Rithm Property Trust Inc (RPT) 2015 Q3 法說會逐字稿

Greetings. Welcome to the Ramco-Gershenson Properties Trust third-quarter 2015 earnings call. (Operator Instructions) As a reminder, today's conference call is being recorded.

It is now my pleasure to introduce your host, Ms. Dawn Hendershot, Vice President of Investor Relations and Corporate Communications. Ma'am, you may begin.

Good morning and thank you for joining us for the third-quarter 2015 earnings conference call for Ramco-Gershenson Properties Trust. With me today are Dennis Gershenson, President and Chief Executive Officer, and John Hendrickson, Chief Operating 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 and risks that could cause actual results to differ from expectations are detailed in the third-quarter press release.

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

Thank you, Dawn. Good morning, ladies and gentlemen. I'd like to spend the next few minutes covering three topics.

First, I want to say a few words about Greg Andrews' departure and where we are in the process of securing his replacement. Second, I'll update you on the status of our capital recycling program and how the sale of our noncore assets and the reinvestment of their proceeds is facilitating our focus on owning and improving a portfolio of large, multi-anchored shopping centers that are concentrated in a select group of major metropolitan markets. And lastly, I will address the status of our balance sheet and explain the reasons for our revised FFO guidance for the year.

Greg Andrews left the Company on October 16 after a five-year tenure. We parted on very good terms.

Greg left after achieving his primary goals of significantly improving our balance sheet, moving us from being overwhelmingly a secured a borrower to primarily unsecured debt, and expanding our line of credit capacity to ensure financial flexibility. These goals achieved, Greg decided to pursue new challenges and opportunities with another company.

Relative to his replacement, we have identified a number of great candidates for the CFO position, and we will be commencing the interview process. It is my reasonable expectation that we will be in a position to identify our choice before year-end.

Concerning the sale of our noncore assets, we have sold to date $66.5 million of property consisting of noncore shopping centers, vacant land, and land leases that we did not see as part of our future plans. We are in contract to sell or have signed letters of intent for the sale of an additional $43 million.

The average cap rate for the shopping centers sold to date at share was 6%. We anticipate that the balance of the sales for the year will generate a cap rate of approximately 7%.

The acquisition this quarter of seven joint-venture shopping centers streamlines our business model, grows our asset base, broadens our geographic footprint, and further concentrates our assets in metropolitan markets, specifically in trade areas where we are the dominant retail destination.

In addition to using the dollars generated from our capital recycling program for these acquisitions, we will use some of the proceeds from this year's sales as well as additional sums we will raise from the disposition of noncore properties to be sold in 2016 to continue to fund our program of value-add expansions, shopping center improvements, and the replacement of underperforming tenants. The success of these ongoing efforts can be seen in our ability to attract and install at our core shopping centers national credit, best-in-class retailers including Nordstrom Rack, Saks OFF 5th, The Container Store, Stein Mart, Dick's Sporting Goods, Ross Stores, and others. Further, the inclusion of these anchors has created the additional opportunity to drive rental rates for our non-anchor tenants, who will benefit from these new significant draws.

It is our intention for the balance of 2015 and well into 2016 to focus our energies on our core portfolio for these growth opportunities. In addition to adding value to many of our legacy shopping centers, the large, multi-anchored centers we've acquired over the last several years lend themselves to significant densification and the creation of a sense of place, both of which translate into above-average returns on new dollars invested and ever-increasing rental rates. As our ideas for this latter group of centers matures over the next several quarters, we look forward to sharing our plans with you.

Now let me take a minute to talk about our balance sheet and year-end guidance. John Hendrickson will provide details on the income statement.

Our balance sheet remains strong, with leverage metrics well in line with our credit-rated peers. During the quarter we closed two $50 million private placement loans, both with a term of 10 years, at an average interest rate of 4.15%. We anticipate closing another $50 million of private placement debt in early November.

These financings are consistent with our strategy of being a corporate borrower, as the proceeds from these loans have been used in part to refinance secured debt. The result of these new financings is an increase in our unencumbered asset pool to approximately $2 billion.

Our line balance at the end of the quarter was $125 million, which will be reduced by year-end as the result of our additional $50 million private placement debt and our pending asset sales. Our balance sheet strategy remains unchanged, which is to maintain ample liquidity with predominantly fixed-rate debt, well staggered maturities, and above-average term of debt of 6.4 years.

Now, concerning our guidance, we are revising our 2015 FFO guidance for the year to reflect our ongoing confidence in our business plan as well as to account for a number of one-time items. We anticipate that our comparable year-end operating FFO will range between $1.32 and $1.33, which is at the high end of our prior guidance.

In addition to our comparable performance, there are four one-time non-reoccurring components that drive our third-quarter and year-end numbers higher. They include lower G&A costs of $0.02, which is primarily driven by the resignation of Greg Andrews during the quarter, as well as a proactive hold on hiring as we evaluate our human resources needs in relation to our long-term strategic goals. Our normalized G&A number would have been in line with our previous guidance of $22.5 million to $23 million.

The second element of our one-time increase involves a remeasurement for the quarter of the fair value of our total shareholder return grants under our long-term incentive program. The program is remeasured on a quarterly basis and will be adjusted again at year-end based on our performance measures.

The third non-reoccurring component involves the official income benefit from postponing the timing of a number of our 2015 dispositions, which was primarily the result of a conscious decision to harvest additional sales proceeds from the execution of pending leases. Lastly, we experienced a short-term interest expense savings as a result of a reversal of the default interest on our Aquia loan, our prepayment of four mortgages without penalty by using our line of credit and by working with our private placement lenders to extend the time for closing our new financing.

These four one-time events contribute approximately $0.04 to the quarter, and $0.05 to $0.06 to our new FFO guidance for the year of $1.37 to $1.38 per share. Again, excluding these anomalies, we project operating FFO of $1.32 to $1.33 per share, which reflects the benefits of executing on our business plan.

I would now like to turn this call over to John, our COO, who will discuss the details of our operations, after which I will conclude with a brief statement about our Company's strategic direction.

Thank you, Dennis. Good morning, everyone. I have now been with the Company five months, and in that time we have made considerable progress on streamlining and simplifying our business model. These changes, I believe, are important to our continued transformation of the Company.

As Dennis mentioned, our recent joint-venture transactions have largely eliminated our partnership properties. In fact, after the sale of our Chester Springs Shopping Center which closed earlier this month, only three of our current 75 properties are joint-venture assets and more than 99% of our annual base rent is generated from our consolidated portfolio. Additionally, we expect to unwind these remaining three shopping centers over the next 18 months to further simplify the portfolio and concentrate our efforts on maximizing the value in our wholly-owned properties.

To reflect these changes in our business plans, you will notice that most of the schedules and supplements now reflect only information related to our consolidated portfolio. Our consolidated portfolio represents all wholly-owned properties including the acquired office buildings, which we also plan to sell in the next 18 months.

So in a very short order, you will be able to evaluate Ramco based on a 100%-owned high-quality shopping center portfolio. Now, let me walk through some of this information and add some color.

Our overall cash NOI was $5.4 million higher in the comparable quarter due to our 2014 and 2015 acquisitions, stabilization of our Lakeland Park development, and same-center NOI growth of 2.2% for the quarter. Year-to-date, same-center is 2.5%, and we still expect to meet our guidance range of 2.5% to 3% for full-year 2015.

Our results this quarter were helped by higher than expected expense recoveries, an increase in other income, and a significant reduction in bad debt year-over-year. Results were somewhat negatively impacted by lower occupancy both inside and outside the same-center pool caused largely by our desire to actively reposition the portfolio.

The other income increase and better collections are the result of our move to a higher-quality portfolio over the last few years, as well as an increased financially-oriented operating focus brought on by the reorganization of center operations that I announced last quarter. Over the next few quarters, we should also expect to see the benefits of this reorganization in our leasing metrics, expense control, and value-creation items.

We continue to see good demand for our space as reflected by a consistent number of lease transactions and comparable rollover spreads of 9.3%, our highest reported level since we began transforming the portfolio five years ago. In addition to the strong rollover spreads, the lease transactions have already started to reflect our strategy of upgraded tenant quality, combined with smart lease terms. These include strong annual rent increases during the term, with fewer tenant renewal options, giving us better control of our real estate.

Tenant demand is also helped by the many anchor upgrades that Dennis mentioned. For instance, at three of our shopping centers -- Hunter's Square, West Oaks, and Mission Bay -- we have produced six anchor upgrades which are expected to generate additional sales of nearly $30 million above previous tenancy.

As a result of these new demand generators, there are 43 additional tenants holding 175,000 square feet expiring at these properties from now until the end of 2019. On these spaces we are forecasting new and renewal rollover increases averaging 12%, which demonstrates the added benefit to our re-anchoring activities.

Also, with our focus now almost entirely on our wholly-owned shopping center portfolio, we would expect greater efficiencies in leasing, which should drive both occupancy and rent at our wholly-owned properties. Our overall lease occupancy at the end of the quarter is 94.3%. Small shop occupancy is 86.5%, which is essentially unchanged from last quarter on a comparable basis.

Anchor occupancy is 97.6%, which is 1% lower than last quarter. This 113,000 square foot increase in anchor vacancies was largely driven by our active re-merchandising of two office-supply stores as we continue to lower our exposure in this category, and our purchase of a vacant 51,000 square foot former grocery box at our Spring Meadows property, which we expect to re-tenant with two national anchors.

We are in active negotiations for both of these vacant anchor spaces, but it should be noted that we are forecasting the NOI benefits of this leasing and the 77,000 square feet of currently leased but not yet occupied anchor space to occur mostly in 2016. Our current pipeline of lease deal suggest that before the end of 2015 consolidated lease occupancy will be approximately 95%.

Again, this NOI benefit for the increase in lease occupancy will not be reflected until part of 2016 and into 2017. My near-term leasing goals are to drive small shop occupancy 100 to 200 basis points by the end of 2016, while still maintaining tenant and lease term quality.

Regarding our value-add pipeline, we added $14 million of projects to our list including the lease-up of the Spring Meadows grocery box, the repositioning of our outparcel at the Shoppes at Lakeland, and the replacement of Best Buy with Container Store at West Oak. We also placed in service the $5.4 million Parkway Shops Phase 2 in Jacksonville, Florida.

Our total active projects we are currently implementing is now $80.9 million, which we expect to stabilize over the next six quarters, including $14 million of projects that will be finalized in 2015. We are committed to maintaining an active value-creation pipeline of at least $65 million to $75 million near term and will work to add value even at properties that may not be long-term holds for the Company. As I noted last quarter, about half of our properties have some form of value-creation opportunity, and with our current operating structure I'm certain we will quickly get after most projects while smartly managing any impact to earnings during redevelopment.

Our projected annual development volume does not yet include the larger potential projects Dennis mentioned at Deerfield Towne Center, Front Range Village, and Woodbury Lakes, for which we are continuing to master plan. We believe that we can create a special place at each of these three properties that will drive long-term value through increased density for many years to come.

So, with these inherent value-creation opportunities, the portfolio's increasing tenant and property quality, and my commitment to judging success on solid execution, I am confident about our ability to generate strong internal growth in the midterm. With that, I'd like to turn the call back over to Dennis for final remarks.

Thank you, John. I wanted to take this opportunity to reemphasize the focus of our future business plans. They include further migrating our wholly-owned, multi-anchored shopping center portfolio into the best submarkets in the central United States, where we will be the dominant retail destination in our trade areas. This philosophy will direct our dispositions as we sell assets that are not consistent with this property type or do not present the opportunity to add significant value.

Focusing on the ownership of these types of shopping centers will allow us to drive net asset value through the acceleration of the number and size of value-add opportunities we can pursue, as these centers lend themselves to densification of retail uses. The opportunities in our shopping center portfolio to grow shareholder value are numerous, and we have the right team in place to take advantage of these opportunities.

I'd now like to turn the call back to the operator for questions. Jamie?

(Operator Instructions) Todd Thomas, KeyBanc Capital Markets.

Yes, hi. Thanks; good morning. First question, just regarding the guidance revision, I appreciate the bridge to the $1.37 to $1.39 range with the G&A and other one-time items. But the move from $1.28 to $1.32, to the $1.32 to $1.33, what specifically contributed to that increase?

Well, first of all, hi, Todd. Other income at our properties, higher recoveries, especially in our recent acquisitions, significantly lower bad debt accruals; and so basically those were the elements that accounted for it. At the second quarter, we were still giving a conservative range, although we thought we would be at the higher end of that range. We certainly believed that all of our information was trending that way, but we waited until this quarter really not only to tighten up the range but to demonstrate our confidence that we would come in at the high end of the range for the year.

Okay. Then, Dennis, you mentioned some of the G&A savings are related to a proactive hold on hiring. Can you just shed some light on that comment? What caused that decision, and specifically where in the business are you postponing hiring?

Well, basically what happened is that there were a number of departures throughout the first and second quarter of individuals that for a variety of reasons left the organization. Typically, we would immediately turn around and refill those positions.

But as we took a look at a somewhat smaller portfolio, because of the number of sales that we had, as well as the reorganization, we just wanted to really let things settle down and really appreciate where we needed the talent and then move on that. But as I said, as we get back to a normalized G&A number, it really will come in -- or would have come in at the guidance that we gave on G&A earlier.

Okay. Then just regarding the dispositions. You talked about having some properties under contract, $43 million. I think you said at about a 7% cap rate. Are they expected to close in 2015, or are those sales part of the bucket that will take place in the next 18 months?

Then I guess are there -- it sounds like there is additional sales on the table beyond that $43 million that you just talked about. I guess I'm just curious as you look at the portfolio today how much of the portfolio's not consistent with the long-term strategy of the Company today.

Well, let me say this. Relative to the $43 million, if we could close all of those dispositions, we would and we'd like to. What has happened is many of the prospective buyer pools -- and again, they aren't all in contracts, some are in letters of intent -- have migrated from institutional buyers and private REITs, as private REITs have had a little more difficulty raising capital, to more exclusively of the private buyers who need to line up their financing, etc.

So we will close the $43 million just as quickly as we can. We believe we're on top of those and we're dedicating enough energy to get them closed before the end of the year. But, again, it will depend upon the timing vis-a-vis our buyers being able to pick and tie everything and get ready to close.

As far as additional dispositions are concerned, we have typically talked about selling somewhere between 5% and 7% of the portfolio on an annual basis. What's important to understand as far as future dispositions are concerned, although we are not at this moment giving any guidance as to a dollar amount, our dispositions for 2016 will be timed so that they will occur approximately when we need the capital for the capital improvements that we're doing at the latter part of 2015 and well into 2016.

Okay, great. Thank you.

Vincent Chao, Deutsche Bank.

Hey, good morning, everyone. I just want to go back to the G&A for a second. I think what I heard you guys say is that's a temporary pause and then you go back to the normalized level. So the intent here is not -- you're not looking for G&A savings; specifically it's more just trying to reallocate those dollars to the best use. Is that right?

Yes, I'd say basically that's correct.

Okay. Then on the 2.5% to 3% guidance, year-to-date, 2.5%, I'm just curious. How much of that implied uplift in the fourth quarter is embedded via leases that are signed or just waiting to commence, as opposed to something you need to go out and go get, I guess?

There isn't anything that we've have to go out and get. Sorry, Vince; this is John Hendrickson. No, it's all embedded in the fourth quarter.

Now keep in mind, we will be adding our core acquisition properties to the pool next quarter. So the pool will change slightly.

Okay. Will that have any meaningful impact on same-store?

No. I don't think so, no.

Okay. Okay, and then just maybe another question on the capital deployment side. The $65 million to $75 million run rate, asset sales of 5% to 7% of the portfolio ongoing, which I think is in that $100 million-ish area, so pretty much funding the redevelopments, maybe plus a little bit. So that seems like it takes care of itself.

Just curious how you're feeling about the acquisition markets today given your own cost of capital, given the current market conditions, and obviously you've got to digest what you just recently announced. But just curious how you're feeling about the acquisition markets and the opportunities there.

Sure. We continue to keep our feet in the waters relative to acquisitions. We want to make sure that both the brokers and the owners who are representing centers in those markets that we really like know that we're still active players.

However, I'd like to think that we're smart allocators of capital. And to the extent that cap rates really haven't moved very much, it's still very expensive to buy anything out there. So we, at least for the time being, will remain focused on our redevelopments.

Okay. Then on that front, cap rates haven't moved yet. Would you consider ramping up the 5% to 7% of the portfolio in, say, 2016 just to capture some of that value? Or unless you have that redevelopment in line of sight, you wouldn't necessarily accelerate that? How do you think about that?

Accelerate the redevelopment, or accelerate the acquisitions?

Dispositions, dispositions. So your comment about cap rates holding steady (multiple speakers)

(technical difficulty) I think that as opportunities arise both in our portfolio and if for some reason we saw something that was very compelling for one reason or another, then we absolutely could ramp up the disposition program, especially because a number of the assets that we would consider selling pursuant to our strategic direction are very desirable assets in the marketplace. So I think that the timing of dispositions, as we have migrated more and more to assets in good markets, we're able to sell those -- we would be able to sell those quicker.

So we're going to stay very focused on redevelopments; and as the environment for acquisitions increases, then we obviously have the ability to sell certain quality assets that we believe are fully valued and just are not going to fit in our philosophy going forward. I hope that answers your question.

Yes, thank you. Then just a last cleanup question; I don't know if I missed it, but did you give the bad debt expense for the quarter?

The bad debt for the quarter?

Yes, in the quarter?

No.

Do you have that?

No, we didn't give it. There is approximately $200,000.

$200,000? Okay. Thank you.

Lina Rudashevski, JPMorgan.

Hi. Thank you. You mentioned in your comments that you're decreasing your exposure to office supplies retailers. I was wondering if there any other retailer categories that you would ideally like to decrease your exposure to, or increase?

Any specific category? No; I mean obviously we constantly review the portfolio. But our -- the largest, with the whole merger with Staples and OfficeMax, that was one that we're focused on and just their long-term viability.

I don't know. We're always trying to move the portfolio to best-in-class retailers, so that's why. That's really our focus.

As we mentioned, we're adding Container Store to our property here in Michigan and we've done now Saks OFF 5TH and done a couple Nordstrom Rack deals. Those are the type of retailers that we expect to continue to do business with.

Okay. So there isn't a category of retailer that you have any preference for?

Not necessarily. I don't think so.

I would just add to John's comments that we certainly watch the financial health of retailers where we have real exposure in the portfolio. We are bullish about the whole omni-channeling and the retailers who get it; and we obviously watch for anybody who may falter because they are not participating in omni-channeling. But we haven't been the kind of organization that talks about going through the portfolio and looking for certain segments that might be exposed because of Internet sales.

We watch all of our tenant categories. I guess if there's anything that we say that we would be focused on it, in addition to just watching everybody, is constantly upgrading our grocers. Our last purchase, Front Range Village, included a specialty grocer; and the number of specialty grocers in our portfolio have been growing.

Okay, thank you.

Collin Mings, Raymond James & Associates.

Good morning, Dennis; good morning, John. First question for me, just going back to the redevelopment pipeline again and the comments as far as opportunities on about 50% of the portfolio, can you maybe just talk a little bit more about how you are prioritizing projects? Is it just simply based on return?

Or just talk a little bit more about how you think about, as you build out that pipeline, how you are prioritizing the projects.

Sure, Collin; this is John Hendrickson. The reality is our focus is on opportunities that we have that we can execute near term and while we continue to plan the longer-term vision. So from a prioritization, it's really just where can we get after it today.

We've scheduled out our pipeline of things so that we can maintain a near-term volume, one that we can execute efficiently, and also that we can schedule [proof] from managing the impact -- any negative impact from an earnings standpoint. So I guess -- I hope that answers your question.

Okay. I mean, I guess, is there any consistent theme or anything that you're focused on in particular, as you look through the pipeline of opportunities?

No, I mean most of it is where there is truly adding GLA (inaudible). Then a second theme would be where you can upgrade tenancy. But the primary thing is just added GLA.

Okay. Then maybe you guys could touch a little bit more on the comments as far as looking to add some density to three assets in particular. Just maybe update us on your thoughts there.

What's driving that? And then how far along down the path are you on those plans?

Well, we're actively working on the master planning process, a process that we think we should be in good shape and maybe in the first quarter of next year ramp up the master planning and start from an entitlement standpoint. Our thinking is that those properties that I've mentioned, the Front Range, Woodbury, and Deerfield properties, are assets that are large and have great raw material to create one. First, create a special place based on the retail; and through that might add possibly other uses, but more importantly, just the ability to drive rent from a retail standpoint.

I would add, Collin, that -- and we've discussed this with you -- that on the larger-format centers, as the parking ratios have come down from 5.5 down to 4.0, there is a significant amount of opportunity when you own 35-, 50-, 60-acre sites to really add a lot more retail space. And the anchors appreciate that they don't need those kind of parking ratios any longer, so they are cooperative, albeit that typically you have to go back to them to get their approval to increase density.

But that's really a very significant opportunity for us and really the primary direction in which we are heading.

Okay. No, that's helpful color, guys. Just going back to a couple specifics from the quarter. Just anything specific that drove the better expense recoveries in the quarter? Or is that just kind of better execution on your guys' part? Or was there something else that drove that?

No, that largely was actually a recalculation of being able to better understand exactly how it will end up. Because keep in mind you don't do a true-up until next year so you're really estimating right now.

So it's a better understanding of that. That was largely -- a big chunk of that was outside of the same-center pool and our new acquisitions as we digested those.

Okay, all right; that's helpful. Then going back to a couple of the other questions earlier, but just again it sounds like there is some re-acceleration of same-store growth going into the fourth quarter. How much of that is core? Or as John, you mentioned a minute ago, I think that the same-store pool is changing a little bit in the fourth quarter. Can you just talk a little bit more about what's going to be driving that lift?

Yes. Really it's a big piece on from rent starts and the fourth quarter. But also the -- I mean, I don't think that the acquisitions themselves are driving it higher. I think they're probably in line, the two pieces are in line for the fourth quarter. So it's really just occupancy starts and all the stuff that's already baked into our numbers right now.

Okay, so just occupancy and higher rents from better spreads?

Right.

Okay. All right. No, helpful, guys. Thanks and good luck during the quarter.

(Operator Instructions) Craig Schmidt, Bank of America.

Thank you; good morning. I was wondering if you could comment on plans for the 28 million in land available for development and the 12 million land available for sale.

Well, the most significant element in the land available for development involves the property we have in Hartland, Michigan. We are working now with several users for not an insignificant percentage of that property, and we'd like to think that we might be able to announce something sometime in the fourth quarter, that we have completed an understanding with at least one specific tenant.

As far as the land available for sale is concerned, obviously the timing on some of those parcels are a little bit harder to give you real timing on, although we did a pretty good job of selling off lands that was not income producing in 2015.

It will be a significant focus of ours going forward, that if we're not going to be able to use raw land then we do want to sell it at the most advantageous time, at the best prices. But to get it off our books, for sure.

Craig, just to clarify one thing on the Hartland transaction that Dennis has mentioned, the transaction we're working on right now actually will end up being a sale. But it won't be -- you won't see that on our development schedule this next phase. We expect that will generate demand for other development opportunities; but this initial phase you won't see it.

Okay, thank you. That's helpful.

Chris Lucas, Capital One Securities.

Good morning, everyone. Just a quick question here on tenant health. Has your watchlist expanded or shrunk, say, over the last six to nine months? And then maybe if you could provide some color on how late pays have trended over the same time frame.

Hi, Chris. No, I don't think our -- it's unchanged, I would say, from a watchlist standpoint and also from a late pay standpoint. I don't think we've seen any significant change, plus or minus, over the last six to nine months.

It seems very stable. In fact, we've been able to get after and I think better focus, we can actually get after -- that's why you're seeing the [lower] bad debt expense. We're getting after things quicker in addition to the fact that we have a better-quality portfolio.

Maybe could you, John, provide a little more color when you say get after it quicker? What specifically are you talking about?

That's fair. I'm talking about just being able to have the right focus so that you can resolve disputes quicker both from either late payers or people doing CAM disputes and so forth, being able to get the right focus from the right-level person and resolve things quicker.

Our reorganization has allowed to do with that. A higher-quality team really focused on a smaller-level properties can get after it quicker.

Okay. Then just a more general question. Are you guys seeing any change in the decision-making by tenants in terms of deciding to sign a lease or not? Is there any more -- is there any change to that?

It continues to be, I think, continues to be harder as it always has been. But I mean, no, I don't think so. Tenant demand is still good and they're still making -- I mean, they're being careful in their decision-making process.

But what has helped, for sure, from our standpoint, is that as we get new quality -- as the quality of our portfolio, but also the quality of our anchor tenancy has really helped drive that, and you have multiple people chasing the same thing.

Okay, great. Thanks a lot, guys. Appreciate it.

Ladies and gentlemen, at this time we have no further questions. I'd like to turn the floor back over to management for any closing comments.

As always, ladies and gentlemen, thank you very much for your time and attention. We look forward to a great quarter in the fourth quarter, and we'll talk to you after the first of the year. Have a good day.

Ladies and gentlemen, this does conclude today's teleconference. You may now disconnect your lines at this time. We thank you for your participation.