Rithm Property Trust Inc (RPT) 2003 Q2 法說會逐字稿

Good morning, my name is Shela and I will be conference facilitator for today.

At this time I would like to welcome everyone to the Ramco-Gershenson Properties Trust Second Quarter 2003 Conference Call.

All lines have been placed on mute to prevent any background noise.

After the speakers remarks, there will be a question and answer period.

If you would like to ask a question during this time, simply press star on you telephone keypad.

If you would like to withdraw your question, press the pound key.

Thank you, Ms. Hendershadt you may begin your conference.

Good morning and thank you for joining us for Ramco-Gershenson Properties Trust second quarter conference call.

At this time, Management would like me to inform you statements made during the call, which are not historical, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1985.

Although Ramco-Gershenson believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be obtained.

Factors and risks that could cause actual results to differ from expectations are detailed in the press release, and from time to time in the company’s filings with the SEC.

Additionally, we want everyone to know that the information and statements made during the call are made as of the date of this call.

Listeners to any replay should understand that the passage of time by itself will diminish the quality of the statements made.

Also the contents of the call are the property of the company, and any replay or transmission of the call may be done only with consent of Ramco-Gershenson Properties Trust.

Having said that, I would now like to introduce Dennis Gershenson, President and Chief Executive Officer, and Richard Smith, Chief Financial Officer and at this time would like to turn the call over to Dennis for his opening remarks.

Thank you Dawn, and thank you for joining us.

We’re pleased to report the financial results of our second quarter, and our accomplishments in all three of our profit sectors, acquisitions, development and asset management.

First, funds from operations for the last three months, was 36 cents per diluted share, taking into consideration, the one time non-cash charge of 19 cents for the write-off of K-Mart’s straight line rent receivable, which was a result of a very positive event.

That is the assignment of the lease by K-Mart, allowing the construction of a new one hundred and ninety-five thousand square foot, Myer Super Store, Ramco-Gershenson exceeded first call estimates by one cent per diluted share.

Without the one time non-cash charge FFO per share would have been 55 cents.

Bettering our performance of last year’s 50 cents by a nickel.

The K-Mart Myer assignment and the effect of the one time non-cash charge will be further discussed by Rich Smith.

Suffice it to say at this point, that we are excited about the Myer replacing a vacant K-Mart with a vastly expanded discount department store and gross re-operation.

Accomplishments during the quarter include the raising of $51m of new equity to a 2m 150,000 common share public offering.

The transaction was underwritten by Deutsche Banc Securities.

Ramco-Gershenson decided to raise equity in June, because the company had identified specific uses for the funds.

These included the acquisition of a number of shopping centers, and the re-development of our core assets.

Our timing couldn’t have been better as we undertook the offering when our stock price was just 22 cents below our all time high.

We have already invested over $11 million of the offering proceed in an acquisition which closed in the first week of July.

In the second quarter we announced successes in all three of our disciplines.

On the acquisition front, we increased our presence in the Southeast and Florida specifically, with the purchase of the Public’s Anchored River Crossing Shopping Center in Newport Ritchie [ph] Florida.

This acquisition increases to thirteen the number of centers we own in the sunshine state.

Newport Ritchie located just north of Tampa, compliments two other shopping centers we own in the area and is the sixth center on the west side of the state creating positive synergies and management efficiencies.

In June we announced that we had four Michigan shopping centers under contract for purchase.

The first of these closed in early July.

The Target Anchored Clinton [inaudible] shopping center in Clinton Township, a suburb of metropolitan Detroit is located on a primary traffic artery in a densely populated trade area.

We expect to announce the purchase of at least two additional centers within the next sixty days.

We are constantly seeking acquisition opportunities our efforts to date have borne fruit with our existing purchases as well as those centers we have under contract.

Please remember that our acquisition criteria involves not only the requirement but the sopping center candidate be located and well ten--- well located and well tenanted but also that it must present the potential for up to add value to the center after the purchase.

During the quarter we were pleased to announce the commencement of a new development project in Grand Haven, Michigan.

The shopping center development will include a Home Depot in 103,000 square feet, a Strip center and several out lots.

The site is an in-fill location and compliments Home Depot’s existing multi-store strategy for the west side of the state, specifically the Grand Rapids, Muskegon (ph) and Holland trade areas.

Our development group is presently working on a number of possibilities.

In the area of asset management, we continue to emphasize our commitment to constantly review our core portfolio for improvement, re-tenanting and expansion.

To that end, we announced the re-development of our Taylor Square Shopping Center in Greenville, South Carolina.

The project includes the expansion of an existing 134,000 square foot Wal-Mart to a new and 7,000 thousand foot super store.

We are also adding 29,000 square feet of new retail space to the center.

We expect the addition retail to open in December of this year, setting a new and significantly higher rental rate for retail space in the trade area.

This is the second Wal-Mart Super Store re-development we’ve announced since the beginning of 2003.

Also in this quarter we announced the assignment of the K-Mart lease at our Tel-Twelve (ph) shopping Center in Southfield, Michigan to Myer Inc.

As I have mentioned, they will demolish the 128,000 square foot K-Mart to build a new 195,000 square foot Myer Super store.

Myer, based in Grand Rapids, Michigan with 156 stores in the Illinois, Indiana, Kentucky, Michigan and Ohio, was the first successful American retailer, to combine a discount department store with a full line grocery component in a super store format.

Myer’s addition to Tel-Twelve compliments the other significant changes we’ve made at the shopping centre.

The replacement of K-Mart by Myer leaves only the vacant Montgomery Ward building to be re-tenanted.

We expect to announce two replacement users for this space within the next ninety days.

As an aside, the assignment of the K-Mart lease reduces our exposure to K-Mart from 5 stores to 4, and our minimal rental exposure to the K-Mart Corporation from 4.02-2.2%.

Our third re-development announced during the second quarter, involves the expansion and complete re-development of the Shoppes of Lakeland in Lakeland, Florida.

We have discussed this project for several quarters and I am pleased to report that we have turned over to Target there building pan [ph] on July the 1st.

We expect Target to open in the first quarter of 2004.

Our additional anchor tenants will be announced as their leases are executed.

It is our expectation that the center will be completely occupied by the end of the second quarter 2004.

In the third quarter of this year you should expect us to announce the commencement of two additional re-development projects.

On the leasing front, we signed 20 new non-anchored leases in the second quarter and a total of 35 new leases for the first 6 months.

Over this time period, we achieved on the new leases a rental rate increase of approximately 11% above portfolio average.

We also renewed 6 non-anchored leases for the quarter and 57 for year to date, achieving a 6.3% increase over the rentals paid previously.

During the quarter we signed 2 new anchored leases.

One tenant occupies 80,000 square feet and the other 21,000square feet.

In each instance, the tenant took the premise in as is condition and thus their rental rates reflect a lower per square foot amount than our anchor portfolio average.

If you’ve reviewed our supplement you would know two statistics that we should address.

The first concerns a drop in center occupancy from 93.1% in 2002 to 89.6% in 2003.

Also our same property analysis for the 3 months and year to date shows the decrease.

Both changes are explainable and are part of an improving story.

Rich Smith will discuss the same center statistics;

I will address the occupancy change.

Our occupancy drop is primarily the result of changes in just a few shopping centers.

First at Taylor Plaza in Metropolitan, Detroit, we have terminated the lease with K-Mart in a free standing 84,000 square foot store.

We are presently finalizing negotiations with a major national credit retailer who will demolish the existing building in order to construct their prototypical store of over 100,000sq ft.

At our Shoppe’s of Lakeland, we essentially emptied the shopping center of all its tenancies, saved the Michael Store in 23,000sq ft to accommodate our planned expansion and re-development.

As I’ve already mentioned, the Target store is under construction.

We should sign a 72,000 square foot retailer within 10 days to occupy the old builder square space and we are actively concluding leases for the balance of the retail space.

This is a result of the fact that the smaller tenancies can now see the target it’s committed to the center.

The third change in occupancy involves our Clinton Valley Shopping Center in Sterling Heights, Michigan, a suburb of Detroit.

Last year the center was 100% leased.

We have since purchased the adjacent service merchandise store in order to control the entire development thus converting a shadow anchor into a company owned-asset by increasing the center square footage to include the vacant service merchandise, our occupancy percentage was impacted.

The fourth center that experienced an occupancy change is our West Oaks One property directly across the street from 12 Oaks Mall, a super regional shopping center in Novi [ph], Michigan.

We acquired the K-Mart premises through our lease termination.

A 110,000 square foot store, previously occupied by K-Mart in 2002, is being leased to one destination user, presently in our second round of lease comments, and believe that we will be in a position to announce this retailer in the near future.

Thus, the vast majority of square footage that accounts for the occupancy change was planned in order to improve the credit quality of our tenants, add to the draw of our centers and increase the rental rates for the spaces discussed.

If we exclude those vacant spaces that were intentionally purchased, or that we have under re-development, our occupancy tep--- percentage would have been 94.7%.

So, with the activities of the second quarter behind us, how do we view the balance of the year, and our prospects for 2004?

First, national credit anchor tenants and mid-box retailers, maintain strong interest in our shopping centers.

We are working with a long list of retailers who wish to join our tenant mix in our existing assets, as well as our perspective developments.

We reasonably expect to announce the names of a number of major retail users, who will occupy currently vacant space in our center before year end.

Presently we are working very hard to complete these leases and secure the appropriate governmental entitlements to allow us to move forward with construction.

Our guidance for 2004 is between $2.35 and $2.45.

This FFO increase of between 6 and 8% over our original 2003 projections includes a partial year’s rentals for these new tenancies.

Thus, for---we showed the results of our leasing efforts this year producing more fully occupied shopping centers, with better credit tenancies and an attractive and updated physical plan.

These changes coupled with our centers superior locations in their trade areas, will insure their liability and profitability for the foreseeable future.

I would now like to turn this call over to Rich Smith, our CFO who will bring our financial information to life.

Thank you Dennis and good morning.

For the second quarter our diluted FFO per share was 36 cents, which succeeded first call estimates by 1 cent.

This represented a 28% decrease from the 50 cents reported in 2002.

The primary reasons for the decrease, resulted from taking properties off line for re-development, tenant bankruptcies including K-Mart and Service Merchandise, the effects of our recent stock offering, and the one time non-cash charge related to the write-off of the K-Mart straight line rent receivable at Tel-Twelve.

Without the $3m charge, the company’s diluted FFO per share for the quarter, would have been 55 cents.

On a gross basis, our diluted FFO decreased $1,607,000.

We went from $7,400,000--- $7,343,000 in 2002 to $5,736,000 in 2003.

The $1,607,000 decrease was made up of a $1,647,000 decrease in income from core assets and operations, primarily attributable from our re-development projects and tenant bankruptcies, a $3m write-off of the K-Mart straight-line rent receivable.

The decreases were offset by a $2.2m contribution from property acquisitions, and an $840,000 gain on the sale of property at Grand Haven and Albern Mile [ph].

For the 6 months ended June 30, our diluted FFO per share decreased 17.3% or 19 cents.

We went from $1.10 in 2002 to 91 cents in 2003.

In total our diluted FFO decreased $615,000.

We went from $14,798,000 in 2002 to $14,183,000 in 2003.

The $615,000 decrease in FFO was the result of a $2,928,000 decrease in core assets, a $3m one-time non-cash write-off, and a $293,000 reduction in income pertaining to our Hickory Corners sale.

The decreases were offset by a $4,766,000 positive contribution from property acquisitions, and an $840,000 gain on the sale of property at Grand Haven and Albern Mile.

Our operating statistics for the quarter include a reduction in occupancy, which went from 93.1% in 2002, to 89.6% in 2003.

As Dennis discussed the details the decrease resulted to several big box and mid box stores that we recently gained control of and also properties taken off line for re-development.

For the quarter our same center analyze decreased 25.4%.

If we look the more normalized, which excludes the centers under re-development and the effects of our K-Mart’s trade line rent write-off, our same center growth was about 2%.

For the three month ended June 30th, our FFO payout ratio went from 84% in 2002, to 116.7% in 2003, again excluding the $3m non-cash write-off our FFO pay ratio would have been inline with our expectations at about 76.4%.

On an FAD basis, the company’s payout ratio went from 108.8% in 2002, down to 83.2% in 2003.

For the 6 months ended our same center net operating in come decreased 14.5%, again normalizing the statistic by excluding centers under re-development, and eliminating the one time Char [ph] same center growth was about 2%.

Our FFO payout ratio went from 76.4% in 2002 to 92.3% in 2003.

Excluding the $3m charge, our FFO pay ratio was 76.4%, and our FAD payout ratio for the 6 months was 90.2% in 2002, compared to 84.8% in 2003.

Our debt at quarter end was $402.8m with an average rate of 6.8%, and an average term remaining of about 3.9 years.

Only 14.9% of our debt was floating, at an average rate of 3.2%.

An 85.1% was fixed, at an average rate of 7.4%.

The availability at quarter end under our un---secured revolver was $48m, and it was $40m on our unsecured revolver.

Excluding the one time non-cash charge our EBITDA interest coverage increased slightly for the 6 months.

We went from 2.19 times in 2002, to 2.21 times in 2003.

For the year our debt to market cap improved.

We went from 56.5% at year end down to 48.2% at quarter end.

The improvement was a result of a recent stock offering, and the increase in our stock price, which went from $19.75 up to $23.30.

During the quarter the company purchased a Publics anchored shopping center in Newport Ritchie Florida, for $7.150m.

As part of the transaction we assume $4.1m of debt with an average rate of 6.67%.

During the quarter the company also completed an overnight phone loan offering, issuing 2.150m shares of common stock, at a price of $23.65 which was near to the underwriter’s discount.

This raised about $50.7m in new equity and the proceeds were initially used to pay down the company’s debt.

Our capital expenditures for the quarter were $19.5m.

We spent about $10.1m on expansion motivation projects, about $7.2m on acquiring the public center at River Crossing.

About $1.8m for development projects. $100,000 on recoverable CAN (ph) and about $300,000 non recoverable CapEx.

For the six months ended June 30th, our capital expenditures totaled $35.7m, $20.2m was spent on acquisitions, $12.7m on expansion renovations projects, $1.8m on development projects, $300,000 on recoverable CAN, and $700,000 on non recoverable CapEx.

For the six months we also sold about $8.5m dollars of property resulting in a net loss of about $527,000.

We expect to fund our future growth by retaining cash from operations, by continuing to sell non-core assets and selected assets with limited upside potential, by refinancing assets which have been expanded or renovated in prior periods and by drawing on our credit facilities.

Lastly, as we work through our 2003 business plan, we are tightening our 2003 guidance to between $2.03 and $2.08.

And as Dennis mentioned we are providing 2004 guidance of between $2.35 and $2.45.

I’d like to open the call for questions now should you have any.

At this time I would like to remind everyone with a question, please press star and then the number one on your telephone keypad.

We’ll pause for just a moment to compile the Q & A roster.

Your first question comes from Jay Leupp of RBC Capital Markets.

Good morning, here with David Rocco.

Couple questions on development and redevelopment.

Could you sort of give the yield on the Lakeland redevelopment project and also comment on whether you have any additional redevelopment activity plans after you’re completed with Loews and Montgomery Wards on the Tel-Twelve

Good morning Jay and David.

Morning Dennis.

First of all relative to Tel-Twelve, once we put the tendencies into the Montgomery Ward’s space, then we have ---- a--- just one more area that is just presently under construction.

I just didn’t think it was significant enough to mention we are building 11,000 square feet immediately adjacent to Media Play in front of the old Montgomery Ward TBA.

For all intents and purposes all of that space is spoken for two leases are executed and we have two leases out and in negotiation and then we will be completely done with the Tel-Twelve redevelopment.

Okay and then can you comment on Lakeland in terms of the expected return on the redevelopment there?

At the present time we, you know --- and obviously we have a significant amount the smaller strip space to lease and that’s where we expect to get higher rental rates but we’re somewhere between 10% and 11% on new cash invested and please remember when we say that we always deduct out when we are computing that number, value for the existing space even though it isn’t leased.

Okay and then Rich on your FAD payout comments you made earlier in the call ----- nice downward drop to 83.2% for this quarter, do you see FAD payout ratio trending further down this quarter and what do you think if it is, where do you think it levels out?

I don’t know Jay if you remember last quarter if we talked about our estimates for the year where somewhere in the mid eighties, that’s where I expect it to be this year.

Next year as income comes online I’d expect that to come down a little bit, but this year probably in the mid eighties.

So it’s safe to assume kind of somewhere between sort of 82 and 86%?

Yes, I’d say.

Okay.

And then, can you also just comment on the year over year drop in expense recoveries, they looked relatively flat on the same store basis but just overall from 96.5 % to 90.9 %?

Yes, they dropped, I think we, I think the biggest effect of that or cause of that was you know, bringing back some of these big boxes on line where we had to eat some of the cost.

The other thing I’d mentioned is some of our lease up, you know maybe dragging a little bit and when we reviewed what we thought recoveries would be for the end of the year, we thought they would trend down so we opted to take a charge forward in the second quarter.

Okay, and then just a last follow up question, the $42.7m of debt maturities remaining this year, can you give us color on your strategy either for payoff or refinancing of those maturities?

I think most of the maturities were for properties that we brought back online from joint ventures.

I think that we have one that we are right in the middle of financing right now and expect to close that here in the next 30 days.

Another one that we’re going into you know contract with, you know hopefully in the next 30 days as well.

On refinancing?

Yes.

I think that they’re probably two stand alones, which you know I think some other ones I think that we’ll end up putting in the line rest of them is to try to stabilize the line a little bit and increase availability there.

Okay.

And any of the longer term maturities that you’re refinancing right now that you’re not putting into the line, are you utilizing a variable rate strategy or are you’re fixing you cost at this point?

I mean the rates are so good with [inaudible] to be honest with you other than the one we put in the line which is variable but then we’re just seeing yields and spreads that are too good to pass up to be honest.

Great.

Thank you.

Okay.

Your next question comes from Lou Taylor of Deutsche Banc

Hi, thanks.

Morning guys

Morning Lou.

Rich when you were talking about some of the builder square replacement and taking K-Mart out of West Oaks One, do you anticipate any more write-offs or write downs from straight line rent receivables over the balance of the year?

Lou I’ll feel that.

The K-Mart at Tel-Twelve, was somewhat unique based on the fact that their lease came up in 2001 so in the year 2000 when they were still ticking along and thought that they would do more of these super stores, we had the upper hand with them and we negotiated some very significant steps in the rent.

When we did the lease assignment, because there was such a dramatic change in the size of the building let alone we extended the term for Meyer, the better part of discretion it indicated that we should treat this as a lease termination for K-Mart.

So in the main, the majority of the rest of our K-Mart leases, all are basically flat -- even if we got any of the other spaces back, which at this juncture we don’t contemplate happening, we would not experience this -- same kind of situation.

Okay.

And then how about any receivables from K-Mart that might prove un-collectable, and have you adequately reserved for that?

Again, if you look at the leases they have rejected and we bought when we got back – in fact when they emerged from bankruptcy, the leases that they affirmed, we had taken write-offs for those in prior periods and were able to boost our reserves back up because we actually collected on those.

Again, I think that other receivables we have from K-Mart specifically have gone pretty comfortable then expected unless, you know – the fact is that I’d say that they are probably pretty current with the exception of maybe reviewing some year on charges, but I don’t really expect any additional write-offs from K-Mart, you know, unless they don’t survive with the new receivables that come into play.

Okay.

But, from the old or the existing, I think that they have either been collected or very collectible.

Okay.

I noticed that in the quarter you had a loss on the sale of an asset.

What assets did that pertain to, or sale?

Dennis had talked on this.

This really didn’t happen this quarter, but it was a Lakeland (ph) property where we sold to Target and not commented to give the anchor in the center of a sweet heart deal so to speak.

That had -- that sale actually happened in July but because there was a loss we recognized the loss in the second quarter.

Okay.

Now I noticed in your FFO reconciliation that your loss add-back was bigger than it was on the income statement.

Could you just explain the nuances of that?

The loss add-back – again, we had some gains.

Again, if you had saw the Weiss (ph) papers, if have out lots for example that had never been put into service or property that’s never been in the service, you -- that’s good FFO, so to speak.

If you have losses that -- or gains on properties that have been put into service, you know -- that -- you know -- basically is not good FFO or bad FFO.

So I think that -- well we had -- the sales we had for gains pertained to out lots for properties not put into service, so what you’re seeing is in fact the net loss we had on bond for the Lakeman (ph) property.

Okay.

So you had about [Inaudible] on roughly $800,000 of -- out lot sales during the quarter that was in your numbers?

I think that number seems about right, in gain 840.

In gain not sales right.

Okay.

Now you had mentioned you’ve got two more acquisition closings in the next 60 days, and just what are their approximate dollar amounts?

One of the two Lou -- should be slightly higher than about $22m, and the other is in the facility of $19m.

Okay.

And do they have associated debt with them?

-- Let me see – yes, they both have debts.

And the --

How much?

The debt is in the vicinity of around 60-65%.

Okay.

And you’ve also got a couple anchor lease expirations coming up over the balance of the year.

How -- What’s your early read on renewing or renewing those leases?

These are leases that have options and all indications are that the tenants are renewing those leases.

Okay. – Ok, thank you.

Again, I’d like to remind everyone in order to ask a question, please press star, then the number one, on your telephone keypad.

Your next question comes from Rich Moore of MacDonald Investments.

Hi, Good morning guys.

Good morning Rich.

Back to the tenant recoveries issue real quick, what do think for a run rate for the rest of the year?

Is it more like the current level?

Yes, I think its probably a little bit less, again I say when we took a charge in the second quarter, thinking that the rate was coming down.

I don’t think its going to be a 97%, 98% as we thought, but I think it’s probably going to be more in the 94%, 95% range for the year.

Okay.

Okay thanks Rich.

Yes.

And then looking again at occupancy to follow up on some of the thoughts you guys had.

When I look first quarter to second quarter at Florida, occupancy, it looks like it goes from 91% to 84%.

Is that all covered by what you discussed Dennis?

Yes.

So the whole thing is covered by that?

The one other that would not have been included in that is in 2002, Jacobson’s was in occupancy in South Bay, and they are good occupancy in ‘03.

I will say however that we were on the cost of having a lease executed.

As far as I know, some of the lease comments have been finalized and we’re just waiting for execution copies, for a replacement tenant for that space, at better economics than Jacobson’s was paying, and we’re not putting any money into store.

So, I would like to think that before the end of the third quarter, we will be announcing the replacement tenant for that Jacobson’s space as well.

Okay.

And then again on that, it looks like it went down from the first quarter as well, not just from second quarter of last year.

Well I think that was Jacobson’s.

That was Jacobson’s—

Well it was either Jacobsons or—you know, the Montgomery-Ward space would be part of that statistic, as well as -- you know, Service Merchandise was still paying in 2002 on this space, because they had affirmed their lease and then we terminated their lease in early 2003.

Okay, but no general weakness in Florida?

None whatsoever.

Okay great.

On acquisitions, you guys mentioned that you had four before, one closed and you had two others, is that fourth one kind of gone away?

No, its still there.

It’s just the timing of closing on that, won’t come -- potentially won’t come within the sixty days.

Okay.

And then so for the year, beyond what you’ve done so far, have you got any thoughts on acquisition targets?

We are working on an additional acquisition that is in the $ 25m range, and we’re planning on at least one more acquisition over and above that, so I think that would be a total of six, a minimum of six for the year.

Okay.

And when you came up with your 04 guidance, what did you think about acquisitions?

We were originally planning in the $50m to $60m range, and we’ll come in higher than that.

Okay, okay great.

A couple of quick questions on numbers.

G&A run rate, is it pretty good where it is?

I think it’s pretty good the way it is.

Okay.

And you had a higher fee in management income, any thoughts on that?

-- At least versus the first quarter Rich, higher fee and management income and lower interests and other income, they kind of offset each other.

I’m trying to take a look at what the fee would be Rich.

I’ll have to get back to you on that.

Okay, that’s fine.

On—and then—

You know Rich, I think we got a development fee on Grand Haven -- is what that was for the fairly increased fees.

Should we think about these fees going up, Rich, as you guys have more developments and --?

You know again, I think that our fees have come down because of the off balance sheet ventures being back on line.

I think that to the extent we do some development off the balance sheet, I’d expect those to go up.

You know, otherwise I think they’d be pretty stable to be honest with you, just a mere pure management fees, they are pretty stable.

Our leasing is leasing driven, and our development is development driven as well.

So, if we have a development, expect them to go up, if not, relatively flat.

Okay.

And Dennis, do you think you can give us an update on the larger IRS issue that’s outstanding?

Suffice it to say, and I’ll knock on wood here, I believe we’re on the two yard line.

I think we are very close to resolving all of the issues and putting this behind us.

Do you have any thoughts on a time frame? --

Every time I have had thoughts on a time frame I’ve been disappointed.

But I will venture to say that I think that we may -- I feel reasonably comfortable that we should be able to wrap this up before the end of the year.

Okay great, thank you guys.

Your next question comes from Aprah (ph) Hurley of Leanmunder (ph) Capital.

Hi guys.

I was just wondering if you could talk a little bit more about your thought process in lowering the top end of the range for ‘03?

Well, when we looked at that, I think that we looked at our business plan, you know, we looked at some of the recoveries, we looked at the equity offering we did putting that money to work, and just you know — normally as you go through your business plan and then get closer to year end, I think that it becomes more apparent of where you’re going.

I think that what we try to do is just knock a nickel off the top-end and try to get further guidance on that.

But, it’s just a result of a number of factors that I just mentioned.

Great, and just one other question.

How close are you to your minimum payout?

I think we still have a little bit of room.

I don’t have an exact number, but I think from -- you know, from the last time we looked I think -- I think would we’re probably $6-8m, somewhere on there.

Okay and where does that put you, given your’04 guidance, you know -- so where does that put you next year?

I really don’t have that tax piece yet, to be honest with you.

I can get it then -- and get back to you or you call me later, I can try to find it.

Okay, great, thanks.

Okay, yes.

Your next question comes from Louis Taylor of Deutsche Banc.

Yeah, hi just a follow-up on the re-development pipeline.

Can you -- of the active projects, can you give us a sense for when the projects will be completed?

Well, as I mentioned Louis, Lake Lugant (ph) target will open in -- at the end of the first quarter and we expect, basically all of our other retailers to be done at the end of the second quarter.

At Greenville, South Carolina; the Taylor Square development, that should be done I believe at the end of the second quarter.

It takes just about a year for Wal-Mart to build their store, all be it that we will be opening our retail stores this December.

In Maples, Florida, basically that project is done and Raphels (ph) will be opening within 30 days.

We have just about 6000 square feet of space that we’re presently filling up and then we’ll be done with that.

Tel-Twelve, you probably are looking for a third quarter of 2004 for The Meyer to be completed, all be it that our script stores -- you know, the new 11,000 square feet that we’re working on now will be open for this Christmas and we expect the two retailers that we will be announcing before the end of the year to be open for Easter for next year.

Troy (ph) Town center is basically done as of this date up for our work and we expect the Wal-Mart to be opened by summer of ‘04.

A, we will be able to give you a lot more information on that probably within the next 45 days when we make an official announcement on that.

But, we would assume that would take our share of the work on that re-development is basically done.

We have a major national anchor who will be expanding their store and that will probably take about 9 months.

Redevelopment B will be a replacement of a closed supermarket.

We expect construction to start probably in the fourth quarter of this year and that should take about 9 months.

And, redevelopment C, I referenced in my comments, which is the closed 84,000 square foot K-Mart that we brought back in Taylor, Michigan.

We expect to be signed with our new anchor tenant probably within 60 days and it will take a good 9 months for them to build their store.

Okay, thank you.

At this time there are no further questions.

Well we thank you all again for your attention, we know this is a day filled with conference calls so we wish you all luck and look forward to talking to you at the end of the next quarter.

Have a good day.

This concludes today’s conference call, you may now disconnect.