Rithm Property Trust Inc (RPT) 2012 Q1 法說會逐字稿

Greetings, and welcome to Ramco-Gershenson Properties Trust First Quarter 2012 Earnings Conference Call.

At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator instructions)

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Ms. Dawn Hendershot, Director of Investor Relations for Ramco-Gershenson. Thank you. Ms. Hendershot, you may begin.

Good morning, and thank you for joining us for Ramco-Gershenson's first quarter conference call. Joining me today are Dennis Gershenson, President and Chief Executive Officer, and Gregory Andrews, Chief Financial Officer.

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.

Additionally, 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.

Although we believe that the expectations reflected in any forward-looking statements are based on reasonable assumptions, factors or risks that could cause actual results to differ from expectations are detailed in the quarterly press release.

I would now like to turn the call over to Dennis for his opening remarks.

Thank you, Dawn. Good morning, ladies and gentlemen.

It's with real pleasure that I report our company's first quarter solid achievements in growing income, improving shopping center fundamentals, and advancing our capital recycling program while simultaneously promoting a sound capital structure.

These results provide concrete evidence of significant advances in the repositioning of our portfolio and the achievement of a much stronger balance sheet.

Our efforts to chart a course that supports growth in long-term shareholder value were evident in our fourth quarter 2011 numbers and are even more impactful in the statistics we are reporting today.

As it relates to our shopping center performance, we believe that the momentum we've created over the last 12 months, which was reflected in this quarter's same center net operating income growth of 3.3% and a core asset occupancy consistently above 93%, will continue to build throughout 2012 and beyond.

Supporting this conclusion, in the first quarter, we achieved meaningful, positive leasing spreads across the board. We also continued to improve our shop leased occupancy, a critical factor in driving income growth by 50 basis points.

One reason for our success in achieving smaller tenant occupancy gains is the number of multi-store agreements we are signing in the soft goods category of 3,000 to 5,000 square feet with national retailers, including Carter's, Route 21, Dots, and Torrid, as these uses position themselves among our new anchor tenancies.

In addition, tenant retention at growing rental rates remained strong at over 85%. Subsequent to quarter end, we signed a new anchor lease with Ross Dress for Less to replace a large portion of the Sweet Bay Grocery, which closed in the first quarter at our Village Lakes Center in Florida.

Supporting our goal of generating consistent, sustainable income growth, management has the responsibility to assess, anticipate, and respond to an ever-changing retail environment. Thus, we have been actively engaged in a conscious effort to reduce our exposure to certain retail categories and to proactively work with those retailers who anticipate closing stores or who are downsizing their footprint.

By way of example, over the last 18 months, we have worked with our three office supply retailers to replace their tenancy where sales fell short of their expectations and where we could constructively achieve a reduction in our exposure to that sector. Since initiating this program, we have decreased the number of office supply stores in our portfolio from 30 to 24.

We have also been in active negotiations with certain mid-box tenants who were desirous of downsizing. These store size reductions have created the opportunity to lease space to a growing list of national in-between-sized retail uses occupying 8 to 11,000 square feet, including Ulta, Five Below, and Shoe Carnival.

Historically, community shopping centers consisted of large-format anchors and small ancillary retailers. Thus, the downsizing of the mid-boxes has created the opportunity to accommodate these exciting retail concepts. An additional benefit to signing these in-between retailers, like Ulta, is that their tenancy generates interest from other complementary operations.

Also in the category of large-format retailers who are working to redefine their identity, Best Buy has recently announced a series of store closings, and they have revised their prototypical footprint, which is now smaller than many of their existing stores. We have five Best Buys in the portfolio. None of our stores are on the closing list, and the majority of our locations fall within the range of their new prototype. That said, we are positioning ourselves to mitigate the risk to our portfolio if there is a change in Best Buy's current strategy. Each of the five shopping centers where Best Buy is located is part of a major metro market, each is an infill location, and each is the object of additional national mid-box tenant interest if space should become available.

As part of our initiative to upgrade the quality of our shopping center portfolio, in addition to our aggressive leasing program to build existing anchor vacancies and replace under-performing mid-box retailers, last year, we commenced a capital recycling program. At that time, I communicated our intention to sell a number of non-core shopping centers, to diversify our markets, and to dispose of nonproductive excess land.

As of the end of 2011, we had sold four retail properties. In the first quarter of this year, we closed on the sale of a shopping center in Flint, Michigan and a freestanding, limited-term net lease Office Max in Toledo, Ohio. We also sold an undeveloped parcel of land in Alpharetta, Georgia.

In furtherance of our goal to dispose of non-core assets, we are in contract to sell two additional shopping centers, which we expect to close in the second quarter.

Counterbalancing our asset dispositions, I mentioned in our last conference call a pending acquisition. As of this date, we have concluded our due diligence process, and we plan to purchase this national credit multi-anchored shopping center in the second quarter. It will be our third St. Louis acquisition, and it is located on one of the most dominant retail arteries in the St. Louis market.

As with our other two St. Louis acquisitions, this latest purchase meets all of our acquisition criteria, including a demographic profile with superior average household income, multiple national anchors with a reasonable amount of ancillary retail space, and the opportunity to add additional value.

Please note that with the completion of the first quarter non-core sales and our expectation that we will sell at least two additional non-core properties in the second quarter, we are reaffirming our guidance for 2012.

In conclusion, our solid performance in the first quarter relative to our financial and operating results are the product of a focused business strategy to build a stronger, high-quality shopping center portfolio and balance sheet.

A constantly improving asset base will produce consistent, sustainable earnings growth, and a strong capital structure will generate the liquidity necessary to seize opportunities to grow our platform. We believe that executing on this focused strategy will translate into ever-increasing growth in shareholder value.

I would now like to turn this call over to Greg Andrews for his comments.

Thank you, Dennis.

Let me start with a few remarks about our business overall. Then I'll cover the balance sheet, discuss our income for the quarter, and conclude with our outlook.

Over the last three years, the shopping center business has been challenging. At Ramco-Gershenson, we have responded to the challenges with top-notch day-to-day execution on all fronts, notably, leasing, property management, and collection. These efforts have been paying off in terms of fewer anchor vacancies, improving shop leasing, solid expense control, and more timely collections.

We have also responded by rethinking where we are steering our ship. We have made several important decisions, all centered on creating a company built on quality. Allow me to cite three areas on which we are intently focused.

First, we are improving the quality of our assets. Three of our top 10 assets by day's rent are centers that we acquired over the last two years. Over the same period, we have sold, transferred, or held for sale eight non-core shopping centers that no longer fit our criteria. As a result, our typical shopping center today is a stronger, larger, multi-anchored property located in a core major metro market. It is over 93% leased and generates nearly $2 million in annualized base rent. Its tenants generate excellent sales at low occupancy costs. For example, grocers in our center generate sales averaging $480 per square foot and have rents that average just 1.75% of sales.

Second, we are improving the quality of our tenants. Over the last two years, we have increased our exposure to credit tenants, such as the TJX Companies, Bed Bath & Beyond, and Ross stores. We have also increased our exposure to high-quality grocers, such as Whole Foods and Fresh Market. Correspondingly, as Dennis mentioned, we have decreased our exposure to less-productive discounters, office supply retailers, and non-dominant grocery stores.

Third, we are improving the quality of our income. Our FFO today is more durable and sustainable as a result of our improved asset quality, lower leverage, and lesser reliance on one-time income items.

Now, turning to our financials --

During the quarter, we continued to focus on maintaining a strong and flexible capital structure. We ended the quarter with debt to trailing 12-month EBITDA of 6.9 times, an improvement from 7.0 times at year-end.

Based upon the last four quarters, our interest coverage ratio was 2.6 times and our fixed charge coverage ratio was 1.8 times.

As a result of paying down $12 million in debt, we ended the quarter with cash and availability under our line of credit of approximately $160 million.

We strive to maintain a manageable debt maturity profile. The weighted average term of our consolidated debt is 5.9 years. Only $15 million of debt matures over the rest of 2012.

Where practical, we are proactively seeking to address debt that comes due in 2013. We are also focused on lengthening our debt maturities wherever possible. I will report our progress on these fronts later this year.

Finally, our unencumbered pool continues to grow. Subsequent to quarter end, we paid off one $9 million mortgage, and we intend to pay off another $11 million mortgage in the second quarter. We will be adding the two centers that secured these mortgages to our unencumbered pool, which will raise the pool value to in excess of $600 million, or roughly half the value of our operating assets. This provides us with great flexibility to continue borrowing on an unsecured basis and make progress towards an investment-grade profile.

Now, let's turn to the income statement.

FFO for the quarter was $0.26 per share, a 4% increase over the $0.25 per share recorded a year ago. As usual, I'll work my way down the income statement to explain notable items.

Cash NOI of roughly $21 million was approximately $1.2 million, or $0.03 per share, higher than in the comparable quarter, driven by strong same-center NOI growth of 3.3% and by the contribution from our net investments in 2011.

Our provision for credit loss was $441,000, or roughly on par with the $422,000 reported a year ago.

As expected, our lease termination fees were down from the comparable quarter. They included a payment from Office Depot for a space that we expect to backfill with an identified credit tenant. We anticipate only modest lease termination fees during the balance of the year.

Our joint ventures are also performing well, with same center NOI increasing 5.3%. However, our equity and earnings of joint ventures was $466,000, or $0.01 per share, lower than last year.

Last year, we booked a one-time pick-up of approximately $300,000 when we wrote up our negative equity in West Acres, a single asset joint venture, to zero.

This year, we booked a net loss of approximately $140,000 at that same joint venture as a result of one-time costs involved in completing our deed-in-lieu transfer to the lender.

Because we have now wound up this joint venture, our equity and earnings of joint ventures won't be affected by this loss in future quarters.

Our G&A expense of $4.9 million was on track with expectation and lower than the $5.1 million recorded in the comparable period. Due to the timing of expenses, we believe our first quarter reflects a slightly higher run rate than we expect for the remaining quarters of 2012.

Finally, during the quarter, we booked a non-cash impairment charge at Kentwood, an operating shopping center. Our proportionate share of this charge is $2 million. Because one tenant, which is a private investor that is subleasing space to retail tenants, stopped making payments during the quarter, we determined that the non-recourse loan balance most likely exceeds the carrying value of the center that we previously had. We are engaged in discussions with the lender on this asset.

Now, let me turn to our outlook.

I'm glad to say that our fine team of leasing agents and property managers has done a good job of delivering on their budgets so far this year. In addition, I'm pleased that our finance and accounting teams are providing ever-better insight into where we are headed.

Barring any macroeconomic surprises, we still expect 2012 results to be within our previous guidance range of $0.94 to $1.02 per share. We will, of course, provide a further update on next quarter's call.

With that, I'd like to turn the call back to the operator for Q&A.

Thank you. We will now be conducting a question-and-answer session. (Operator instructions)

Todd Thomas, KeyBanc Capital Markets.

Hi, good morning. Jordan Sadler is on with me, as well.

First, Dennis, I was just wondering if you could provide some detail around the dollar amounts and expected pricing on the two assets that you're under contract to sell and also the new acquisition in St. Louis?

Well, as far as the two acquisitions, these are smaller properties, and so the proceeds that we'll generate from them will not be significant. However, one of our objectives relative to our disposition program is to deal with those assets, as we've talked about in the past, that fall into one or two categories.

The first is that we have prospective tenants for those redevelopments, but upon completion, they still wouldn't be core assets and therefore, we would expect to sell them, and the time commitment, as well as the return on investment, just didn't justify sticking with the asset.

The other is that it's just a small property and it just doesn't fit into our definition of what we expect to be core.

So one of the things that we have accomplished and will continue to accomplish with the capital recycling program is not only in generating dollars but that we are eliminating -- those assets take an inordinate amount of energy on the part of our leasing team to work on filling them up.

As far as the acquisition is concerned, this is a shopping center with four anchors. Typically, we really don't go into any detail until we close on it, and you should expect that to occur around the end of May.

Okay. Will the pricing on this asset be somewhat consistent with the previous St. Louis acquisitions?

Approximately. It may be a little bit lower, in the 20 to $30 million category.

Okay. And then switching over to guidance, Greg, I was just wondering, you did $0.26 in the quarter and you reaffirmed guidance. I was just wondering if you can help us understand what the negative variances might be going forward that would sort of get you back down into range that you've provided?

Sure, Todd. First, let me start by saying we're very pleased with the results for the quarter, and we feel very positive about the impact that leasing is having on our financial results. But I would point out that in the quarter, there were several items.

I mean, first of all, we had lease termination fee income, and although it was less than it was a year ago, it was still a material amount, and as I mentioned in my prepared remarks, we don't anticipate a lot more on that front during the balance of the year.

We had slightly better leasing fees at our joint ventures. We also had some other miscellaneous income. Those are items that may or may not be recurring for the balance of the year.

And I think, importantly, for the quarter, our straight-line rent was modestly positive, but I think we still view it as likely that we'll be negative $0.01 to $0.02 for straight-line rent during the year just because the core portfolio is pretty much on the back side of the straight-line rent curve, meaning that we're receiving more cash than we're actually allowed to recognize under GAAP. So it's not a cash issue, but it is a GAAP recording issue.

So I think those are some of the items that would -- you'd need to take into account.

And then, finally, I would just mention that we've made a good start on our capital recycling effort, but we have a ways to go there, and so that will also factor into the totality of results for the year.

Okay, and then just a last question. I was just wondering with regard to five consolidated anchor lease explorations during the year and then there's four unconsolidated anchor expirations that are coming up this year, I think you talked about one in Village Lakes. Are there any other known move-outs that you're expecting this year?

Yes, the one that we're aware of, Todd, is at a joint venture, and that's the Kmart that had a lease expiring this year, and that's one of the ones they announced that they would be closing, and that, in fact, happened in April.

Okay. Any update on backfilling that?

Well, we have a number of tenants interested. It's on a main arterial and actually at a corner, and it's a major shopping area, but we're still working through analysis of kind of cost and whether we can create sufficient value out of that to make it worth our while. So we'll probably have an update on that by next quarter.

All right. Great. Thank you.

Nathan Isbee, Stifel Nicolaus.

Just looking at the leasing for a minute, it seems like you did about 40,000 of non-comp leasing, I guess, perhaps maybe a space that was vacant for longer than 12 months. Can you just give a little bit of detail on that leasing specifically?

Well, one of the things, Nate, that was involved with those leases is that we have a program where we have converted from what the leases that we used to have with variable common area maintenance charges to fixed CAM charges. So we're leasing those spaces at what we believe are very good rents. They just don't happen to be comparable because of the change in the format of the lease.

Okay. All right. And then just focusing on the development side real quick, can you just give a quick update of River City and especially where things stand on Gateway Commons in Lakeland?

We continue to make real progress in executing leases for that project. We have identified anchors for basically all of the spaces. However, at this juncture, we have not brought the project back to the board for their approval. We won't do that until we have a comfort level that not only do we have sufficient anchors but we have sufficient additional small tenant space that we would be able to announce to them and announce to the investment community that the center is more than just viable but is extremely well leased.

Okay, and then Parkway Shops, the 20,000 square feet of small shop space, where does the leasing stand on that?

We are continuing at pace with that. I committed to you in our fourth quarter conference call that we would be over 90% leased when we report earnings for second quarter, and we are on pace to accomplish that.

Perfect, thanks.

Vincent Chao, Deutsche Bank.

I just wanted to follow-up on the guidance again for second. Just wanted to make sure that none of the underlying sort of guidance items had changed. Particularly, I think you'd expected to be sort of net neutral in terms of investment activity for the year, but so far, it sounds like on a disposition side anyway, we're at about maybe 10 million or so including what's under contract here.

And then you're buying something in the 20 to $30 million range. It just seems like you're starting off where that wouldn't be a headwind as much as maybe I thought it might have been, so just wondering if you could comment on that.

Yes, Vincent, I think for modeling purposes, I think it's still appropriate to think of kind of a net balance between acquisitions and dispositions. I mean the timing of these things is very hard to forecast, so we can't really be more specific about that, but I think that's still the best way to think about modeling for the year.

Let me just add to that, Vincent, that part of our approach for the dispositions in 2012 was indeed to frontload the year with those assets that were more challenging as far as leasing was concerned and that there are others that we have identified as non-core that are well leased but just do not fit our definition of what we want to own going forward, and I think that you'll see those dispositions occurring later in the year.

Okay. And then just on the stuff that was sold, the Eastwood property -- or Eastridge, I should say -- sorry -- sold at, I think it was $10 a square foot. I mean is that the right way to think about the other four properties that are in the available-for-sale bucket, or was there something specific there that -- I know that it was a sort of future redevelopment project.

No, I think -- look, I think there was something very specific there, and as Dennis pointed out, we've taken on some of the challenges early, but that's not a good indication of anything about other dispositions that might take place.

Okay. Can you share some color? What exactly was it about that property that really drove it down so much?

Well, the one thing I might add, although it wasn't in our remarks, one of the leases that we terminated -- we terminated two Office Depot leases in the first quarter. One of those two involved the Eastridge Shopping Center. So we received a termination fee prior to the sale.

Okay, okay. Okay, that's helpful. And then just on the same-store NOI, which was very strong in the quarter, just wondering, I guess -- we had a pretty mild winter season here. I was just wondering how much of an impact that had on the quarterly result and if we should expect a drop-off in 2Q where the seasonal impact is not as big a factor?

Yes, it's a good question. What you have to understand, however, is that in order to smooth the risk/reward for winter conditions, we have for the last, oh, maybe five, six years signed agreements with the people who plow our lots and things like that so that on a very heavy year, we gain a benefit. On a mild year like we just had, the contractor does better. But our numbers do not reflect the fact that we had less snow and, therefore, we gained a benefit from that.

Okay. So, yes, I'm just trying to understand expectations going into next quarter. I mean is the 3.3%, is that sustainable? And I guess the guidance is only for 1 to 2%.

Yes, I think, Vincent, that the best way to really think about same store is more over a longer period, and so we haven't changed our guidance of 1 to 2 for the year. Obviously, we started out strong. We're going to do everything in our power to deliver as good of a same store number as we can. We always focus on driving the cash flow at our shopping centers. But we haven't changed our guidance for the year at this stage.

Okay, thank you.

Ben Yang, Keefe, Bruyette & Woods.

Just really quickly, last quarter, you talked about moving 20% of your land holdings by year-end, either selling or starting to develop. You obviously sold one land parcel, so I'm just curious. Do you think you'll end up just selling that 20% rather than developing this year? Is that kind of your expectation at this point?

Well, there are a number of land parcels that we have indeed identified we are either in contract for or that we absolutely plan to sell. Whether or not we move other parcels -- and the prior question did concern our Lakeland project -- if at some point in time during the year it's determined that we will indeed move ahead with that, then obviously that would impact that number. But certainly the land that we own that we just see as salable and not part of a development, like the Alpharetta, Georgia property, we're very pleased to say that we'd move that off our balance sheet.

Okay. And then why is 20% the right number? I mean why not 50% or even 100% at this point?

Well, I think that if I give you an expectation of 20 and then I can exceed that, you'll be extremely pleased.

The 20% is conservative?

My hope is that it's conservative, but as consistent with Greg's last comments, I think that certainly starting off the year with a conservative approach to all of our metrics will give us the opportunity to certainly take another look at that and update you at the end of the second quarter.

Great. Thank you.

Rich Moore, RBC Capital Markets.

Back to the same-store NOI thing, if I could, for just a minute. It was pretty clear in the quarter actually, Greg, that the big gain came from a drop in same-store expenses, and it's obviously not snow, but what is that, and does that kind of thing continue?

Well, I guess let me start by just saying I think the gain in same center came from a variety of things. Same center occupancy was up 1%. Minimum rents were up. We had some additional percentage rent, which I think reflects, in part, certain tenants doing better in terms of sales than they had previously. And then, yes, there was a lower cost, which I don't think reflect anything in particular but just our focus on keeping our CAM expenses down and always fighting to get our real estate taxes marked appropriately.

So I don't know that there was anything in particular other than all the blocking and tackling that we've been doing for -- all along.

Okay, so we could run that improvement in expenses forward into future quarters, you think?

Yes. I mean it is variable by quarter, and typically, some expenses get kind of racked up into the fourth quarter so there is some -- and there is some timing involved in all of that, but I think that, in general, the trend has been down and continues to be down on that front, and I think the nice part about it is our recovery rate was higher this quarter. Hopefully, that will be sustainable for the whole year, but it is trending a little bit higher than we had in the last quarter.

Okay, good. Thanks.

And then on the Village Lakes, it was the one center that kind of dragged down Florida. Does the new anchor -- in terms of occupancy -- does the new anchor bring that center back to life, I guess? Is that all that needs to happen there is the addition of the anchor?

Well, indeed, as I said in my remarks, it had been my expectation that we would have executed in the first quarter. We wound up signing the lease in April -- about April the 11th.

We also have an LOI out for another retailer executed by that retailer for about 16,000 square feet which will fill all of this Sweet Bay space.

If you'll remember, this is the shopping center where we had a Wal-Mart that moved about a half a mile away, and I'm sure that affected the Sweet Bay sales when they actually put in -- or they went from just a Wal-Mart to a Super Wal-Mart. But the addition of the Ross Dress for Less indicates the strength of that area.

We have filled approximately 50% of the old Wal-Mart space with two uses, and we are working with a number of retailers on a preliminary basis to fill the balance of that space.

So it's a very good asset, and I think that what you'll see, at least as far as leased occupancy, come the end of next quarter will be substantially higher than the percentage you see now.

Okay. All right. Good. Thanks, Dennis.

And then the change to leasing spread reporting, Greg, that you did this quarter, could you tell us why you decided to take that route? I mean it seems to impact mostly spreads on new leases. There wasn't a whole lot of change to spreads on renewals, and I always feel like spreads on new leases is a far less important metric because the space was vacant anyway. But you've gone to this shorter -- has to be a shorter period, 12 months or less, to make the comparable leasing spread metrics, and I'm curious why exactly you did that.

Yes, we talked to a lot of our investors and analysts, and I think the sense we got is that people were finding it confusing that companies reported leasing spreads in different manners. And the consensus seemed to be that to be around kind of the method we're now doing, which is to say comparing spaces where there was a [prior] tenant in occupancy within the last year. So that kind of comparison, I think, provides a better sense of where today's rent is compared to kind of what's in place in the portfolio as opposed to a comparison to a rent that might have been in place three or four years ago.

That's how the majority of our peers are reporting it. We want to be as comparable as possible to peers, so that's kind of how we made that decision, just trying to make it easy all around for everybody.

Okay. All right. Got you.

And then the last thing I had is the 7-7/8 subordinated note that is due 25 years from now but is kind of due in January '13 or could be taken out in January '13, is that something you are looking at? You mentioned that you were kind of looking at 2013 maturities on your (inaudible).

No, that's --

Is that one of the ones?

No, that's -- that's an almost semi-permanent piece of our capital structure. What can happen in '13 is the rate can be adjusted to a variable rate, but that's not part of it. What we're really looking at is the mortgage debt, both wholly owned -- on wholly owned assets, as well as on joint venture properties that comes due, and there are, at least in some instances, perhaps an ability to renegotiate -- not renegotiate really but to address those maturities sooner rather than having to wait till 2013. And if we can do that on terms that make sense for the company, then we would be very happy to do that just to spread out some of the work that we're going to have to do on that front.

Okay, great. Thanks, guys.

(Operator instructions)

Michael Mueller, JPMorgan Chase.

Just a couple things. First of all, on the JV front, is there anything that we should be thinking of over the next couple of years, such as either the unwinding of one or more JVs or just activity picking up in terms of capital deployment?

Well, as we've said on previous calls, we have an excellent relationship with our JV partners. We certainly have been talking to them as we look at the portfolio about the possibility of selling one or several of the assets in the joint venture where we feel we've maximized value. But in each venture, they're talking about redeploying proceeds or even adding to the venture if we come across assets that meet their evolving criteria.

Okay. Are most of the acquisitions you're looking at on balance sheet, or could some of them be as part of the ventures?

Again, it can vary. I think that if we have our druthers, the acquisitions we would make we would make on balance sheet.

Okay. And then, secondly, Greg, I think that the guidance -- the leased percentage guidance for -- you were expecting end of year or average for year, that's on a leased basis. I think on an occupied basis, the core portfolio was about [92, 3]. Where do you see that going on an occupancy basis by year-end?

Hang on a second.

Sure, thanks. I know there can be a difference between leased and occupied in terms of (inaudible).

Yes, I mean I guess I would answer the question this way, that I don't -- we have a spread that tends to hover around 100 basis points there between leased and occupied. Sometimes it's a little more. Sometimes it's a little less. But I think it's going to probably hang right in about that range. So I think that's where I would expect the core occupied rate to be, about 100 basis points below our core leased rate, which we said was, what, 93 to 94.

Got it. Okay, great. Thank you.

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

Thank you. The only thought that I'd really like to leave the listeners with is that Ramco-Gershenson is definitely on a positive trajectory, and we are looking forward to a very good year. We appreciate your interest and your participation. Look forward to talking with you again in approximately 90 days.

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