Piedmont Realty Trust Inc (PDM) 2016 Q4 法說會逐字稿

Greetings, and welcome to the Piedmont Office Realty Trust, Inc. fourth-quarter 2016 earnings call.

(Operator Instructions)

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Robert Bowers, Chief Financial Officer at Piedmont Office Realty Trust. Thank you, Mr. Bowers. You may begin.

Thank you, operator. Good morning and welcome to Piedmont's fourth-quarter 2016 conference call. Last night, we published our quarterly earnings release, and we filed our Form 8-K containing our unaudited supplemental information. Both of these items are available on our website under the Investor Relations section.

On today's call, the Company's prepared remarks and answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters which are subject to risks and uncertainties that may cause the actual results to differ from those we discuss today. Examples of forward-looking statements include those related to Piedmont Office Realty Trust's future revenues, operating income, and financial guidance, as well as future leasing and investment activity.

You should not place any undue reliance on any of these forward-looking statements, and these statements speak only as of the date they are made. We encourage all of our listeners to review the more detailed discussion related to risks associated with forward-looking statements contained in the Company's filings with the SEC.

In addition, during this call, we'll refer to certain non-GAAP financial measures, such as FFO, core FFO, AFFO, and same-store NOI. The definitions and reconciliations of our non-GAAP measures are contained in the supplemental financial information that's also available on the Company's website.

I'll review our financial results after Don Miller, our Chief Executive Officer, discusses some of the quarter's operational highlights. In addition, we're also joined today by various members of our Management Team, all of whom can provide additional perspective during the question-and-answer portion of the call.

I'll now turn the call over to Don.

Good morning, everyone, and thank you for joining us on today's call. Before I begin my quarterly comments, I want to thank those of you who were able to attend our Orlando Investor Day event on January 17 and 18. The Florida weather was perfect for us to showcase our premier position in the Orlando CBD market and a great opportunity for the attendees to get a first-hand view of what is materializing in Lake Mary's TownPark mixed-use development.

Our 500 TownPark build-to-suit project was completed on budget and one month ahead of schedule and the 80% occupant CNA began moving in on January 1. One of the intended takeaways from the event was not just about our Orlando operations however, but also the success overall of our concentrated ownership strategy and how that same approach is being employed in our other major markets such as in Boston, in Burlington, in Dallas in the Las Colinas submarket, and in Washington DC along the RB corridor. I hope you take the time to watch the presentation we made during our Investor Day. It is available on the website for your review.

Now as we review our quarterly and annual 2016 financial and operational results, you may have seen in our filing last night that the fourth quarter was an active period for us from both a leasing and transactional perspective. Regarding leasing, the amount of executed lease agreements for the fourth quarter totaled approximately 400,000 square feet, which pushed our annual total to over 2 million square feet for the year. With low expirations in 2016, these completed leases allowed us to end the year at 94.2%, well above our original goal of 93%.

To delve into some specific fourth-quarter leasing highlights, the largest two transactions for the quarter were an approximately 100,000 square foot renewal and expansion of Children's Hospital of Los Angeles' lease through 2026 at 800 North Brand Boulevard in Glendale, California. And at 8560 Upland Drive near Denver, Colorado, a leading cable and broadband communications company signed an approximately 65,000 square foot 10-year new lease.

A more complete list of the larger leases signed during the quarter is detailed in the supplemental information filed last night. Overall, we are very pleased with the breadth of activity that we saw in almost all of our markets during the fourth quarter, especially late in the quarter after results of the election were known.

Looking forward, we want to remind you that our reported lease percentage was revised to 91.6% on January 1, 2017, primarily due to approximately 700,000 square feet being transferred from the development and lease-up classification into our in-service portfolio. The additional square footage includes Enclave Place in Houston, 3100 Clarendon Boulevard in Arlington Virginia, as well as the additional 500 TownPark in Orlando, Florida.

With low lease expirations in 2017 and 2018, these development projects along with other properties such as One Independent Square and 1201 Eye Street in Washington DC and our recently acquired property in Las Colinas, all provide us great opportunities for further organic occupancy growth in 2017.

Regarding capital transactions, we had provided guidance throughout 2016 that we had intended to be a net seller of assets. Much of that forecast hinged upon our success in closing on the sale of one of two large deals. Either the 606,000 square foot Two Independent Square property in the southwest submarket of Washington DC that is 100% occupied by NASA or the 800 North Brand property in Glendale, California, which is anchored by Nestle.

Many of you read speculation about the Washington DC sale in the real estate trade publications over the past few months. The property is under contract with limited contingencies and is expected to close during the first half of 2017. The potential sale of Two Independence will allow us to decrease our ownership concentration in the southwest Washington DC submarket. If the sale closes, we plan to use the proceeds from the disposition to pay down debt and free up capacity on our line of credit for strategic acquisitions.

Given Nestle's recent corporate headquarters move announcement, we plan on re-tenanting the 800 North Brand building over the course of the remaining term of the Nestle lease, which runs through 2021.

During the fourth quarter of 2016, we did close on two dispositions and two acquisitions. First, we completed the sale of Braker Pointe III in Austin Texas for approximately $50 million. We are particularly pleased with this sale to an owner occupant which garnered a stabilized valuation and allowed us to exit the Austin, Texas market. It also allowed us to accretively recycle this capital into a value-added Dallas acquisition at 750 West John Carpenter Freeway.

The Las Colinas building is approximately 315,000 square feet, constructed in 1999 and 78% leased primarily to two tenants, CVS Health and IBM. The acquisition also entailed the purchase of a 3.5 acre adjoining developable land parcel for approximately $1 million. A strategic capital deployment presentation with more details regarding this capital recycling project is available on our website in the Investor Relations section.

Additional capital transactions during the quarter included the purchase of the 89% leased 432,000 square foot Galleria 200 property, a sister building to our 300 Galleria asset in the northwest perimeter submarket of Atlanta. Also, we completed the sale of our four-story 100,000 square foot corporate headquarters building here in Atlanta for $14 million late in the quarter.

I will now turn the call over to Bobby to review some financial and balance sheet highlights for the quarter and the year. Bobby?

Thank you, Don. While I'll discuss some of the financial highlights, I encourage you to again, please review the earnings release and supplemental financial information, which were filed last night for more complete details.

For the fourth quarter of 2016, we reported FFO and core FFO of $0.44 per diluted share, a $0.03 over the same metrics last year. Core FFO for the year was $1.67 per share, up from $1.60 per share in 2015. This increase was delivered despite the sale of 11 assets since October 1 of 2015, including Aon Center in the fourth quarter of 2015. The significant decrease in FFO associated with those sales was more than offset by earnings growth from our occupancy gains, from acquisitions of eight strategic assets over the same time period, and from our opportunistic share repurchases.

AFFO was $45.6 million for the quarter and $189.4 million for the year, up from the comparable periods in 2015 and well in excess of the declared 2016 dividends. Same-store cash NOI for 2016 was up 4.8% compared to the previous year primarily driven by the commencement of new leases and expiration of rental abatements, and as Don mentioned earlier, we ended the quarter at 94.2% leased, a 270 basis point improvement over one year ago.

We did not have any significantly new or different financing activities during the quarter, and our debt-to-gross asset ratio was approximately 36.9% as of year end. Our average net debt-to-core EBITDA ratio was 6.4 times for the fourth quarter of 2016. Now if Two Independent Square sells, we pro forma this debt to EBITDA ratio to drop into the low 6s or upper 5 times ratio in 2017.

We had $178 million outstanding on our $500 million line of credit at year end. Our next debt maturity is a $140 million mortgage that opens for prepayment in August of 2017. We intend to pay off this debt with proceeds from net disposition activity during the year.

At this point, I would like to reaffirm our annual 2017 guidance that we released during the Orlando Investor Day. The range is $1.70 to $1.80 per diluted share for core FFO. That range incorporates assumptions related to same-store NOI growth of 5% to 8% on a cash basis and 5% to 7% on a GAAP basis. It also assumes net disposition activity of $200 million.

The targeted year-end lease percentage is expected to be in the mid-to-upper 92% range. It is important to note as you prepare your own financial models for Piedmont that our quarterly earnings can vary by a penny or two based upon the timing of our capital markets activities as well as annual one-time expense items.

With that, I would now ask the operator to provide our listeners with instructions on how they can submit their questions. We will attempt to answer all of your questions or we may determine if more appropriate to issue a public disclosure later. Please try to limit yourself to one follow-on question so that we can address as many of you as possible. Operator?

(Operator Instructions)

Our first question comes from the line of Jed Reagan with Green Street. Please proceed with your question.

Hello. Good morning, guys. In terms of the pending Two Independent sale, are there taxable gains there that you need to consider for a (inaudible)1031 or a special dividend? And then can you talk about maybe a pipeline of acquisitions that you are pursuing potentially?

(technical difficulty) that actually worked out well for us. There is some possibility that we would have to make a distribution at the end of the year if we are unable to manage our tax considerations going forward for the rest of the year, but it's a little too early to tell given so much has yet to happen. But the gain is very substantial on the asset.

As it relates to acquisitions, I think we budgeted and we always be careful about budgeting acquisitions because it is so hard to give concrete guidance on that. We budgeted 300, Ray, help me, sorry, 325 of acquisitions for 2017 in our strategic cases, but obviously we usually give guidance off of a combination of base case and strategic. So those are not critical to our success in achieving our numbers for the year.

Okay. So just triangulating from that, does that imply that on top of Two Independence, you might sell somewhere in the neighborhood of another $200 million of assets this year? Does that sound about right?

Yes. I think if you do the math guiding to a $200 million net disposer that would mean that there is ballpark another couple, $300 million of dispose. We're going to be as opportunistic on the disposition side as we can possibly be. So we will have to see. We are going to try to move as much as we can of nonstrategic product but in terms of budgeting process and making a forecast, that is the best estimate we can come up with.

How many non-core market exits could that imply potentially?

You know what? Let me count. Two to three probably.

Okay. That's helpful. Does the current FFO guidance for the year include the Two Independent sale and do you feel comfortable with the midpoint of guidance inclusive of that sale?

So if you think about it, you saw that our guidance was a little wider than normal this year. A lot of that had to do with when and if we sell the asset. If we don't sell the asset, obviously we are pushing towards the upper end of the range.

If we do move forward and sell the asset, the earlier in the year we sell it, the lower our FFO will be by definition just because of the size of the asset. But I think if we sell it in the first half as we've said, then I think we would expect to be in the midpoint of the range.

Okay. Great. Thanks. I'll get back in the queue.

Thank you. Our next question comes from the line of Michael Lewis with SunTrust. Please proceed with your question.

Thank you. Good morning. So you had strong 4Q results. I was looking through your filings of those big four lease expirations over the next 12 months are upon us now. I think you went through them on the 3Q call, but maybe you could provide any updates now a few months later on Arlington, 1201 Eye, Two Pierce, and Connection Drive.

Yes. Mike, I think there's -- I don't know if there is concrete -- obviously, we would only announce it to the extent we've got leasing going. But activity is fairly strong at multiple of those assets. You combine that with other vacancies in the portfolio, I think probably the easier thing rather than to specifically get into those assets given that we've got activity going on at multiples, I'm just sort of focused on the overall lease percentage of the portfolio.

I think we've said we expect to go from what is now upper 91%s when you include all of our (inaudible) assets being brought into the portfolio on January 1 to mid-to-upper 92%s and that includes obviously the fact that we have two of those leases totaling about 225,000 square feet vacating this year. So by definition, our projections include picking up reported occupancy of 0.5% to 1% over the course of the year despite the fact that we are losing those two leases.

So that gives you some estimate of our optimism around what we think happens broadly in the portfolio rather than trying to address those two individuals because we've got things going but I don't want to indicate what they are given the competitive market issues.

Okay. That helps. Thanks. My follow-up, you don't have much lease roll-up over the next couple years but a big part of the 2017 expirations are Washington DC. And so as I think about you do a good job in the schedule here with some of the abatements throughout your portfolio that are burning off. What are the -- is anything shifting in DC?

We talked about the election I think on the last call, but do you think you might be essentially replacing some of those abatements with new ones because DC is simply a market where you still need to give concessions to compete?

Let me have Bob address the Washington market issue. The real quick answer to the -- clearly, when we lease back up those buildings in DC given that it's probably the highest concession market we're in now, there will be some abatement time. But remember, that is only a couple hundred thousand square feet as compared to what I think is about 800,000 square feet of space that is currently in abatement across the portfolio.

If you look at the abatement schedule in the supplemental, you will see that disproportionately most of the large abatements in our portfolio burn off here in the next few months, which is a part of the reason why our same-store GAAP and same-store cash NOI numbers look so strong this year is I think a lot of people have been confused by the issue of the fact that we have a lot of free rent burning off in the first half of 2017, plus we had a lot of leases commenced during the course of 2016, which wouldn't have given us full-year 2016 GAAP NOI but they're giving us full-year 2017 GAAP NOI.

So the combination of those two things is what's contributing to the really strong same-store GAAP and same-store cash numbers. But, so, even if you translate the two 100,000 square footers that are vacating in DC into free rent, that doesn't anywhere near come to meet the amount of free rent that is burning off here in the first half of this year. So Bob, let me have you give us all the market update on Washington, if you don't mind.

Sure. I think the DC market is generally more optimistic, certainly since the election. I think there is sectors that are expected to do better than others from a positive side. The legal lobbying groups are expected to do well along with the defense and cyber security. And I think generally, the thought is that healthcare, GSA, and some of the nonprofits may suffer a bit. But given that bigger context, the east end where we have our 1201 and 1225 Eye Street assets has been historically the most active part of the market and we continue to see that.

There is some good and bad to that in that the GSA tenants are starting to get priced out of that market. But there is activity more in the private sector backfilling that space, and we are seeing that 1225 a lot of activity over the past 12 months, and 1201 we're have a continuing group of proposals that are coming through the market that will I think deliver some results this year. Interestingly, the southwest market, which is typically all federal contractors and users, has been pretty active for us, principally through the advanced acquisition program that the GSA uses here in the national capital region.

And that process hadn't been used much for the past few years. But we have seen a lot of activity in our 400 Virginia building as well as 250 E Street through that program which has been very good for us.

Great. I appreciate the color. Thanks.

Thank you. Our next question comes from the line of John Guinee with Stifel. Please proceed with your question.

Great. Thank you. First, it looks like your lease number, you're going from 94% to 91%, now to 92% by year end and then down into the 89%, 90% in the first quarter if these two, Gallagher and Goldman Sachs move out. Is that accurate? And then second, is the lease -- the economic occu guide to leased tends to run about a 700 basis point gap. Is that an appropriate run rate, about a 700 basis point gap between lease and economic occupancy?

The first question, John, I think if you were to say yes, if we were to do no leasing activity in early 2018 and you took both Gallagher and Archon out of the portfolio, then in theory if you go from mid-to-upper 92%s, and you lose the square footage of those two leases. I'm trying to do the math here, but that would be close to 3%. So you would be probably maybe 90%, maybe it's not 89% but maybe it's 90%. It would be in that ballpark if we did no leasing. So yes, I think that mathematically you are correct on that.

The answer to the second question, I'm sorry, was the --?

The gap between leased and economic occupancy appears to be about 700 basis points for the last few years. Is that accurate and a good run rate going forward?

Yes, John. That is exactly accurate. What it's reflected is heavy lease activity that we have seen for the last three or four years, and we have done 7 million square feet of leasing. Maybe 40% of our portfolio in the last three years alone. Obviously, some or much of that comes with some amount of free rent.

That loss to lease, if you want to call it that, has been persistently high. The point I think we were trying to make on the earlier question was because we have so much leases that are in free rent at this very moment that burn off here in the first and second quarter of this year, I think that number comes down pretty dramatically in the second half of 2017.

Frankly, I hope it stays high if only because that means we have done a lot more new leasing. But obviously, I'm afraid we can't do as much new leasing as we have free rent burning off and so as a result, we think that number comes down fairly materially over the course of 2017.

And then you sold your headquarters building. Did you sign a long-term lease there or are you going to move?

I knew you would ask that, John. I just knew it. No, we actually have about one year left on the lease as it was structured on the sale but we built in some flexibility to move earlier or later. Undoubtedly, over the course of time, we will probably be moving to another building in our portfolio here in Atlanta.

Any idea when? John's Creek is closer to Charlotte than Atlanta, isn't it? (laughter)

It might be closer to the North Carolina line maybe, but no, it's -- obviously, there's a lot of us who live up in this area and so it's convenient for many of us to commute to this particular building. But we will also have to think about the best interest of all of our employees before we make that decision.

And your shareholders.

And our shareholders.

And then the last issue is you can raise your dividend. When is the last time you raised it and when do you expect to raise it again?

We raised it, it was fourth quarter of 2015. I believe is correct. We have some room to raise it but we like to make sure that we are maintaining a conservative dividend policy. And so we don't have any near-term decision to raise the dividend any further but we certainly would have capacity to do so if we decided to do that.

Great. Thank you.

Sorry, John, I misspoke. It was fourth quarter of 2014, not fourth quarter of 2015.

Oh, okay. So it's been a couple of years then. Time to do it. All right. Thank you.

Thank you.

Thank you. Our next question comes from the line of Richard Schiller with Baird. Please proceed with your question.

Hello. Good morning, guys. Thanks again for hosting the Investor Day down in Orlando. Quick question for you. Could you break out the 5% to 7% on a GAAP basis and 5% to 8% on a cash basis the SSNOI growth there into its components with the, one, moving occupancy and what you expect for the change in rents?

Yes. Well, breaking it down, it gets a little more complicated. Why don't I try to address the big contributors to it so hopefully that gives you a little more perspective without trying to build your model in too much detail. On the cash side, clearly the biggest contributor by far is the burn off of the free rent that I was just mentioning in the call from John Guinee.

We have 800,000 square feet of free rent burn off in the first quarter -- the first two quarters of this year. And that is a material contributor to the cash step-up, and then obviously just overall occupancy pick-up and otherwise has been a very strong contributor. On the GAAP side, the biggest contributor would be a combination of the fact that some of those leases that are in free rent are net leases, and as a result your operating expenses -- because they are gross free rent.

Those operating expenses coming into the portfolio contribute to same-store GAAP in addition to same-store cash as well as the fact that we had a lot of leasing done, as you were just talking, in 2014 and 2015 where they have commenced in 2016 but we didn't get a full-year's benefit of the GAAP same-store in 2016 and now we're getting it in 2017. So the numbers we produced, the 5% to 8% cash same-store NOI growth and the 5% to 7% GAAP same-store NOI growth, we still feel very confident about.

Obviously, there is always some amount of leasing you need to get done to contribute to those numbers. But as we been able to do in the past, we have usually outperformed the numbers we've given you early in the year. I'm not suggesting we are going do that this year. I'm just saying that we've always tried to be cautious in our guidance.

Awesome. Great. Thanks, guys.

(Operator Instructions)

Our next question comes from the line of Anthony Paolone, JPMorgan. Please proceed with your question.

Thanks. Good morning.

Good morning, Tony.

An the Glendale assets, you mentioned that it was a potential sale but then you talked about focusing on leasing over the remainder of the Nestle lease. What exactly is the plan in understanding with Nestle now with that asset?

Good question. There's about 350,000 square feet that Nestle occupies in the building today. If you noticed, we did a 50,000 square foot wraparound, what we call wraparound lease internally where Children's Hospital took 50,000 feet of Nestle's lease post the expiration of Nestle's lease in 2021 and extended out for five years on that lease and then did a 10-year renewal -- five-year extension of their lease that also expired in 2021. So now we have 100,000 square feet in the building going out to 2026.

We hope we will be able to do a fair amount of those leases going forward for a variety of reasons, not the first of which is Nestle had the substantial amount of term left in their lease. They go out until early 2021. Number two, they are at a substantially below-market rent. Their last lease renewal was done really right at the bottom of the Glendale market and so there's about a $5 difference between what they are paying today and what market rents are in the marketplace, as evidenced by the Children's lease.

Then third, I think they've got a lot of motivation as do we in trying to get as much recovery from their lease commitment to us in Glendale as possible. And so we think and we hope, we have had plenty of conversations with them about it already that we will be working together to try to find tenants to backfill their space and go longer term with us. Given that they are below market and they've got a fair amount of term left, it is going to be a very interesting opportunity for us that we hope creates a fair amount of value going forward.

The only thing I would add that we haven't disclosed that I think is valuable to just mention on the call is, they do have a contraction option for two floors that are about 50,000 square feet that they could exercise here in the coming months that would require them or would allow them to get out of two floors or 50,000 square feet in the middle of 2018 or so. There is a fairly substantial penalty on that so if they take it, I don't know if that's necessarily a bad thing for us.

In fact, I'm kind of excited if they did because I think it would allow us to stagger out some of that leasing activity. But overall, we are very excited about it. I think it's a really interesting opportunity to create a lot of value for us.

Okay. And then I guess just to make sure I understand it right. During this process, it sounds like this will not be much of a sale candidate in the near term then.

Well, you never say never just because there could be somebody who sees the same opportunity that we have and is prepared to pay us for that opportunity. We always are keeping our ears open on those kinds of opportunistic sales. It is not a core part of our plan over the next year or two as we try to realize the re-tenanting of the building.

Okay. And then my other question is, can you talk a bit about just what you are seeing on the acquisition side in terms of deal flow and pricing and whether the pricing feels okay for you all and whether you think you'll find some opportunities in that?

Tony, it's Ray Owens. As we have proven I think over the last couple of years, we've really gotten laser focused on trying to find opportunities that bolt on to where we have a [good net] asset so we are continuing to stay diligent in that regard. What we have seen in the fourth quarter and the first quarter of this year has been a slow down.

People have been both on the buying and selling side have been somewhat cautious. Sellers haven't really been pull the trigger because are not sure where one, interest rates are going to go or what the election was going to do. I think investors are having some of that same uncertainty. So historically, you would always see a lot more activity in the first part of the year but in our conversations, not only with principals but with brokers, there haven't been as many deals coming to the market.

Now what we are starting to hear is that people are getting a little more comfortable with making those decisions so we anticipate over the next quarter or so more opportunity. But the real important thing is to remember we are going to stay laser focused on the assets and the submarkets similar to what we have done previously, making sure that we are bolting on to the assets that would add to the existing portfolio.

Okay. Thank you.

Thank you. Our last question comes from the line of Jed Reagan with Green Street. Please proceed with your question.

Hello, guys. Where would you say you're in-place rents are versus market at this point? You had about -- it looked you had about a 1% mark-to-market cash rent spread in 2016. Is that a decent bedding line for 2017?

You know, it's always hard to forecast, Jed, what the number will be over the coming year without knowing what leases we are going to be executing on. I think we have said recently and we still believe that the portfolio on average is around 5% to 10% under-rented today. And obviously, in some markets it is more than that and other markets it's less.

It really comes down to which particular leases we get done. I think when we you look at our mark -- when we do our mark-to-market across our portfolio, market rents in-place, existing rent, it's about a 5% to 10% under rent today. I think you will see some quarters that are much higher than that and some quarters that are quite a bit lower than that depending on the lumpiness of the leasing.

Okay. That's helpful. And then you've got the $140 million of secured debt coming due later this year and a term loan maturing early next year. Can you just talk about how you were thinking about those two notes?

Yes. I think that the $140 million probably is clearly paid off by NASA assuming the deal closes and the timing of that works out well. And then of course we also have $180 million I think as of year end, about $180 million on the line. If we execute the sale as we anticipate, we would probably pay off both of those, clear out a fair amount of debt off the balance sheet, and then we are in great shape to either refinance both either in the buy market or in the bank market with that term loan coming up next year.

Okay. That's helpful. And then last one, just curious what -- how things are looking in Houston. Any signs of life for leasing up Enclave, and as you think about that, is there -- at some point, do you consider just selling that project and letting someone else fight the battle or do you keep soldiering on?

I would say the signs of life are closer to Mars than Earth in Houston right now. But obviously, just like we've talked about with the Nestle deal, if the right opportunity came along, we certainly would consider it. We are constantly pinging the market when we are trying to evaluate whether we should sell something that we're constantly watching what else gets done and talking to market participants and see if anybody feels like the asset is worth more than we do, and if it was then we would probably do something with it.

The higher oil prices haven't necessarily resulted in a pick-up in leasing velocity in that market?

I think the west corridor for certain has been fairly stagnant. I think there is probably a little bit better pick up as you get closer into town. It's not very strong anywhere right now.

Okay. Makes sense. Thank you.

Thank you. We have reached the end of our question-and-answer session for today. I would like to turn the call back to Mr. Miller for closing remarks.

Thank you, operator. I think the only thing I wanted to point out to everyone before we get off is that we do have the webcast of our Orlando Investor Day out there. If you haven't listened to it, we really strongly encourage you to do so. The reason being is that we had so much opportunity to talk about the culture of the organization and the strategy of the organization, and hopefully it's the same format that allows you to really get a much better flavor of the organization than it does through either these quarterly earnings calls or the speed dating that we do at NAREIT.

We strongly encourage you to take a look at that, listen to it, and hopefully get a much better flavor for how we go about our business each day. Again, thank you to those of you who attended, and we look forward to seeing you all at our next call and various conferences. Thank you.

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