Life Storage Inc (LSI) 2012 Q3 法說會逐字稿

Thank you and good morning. Welcome to our third quarter conference call. Greetings and welcome to the Sovran Self Storage third quarter 2012 earnings release conference call. At this time all the participants are in a listen-only mode mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. (Operator Instructions).

It is now my pleasure to introduce your host, Diane Piegza, Vice-President of Corporate Communications. Thank you, ma'am. You may begin.

Thank you, Brenda, and good morning. Welcome to our third quarter conference call. Leading today's call will be David Rogers, Chief Financial Officer. Also par -- Chief Executive Officer. Also participating are Andy Gregory, Chief Financial Officer, Ed Killeen, Executive Vice President of Real Estate Management, and Paul Powell, Executive Vice President of Real Estate Investment. Each of you should have received a copy of your earnings release last evening.

If you did not and you wish to be added to our distribution list, please email invest@sovranss.com. As a reminder, the following discussion and answers to your questions contain forward-looking statements. Sovran's actual results may differ materially from projected results. Additional information concerning the factors that may cause such differences is included in our Company's SEC filings. Copies of these filings may be obtained by contacting the Company or the SEC. At this time I will turn the call over to Dave Rogers.

Thanks, Diane, and good morning everyone. Q3 was another nice quarter for us. Demand has been good, our web-based marketing efforts are driving traffic, our revenue management group is working the rates, the customer care reps and store personnel are making sales, costs are under control, our recent acquisitions are performing well, and we're pretty much hitting on all cylinders.

I will let Andy provide the details on the quarter's opening results in a minute, but it was a good one, and we're especially pleased because last year's 3Q was also real strong, so this year's improvement came over a pretty tough comp. We bought some good-looking stores during the quarter. We announced most of them in prior releases so I will just give a quick review. Five stores were acquired in the Atlanta markets, giving us a total of 24 Uncle Bob's there. Three were bought in the Jacksonville, Florida, area, where we now have seven.

One was in Cherry, North Carolina, which is our eighth in the Raleigh market, and we bought another one in the Chicago metro area, giving us three there. Four of the Atlanta stores and the three in Jacksonville were bought as a portfolio. It was an opportunistic play with occupancies below 50%. We expect a first-year yield of about 5.8%, but by the end of the third year, we think we will be close to eight.

The other Atlanta store and the Chicago and Cherry stores are stabilized, with the average going in cap rate at 7.2%. In early July, we sold the remaining four stores we had in Michigan and the one property we had in Eastern Maryland for a total of $13.5 million. These were markets we thought we couldn't grow in, so we used this opportune time to sell out. A bit later in the quarter, we sold nine stores in Houston and three in Dallas for a total of $35 million.

We certainly -- certainly like owning stores in these markets, but we acquired 22 there in 2011 and another ten earlier this year, so we sold off some of the more mature stores and traded up to some solid Class A properties. After the end of the quarte,r we signed contracts totaling $37 million to acquire two more properties in Chicago, one in Phoenix and four in Tampa and Fort Myers.

We expect to close on these before the end of the year, but we haven't completed due diligence or title work so we can't guarantee for certain that they will be acquired. We're also pretty far along in the negotiations -- negotiations to buy eight more properties, all in markets where we already have a presence. The total of these contracts would be $64 million if we can bring them all home. It was in anticipation of these acquisition opportunities that we were active with our ATM program this quarter.

We sold a million shares at an average price of almost $57 a share, netting a bit over $56 million, and we used the proceeds to pay down our credit line. We don't have any near debt -- near-term debt maturities to worry about, our EBITDA-to-debts and our debt-service coverage ratios are really strong and we have almost $250 million of -dry potter] available. Our balance sheet and liquidity position has never been stronger. So with that, let me turn the call over to Andy, who can provide details of the quarter's activity.

Thanks, Dave. Regarding operations, total revenues increased $9.7 million, an 18.6% increase over 2011 third quarter, and property operating expenses increased by about $1.7 million, resulting in an overall NOI increase of 23.6%. These total Company results reflect the impacts of the 29 stores we acquired in 2011, the 14 stores we acquired in 2012, the one store we opened in Richmond three years ago, and the increase in same-store NOI I will get to in a minute. The net operating income does not include the one Maryland, four Michigan and 12 Texas stores we sold in July and August of 2012, as these have been shown on a separate line as discontinued operations.

The same store results include 344 of our 377 Company-owned stores. We provided some additional detail in the press release regarding our same store revenue and expense components, but I will provide some highlights. Same store revenues increased by a strong 8% over those of the third quarter of 2011. This was primarily the result of a 670 basis points increase in average occupancy and a significant reduction in incentive offers.

We've also continued to see increases in tenant insurance commissions. Total operating expenses on a same store basis decreased by 1% as we realized reductions in Yellow Page costs, utilities and credit card fees. We expect credit card fees on a comparable basis to begin to increase in the fourth quarter of 2012 since the legislation that lowered those fees was effective October 1st, 2011 and the credit card companies have initiated now fees to recoup some of their losses.

Property taxes, insurance, and personnel costs increased modestly as we expected. Overall then, with same store revenues coming in at plus 8% and same store expenses decreasing by 1%, same store net operating income improved by 13.1% over 2011 third quarter. G&A costs were $1.5 million higher this quarter over that of last year. Aside from the $451,000 increase in internet advertising, the main reason for the increase is the fact that we operated 41 more stores at the end of the this quarter as compared to June 30 of the last year. Offsetting a portion of of that overhead cost is an increase of almost $300,000 in third-party management fees earned this quarter.

Regarding properties, Dave just mentioned the ten stores we purchased during the quarter for approximately $63 million. These purchases were funded by the proceeds from our ATM issuance and a portion of the proceeds from the 17 properties sold. We continued pruning some of the mature properties from our portfolio, and in July and August sold the 17 stores for $48 million. We realized a gain from these sales of $4.5 million. We currently do not have any additional properties for sale but may look to prune additional mature properties in 2013.

From a balance sheet perspective, we continue to maintain our conservative and flexible strategy by staggering our debt maturities, keeping our assets almost entirely unencumbered, and limiting floating interest rate exposure. At September 30th we had $5.4 million of cash on hand and $149 million -- $149 million available on our line of credit. Plus and according features that would add anther $75 million to our capacity. During the quarter we issued 1 million common shares at average price of $56.95 under our previously announced aftermarket program, resulting in net proceeds of $56.1 million. As Dave mentioned, this allowed us to further strengthen our balance sheet and in anticipation of increased acquisition opportunities.

With regard to guidance, we have included in our press release the expected ranges of revenues and expenses for the fourth quarter and the year-to-date. Same store revenue for Q4 should be in the 7.5% to 8.5% range and expense growth around 3.5% to 5% for this quarter. We're expecting property taxes to increase between 3.5% to 4.5% for the year, but the effect of the 2011 accrual adjustment is expected to result in a 4Q property tax increase of between 10% and 13%. Core G&A expenses are protected at $31 million to $32 million for 2012.

We have not assumed any additional purchases or sales of properties in our guidance nor -- nor have we included the related costs. We have included in our guide and the dilution from the one million common shares issued in the third quarter. As a result of the above assumptions, we are increasing guidance and are forecasting funds from operation for the full year 2012 at $3.25 to $3.27 per share and between $0.80 and $0.82 per share for the fourth quarter of 2012. With that I'll turn the call back to Dave.

Thanks, Andy. Before we go to Q&A we will just give a quick update on what we know about our stores at least affected by Superstorm Sandy. We had 68 stores, by our count, in the affected areas. Right now as of this morning, most of them have debris damage, or floating debris and some doors nicked. Some signs and so forth, but for the most part, we escaped without much incident at all. 16 are still without power, two we cannot open -- open yet.

One -- one the store Tom's River had some pretty significant roof damage. That was a JV store. We are going to continue to do our best to do what we can to help our employees and our customers and the members of those communities who are affected over the coming days and months. And we would also like to thank those of you who are in the affected area, especially Jersey, Connecticut, New York for slogging through the difficulties you are going through to listen to our call today. We appreciate it. Having lived in Buffalo my whole life, I have experienced three -- three big storms over the years where there have been many days without power and hard to get around and to use transportation.

And I know it gets old after just a few hours, and our problems are nothing compared to what you folks are going through through this thing. So our thoughts with you now, and they will be through what promises to be an incredibly long and drawn out cleanup and rebuild process. Okay. Brenda, I think we can take questions now.

Thank you. (Operator Instructions). One moment while we hold for questions. Our first question comes from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.

Hi. Good morning. Thanks.

Morning, Todd.

Morning. Glad everyone every one of your properties was safe following the storm. It sounds like you've made some initial assessments. I was just wondering can you quantify what your maximum exposure is on the property side and then, I believe, in terms of insurance, you essentially just receive commissions from brokering the insurance. But I was just wondering what your exposure is with regard to you know, your customers', you know, property.

On the customer side, Todd, it's pretty easy. We third-party it out so we only collect commissions on insurance. The whole brunt of the loss, should there be one, is on Bob Bader Insurance, our provider. So it's a pure third-party relationship and -- and the insurance is provided by paid Bader insurance, so we have zero exposure on that. On the damage side, it's kind of early to tell. Like I said, I don't think it's going to be that significant. It's much more inconvenient. I know we've got an elevator well that's probably going to costs some money. The water is sitting in the first floor of that, and as I mentioned, the roof, but for the most part, we don't think yet that there's any -- we don't have contact with two of the stores. That's the only sort of big question mark left, but dollar-wise it should not be much more than negligible.

Okay. And then if you -- if you look back historically, you know, from some other storms or -- or events, you know, you have large exposure in Florida and in Texas that have been impacted before. Can you just help us understand what the impact may look like, you know, in terms of incremental demand. Is it from individuals, contractors that come in to rebuild and some are sort of -- what sort of time frame this tends to last until?

I guess the only comparable one we have -- we've had going back to Hurricane Hugo in South Carolina and Hurricane Andrew in Florida. Those were a couple big ones ones that were actually, looking back now, quite limited in scope unless you happened to be right there. But probably the most comparable is the four storm year in Florida, Irene -- or Charlie and Ivan and Wilma I forget the other one, but that was pretty widespread like what we have here and that was everybody. I mean there were people who were looking at first blush to get their goods out and that's where we tried to help people with our trucks, with our carts. We gave out water. We tried to be pretty good community citizens in that regard so the initial blush was everybody.

The long-term effect is -- it lasted almost two years in Florida were the contractors who came in and. you know when you flew over Florida, all you saw was blue roof tops from the tarps that were up there. And those guys came were many of the surrounding states with their step vans and pick-up trucks and rented space from us so they were there quite a while. Actually going back to Hugo in Charleston, we only had two stores at the time but that was very similar. We had a big influx of contractors. So, you, know I think it's -- this is a (technical difficulty) awful flood, though. You don't know how much of the customers' goods really need storing.

You know, when it's wind damage and people are looking to protect what they have that's a little different. They're all unique. This one is really, really unique and I would say, though, that the long-term impact it looks like you guys in the metro area or the Tri-State area are going to have a flood of folks from all the surrounding states for months and maybe even years to come working on their stuff and that will probably be the biggest impact.

Okay. That's helpful. And then switching over to operations, you know when we think about maximizing revenue, you know, some of of your peers feel that they maximize revenue at 92%, 93%, some are in the camp that maybe 88%, 89% is the right number. What is sort of the optimal level for Sovran to maximize revenue, and where is that during I guess the peak leasing season.

Hi Todd. It's Andy. We look at it similarly to a few others in the low 90%'s the 92% range. Getting there to maximize revenue we didn't want to get there too quick. The revenue department said hey, we could have got there this year but we wouldn't have maximized it. Next year we may be close it it so in the busy season of next year we would push on low 90%'s.

Okay. Then lastly do you have an update on occupancy at the end of October and what that was year-over-year?

You want to take that, Ed.

Hey Todd. This is Ed. Our occupancy remains pretty steady at 87.5%, dipping just below September's ending occupancy of 87.8%. Ins were strong and up over last year, yet the outs were up as well, creating a -- a negative net in/out of approximately 900, but overall October was strong and our offered rates were up as well.

And, Todd, I think last October we had a slight uptick. We had a very unusual fourth quarter. So October was actually ten basis points point higher than September so we're not -- we don't expect to see that this year. We expect to go back to normal seasonality and that's what we're seeing.

All right. Great. Thank you.

Our next he question comes from the line of David Toti of Cantor Fitzgerald. Please proceed with your question.

Good morning everybody.

Morning, Dave.

Morning, David.

Just a couple of quick questions. I know you touched on G&A growth a little bit, but what are your thoughts about next year? Do you guys feel like you're sort of hitting the optimal staffing levels at this point or -- or should we expect a little bit more growth in corporate next year?

Hi. This is Andy, David. I think you won't see the big jump next year. I think we're staffed pretty well. It depends on the level of acquisitions we have, but I think we're in good shape. This year we've had quite a bit of incentive comps because obviously we're doing better than projected and many of our people or bonus based on incentive comp here at the home office as well as the field, but at the home office it's the G&A so next year -- we wouldn't expect to see a large uptick in G&A.

One caveat to that, Dave, would be depending on how successful we are bringing at third-party management contracts. That skews it a bit more and as we have talked about before we department get the margins on third-party management contracts. So we -- you know, if we bring in 50 to 100 third-party management contracts, that would disproportionately move the needle on G&A costs per revenue dollar, I guess, but the fees would -- you know we're working on a margin of somewhere between 20% and 30% on 3 PM, onto so that would be the one caveat to G&A growth.

Okay. That's helpful. And then my only other question is relative to the -- the large growth we have seen this year in occupancy in overall revenues. Could we expect some margin improvement on the yields of that next year or going forward relative to a more robust portfolio?

I think you will see a little margin improvement next year, David. Again, we expect that occupancy to peak out in the low 90% and I think the margin will come up with it.

What are some of the areas you think that there actually could be some improvements in terms of that margin.

Well, you know, pretty much it all falls to the bottom line, right? So if we keep three party management out of the equation, just look at rental rates and occupancy growth, we have a little bit more in terms of payroll perhaps, but almost -- the costs are almost dead fixed so if we can grow occupancy or even revenues another 300 basis points we'll probably see close to 270, 280 points in NOI growth. So the quirk was with the G&A part in GM, but as far as basic operations go we're at the point now, I think, where almost everything follows. Now, we're going to have some upward pressure on property operating costs just because of the last three years it's been very muted, but even so I think the margin will be -- will be decent.

Okay. Great. Thanks for the detail guys.

Our next question comes from the line of Jana Galan with Bank of America Merrill Lynch. Please proceed with your question.

Thank you. Good morning.

Morning.

Now you have been able to achieve very (inaudible) impressive occupancy growth in the second quarter and third quarter and maintain it. I was curious if maybe you could talk about the market dynamics in the markets where with you are a little bit low that average, even thousand you had gains in New Jersey and Virginia and Rhode Island was there a little bit on the low end of occupancy?

Hey Jana. This is Ed. Well, our strongest markets that were above our average NOI were, as you know, it was in our release, Atlanta, Florida, Southern Florida, pretty much all of the East Coast, Dallas, Houston, Cleveland. Very strong in the Carolinas but the weaker markets below our average NOI were the Gulf States, Phoenix was a little bit light and the western central New York and Long Island, but we -- we expect that we'll start to improve in those markets as well.

Okay. And then maybe just a question on the acquisition pipeline. How is that looking right now, and do you see kind of a rush to close your [by] year-end.

Yes, Jana. This is Paul. We do, as Dave mentioned, we've got seven properties that we are under contract and the majority of those we hope to close this quarter and that is -- you know, we have seen that over the last couple months, the deals we've gotten is -- is requiring us to close by year-end so we will not take on any other deals at this point that requires us to close by the end of the year, but we are looking at another, you know, $64 million worth of deals that will close shortly after the first of the year, but -- so we're not -- we're seeing a pretty good opportunity out there. Mostly off-market deals. The open market transactions we do participate in, but we do know there's a lot of money out there chasing these deals. It gets very competitive and we have been very successful with our off-market transactions this year where most of our deals came from.

Great. Thank you very much.

Our next question comes from the line of Ross Nussbaum with UBS. Please proceed with your question.

Hi. Good morning.

Hi Ross.

Dave, you know, in the 15, 17 years I've been covering self-storage, I have never seen anybody put up the level of occupancy growth that you have over the last year. And I guess the question is, as you talk about sort of maxing it out, you know, perhaps this time next year just above the 90% threshold, how do you think you're going to make that transition over from occupancy growth over to rate growth in terms of how much elasticity you think there is in pricing given the current economic environment?

Hi Ross. This is Andy. We're already seeing some pricing come back our way as of the end of September. Our price -- acting prices were 3.7% above last year's September. We don't expect (inaudible) that to widen the 3.7% because we reduced rates in the fourth quarter of last year. We expect to reduce them but that 3.7% gap we think can continue. We think there's a rising tide in the industry right now. It isn't just grabbing market share. We're doing that, but there is also -- there's more out there -- there's more demand out there so we feel price -- we will have pricing power next year, and we're really have some pricing power with our current customers. We have been very light on our current customers, and we think next year we will have some opportunity there.

But I think what you're really asking, Ross, is it sustainable? How much of it is sustainable? And we had 8% this quarter. We're hoping for somewhere near 8% or at 8% next quarter. It gets tough next year, both in terms of we don't have the runway with the occupancy to go, so we're not talking 8% next year. I'm sure we're not talking 8% next year. So we have room. I think we're comfortable. We really dropped our rates at the beginning of of 2011, and we're just now clawing back to where, as Andy said, we're 3.7% over as of September. That's the first positive spread we've had in 18 months. So that's coming back to where it was, but I think things are really good, I think we have room in place on rate growth, but it isn't 8%. That's for sure.

And in terms of the bumps on your existing tenants, can you remind us of what are you doing there and how often.

Ross, this is Ed. Our average -- this quarter, our average rent increase was 6.2% versus 7.1% last year, and we did -- we are a little bit lighter this year than last. Very cautious about the -- the number of customers that we -- we raised. We raised 6.2% of the base versus 8.4% last year. And while our -- our move out rate is 19% greater, you know, a large portion of these customers of these outs, they're welcome. I mean, our system indicates that we would -- we would go ahead and backfill them at a higher rate given our current occupancy. And, as Andy suggested, next year we intend on getting a bit more aggressive with our -- our existing customers.

So just to clarify. Did I hear correctly, you raised the rent 6.2% on 6.2% of of your existing customers?

Yes, it was actually.

Okay. And where are the rents on the existing customers today versus your -- your average asking rent?

I don't -- do we have that?

We do have that.

Is that rent when they leave are you going to roll up or roll-downs?

Well, you know, I could tell you this. That -- the process of putting in in-place rents, it is a very systematic process, and we look at a lot of -- you know, of pricing signals and pricing sensitivity. So I can say that when somebody does gets a rent increase, there's a pretty high degree of confidence that we can replace them with higher rents, so I would suggest that they might be the in place versus the offered are -- are slightly lower and they would be backfilled at higher rents.

Okay. And the last question from me. What percentage roughly of your NOI comes from New Jersey?

It's relatively small, Ross. The -- there's 17 stores in a joint venture, remember, in the heightened joint venture that are in New Jersey. We have three Company-owned stores in New Jersey, and only one in the same store pool at this time.

Okay.

So while you might get a little bit of an uplift from the storm, the reality is in terms of where your stores are located relative to where the flooding and the true extent of the damage is. It's not a high -- high percent of your portfolio.

Correct. The JV partner actually if there is a bump it will primarily go to the JV partner stores.

Okay. Thanks, Ed.

Thanks.

Our next question comes from the line of Paul Adornato from BMO Capital Markets. Please proceed with your question.

Oh, hi. Thanks, good morning.

Morning, Paul.

I have a couple of follow-ups. First, with respect to your experience given catastrophic events, what would you expect in terms of your property insurance rates? You know, obviously everyone's rates are going to be going up. Could you help us understand the numbers behind it?

You know, we've always -- for years and years now, we've made it a point to manage our risk through the premium. So we've had a set coverage policy in force, and we haven't shaved coverage to prune premium dollars so we -- we have worked it through with the same coverage on deductibles and wind damage and [name] storms and all that stuff. The carriers have been telling us for the last year or two, because the returns in the investment market have not been as great for them as they would want them to be, that they're going to have to bang it back on premiums. So we've been pretty successful in holding the line but, you know, I -- we have a lot of coastal properties in our portfolio, remarkably. I don't know the percentage, Andy.

40% plus.

40% plus of our properties are in coastal markets, which pretty much freak out the carriers. They don't like that at all. And so I think what they're going to do is they're going to look at our 377 corporate stores, and the JV stores and they're going to say, holy cow, you guys have all these, a we've got another big event. And even though we weren't affect add very much by Katrina, and actually our experience (inaudible) be impaired about the storm the fact that we have a high percentage of our stores in coastal counties, it's going to have and impact on our premium. Now we -- are we locked?

We're -- locked through the end of February.

Okay. So we start negotiating soon for next year, so we'll know, perhaps, by the next conference call what it is going to do to us, but it isn't going to be good, I'm sure.

Okay. Thanks. And with respect to the third-party insurance for your customers, of which penetration of insurance?

Our penetration right now is at 57% versus 52.5% last year.

Mm-hmm. And is there -- you know, an increased effort on -- on selling that product?

Oh, there -- it's a continual effort through our online learning management system. We are always working with our managers to improve their sales skills and -- in selling insurance.

And, Paul, our now penetration is about 80%, but to to move that needle up from 57% to get to that 80% it's going to be awhile. Just from the turnover of customers, it will take probably another two years to get to towards the 80%.

Okay. Great. Thank you very much.

You're welcome.

Our next question comes from the line of Eric Wolfe with Citigroup. Please proceed with your question.

Hey. Thanks. Good morning.

Hi Eric.

Morning Eric.

You mentioned that you expected to see the normal seasonality in occupancy in the fourth quarter versus last year, where obviously you saw some abnormal seasonal strength. I think (inaudible) you actually improved a little bit. You know, so just thinking about the fourth quarter revenue guidance is 8%, I'm trying to understand how you get to that when your occupancy spread is coming down. Are there lower incentives? Are you being a little bit more aggressive on renewals? Just trying to think about the 8% in the fourth quarter versus the 8% of the third.

There's couple things there, Eric. The incentives the concessions have reduced significantly. I think Ed has those numbers and he can talk to the incentive reduction. The occupancy you know we still -- we expect the seasonality, but we're looking at the end of the year. We could still be above 86% come of the end of the year versus the 81.8% that we were at the end of the last year. So we've got some rate coming back with our rate tasking rates higher than last year, concessions definitely burned off.

Our -- Eric, our -- our during this quarter our year-over-year concessions were -- was reduced by 19% on a per move-in basis from $80 to $65. And additionally, only 56% of our customers this year received concessions versus 68% last year.

Got you. Got you. That's very helpful. And then I guess just thinking about what you said end of the year around 86% that would imply something like 86% for the of average for the quarter in terms of occupancy?

Correct. That seems reasonable.

Okay and then just one quick last question and maybe I'm sort of making too much out of it or misreading the information, but it looks like your same-store occupancy jumped 30 basis points from, I guess, the end of the second quarter to the end of the third quarter even though your meet move-outs were greater than your move-ins during the third quarter. So I am trying to reconcile this. I don't know if it's a change in the same store pool. I'm just wondering how it can go up when the move-outs were greater.

Yes. There was -- there was one store added to the same store pool, which did -- and it was very lowly last year so that was very odd. You have got to watch the move-ins move-outs are units and it's not necessarily square feet. When we're talking occupancy it's a square foot occupancy and you lose a lot of students during the summer, but the square footage that you lose is not in the same ratio.

Okay. Great. That's helpful. Thank you.

Our next question comes from the line of Paula Poskon with Robert W. Baird. Please proceed with your question.

Thanks. Good morning everyone.

Morning.

Andy, a couple of questions on the -- the ATM usage. First is housekeeping. Can you tell what the ATM usage was in October, if any?

There was none in October.

None in October.

The program -- the program, Paula, if you look to hold $125 million, was the program and we used it all up in the third quarter.

Okay. Thank you. And then just sort of thinking about, I would presume that you will replace it at some point. What's the strategy for using that is that really just to kind of match fund acquisitions or what's the strategy on -- on how you use it?

Yes. I mean, we love to maintain our balance sheet we want to match funds to acquisitions and in this case, most of that issuance happened in September when Paul came to us with a lot of acquisition opportunities and we thought let's get ahead of it in the quarter. So that's why you saw the big issuance in the quarter. Most of it happened in September and that's we didn't see dilution in the quarter. We will see it in the fourth quarter but yes, it's to match funds to acquisition.

Thanks very much. And, a Andy, also, I apologize if you covered at the Investor Day. I just don't remember. Do you have a targeted leverage range that you're comfortable staying within?

We like -- the enterprise value in the 30%, the 40%, and we're below that now. But, again, we sort of funded these acquisitions coming up a little bit with ATM beforehand, but 30% to 40%.

Thanks very much. That's all I have.

There are no further questions at this time. I would like to turn the floor back over for closing comments.

Okay. Thanks everyone. We appreciate your time. We wish those of you in Sandy's wake the very best and we'll look forward to seeing you in a couple weeks at NAREIT. Take care.

This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.