Rithm Property Trust Inc (RPT) 2003 Q4 法說會逐字稿

Good morning, my name is Amanda and I will be your conference facilitator today.

At this time I would like to welcome everyone to the Ramco-Gershenson Properties fourth-quarter year-end conference call.

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

After the speakers' remarks there will be a question-and-answer period. (OPERATOR INSTRUCTIONS) Ms. Hendershot you may began your conference.

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

At this time management would like me to inform you that certain statements made during this conference call which are not historical may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

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

Factors and risk that could cause actual results to differ from expectations are detailed in the press release and from time to time and accompanies filings with the SEC.

Additionally, we want to let everyone 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 the 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.

Good morning.

We are pleased you have joined us for our fourth-quarter and year-end 2003 conference call.

During the period of time when investors were searching for both yield and security, Ramco-Gershenson produced a 2003 total shareholder return of approximately 52 percent.

This follows two previous years with total returns of 33.5 percent in 2002 and 37 percent in 2001.

2003 was marked by a number of successes, both on the capital market side and the company operations.

In the fourth-quarter we raised $57 million, which exceeded the $50 million we raised in the second quarter, both through common stock offerings.

Each offering was launched at a time when our stock price was near an all-time high.

With each capital raise we identified a specific use for the majority of the proceeds, and they were quickly put to work.

In addition to utilizing most of the funds to grow our asset base through acquisitions, development and redevelopment, we fulfilled a pledge made in the early part of 2002 to reduce our debt to market capitalization in order to bring our leverage in line with our peer group.

Approximately 22 months ago our debt to market cap stood at 62.5 percent.

At year-end 2003 we are pleased to report that our ratio of debt to market capitalization stood at 43.7 percent.

Also, based on the efforts of our entire management team, the company's total capitalization at December 31st exceeded $1 billion.

Lest I forget to mention it, the fourth-quarter of last year will long be remembered by Rich Smith and myself as the time when the never-ending story of the tax issue finally came to an end.

Not only has the vague remnant of our predecessor company been put behind us, but its resolution resulted in a deficiency dividend of 13.1 cents to our shareholders of record on December 31st, which was funded by another company, Atlantic Realty Trust.

During 2003, the company was also very busy on the operations side of the ledger.

Our acquisition team acquired over $106 million of shopping centers in Michigan and Florida.

Each lends itself to a value-added opportunity.

As a matter-of-fact, we should be announcing within the next 30 to 60 days the expansion of the supermarket anchor at one of our 2003 acquisitions, less than 12 months from the date we purchased the center.

Other opportunities to increase net operating income and center value are in the planning stages through the expansion of anchors, the addition of retail space on undeveloped land, or the leasing and sale of out lots not priced in the acquisitions.

The purchase of shopping centers that represent approximately 1.4 million square feet were a major intervening factor to the companies exceeding $1 billion in total capitalization.

2003 was also a year when the Ramco management team continued its aggressive repositioning of core assets by either completing or commencing eight shopping center redevelopments.

Each project represents a significant change to the character, credit quality and net operating income of the center.

At our Tel-Twelve shopping center in metropolitan Detroit we will be replacing Kmart in 128,000 square feet with a Meijer discount and grocery superstore in 195,000 square feet.

Also at Tel-Twelve we opened a Lowes Home Improvement store in 144,000 square feet and announced the signing and opening of Pier 1 in 12,000 square feet and the commitment commencement of construction for a Michael's Craft store in 24,000 square feet.

The opening of the aforementioned anchors will complete the de-malling and redevelopment of Tel-Twelve, which was commenced in 2001.

Last year we also announced the expansion of two Wal-Mart stores to their superstore format.

We filled vacant Service Merchandise locations with Michael's Crafts and Marshalls Megastores.

We also replaced a vacant Jacobsen store with Bells Coastal Home in Sarasota, Florida.

We demolished a 78,000 square foot Montgomery Ward building to make way for a 125,000 square foot Target department store in Lakeland, Florida.

We filled a vacant Kmart in Novi, Michigan with a Gander Mountain superstore in 90,000 square feet.

And we breathed new life into our Highland Square shopping center in Crossville, Tennessee with the expansion and complete renovation of our Kroger supermarket anchor.

All of these achievements by our asset management team demonstrate our ability to seize opportunities and confront challenges as they arise.

These actions will have a significant impact on both our occupancy rate and center net operating income over the next 24 months.

It is my belief that our management team's expertise in the redevelopment of our acquisitions and core assets allow us to constantly update and reposition our shopping centers to be both ever responsive to our trade areas and a constant source of above average same-center income growth.

You should expect a number of additional announcements concerning new redevelopment projects in the first quarter of 2004 and throughout the year.

In 2003 our development team commenced the construction of a new center on the west side of the State of Michigan.

The new project, located in Grand Haven is anchored by a Home Depot.

The home improvement store should open in the second quarter of 2004, and our retail stores should be ready for occupancy in the third quarter.

We are also busy conducting due diligence on two additional shopping center developments.

At least one of which should be announced and construction commenced in the second half of 2004.

Lastly, our financial team refinanced a number of shopping centers in 2003, taking advantage of historically low, long-term interest rates.

We financed three shopping centers for over $48 million at an average interest rate of 5.3 percent for 10 years.

Our efforts to finance redeveloped centers that have increased and assets with existing debt at high interest rates that makes sense to refinance are ongoing, and we expect to report additional advantageous financings this year.

In summary, our activities and accomplishments in 2003 reflect a growth plan that ensures multi-year income and expansion combined with higher quality rental streams.

These results do not occur overnight.

Nor are they the result of several months or several quarters efforts.

Instead, our actions by design are intended to generate constant net income growth and increased center value.

At this time, I would like to introduce Rich Smith, our CFO who will put his back into an explanation of our numbers.

Thank you Dennis and good morning everyone.

For the fourth-quarter our diluted FFO per share was 54 cents, which meant first call estimates.

This represented a 25.6 percent increase from the 43 cents reported in 2002.

The primary reasons for the increase resulted from redevelopment properties coming back online, lease termination fees, the positive benefit of our acquisitions and gains realized on the sale of some residual property.

On a gross basis, our diluted FFO increased $3,835,000.

We went from 6 $6,606,000 in 2002 to $10,441,000 in 2003.

The 3,835,000 increase was made up of a $2,252,000 contribution from property acquisitions and $890,000 increase in income from our core assets and other operations and a $693,000 increase on the gain and sale of both outlots.

For the twelve months ended December 31, after taking into account our recent offering and the $3 million non-cash write-off of the Kmart straight line rent receivable our diluted FFO per share remained flat at $2.03.

In total, our diluted FFO increased $5,474,000 or 18.8 percent.

We went from $29,180,000 in 2002 up to $34,654,000 in 2003.

The $5,474,000 increase in FFO was for the most part the result of a $9,805,000 positive contribution from property acquisitions; a $1,828,000 gain on the sale of residual property in Grand Haven, Auburn Mile, Jackson West, Crossroads and our North Lakeland properties.

These increases were offset by a $2.8 million decrease in core assets and operations, a $3 million onetime non-cash write-off of our Kmart straight line rent receivable and a $382,000 reduction in income pertaining to the sales of our Hickory Corners and Ferndale Shopping Center.

Our operating statistics for the fourth-quarter include a reduction in occupancy which went from 90.5 percent in 2002 down to 89.7 percent in 2003.

This reduction related to several big box users, which for the most part had been released and will come back online and 2004.

For the quarter and same center NOI increased 8.4 percent.

The increase resulted from bringing back online, retenanting at Rosedale and termination fees recognized during the quarter.

For the three months ended December 31st, our FFO pay ratio went from 97.7 percent in 2002 to 77.8 percent in 2003.

And on an FAD basis the Company's payout ratio went from 114.1 percent in 2002 down to 87.2 percent in 2003.

For the twelve months ended, our same center NOI decreased 3.7 percent, but if you look at a more normalized statistic which excludes centers under redevelopment and the effects of Kmart straight line rent write-off our same center growth was 3.8 percent.

Our FFO pay ratio remained not changed at 82.8 percent excluding the $3 million write-off, our FFO pay ratio was 76.4 percent.

Our FAD payout ratio for the twelve months was 98.9 percent in 2002 compared to 84.4 percent in 2003.

Our leasing for the quarter included the renewal of twelve non-anchor leases at an average rate of $15.66 per foot, which was a 5.3 percent increase over the previous rental rates.

We also added 25 new non-anchor stores at an average rent of $13.53 per foot, which was 7.4 percent on our portfolio average.

In addition, we added three new anchors at an average rent of $7.67 per foot, which was 22 percent above our portfolio average.

For the twelve months ended we renewed 98 non-anchor leases at an average rent of $11.14 per foot, which was a 5.7 percent increase over the previous rental rates.

We added 77 new non-anchor stores at an average rent of $13.75 per foot, which was a 9.1 percent increase over our portfolio average.

And lastly, we added 10 new anchor stores at an average rent a $5.81 per foot, which was 7.6 percent below our portfolio average; however three of these leases were ground leases, which generated less rent per foot but will require little if any capital by the Company and this generally improves our overall return while reducing our risk.

Our total debt at quarter end was $454.4 million at an average rate of 6.5 percent at an average term remaining of about 4.4 years.

Only 8.5 percent of our debt was floating with an average rate of 3.3 percent and 91.5 percent was fixed at an average rate of 6.9 percent.

We had availability under our unsecured revolver of $48 million at year-end and all of our $40 million unsecured revolver was available as well.

Excluding the quarter the second quarter write-off, our EBITDA interest coverage increased for the twelve months ended from 2.11 times in 2002 up to 2.29 times in 2003.

For the quarter our debt to market cap improved from 56.5 percent at year-end 2002 down to 43.7 percent at 2003.

The improvement was a result of our stock offerings and an increase in our stock price which went from $19.75 to $28.30.

During the quarter the Company acquired about 290,000 square foot shopping center located in Warren, Michigan for $33 million.

We assumed debt of $11.8 million at a rate of 7.5 percent, and the center is anchored by Kroger's, TJ Maxx, Marshalls and OfficeMax.

Our capital expenditures for the quarter totaled $41.5 million; $33.3 million was spent on acquisitions; 6.9 on expansion renovation projects; $505,000 on development projects; 450,000 on non-recoverable CAPEX; and $384,000 on recoverable cam.

For the twelve months ended December 31st, our capital expenditures totaled $147.1 million.

We spent $108.7 million on acquisitions; $33.2 million on expansion renovation projects; $2.3 million on development projects; $1.7 million on non-recoverable CAPEX; and 1.2 on recoverable cam.

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

Lastly, we are reconfirming our 2004 guidance to between $2.35 and $2.40.

We expect the first quarter of 2004 to be comparable to Q4 of 2003, and we're showing gradual improvement for 2004 with most of our growth coming in the last half of the year.

Amanda, at this I would like to open the call for questions.

(OPERATOR INSTRUCTIONS) David Bromco (ph) with RBC.

I just wondered first if you could go over the cap rates, both the Merchant Square and Hoover Center acquisition, I didn't think I heard those.

Typically we don't deal with individual cap rates, David, for specific assets.

I can tell you, however, in this very aggressive cap rate market, we have not paid less than an 8.5 cap for any of our acquisitions.

I guess just a follow-up if you follow-up on those acquisitions.

Can you talk about -- you mentioned the anchors for both centers.

Can you talk about what anchors you own and don't own and maybe talk about the current occupancy of each center and potential for improved occupancy or market rents going forward?

At Hoover Eleven all of the anchors are a part from the shopping center and are owned by us.

The other specific reference that he is talking about?

At Merchant Square, we do not own the supermarket.

The Marshes supermarket, we own everything else.

Okay and the current occupancy?

Are both centers fully occupied or do you see some room to improve that?

Both centers have occupancy in the 90 percent area, but we see an ability in at least one of those two centers -- we are in negotiations about the potential expansion of at least one of the anchors.

There are outlot potential that we did not pay for in those developments.

And we see in a number of cases some subpar rents.

Great.

And just one last follow-up.

Given I know you guys last quarter you talked about 75 million in acquisitions for 2004 given that you already about have that, have you changed your outlook at all or is 75 million still the number you're budgeting?

I would not like to change at this moment anyway, David the projection.

Based upon what we acquired in '03, I would like to think that we should be able to exceed the $75 million number but I can tell you that on a number of centers that we bid on even as late as last week one that we thought required significant redevelopment.

So we put in a bid that we thought was moderately aggressive but still intelligent and conservative based upon the condition of the center and we were outbid.

So this is our area of expertise, and there are still plenty of people out there willing to pay up for these assets.

So again, I'd like to think that we can acquire more than the 75.

I am reasonably comfortable we can, but there are always surprises on how aggressive in our competitors want to be in buying the centers we are interested in bidding on.

Thanks a lot, and good luck.

Lou Taylor with Deutsche Bank.

Just as a follow-up to that, Dennis can you just talk about the acquisition pipeline a little bit in terms of how you think it is going to fall within the year?

I mean are you comfortable about with some stuff now or do you think that it might take the balance of the year to get to your 75?

We have at least three proposals out at the present time, you know four acquisitions.

The very first acquisition that we had planned on for the year had been later than the merchants where acquisition to the extent that we made that in January, we are already ahead of the curve.

But we are projecting an April, May, June, September and November acquisitions total.

And my gut tells me that if the first acquisition that we had absolutely planned on was sometime in April, we may indeed beat that.

So we are still out there aggressively looking for centers.

We are seeing some quality product.

Again, our view of the world is not to buy a supermarket anchored shopping center that is 100 percent leased, basically relatively new, with cap rates below 8 percent.

So we have to cull through a bunch of them in order to find centers that we feel we can be competitive on and yet still have upside potential through value addition.

And how about on the development front?

Do you have much in the pipeline that you expect to start this year?

Again, we have two centers, one of significant size that is at least been in the local papers down in Florida that is a substantial development.

And we would like to close on that in '04, but it will be at the very end of '04 maybe even the beginning of '05.

The other center, however, that we are well through work with the community, it is a shopping center in the state of Michigan, and we would like to think somewhere second or third quarter we should be able to break ground.

Great.

Thank you.

Philip Martin with Stifel Nicolaus.

Congratulations on a good quarter.

Looks like you're already making me look smart.

You were smart already.

Just a couple of questions.

Just jumping around a little bit here.

On the refinance shopping centers in '03, what was the interest rate on the refinanced portion?

I know you refinanced at an average rate of 5.3?

Basically look at East Towne, was about 12 million bucks.

I think we locked at about 5.45 percent.

Lantana was about $11 million.

That was 4.76 percent; and Chester Springs was $25 million at about 5.51.

Those were the rates you received?

That's right.

What did you replace?

What did that replace?

Were the rates 6, 7, 8 percent?

I think in all of those cases they were all floating-rate debt.

One, I think was on the line.

Two were in a joint venture that we had bought back, and then honestly I don't remember what they floated, what the spread was.

Okay and similar in '04 here on the refinancings you would expect mostly the floating-rate debt that you're going to fix at attractive long-term rates?

If you think of it I think we talked to this at the last conference call we have two developments have been out there for a while.

One in Auburn Mile and the other one down in Crossroads that had many firms on them that we were looking to replace right now.

Okay.

And then on the 77 new non-anchor stores opened throughout the year, you mentioned that rental rates were 9.1 percent above the average.

How does that compare to market?

How far above market, are you at market above market?

Where are you at there?

It depends -- center by center it will depend.

I'd like to think that in the majority of our resources we are establishing new market rates.

I know that one of the centers that we announced, Taylor Square where we went from about 133,000 square foot Kmart or Wal-Mart I'm sorry to 207,000 square feet, that is in Greenville, South Carolina.

We are setting significant new highs for rental rates.

But if you look back at our last couple of years you will see that we were anywhere from 15 to in the low 20s above portfolio average.

So on a year-to-year basis in part it will be pinned are you renewing leases in the Midwest, are you renewing leases in the Southeast?

Typically Midwest leases command a higher rental rate than we've been getting in the Southeast.

So if just to get idea of a range are you 5 to 10 percent above market?

You are setting apparently you're setting new highs.

Up by definition you are at market because it is a brand-new lease, and really what's happening is I think what Dennis is saying is given the locations we feel we have we may be on the higher side in the market itself.

But for our property I think the market is the market, whatever you can negotiate.

Okay.

How about -- a little different question here my last one.

Are you getting -- are you getting any data from your some of the newer tenants that you brought in anchor, non-anchor over the last year on a sales per foot basis where their sales per foot have increased significantly over the last year?

Looking specifically at consumer spending trends and then also centers that you brought online a year, year and a half ago from a redevelopments situation and they've just performed very, very well obviously your numbers speak to very good performance, but in terms of specific sales per foot data out of the retailers generally speaking what are you hearing from them?

Number one, the most telling numbers of course would be from our anchor tenants who really have no obligation to report to us or report to us only once a year.

So it's a little hard to tell other than when we interact with the managers and the regional managers all of whom have talked about increased consumer confidence.

Relative to sales per square foot, we are seeing modest increases, both in the fourth quarter and in January of this year.

But what we really are seeing not only on a national and regional level but on a local level as well is significantly higher confidence on the part of the retailers to make commitments to new locations which must obviously be reflective of their view that retail sales will continue to improve.

Okay perfect.

Thanks again.

(OPERATOR INSTRUCTIONS) Richard Moore with McDonald Investments.

Question for you on bankruptcies.

What does the bankruptcy season look like at the moment?

Well, in the words of Milk Cooper there is always going to be bankruptcies.

I'd like to think that for the most part we've gotten any serious issues with any significant tenants out of the way.

Probably if you were to try and identify a category, it might be in the toys area.

We have a limited number of Toys R Us and Kids R US stores.

However, that probably would be the most vulnerable area that we could imagine.

We always keep our eye on the supermarkets and their sales per square foot just to make sure that they continue to perform properly and if they are not, then we are in talking to them because we want to be proactive if there is going to be issues there.

Do I think that there may be some shakeout in the supermarket category?

More likely than not.

And yet as we gave you an example here of Kroger in our Crossville Shopping Center just expanded by about 30 percent and Wal-Mart is immediately next-door.

So you are finding certain supermarket retailers are hitching up their pants and saying we can be competitive.

We may need to be a larger store we may need to be more attractive and there is going to be survivors and there is going to the problem tenants in that area.

Thanks Dennis.

Would you characterize this bankruptcy period as maybe lighter than last year you think given the rising economy?

The moment I say that I will be proven wrong.

So let me just say this.

I'm optimistic that with an improving economy and the number of retailers who we shook out in the last 18 to 24 months I am more sanguine about 2004.

Did you guys put a -- did you give a number for lease termination fees for the quarter?

For 4Q?

We did not yet -- hold on for a second.

I can give it to you.

Roughly about 300,000 bucks.

Okay, then I've got to ask you guys a couple questions.

I'm looking at guidance and I am trying to figure out how we get to where you guys are guiding with a 54 cent first quarter, which is kind of where I am coming out in our model as well.

Any thoughts -- you had an average 60 cents a quarter after that.

Where does that kind of growth come from?

I think you've got some of these anchors coming back online.

I think we had talked about this before.

If some of the development we are looking at potentially could take off balance sheet in generate some fees there.

I think that's most of what you are seeing is bringing some properties back online as well as the anchors.

Rich, are those things that are certain to happen?

I mean, you've modeled them in because you feel very comfortable they're going to happen, or is there some chance some of them might not happen?

If you go through the anchors, I think that we are fairly certain to happen once the deal is signed.

They are still at least one that we're in negotiations on, which we think will happen in '04.

But you never say never is what it amounts to.

Acquisitions, I think Lou asked that question before and Dennis answered, I think we kind of spread those out through the year for our plan.

Right now we're a little bit ahead of plan but you never know what happens there.

And development is probably the same way.

We think we are on track; we're making good progress with the tenants and good progress in the communities.

But it is just that.

Our plan for the year and it can move one way or the other.

But right now I think it is a good plan.

Any thoughts on land sales for the year?

I think there could be some, but if you were to think of land sales where we have the potential probably is Crossroads where we've got 20 acres available tenant each side.

Most of the Auburn Miles all spoken for.

There may be a little pieces here and there.

Our general philosophy is not to do land sales but from time to time we will do some to keep to obtain a tenant we want to keep and keep them from going to a competitive site.

But right now I think that, again I think if we were to look at some things, and I think we are kicking around some ideas with the 20 acres at Crossroads.

Let me just add to Richard's comments, and that is that we will experience some land sales in '04 just based on the fact that certain of the tenancies that we either want to bring into a development or as we start a new development insist upon owning their own sites.

So that is going to generate a number of land sales just by itself.

And have you got an occupancy target for the year?

I think we will be in the low to mid-90s.

Rich, low to mid-90s, like 91 or 92 type low to mid-90s?

I will go a little higher.

I would say somewhere between 92 and 95.

Okay, I got you.

It depends on whether you look at an average, Rich, or year end.

For an average it maybe closer to the 93 percent, I think but to get to that average I think you would be higher at year end.

That's fair.

Great.

And real estate taxes, they were up I assume that's probably some sort of timing thing and they come down, is that true?

I think timing of acquisitions as well as a result of the properties we acquired.

Okay, and management fee income, that was down as well.

What happens there?

I think if you look at -- management fees the biggest reason they are down is you look at Q2 was high from some leasing fees we generated on Crossroads before we brought that back on balance sheet.

To the extent we do some development off balance sheet you've got the possibility of generating some more leasing development fees there.

So again, it depends on what happens with those.

They could be up.

And G&A, what you thinking there, Rich?

I think G&A is going to be up.

I think we had the benefit in the Michigan single business tax from the Brownfield credits, and capital acquisition reduction from last year that really helped us a little bit.

I think as that burns off, we will be at SPT (ph) (indiscernible) , but I would expect our G&A to be probably in the $10 million range.

There is this uptick in this receivable, the tenant receivable what is that exactly I think it was $10 million higher this quarter?

Am I looking at that right, Rich?

I think it was 18 and change in this quarter and I think it was 8 in the third quarter?

I think what you have is probably the biggest part of that was the receivable that was due for the deficiency (indiscernible) from Atlantic.

Okay, so have you guys paid that already, or you just look at it as a receivable?

Is that how you do that?

That was paid and collected.

It was paid to our shareholders on January 20th, and we collected I think maybe a day or two later from Atlanta one day later.

Okay.

I got you.

And the last thing is, I was looking at the occupancies and I noticed George was down, anything in particular going on there?

Let me finish on that.

I think one was the deficiency dividend, the other was the taxes and interest due.

What happens with deficiency is when you pay your deficiency dividend than the IRS assesses you for the taxes and interest.

So basically we have a receivable, payable on our books, receivable from Atlantic, a payable to the IRS for that.

That doesn't flow through our income statement.

I got you.

Good.

Thanks and what happened in Georgia?

Occupancy dropping like it did?

Basically what we had is it is one of the redevelopments we had talked about that we haven't talked about that we got control of the space from a grocer.

Okay.

So that tenant obviously is no longer -- it is one of the termination fees we've got related to that.

We are waiting to announce the signing of the anchor to replace them.

Okay.

Great.

Thanks a lot, guys.

Philip Martin of Stifel Nicolaus.

One follow question here.

On the anchors expected to come online in '04, can you give some sense of the timing of that?

And I guess a kind of dovetails my next question, which is your occupancy trend here throughout the year if we are going to go from just south of 90 percent now to call it 93 to 94 percent by year-end?

Can you just give us a little trend line there?

I think, Philip, let me say it this way.

Gander Mountain, as an example, in Novi is a 90,000 square foot user that we expect to come on in the second quarter of this year.

We expect to turn over the site the 128,000 square foot Kmart building in April of '04 to Meijer.

And Meijer will start construction at that point in time and probably will finish either the fourth quarter of this year or the first quarter of '05.

So throughout the year we have a number of these significant changes ramping up.

We had Pier 1 opened at Tel-Twelve in December, and we are going to have Michael's Crafts in 34,000 square feet opening in April or May of this year.

So we have a significant number of these tenants that I at least referenced in general opening up either in the spring or in the fall of 2004 and of course because they are all such significant users, you will see major jumps in occupancy numbers both in the spring and fall.

Okay, perfect.

Thank you.

At this time, sir, there are no further questions.

Are there any closing remarks?

I just want to take a moment to thank you all for your interest and for your attention.

Look forward to talking to you again at the end of the first quarter.

Thank you for participating in today's conference call.

You may now disconnect.