your questions. Also on the call today are Jojo Yap, our Chief Investment Officer; Peter Schultz, Executive Vice President; David Harker, Executive Vice President; Chris Schneider, Senior Vice President of Operations; and Bob Walter, Senior Vice President of Capital Markets and Asset Management. Let me turn the call over to Bruce.

Thanks, Art, and thanks to everyone for joining us on our call today. Our team delivered another very good quarter, driving our occupancy higher by another 40 basis points to 95.5%. This puts us 50 basis points ahead of our original year-end occupancy target of 95% that we established back at our November 2013 Investor Day. Our team should be proud of their accomplishments, and I thank everyone at First Industrial for their contribution.

Our third-quarter same-store NOI was up a strong 5.9%, driven by higher average occupancy, contractual rent bumps, increased rental rates on leasing, and an increase in normal course restoration fees. Based on this strong third-quarter performance, we increased our full-year same-store guidance 50 basis points at the midpoint. Scott will walk you through our guidance changes later.

Cash rental rates were up 2.4%, marking the seventh consecutive positive quarter for this metric. On a GAAP basis, rental rates were up 11.9%, and we now have been positive on that basis for 15 consecutive quarters.

Demand continues to exceed new supply, making it a good time to be an industrial landlord. That demand continues to be broad-based across markets, industries, and tenant sizes.

We have been busy on the portfolio management front, as we continue our efforts to enhance our portfolio through new investments and targeted dispositions. Development continues to lead the way, as we use our platform to deliver higher risk-adjusted returns and add high-quality buildings that meet tenant needs.

We had three new starts in the third quarter. The largest was at First Park 94, our new 309-acre site in the Southeast Wisconsin submarket of Chicago that we acquired for $13.4 million. First Park 94 can accommodate up to 4.6 million square feet of industrial space, and our development plan for the park includes marketing sites for build-to-suit to own or for sale as well as speculative development.

We immediately began construction of a 600,000 square foot spec distribution center scheduled for completion by third-quarter 2016. Our estimated investment for this building is $29.1 million with an estimated GAAP yield of 8.1%.

The second start was First San Michele, a 188,000 square foot building in the Moreno Valley in the Inland Empire. The site is adjacent to our First Inland Logistics Center, the 690,000 square footer that was our first speculative development coming out of the downturn that is leased to Harbor Freight Tools on a long-term basis. Total investment for First San Michele is expected to be $12.2 million, with a targeted GAAP yield of 6.3%.

Our third start this quarter was First Arlington Commerce Center II in the great Southwest submarket of Dallas, not far from First Arlington I, which we completed during the quarter. We expect to invest $14.1 million in this 232,000 square foot facility and have a targeted GAAP yield of 6.5%.

Including these third-quarter starts, as of September 30 we had 2.2 million square feet under construction across six projects with a total estimated investment of $148 million. These projects were 22% preleased at quarter-end, reflecting 172,000 square feet of leasing at First Park @ Ocean Ranch in Southern California, 142,000 square feet at First Park Tolleson in Phoenix, and 43,000 square feet at Interstate North in Minneapolis. Our targeted first-year weighted average GAAP yield for this group is 7.1%.

At September 30, we had three completed developments that are not yet in service, located in Houston, Dallas, and Minneapolis. These total 647,000 square feet and were 71% leased at quarter-end. Our total estimated investment for these completed developments is $39.9 million, with a targeted weighted average first-year GAAP yield at 7.2%.

We placed one development in service during the quarter, our 222,000 square foot First Pinnacle Industrial Center II in Dallas. It was 100% leased. Recall that we placed First Pinnacle I in service in the second quarter, which was also at 100%.

We replenished our development pipeline in Dallas by acquiring a site in the I-20 corridor that will be the future home of the First Mountain Creek Distribution Center. We acquired the site for $4.1 million, and it could potentially accommodate up to 1.2 million square feet, which would likely be on a build-to-suit basis. I refer you to page 20 in our supplemental for details on all of our developments.

While acquisitions have been challenging, given the number of investors seeking industrial assets, we were successful in adding a few more high-quality buildings to our portfolio since we last spoke. In the third quarter, we acquired a 366,000 square-foot distribution center in Moreno Valley for $29 million, adding further to our position there. The in-place cap rate is 4.8% and the lease rolls over in two years at rents that are below current market.

With this acquisition we now have 2.1 million square feet of product completed or under construction in Moreno Valley, plus the ability to add up to 1.45 million square feet at our First Nandina land assemblage. We love the portfolio we have put together over the last several years. This area benefits from broad-based tenant demand due to its strategic location that serves the Southern California ports and population center. We believe these factors portend well for Moreno Valley's long-term rent growth prospects.

In the fourth quarter, we successfully acquired a two-building portfolio totaling nearly 1 million square feet in the I-95 North Corridor of the Baltimore/Washington market for $61.9 million. The larger 644,000 square-foot building is 100% leased on a long-term basis to a leading retailer, while the 349,000 square footer is leased to that same retailer on a short-term basis. Our expected combined stabilized yield on these two buildings is 6.1%, which we underwrote applying an in-place cap rate of 5.7% to the larger, stabilized building and a 6.9% stabilized yield to the value-add investment.

Moving on to dispositions, in the third quarter we sold three buildings totaling 75,000 square feet plus one land parcel for $7.5 million. These buildings were located in Detroit, Tampa, and Baltimore/Washington.

In the fourth quarter to date, we've completed $28.2 million in two sales. The first was a 665,000 square foot light industrial and flex portfolio in the Detroit market for $17.8 million. The second was a six-building flex portfolio in Houston totaling 133,000 square feet for $10.4 million.

Year-to-date we have closed $78.2 million of sales, reaching the low end of our full-year target of $75 million to $100 million. We expect to meet or exceed the high end of that range based on our current sales activity.

Our sales focus continues to be squarely upon assets with higher finish, CapEx, and leasing costs which we believe have limited cash flow growth potential. We are redeploying those proceeds to self-fund our development and select acquisitions which we believe can deliver better cash flow growth.

Our quarter also featured a successful capital markets execution with our new seven-year $260 million unsecured term loan that Scott will discuss shortly.

Before I turn it over to Scott, I want to remind everyone about our upcoming Investor Day on November 12 in New York City. There we will highlight our transformation, our performance, and the ongoing opportunity we believe we offer to investors.

We will discuss our disciplined execution on strengthening our balance sheet, enhancing our portfolio, and driving cash flow through leasing. We will also outline the roadmap for future growth by way of our new investments, as well as the opportunity as we see it with respect to our valuations. The Investor Day will also provide you with a great opportunity to spend some time with members of our team from around the country that have been instrumental in what we have done and, more importantly, what we can do in the future.

With that, Scott?

Thanks, Bruce. Starting with the overall results for the quarter, funds from operations were $0.35 per fully diluted share compared to $0.32 per share in 3Q 2014. EPS for the quarter was $0.13 versus $0.19 one year ago.

As Bruce noted, we finished the quarter with occupancy at 95.5%, which was up 40 basis points from the second quarter and up 160 basis points year-over-year. Sales had a 4 basis point impact on our third-quarter occupancy, while investments helped by 5 basis points.

Regarding leasing volume, we commenced approximately 2.4 million square feet of long-term leases in the third quarter. Of these, 900,000 square feet were new; 1.1 million were renewals; and 400,000 were development leases. Tenant retention by square footage was 77.7%.

Same-store NOI growth on a cash basis, excluding termination fees and the large one-time restoration fee that we recognized in 3Q 2014, was 5.9%. Same-store growth was primarily the result of higher average occupancy, contractual rent bumps, and increased rental rates on leasing, as well as an increase in routine restoration fees versus the year-ago period.

Lease termination fees totaled $76,000 in the quarter. Same-store NOI growth including termination fees, but excluding the one-time restoration fee in the year ago quarter was 4.4%.

Cash rental rates in the quarter were up 2.4% overall. Breaking it down, renewals increased 8.4% and new leases were down 3.5%. On a GAAP basis, the overall rental rate change was a positive 11.9%, with renewals coming in at 19.4% and new leasing at a positive 4.7%.

On the capital side, as previously announced we closed a $260 million seven-year term loan which we effectively fixed to a current interest rate of 3.39%. We initially have used the proceeds to pay down our line of credit and would expect to redraw from our line to pay off our total of $240 million of maturities in the fourth quarter of 2015 and in the first quarter of 2016. Please note that this debt carries a weighted average interest rate of 6.2%, so in 2016 we should see some increased cash flow related to this financing and expected debt payoffs.

Moving on to our balance sheet metrics, at the end of 3Q our net debt plus preferred stock to EBITDA is 6.1 times after normalizing G&A. This is near the low end of our target range of 6 to 7 times.

At September 30, the weighted average maturity for unsecured notes, term loans, and secured financings is 4.4 years, with a weighted average interest rate of 5.5%. These figures exclude our credit facility.

Our credit line balance today is $72 million, and our cash position is approximately $28 million.

Now reviewing our updated 2015 guidance, per our press release last evening. Our NAREIT FFO guidance range is now $1.20 to $1.24 per share, a reduction of $0.03 at the midpoint compared to the guidance discussed on our second-quarter call. This change in guidance is primarily related to a $0.01 production due to the short term dilution related to the term loan execution, a $0.01 reduction due to an increase in G&A related to an increase in incentive compensation costs.

Guidance also includes the impact of the Baltimore acquisition and the two portfolio sales completed in the fourth quarter to date. The NOI impact of these transactions is offsetting, but there is a $0.01 reduction in FFO due to the acquisition costs related to the acquisition in Baltimore.

Excluding the impact of the settlement of the interest rate hedge, acquisition costs and a NAREIT-compliant gain, our FFO guidance is $1.31 a share to $1.35 per share, which is a $0.02 decrease at the midpoint compared to the guidance we provided on our second-quarter call. The key assumptions are as follows: average in-service occupancy of 94.75% to 95.25%, based on quarter-end results, which is a tightening of the range; average quarterly same-store NOI on a cash basis before termination fees of 4.5% to 5.5%, which is an increase of 50 basis points at the midpoint from last quarter's guidance. Note that this excludes the one-time restoration fee in 2014.

We increased our G&A guidance by $750,000 at both ends of the range to $24.8 million to $25.8 million due to an increase in incentive compensation. Guidance reflects the anticipated fourth-quarter 2015 no-cost prepayment of approximately $23 million of secured debt at 5.58%.

Lastly, guidance includes the costs related to our developments in process. In total for the full-year 2015, we expect to capitalize about $0.02 per share of interest related to our developments.

Other than what I have noted, our guidance does not reflect: the impact of any future debt issuances; the impact of any future debt repurchases or repayments; any additional property sales, acquisitions or further developments, other than the fourth quarter Baltimore/Washington acquisition and the Houston and Detroit sales we discussed earlier; nor any future NAREIT-compliant gains or losses or the impact of impairments; nor the potential issuance of equity.

With that, let me turn it back over to Bruce.

Thanks, Scott. Before I open it up for questions, let me say that overall business is good with strong tenant demand which has continued to exceed new supply. With occupancy at 95.5% and with our other metrics consistent with our peers, we have shown the power of our portfolio, platform, and our people. Our balance sheet metrics are also in excellent shape.

At our Investor Day in New York, on November 12, we look forward to highlighting for you what we have accomplished and, more importantly -- since there is no future in the past -- the opportunities we see ahead. We look forward to seeing many of you there. And if you haven't registered or need additional details, please reach out to Art Harmon.

We will now open it up for your questions. As a courtesy to our other callers we ask you limit your questions to one plus a follow-up, in order to give the other participants a chance to get their questions answered. You are, of course, welcome to get back in the queue. So, Holly, may we please open it up for questions?

(Operator Instructions) Craig Mailman, KeyBanc.

Hey, good morning, guys. I guess I just want to hit on occupancy here. You guys are 50 basis points ahead of plan. Just looking across your markets, you really only have six that are below 95% here.

Just curious, I guess. What do you think peak occupancy for this portfolio can be? How much of the markets that are below average here have structural issues? Just thoughts on that.

All right, well, let me start and I'll throw it over to Peter to talk about a couple markets in particular. But I would say that we are very encouraged by what we're seeing. We really are -- across almost all of our markets, we're seeing good demand and our 95.5% occupancy today is very good.

Again, the mission for us is to focus on getting that average occupancy up, and that's what can deliver dollars. But we're encouraged by what we're seeing. We're seeing good, good demand, as they said in the script, in terms of by all types of tenants and size, and we're encouraged.

But we do have a couple places where we have to pick it up in terms of -- and, Peter, why don't you talk about what we're doing in Indianapolis and Minneapolis?

Sure. Sure, Bruce, thanks. Craig, this is Peter. In Indianapolis, we made some incremental progress this quarter, up about 170 bps on our in-service portfolio.

We have one large vacancy that's a 311,000 square foot space that's part of a larger multitenant building, that we could demise for one or two tenants. That was resulting from a first-quarter moveout, as we touched on last call. While we've seen some interest, there are no signed leases to report; but I would say it's not a structural issue and our team there is all over on getting that space leased.

So we fully expect occupancy to improve there. And that's a big one, because that's about 10 percentage points of our occupancy in Indy.

In Minneapolis, we picked up about 230 bps quarter-over-quarter in our in-service portfolio. Most of our activity has been in the 20,000 to 40,000 square foot range, which includes a deal that we did in our development building at First -- at Interstate North that's not yet in-service.

But the large vacancy in Minneapolis, as we talked about on the last call, is a 221,000 square foot building that had been leased long-term that can accommodate one or two tenants. We're seeing some activity there, but more supply in Northwest Minneapolis, so still some work to do. But again, not a structural issue and we fully expect the occupancy to return to the mid-90%s as it has been.

Great; thanks for the color on that. Then, Bruce, maybe just on the Inland Empire acquisition, can you just provide some color on maybe how far below market those rents are, what that 4.8% stabilizes to? I guess I'm just trying to reconcile a cap rate that low versus your guys' cost of capital.

Sure, all right. Jojo, why don't you take that?

Yes, Craig; this is Jojo. The in-place market rent is approximately 10% below market, and that's just even comparing it to bulk warehouse rent. This building is fully air-conditioned.

Right now it's in the in-place and it's low 30s. Market for bulk is mid-30s and that's not accounting any premium for air-conditioning space.

So if you assume bulk warehouse rents we expect to stabilize in the low 5% yield. If you assume any premium, which we expect to do so in air-conditioning, we would approach greater than a mid-5%, 5.5% yield for more.

And I would only add, Craig, that if you look at this on a replacement cost basis, we think it's about 15% below replacement cost when you add in the air-conditioning too.

Ki Bin Kim, SunTrust.

Thanks and good morning. Could you talk a little bit about your renewal lease spreads, above 19% this quarter. I know this stat can be volatile quarter to quarter, but it seems like a pretty positive trend and obviously from an absolute standpoint a big number.

Is this a mix issue? Or is this something that's a little bit more longer-term in nature?

Well, Ki Bin, again that number was very strong for the quarter. If you look at on the GAAP rental rate increases, especially when you're coming up and you're renewing a tenant for the first time, the first term you'll have a lot of free rent; the second time you will have less free rent. So that's driving some of that increase.

But again, overall a very strong number for the quarter.

And we continue to feel pretty good about it.

Yes. Ki Bin; this is Peter. I would simply add that on the strength of that, tenants have fewer options. We're certainly getting more traction and in many sectors very limited or no supply. So we continue to feel good about our progress there.

Okay. In terms of a couple development projects, why Dallas? Because -- I know I'm looking at this from a very high level, but we do see more potential supply risk in that market. So why add to that? Or is it just very submarket specific?

And secondly, Nandina, when -- what is the timeline for that project to start to maybe get it in line or online?

Good, we've got David Harker with us who has overall responsibility for a lot of markets including Dallas. So why don't, David, you talk about the site down there, the market?

Yes, the Mountain Creek site in Dallas, what attracted us to it -- a number of things. One, it's got great access to I-20. It's right on the border of the GSW and the South Dallas market. If you look at where most of the overbuilding is in South Dallas, it's on the Eastern side of the South Dallas market; the I-45 corridor is the area that's most overbuilt.

So we feel that it's a very attractive site. Our basis in it, we've paid less than $1 a foot for it.

We're very optimistic that it's going to be a good site. But because of the building in South Dallas we're not recommending we go spec on it. We're going to hold it for a build-to-suit, and we think we've got a very, very valuable site.

And, Jojo, why don't you talk about First Nandina?

Yes, Bruce. First of all, we're encouraged about the absorption. There is a significant leasing on the million square feet and up in the whole Inland Empire, and robust leasing there. But we're not prepared to announce anything yet, and we'll let you know once we announce anything on that site.

Again, that site can accommodate 1,450,000 square feet cross-dock, state-of-the-art functionality with trailers and all that. We really like that site. We can get a lot of success [there], but we'll let you know once we announce something there.

Again, that's another site where we've got a good basis, too.

Okay, thank you.

Dave Rodgers, Robert W. Baird.

Good morning, guys. Bruce, maybe a question for you, just along the lines of what you just answered. But I guess on the development trades or the development deals that you're working on, 74 million for what's been placed in service; I think it's 69 million for what was placed in-service 12 months. But as you look at what's completed but not in-service and under construction, can you give us a range for those?

Then I guess the other question would be the big difference maybe between projects you just started, like First Park 94, and the stuff that you'd started a year or two ago on embedded land, the differential on those returns. I didn't hear if you mentioned that.

Well, we mentioned it, but let me -- I would say that if you look at what we have under construction, we mentioned that we probably have between -- under construction and the stuff that's just completed, the average GAAP yield first year would be like 7%. So again we feel those yields are pretty good.

We think again our focus continues to be development, because we think we get higher risk-adjusted returns and that we continue to enhance the portfolio with these developments.

On First Park 94, like we said in prepared remarks, we're forecasting a yield of 8%, roughly 8% GAAP yield. Did that answer your question, Dave?

It did, yes; that was helpful. Thank you.

Then I guess maybe just a follow-up on the guidance from Scott. I heard Craig ask about occupancy earlier, and you said returning to higher historical levels for a couple of the markets like Indy and MSP.

But I guess with regard to the occupancy guidance for the end of the year, down from where you are now, is that just [reiterating] guidance? Is there something in there big? I didn't really here if you addressed why that number would slip into the end of the year.

Sure, Dave; this is Scott. We basically tightened our year-end occupancy guidance to 94.75% to 95.25%. When we do guidance, we do ranges of 25 basis points. So if you were to do the midpoint of the fourth quarter based on that range, it would be about 95.1%.

Our goal again is to be 95% or higher in the fourth quarter, and that's what we'll continue to push to do.

I guess just to follow up on that, typically don't you see some pretty decent seasonal leases in the fourth quarter and we see that move up? I guess that's why I'm asking the question.

Yes, I would say typically we do have -- the fourth quarter is a good quarter for us. But we've got work to do and we'll let you know at the end of the year how we end up. But the fourth quarter typically has been a decent quarter for us.

Okay. Sounds conservative. All right. Thanks, guys.

John Guinee, Stifel.

Great. Hey, thank you. A lot of questions on development, etc. If I look at your land inventory towards the end of your supplemental, how much of that land is in locations where you can start development in the next couple of years? And what's the general below market/above market valuation on that land?

Jojo?

Yes, John, if you look at the -- on page 23 of the supplemental, I think that's what you're referring to, I would say that the key land sites would be about 680 acres -- I'll just quickly touch on the locations -- allowing us to develop about 11.5 million square feet.

Just starting off very briefly, first part, Fairburn, that's a very good site in Atlanta; it can accommodate 1.2 million square feet. Followed by the Covington land which is Central PA; that can accommodate a build-to-suit of about 500,000 square feet.

Moving down, we briefly spoke about in the prepared remarks First Park 94, the Southeast Wisconsin submarket of Chicago. That's totaling about 4 million square feet of developable.

And moving further down you have First Arlington -- First Mountain Creek Distribution Center that can accommodate 1.2 million square feet which David Harker just discussed. You've also have heard us talk about our position in Katy, West I-10 corridor to Houston, that could accommodate about 676,000 square feet.

We already touched on First Nandina; that's about 1,450,000 square feet. And I'm just going to finish off with two other land sites that we didn't talk about on this call or our prepared remarks, which is our land in Nashville, that's a very active market build-to-suite market that could accommodate about 1.2 million square feet; and Stockton, that can accommodate 1.2 million square feet.

So John, if you add all that, that's about 11.5 million square feet of building that would fit under your description of could be developable in the immediate future over the next couple of years, as really helping us grow our portfolio.

Again, in the land up in the North of Chicago, that 4 million square feet, you're not going to do that all at once, but over time you will do that. So that will take some years. And the other thing is, that Stockton will take a few years with that. I wouldn't anticipate that in the next one or two years.

Then is it safe to say that the rest is on the market if the price is right?

A number of the sites are key expansion sites or potential expansionary sites. Some of them are worth keeping to provide additional functionality and flexibility to our buildings.

And you are correct: it is correct to assume that some of those are in the market for sale.

Great. Thank you.

(Operator Instructions) Eric Frankel, Green Street Advisors.

Thank you. I have a leverage question. Some of the acquisition, the acquisitions closed on the third quarter and which closed on the fourth quarter, I'm sure they have a compelling investment case, each one of them. But I was curious to understand your thoughts on your leverage goals.

If the acquisition market is pretty heated and share prices certainly haven't been screaming lately, why not just delever a little bit further and go below 6 times debt-to-EBITDA?

Scott Musil6

Well, Eric, this is Scott. We closed the quarter actually at 6.1 times debt-to-EBITDA, so we're at the low end of our range there. Again our goal is to use sales proceeds to basically cover the cost of any acquisitions and investments, and also the excess working capital that we have after paying our dividend, which is about $45 million this year.

Now you might have some slight mismatches between quarters. Everything doesn't match up perfectly. But I would say long run, our goal is to make sure our acquisitions and investments are covered by property sales and, again, our excess cash flow after paying our common dividends.

Okay. Just my next question or follow-up question rather, I'm not sure if you guys ever talked about the Panama Canal in the past, but obviously that's set to open next year, but it doesn't seem like many East Coast ports can actually accommodate the larger ships that are coming through. Do you think that's going to impact tenant demand in any shape or form in the next couple years?

Eric, it's Peter. We're seeing modest to limited impact from the potential of the Panama Canal. You're correct; there are only a couple of ports that can accommodate the larger ships now, and some of those have dredging projects.

But we think from a port diversification strategy a lot of the users and our tenants have already made some of those adjustments. So we're not really anticipating that much, but really some modest incremental demand.

This is Jojo. I'd like to just briefly add to that. What's good with the Panama Canal is that that will make everything even more competitive, because larger ships lowers the cost of goods being transported to the US; and that means the American consumer can buy more, if they choose to spend the same dollars, because the cost of goods coming to the US is less.

The more goods comes to the US, the better it is for the industrial real estate space.

Okay, thank you.

Bill Crow, Raymond James.

Good morning, guys. Bruce, one quick question, the hotels -- no, I'm kidding. (laughter)

The question I do have is one of your peers talked about some hesitancy on the part of tenants to take on new space, to commit to new developments. Maybe it was just a temporary phenomenon that occurred in the late summer.

Did you see anything like that? Any because of the economic environment or anything else that was going on that tenants balked a little bit at new commitments?

No, we did not see that. I would say that, again, typically we've had some sense of a summer lull and this quarter we didn't. We picked up 40 basis points in occupancy, which we were very pleased with.

We're seeing very, very good demand, so we did not see that.

Okay. That's it for me. See you in New York. Thanks.

At this time we have no further questions. I'll turn the conference call back over to Mr. Duncan for closing remarks.

Great. Well, we appreciate very much your interest in First Industrial, and I remind you that the November 12 Investor Day we hope we see you then. If you have any questions about that, call Art; and put it on your calendar because we look forward to that and to see you at NAREIT out in Las Vegas. Any questions from today's call or the report, please call Art or Scott or myself.

Look forward to it. Thank you. Bye.

Once again we'd like to thank you for dialing in for today's First Industrial third-quarter earnings conference call. You may now disconnect.