Rithm Property Trust Inc (RPT) 2008 Q1 法說會逐字稿

Greetings, ladies and gentlemen, and welcome to the Ramco-Gershenson Property Trust First Quarter 2008 Earnings Conference Call. (OPERATOR INSTRUCTIONS)

I would now -- it is now my pleasure to introduce your host, Ms. Dawn Hendershot, Director of Investor Relations. Thank you. You may begin.

Good morning, and thank you for joining us for Ramco-Gershenson Properties Trust First Quarter Conference Call. I am hopeful that everyone received our press release and supplemental financial package, which are available on our Web site at rgpt.com.

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 assumption, 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 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.

I would now like to introduce Dennis Gershenson, President and Chief Executive Officer; Richard Smith, Chief Financial Officer; and Thomas Litzler, Executive Vice President of Development. And at this time, I'd like to turn the call over to Dennis for his opening remarks.

Thank you, Dawn. And welcome, everyone.

We're pleased to report first quarter FFO results of $0.62, which is in line with our projections for the year. Our 2008 business plan is also on track. It involves the value-add redevelopment of a substantial number of our existing centers, the pursuit of four new developments and the acquisition of a limited number of opportunistic, value-add shopping centers for our off-balance-sheet joint ventures.

So how are we doing? First, I will not take up your valuable time by covering my view of the state of the national economy, nor its effects on our industry. You've certainly heard enough from others. I will tell you, however, that the economic climate's most direct impact on Ramco-Gershenson is an increase in receivables from local tenancies. We are also experiencing a desire by some new mid-box and anchor retailers to push off store openings as much as six to nine months, which modestly affects the timing of both our redevelopment and development projects.

As always, one of the best indicators of our performance in these challenging times is reflected in our portfolio metrics. For the first three months of 2008, we renewed 62 leases at an average increase of 13% over prior rental rates. And we opened up 21 new stores at rental rates 11% above our portfolio average.

To give you a sense of our leasing velocity -- in the first quarter of 2007, when retailers were relatively unaware of the pending change in the economy, we renewed agreements with 40 of our existing tenants, and we opened 27 new retail spaces. Thus, in the first quarter of 2008, we renewed more leases and opened approximately the same number of new tenants as we did a year ago.

The leasing statistics in our supplement for 2008 include only those stores that opened in the first quarter. Therefore it's also important to understand how we're doing in signing new agreements this year. During the first 100 days of 2008, we have signed 24 new leases at an average rental rate of $16.66. This average rental number is affected by the inclusion of five larger-than-average spaces leased to national retailers -- three at 8,000 square feet and two at 10,000 square feet.

Thus, even with 44,000 square feet encompassing only five spaces, our new leases signed during 2008 on an overall basis exceeds our portfolio average. Also, of the 23 leases that expired and were not renewed during the first quarter, the expiration of seven of these tenancies were allowed to occur to make way for the expansion or the addition of a new anchor as part of our current value-add redevelopment plans.

Other factors supporting a solid asset base include -- a same-center operating expense recovery ratio of 101%, a stable occupancy rate, and, although modest, a 1.6% increase in same-center net operating income.

As positive as these statistics are, we're aware of the potential for tenant issues in this economic environment. And we are working proactively to stay ahead of any potential problems in our portfolio.

We continue to make significant progress on our value-add redevelopments. In our wholly owned portfolio, we have commenced construction on the 55,000-square foot Hobby Lobby at Oak Brook Square in Flint, Michigan. We are finalizing a lease with an 80,000-square foot softline retailer in West Allis, Wisconsin. At our Hoover Eleven shopping center in Warren, Michigan, Kroger will commence the construction of the third expansion to their premises that summer, bringing their store size to 72,500 square feet.

In our supplement, under Future Projects, we have listed Rivertown Square in Deerfield Beach, Florida. Since the end of the quarter, and earlier than planned, we have signed a lease with Bell's Department Store to join our tenant lineup at this center in 62,000 square feet.

Continuing with this progress report -- our off-balance-sheet value-add redevelopments include Paulding Pavilion in Hiram, Georgia, where we are under construction with a 40,000-square foot sports authority. In the Troy marketplace in Troy, Michigan, L.A. Fitness has opened in over 45,000 square feet.

We are also announcing today the signing of a lease with Plum Market, an upscale regional specialty grocer in 37,000 square feet, for the Old Orchard shopping center in West Bloomfield, Michigan, which will be a transformational event for this asset. And we have signed a lease with Staples in 20,000 square feet for our newly acquired Market Plaza in Glen Ellen, Illinois.

At a number of our other shopping centers, both on- and off-balance-sheet, where redevelopments are planned, we are well through negotiations for leases with national retailers who will either expand their existing premises or will be additions to our centers. We expect numerous signings during the second quarter.

I could not be more proud of our management team's efforts in the area of value-add redevelopments. And I am excited about our plans for the balance of the year.

On the development front -- we are making progress on all four of our projects. At our Hartland Town Square in Hartland, Michigan, we have just closed on the sale of 21 acres to Meyer for the construction of a 192,000-square foot grocer discount department superstore. We are presently negotiating a purchase agreement with a Home Improvement store on 16 acres to join Meyer. And we are actively working with three mid-box retailers for the balance of the larger spaces.

Construction, starting with site preparation for the Meyer parcel, plus the off-site infrastructure work, will begin this summer. Hartland Town Square is part of an off-balance-sheet joint venture.

At our Town Center at Aquia, we have secured all of the required entitlements to move this development forward. Our primary office building tenant, Northrop Grumman, has moved into their premises, and we have signed a lease with another defense contractor in 9,000 square feet. The office building of approximately 100,000 square feet is now over 77% leased.

In addition, we are announcing today the execution of the lease with Regal Theaters for a state-of-the-art 14-screen, 55,000-square foot cinema. Regal has been a tenant at this shopping center for years in a much smaller format. And this new, enlarged Regal should serve as an important catalyst for the rest of the development.

In Lakeland, Florida, we now control all the land needed to build a 375,000-square foot development adjacent to our 300,000-square foot Shops of Lakeland, which is anchored by Target, Michael's, Linens 'n Things and Ashley Furniture.

Securing the entitlements necessary for the development will take the balance of 2008. We have generated a significant amount of anchor tenant interest from national retailers who are not presently represented in this densely populated trade area. We would expect a construction start in the second quarter of 2009.

Lastly, we are well into the entitlement process at our North Point Town Center in Jackson, Michigan. As many of you may know, we own the highly successful 650,000-square foot Jackson Crossing shopping center, directly across the expressway from this site. We are pursuing a development here based on the demand from national anchor and mid-box retailers who cannot be accommodated in our existing center. This project will require approximately 12 months to secure all the necessary governmental approvals.

On the acquisition front -- subsequent to the end of the quarter, our Heitman State of Florida joint venture purchased the Rolling Meadows Shopping Center in metropolitan Chicago. This 130,000-square foot asset is anchored by a Jewel-Osco supermarket. There is a 20,000-square foot box which was not priced as part of the acquisition. Plus we have identified the ability to add two outlots.

During due diligence, we commenced negotiations with a bank to land lease one of these outlots. Just this one agreement with the bank will increase our internal rate of return on the center over a five-year holding period by over 150 basis points.

I know you're all interested in an update on our capital status. Rich Smith will cover the details of our debt expirations, which are in good shape and do not cause us any concern. In our year-end call, we outlined the fact that our 2008 capital requirements are relatively modest, at $38 million. Upon the completion of an agreement with a partner for the off-balance-sheet development of Aquia and the Lakeland two projects, we will generate over $40 million in liquidity when these new relationships close.

Further, we continue to pursue our new joint venture opportunity, which has taken longer to complete than anticipated due to the general economic conditions and a slower, more cautious approach by those who would commit capital to our asset class.

As we continue these efforts, we will also pursue the contribution of our core shopping centers on a one-off basis to our existing joint ventures, as we did earlier this year with ING. Further, we have been approached by a number of prospective buyers for several of our more stable assets.

We are confident that all of these activities will generate the capital necessary to maintain a healthy debt-to-equity ratio, and in turn will be more than adequate to cover the capital needs for our outlying business plan, as well as provide us sufficient dry powder to pursue opportunities for growth and increased shareholder value.

I would now like to turn this call over to Rich Smith, who will briefly fill you in on our financial details.

Thank you, Dennis, and good morning, everyone.

For the quarter, our diluted FFO per share was $0.62, which was in line with our business plan. This represented a $0.04 decrease compared to the $0.66 reported in 2007. As outlined in our year-end conference call, the decrease was anticipated and the result of reduced acquisition and development fees, as well as from taking assets off-line for redevelopment.

Our 97% operating expense recovery ratio was slightly below our plan due to adjustments to actual for billing accruals made in 2007. As 2008 normalizes, we expect our recovery ratio to be in the high 90% range. Our $3.8 million of G&A expense was at plan and is tracking our expectations of between $15.5 million and $16 million for the year.

As you are aware, the current mortgage environment's difficult, with fewer lenders in the market, all with tougher underwriting requirements. In spite of this, we recently closed on loans at favorable terms and rates for acquisitions made in our Heitman joint venture. In the future, we'll continue to be in the market on a limited basis to replace maturing loans, as well as to obtain construction financing for our new developments.

We have four debt instruments coming due in 2008. Our $8.5 million Beacon Square construction loan has been extended until November. Upon maturity, we'll either place permanent debt on the project or use the asset to support our line.

We're currently in the market to replace the $43.3 million mortgage on our Plaza at Delray shopping center, which matures in August. We don't expect any issues refinancing the center, since the current loan-to-value is approximately 60%.

As we discussed on the prior call, we plan to exercise our right to extend our $150 million credit facility when it matures in December. Assuming our line of credit and unsecured term loan were fully drawn, our loan-to-value for the assets supporting the facilities would be approximately 50%.

And lastly, our $40 million secured term loan on Northwest Crossing, Taylor Square and Ridgeview Crossing mature in December of '08. Both Northwest Crossing and Taylor's include new Wal-Mart Supercenters that were part of previous redevelopments. We expect to sell or refinance some or all of these assets; in either case, we are confident that the proceeds will be more than sufficient to retire the existing debt, since the combined loan-to-value for the three assets is less than 60%.

Although we have a robust development and redevelopment plan, our use of off-balance-sheet joint venture partners will mitigate risk and minimize our capital needs. Our current development and redevelopments will cover multiple years. The projects, along with our planned 2008 acquisitions, are projected to cost $525 million. Of the $525 million, $386 million will be spent on development, $75 million on acquisitions, and $64 million on redevelopment projects.

After considering both existing and anticipated joint venture partner equity contributions and financings, our share of capital is expected to be approximately $94 million. Of the $94 million, we have through the first quarter spent $33.7 million, leaving about $60.4 million to be spent over the next couple of years. For the balance of 2008, we expect our capital requirements to be only $32.4 million.

In the first quarter, we completed the $74 million installment sale of Mission Bay to our joint venture partner with ING. As a result, we reduced the Company's secured debt by $40.5 million. And after paying our share of transaction costs and making our equity contributions, we generated an additional $23.5 million, which was used to pay down our revolving line of credit, freeing up availability to execute our business plan.

And as Dennis discussed, for the balance of 2008, we anticipate raising capital by selling additional assets to existing joint ventures, as well as forming additional relationships, [seeded] with development and existing centers; then selling existing centers that are owned by the Company. We believe this approach, along with line availability, which was approximately $37 million at quarter end, will be sufficient to fund all of our capital needs.

And lastly, we reaffirm our 2008 diluted FFO per share guidance of between $2.47 and $2.53. We expect the growth to accelerate through the fourth quarter as a number of the redevelopments begin to stabilize. And we strongly believe our business plan has been designed to increase our overall value of our properties to generate reliable and improved cash flows, and accordingly should increase shareholder value.

Bryan, like to open the call for questions.

(OPERATOR INSTRUCTIONS) Philip Martin, Cantor Fitzgerald.

Good morning, gentlemen.

Hi, Philip.

Just -- Dennis, you may have mentioned this in the first couple minutes of the call; I jumped on a tad late -- but the rental growth that you saw was in the Michigan portfolio versus the rest of the portfolio. Could you break that down for us a little bit, since Michigan is always a source of concern?

I can supply that to you later; I do not have that for the call. But what I will tell you is this -- is that the -- both the Michigan renewals and the new leases that we signed in Michigan were all at very strong rental rates. Our occupancy is holding up in Michigan, and we have a number of projects that we continue to move on the redevelopment that I outlined, where people are indeed signing leases.

I will tell you that the Michigan average leased and occupied is almost 96%.

In terms of the retention rate -- and I know of some of the leases within the entire portfolio were allowed to expire, because you wanted to make room for anchors as you're repositioning individual assets -- but overall, what has your retention rate been? And given where we are in this economy right now, where do you think retention will be in '08?

Well, historically, we have retained about 75% of our tenants when their leases roll over. If you take out the seven that we specifically let expire, for the first quarter we did even better than that ratio. But we've been around for a very long time, and in good times and bad times; I would say that that percentage is probably still pretty good -- around 75%.

And indications from your leasing people -- I'm sure the leasing people are out there talking to tenants with leases expiring this year. Are the discussions going pretty well? And I'm assuming by your last comment that they probably are, as retention looks like it is expected to be about the same.

Yes. As I said in some of my prepared remarks, some people are postponing their occupancy for a period of time. But the vast majority of tenants, especially the national tenants, have -- their people have been around long enough to know that we're truly in a cycle. That cycle will end. I'm not prepared and they aren't prepared to say how long that cycle will be, but the cycle won't be years.

As a matter of fact, we are on the cusp -- and will probably, hopefully, announce it next quarter -- the signing of two very important national tenants to one of our shopping centers in Florida, where they don't really want to take occupancy until either late 2009 or the spring of 2010. So they're making commitments, but they are looking very hard at an opening schedule that will probably assure them that they're back into accelerating retail times.

Okay.

And how much of the same-store growth that you saw here in the first quarter, which I believe was 1.8, is related to the seven tenants that you chose not to renew the leases?

Philip, I need to get the -- I don't have that information under my fingertips.

Okay. I mean, it's --

Good question.

I mean, is this -- I know there was some slight slippage in occupancy in the same-store, but I'm just trying to -- if we were kind of at an average 3.5% NOI growth rate last year, and now we're at 1.8, and I believe you were 5.7 in the fourth -- I'm just trying to understand that move. And is this a run rate? I know I'm taking down my same-store growth estimates kind of across the board, but I'm just trying to understand the impact within your portfolio. So that would help if we can talk off-line about that.

Okay.

Last question I have, Rolling Meadows -- the five-year IRR -- I mean, this is a redevelopment repositioning, some value-add here -- what is that five-year IRR estimate roughly?

Mid-teens.

Mid-teens. Okay.

Okay. Thank you very much.

[Nathan Isbee, Stifel Nicolaus].

Hi, good morning.

Good morning, Nate.

Dennis, you'd mentioned before [in your] prepared remarks about the -- some of the small shop space in Florida and the associated weakness there. But at the same time, if I'm understanding you correctly, you're saying that the same-store occupancy drop this quarter was more for tenants that you chose not to renew. And I'm just curious -- does that portend a further occupancy drop, as some of the small shop space closes in the next -- in the coming quarters?

Well, I'm not sure we're on the same page here. We chose not to renew certain tenants because they were in the way of expansions or replacements.

As an example, in Rivertown, which is in Deerfield Beach on US-1, we had several tenants in the path of the new construction for the Bell's Department Store. We were pleased not to have to worry about those tenants. Otherwise, we may have had to have paid them termination fees. So that's the kind of decisions we made not to renew the leases.

Okay. But what we're hearing -- and I think we've discussed previously that some of the small shop, the local mom-and-pops down in Florida, might be seeing some weakness, given the economy.

Yes, that's true.

And I'm just curious what that means. Should we expect a further occupancy drop in the coming quarters?

Well, number one, we have always been an organization that tries very hard to work with our small tenants. In instances where they're prepared to be forthright with us and give us their sales volumes and a commitment to stay with the asset, then we'll work out a payment plan with them. It's always harder to replace a tenant than to work with a tenant.

At the beginning of the year, we increased our allowance for doubtful accounts. So we have taken into consideration -- and that's part of our projection of FFO -- some slippage, especially in the Florida market. But the flip side of that is that we are seeing an increase through the efforts of our Florida leasing people. And we have brought some canvassers on as well to increase our efforts in Florida. And we're seeing results from that.

So I think that we'd -- I'd probably be able to give you a better indication on exactly how we're doing at the end of the second quarter. And of course, we certainly could talk both to you and to the other analysts on the phone after the ICSC convention, when we really have a much better handle on what the national tenants are doing.

Okay, great.

And I'm not sure if you mentioned this earlier, but do you have any update on the Linens space in your portfolio?

We obviously are in contact with Linens. We have seven locations. Of the seven, three are on-balance sheet, four are off-balance-sheet. Of the seven, just based on our knowledge of how they're doing, only two of them look like there may be any question about them. And those two -- of course, I take no prude or pleasure in saying they're part of the off-balance-sheet as opposed to on-balance sheet. But heaven forbid there was an impact, it wouldn't be the 100% impact on us.

Okay, great. Thank you.

[Rich Moore, RBC Capital Markets].

Hello, good morning, guys.

Good morning, Rich.

A question for you on -- and you kind of addressed this a bit, I think, Dennis -- but on the -- I think you had said last quarter there was going to be $4.3 million of lost rent from properties that you brought down for redevelopment. And $2 million of that was coming from Aquia, and $2.3 million from elsewhere. And I'm curious -- how did that shake out in the first quarter? Because I know we put some of that into the first quarter. And then, what do you expect for the -- maybe you have a better view of what's going on -- what do you expect in terms of lost base rent in maybe the second, third and fourth quarters?

Rich, I think we -- when we talked on the conference call, I think that -- I'm not sure people realize that Aquia was where it was. I mean, most of the tenants that we displaced or terminated -- it really happened toward the end of the year, very early in the first quarter. If you go into Aquia now, you'll see that the center's being demolished.

So I think that people, maybe in their guidance or in their estimates, thought that some of Aquia was going to happen throughout the year, when in fact most of it during our first -- our year-end conference call had already happened.

Okay. And then, Rich, and there other redevelopments where you're going to lose additional -- because I thought that was only two --

I think that was a big one. We've got another one that I think is there as well. So I think most -- the lion's share of the pain should be in already. There may be a few more. But the two centers I can think of -- Aquia being one -- is done at this point in time.

Okay, so not much more probably to go for the remainder of the year -- is that what you're thinking?

Yes --

Again, Rich, whether or not people who are looking for quarter-to-quarter growth appreciate our story, because we are truly committed to making sure that our assets are the best that they can be.

And let me use Rivertown as an example. We have an office supply operation there whose lease expires in September; approximately, oh, maybe 18,000 square feet of small shops next to that. We have -- as a matter of fact, I think, in the first quarter, the last of the small shops in the 18,000 square feet vacated. And our office supply operation will vacate in September. And we will immediately turn around and demolish all of that space for Bell's to start construction on their building, and they're going to build their own building. So in a sense, we'll be able to straight-line that, probably within three months.

So you have this ebb and flow of income coming on, with people like Northrop Grumman who are now in and operating, and then you're going to have some income going off, like the office supply in the third quarter.

Okay, very good. Thank you, Dennis.

And then on the two joint venture partners that you've been talking about for awhile now -- where are you exactly with getting a partner for Aquia, and then also for this -- you said you're having -- it's a little harder to find a partner for the on-balance sheet assets that you want to move off. But have you got some thoughts on when that might occur, or is that still pretty far down the road?

No, no. Well, first of all, we have three parties interested in being our partner in Aquia. Each one of them -- I'm pleased to announce, as I did on the call, that we signed the lease with Regal. And to be honest with you, we got the Regal lease signed -- their signature in yesterday.

So we are as interested as our prospective partners are in making sure that we have what we would consider that critical mass. That has not slowed down our efforts as far as the construction is concerned. And that's why I say the moment we close with one of those three parties, we'll get an immediate improvement in our debt metrics, as we take those loans off-balance sheet and close the construction loan, and therefore repay our lines.

As far as the off-balance sheet venture on our stable assets -- there are a variety of elements that impact that, not the least of which is that we have to put new financing on all of the assets that will become part of the joint venture.

And as Rich addressed in his comments, there are a limited number of lenders out there. We've had a couple of false starts with lenders, where they've indicated a desire to work with us, only to get down the road 30 days and have them call and say, Sorry, the window's just closed.

Or you had one the same day -- talked to him in the morning; in the afternoon, the window closed. So it's a strange market out there for --

But we're very focused on this, Rich. And I do know from reading your coverage this morning that you are focused on it as well. But rest assured that we are not going to wake up one morning and say, Oh, damn, I guess we're out of money.

So our plans truly take into consideration, as I said at the end of my remarks, not only covering our 2008 business plan, but having enough capital so that you and your peers will be comfortable with our capital structure.

Okay. And then -- Dennis, thank you.

And then, as far as the size of that venture, are you still targeting $250 million, $260 million? Is that --

No --

-- or has that changed?

The number that we had used always included -- when we originally approached this, we thought that we would have the same partner for both Aquia as the development, as well as the core assets. What we have found is that you have one group of people interested in the development approach and another group interested in value-add existing assets.

So what you'll find at the end of the day will -- that will break itself out between several ventures -- one on the development side, and then the other on the stable. And the stable's probably in the 160 to 175, and then the rest is made up with the developments.

Okay.

And then on Aquia -- is that probably going to be this quarter, are you thinking, that you'll have the partner?

I'd like to think so. But if it isn't the second, it'll be the third quarter for sure.

Okay. Good, thank you.

And then, as far as other JV purchases for your -- other acquisitions for your other JVs -- you made one in the quarter. Is that still something you're looking for? Because I was sort of thinking maybe you weren't going to do any acquisitions. Are you just saying on-balance sheet acquisitions are off the table, and you're still looking for your partners?

On-balance sheet is definitely off the table. There's a balance because our partners -- and the one venture that we're open to buy the moment is the Heitman State of Florida venture. And they are looking for low- to mid-teens internal rates of return. And yet, they only want to get involved in assets that are relatively stable. So that makes certain types of acquisitions a little more problematic, and that's why we've backed away. We'll make maybe a maximum of $75 million this year. Whether or not we can actually get there or not, I don't know.

The interesting thing about our purchase at Rolling Meadows is indeed that we are able to identify mid-teens returns so quickly on that. And that's exactly the type of acquisition that our partner's looking for.

Okay. Okay, very good.

And then, the slippage in the development timing, you had mentioned I think, was primarily due to big-boxes pushing -- maybe pushing things down further -- is that right?

Well, again, when you talk about slippage -- and when we put out our supplement and tried to give you as much information as we could, we really identify the dates when we believed these assets would be stabilized. And if you look on those schedules, you're talking 2010, 2011.

So when you look at Lakeland and you look at Jackson, Michigan, we were always planning like 2009 start. So we've got at both of those at least a year, or maybe a little bit more, before we would ever contemplate putting a shovel in the ground.

We have a number of LOIs on one of those projects. But from our point of view, an LOI is not sufficient for us to be talking to you about the percent leased or the percent of people who are "committed." There's a long distance between an LOI and a signed lease. And we do not like to say anything until we have signed leases.

Okay. And then on that same topic, are the big-box guys pushing back a bit? I've kind of heard that on the rent line, the big-box guys going into new developments are looking for basically a rent reduction. Are you conceding that as well, maybe lowering the yields a bit on these developments?

Certain of the anchor tenants obviously smell blood in the water and know that as these times are somewhat more difficult, they are trying very hard to drive a much more difficult bargain. We believe we're relatively fortunate in having high-quality sites right at expressway exits in densely populated areas. And the situation we find ourselves in is that if it isn't going to be one of those boxes, the anchors, it could be another.

So we have, fortunately, the ability to talk to several of these users. And although we will not maximize the profit on the sale to some of these, we are absolutely not going to take the kind of a hit that some people are talking about.

Okay.

And just two more quick ones, guys -- Rich, on the other comprehensive income, that was down pretty sharply. Is that hedging activity that drives that down?

Yes. That basically is our swaps (inaudible) holding in there.

Okay, thank you, I kind of had a feeling it was.

And then the last thing, Dennis -- you reiterated guidance for 2008. Are you also reiterating the 3.10 to 3.15 for 2010?

Oh, the --

FFO project.

Yes. I still feel confident that based upon bringing our redevelopments online and our plans for development that -- as I said, we should be, in 2010, approximately where we would be if we had 5 to 6% growth from the $2.62 for '07.

Great. Thank you, guys.

(OPERATOR INSTRUCTIONS)

Seeing as there are no further questions, I'd like to turn the call back to management for any concluding remarks.

Once again, I would just like to say I appreciate everybody's interest and their time. And we look forward to seeing some of you in Las Vegas, at the ICSC conference. And for the rest of you, we'll talk in about 90 days. Thank you again.

Ladies and gentlemen, this concludes today's Teleconference. Thank you all for your participation.