Monmouth R.E.'s (MNR) CEO Michael Landy on Q3 2014 Results - Earnings Call Transcript

Aug.11.14 | About: Monmouth Real (MNR)

Monmouth R.E. Inv. Corp. (NYSE:MNR)

Q3 2014 Earnings Conference Call

August 7, 2014 10:00 AM ET

Executives

Susan Jordan - Director, IR

Michael Landy - President and CEO

Kevin Miller - CFO and CAO

Gene Lady - Chairman

Analysts

Paul Adornato - BMO Capital Markets

Craig Kucera - Wunderlich Securities

Louis Feldman - Wells Capital Management

Jon Petersen - MLV & Company

Michael Boulegeris - Boulegeris Investments

Operator

Good morning, and welcome to the Monmouth Real Estate Investment Corporation’s Third Quarter 2014 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions). After today’s presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note, this event is being recorded.

It is now my pleasure to introduce your host, Ms. Susan Jordan, Director of Investor Relations. Thank you, Ms. Jordan. You may begin.

Susan Jordan

Thank you very much, operator. In addition to the 10-Q that we filed with the SEC yesterday, we have filed an unaudited quarterly supplemental information presentation. This supplemental information presentation along with the 10-Q are available on the Company’s Web site at mreic.com.

I would like to remind everyone that certain statements made during this conference call, which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements that we make on this call are based on our current expectations and involve various risks and uncertainties.

Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can provide no assurance that its expectations will be achieved. The risks and uncertainties that could cause actual results to differ materially from expectations are detailed in the Company’s third quarter 2014 earnings release and filings with the Securities and Exchange Commission.

The Company disclaims any obligation to update its forward-looking statements. Having said that, I’d like to introduce management with us today: Eugene Landy, Chairman; Kevin Miller, Chief Financial Officer; and Michael Landy, President and Chief Executive Officer.

It is now my pleasure to turn the call over to Monmouth’s President and Chief Executive Officer, Michael Landy.

Michael Landy

Thank you very much, Susan. Good morning, everyone, and thanks for joining us. Monmouth continued to make substantial progress across several fronts during the third quarter of fiscal 2014. Through the first three quarters, we have generated 12% portfolio growth by acquiring five industrial properties totaling approximately 1.1 million square feet or $73.9 million. Our gross leasable area at quarter end contained 10.8 million square feet, consisting of 81 properties located across 27 states.

We are very excited about our best in class acquisition pipeline which has grown over the quarter by 330,000 square feet and now contains 3.5 million square feet, representing $255.7 million in total acquisitions scheduled to close over the next six quarters. Once again, in keeping with our business model, all of these future acquisitions comprise well located brand new built-to-suit projects under construction with long-term leases primarily to investment grade tenants. These properties are situated near major airports, major transportation hubs and manufacturing plants that are integral to our tenant’s operations.

Approximately 52% of our acquisition pipeline consists of deals with FedEx while the remaining balance of 48% includes a variety of primarily investment grade tenants. The cap rates on these deals average 6.9% and the weighted average lease maturity is 11.4 years.

Subject to satisfactory due diligence, we anticipate closing these transactions upon completion and occupancy. The Company has entered into separate agreements to expand five existing buildings by 236,000 square feet for a total cost of $18.7 million. Four of the five properties are leased to FedEx Ground. Two of these expansions are expected to be completed in fiscal 2014 and the other three are expected to be completed in fiscal 2015. These expansions will result in a new 10 year lease extension for each building being expanded. Additionally, subsequent to quarter end we completed a 55,000 square foot expansion of our FedEx facility in Cocoa, Florida for a total cost of approximately $3.7 million. This marks our sixth property expansion completed for FedEx during the past two years. Substantial progress was made on the leasing front over the quarter as well as subsequent to quarter end.

Approximately 4% of the Company’s gross leasable area, consisting of six leases totaling 438,000 square feet was originally set to expire this fiscal year. As previously announced the Company has renewed four of the six leases, with its existing tenants which were scheduled to expire. These lease renewals have been renewed for a weighted average term of 6.4 years at a weighted average lease rate of $5.42 per square foot as compared to $6.02 per square foot formerly, representing a weighted average reduction in the lease rate of 10%.

Of the two remaining lease expirations, we recently leased up our 60,400 square foot building located in Carlstadt, New Jersey for 10.5 years at an average rate of $8.34 per square foot as compared to $7.61 per square foot that was paid by the prior tenant, representing an increase of 10%. We continue to make progress on releasing the remaining one.

Additionally, our six recently completed expansions resulted in a weighted average lease rate of $8.42 per square foot, as compared to $7.70 per square foot formerly, representing a weighted average increase in the lease rate of 9.4%. These expansions also resulted in an additional 7.4 years of weighted average lease term.

We recently entered into a three year lease agreement which Charlotte Pipe and Foundry for a 160,000 square foot building located in Monroe, North Carolina, that was previously vacant. Annual rent commenced on August 1, at a rate of $560,000 or $3.50 per square foot with 2% increases each year.

The Company’s occupancy rate was 94.3% as of June 30, 2014. As a result of leasing our building in Monroe, North Carolina, the Company’s occupancy rate as of August 1 increased to 95.8%. As we have proven over many cycles, our consistently high occupancy rates are a testament to the caliber of our tenant base, the high quality of our income streams and the strength of our management team.

In fiscal 2015, approximately 7% of the Company’s gross leasable area, consisting of six leases totaling 782,000 square feet is set to expire. To date, the Company has renewed one of these six leases consisting of 87,500 square feet or 11% of the gross leasable area due to expire. This fiscal 2015 lease has been renewed for two years at a lease rate of $4.95 per square foot, as compared to $4.76 per square foot formerly, representing an average increase in the lease rate of 4%.

Looking at the overall U.S. industrial market, total industrial production, the ISM Manufacturing index and global trade growth, three measures that are highly correlated with industrial space demand are all showing solid year-over-year growth.

The second quarter GDP growth of 4% marks a strong improvement from the weak negative 2.1% posting in Q1. Positive net absorption of U.S, industrial space has now been achieved for 16 consecutive quarters with approximately 34.7 million square feet in net absorption over the most recent quarter.

Demand for industrial space has pushed the national vacancy rate to 8.2%, its lowest level in five years. Rental rates are improving and are expected to continue to increase. Following five years of very limited new construction, new supply has been increasing this year, but it’s still projected to be less than 1% of existing inventory.

There has been a lot of recent press concerning the rampant growth in e-commerce and what that means for the industrial property type. As a result of the strong demand for distribution space from the e-commerce sector, Class A net absorption recently represented 40% of all space absorbed on a national level despite comprising only 10% of the total industrial stock.

There is a supply and demand imbalance in the Class A market and demand for high quality industrial space is likely to remain strong for years to come. Monmouth was an early embracer of this secular shift in the global supply chain with, whose origins can be traced back to the advent of digital technology. We have strategically positioned our portfolio to take advantage of these growth opportunities, as evidenced by our numerous property expansions and acquisitions.

And now, Kevin will provide you with greater detail on our results for the third quarter of fiscal 2014.

Kevin Miller

Thank you, Michael. Core funds from operations for the third quarter of fiscal 2014 were $7.8 million or $0.15 per diluted share. This compared to core FFO for the same period 1 year ago of $5.7 million, or $0.13 per diluted share. Excluding securities gain realized during the quarter, core FFO was $6.9 million or $0.14 per diluted share, as compared to $4.6 million or $0.11 per diluted share in the prior-year period.

Adjusted funds from operations or AFFO, which excludes securities gain or losses and excludes lease termination income were $0.12 per diluted share for the recent quarter, compared to $0.11 per diluted share a year ago. Our per share results reflect the partial impact of our recent equity offering completed in May of this year.

Rental and reimbursement revenues for the quarter were $15.7 million, compared to $14.1 million or an increase of 12% from the prior year. Net operating income increased $1.5 million to $12.9 million for the quarter, reflecting a 13% increase from the comparable period a year ago. This increase was due to the additional income related to five properties purchased during fiscal 2013 and five properties purchased during the first quarter of fiscal 2014.

Net income was $5.6 million for the third quarter, compared to $4.2 million in the prior-year period, representing an increase of 34%. Again, this improvement was driven largely by the substantial acquisition activity that has occurred over the past year.

With respect to our properties, end of period occupancy decreased 60 basis points from 94.9% in the prior year period to 94.3% at quarter-end. As Michael noted as a result of leasing up our Monroe, North Carolina property subsequent to quarter end, our occupancy rate is now 95.8%. Our weighted average lease maturity continues to increase and as of the quarter end, was 6.8 years as compared to 6.2 years in the prior year period. Our weighted average rent per square foot was relatively unchanged at $5.56 as of the quarter end as compared to $5.54 a year ago. This average rent is in line with the current national average rent of $5.42 pre square foot.

With regards to our capital markets activity, in May, we announced the closing of a common equity offering which generated net proceeds of approximately $65.1 million. This transaction was more than two times oversubscribed with strong institutional support.

This offering positions us well to continue to execute our growth strategy going forward. As of the end of the quarter, our capital structure consistent of approximately $305 million in debt of which $280 million was property level fixed rate mortgage debt and $25 million were loans payable. 93% of our total debt is fixed rate with the weighted average interest rate of 5.3% as compared to 5.7% in the prior year period. We also had a total of $111 million in perpetual preferred equity at quarter end. Combined with an equity market capitalization of approximately $566 million, our total market capitalization was approximately $982 million at quarter end.

From a credit standpoint, we continue to be conservatively capitalized with our net debt to total market capitalization at 27%, and our net debt plus preferred equity to total market capitalization at 38% at quarter end. For the three months ended June 30, 2014, our fixed charge coverage was 2.1 times and our net debt to EBITDA was 4.9 times. From a liquidity standpoint we ended the quarter with $43 million in cash and cash equivalents. As of the quarter end, we had $40 million available from our recently expanded credit facility as well as an additional $20 million potentially available from the accordion feature.

In addition, we have $60.6 million in marketable REIT securities, representing 7.2% of our undepreciated assets. At the end of the quarter, we had $3.9 million in unrealized gains on our securities investments, in addition to the $900,000 in gains realized during the third quarter and the $1.5 million in gains realized thus far through the third quarter of the current fiscal year.

During the recent quarter, we fully repaid two loans and one additional loan on July 1, 2014 with unamortized balances totaling $2.2 million. In the process we unencumbered approximately $24 million of properties. Thus far during the current fiscal year, we have fully repaid a total of five loans with unamortized balances totaling $4.2 million which unencumbered approximately $34.6 million of properties to enhance our financial flexibility and strengthen our already strong credit profile.

And now let me turn it back to Michael before we open up the call for questions.

Michael Landy

Thank you, Kevin. I'm very proud of the progress that has been ongoing at Monmouth. Our 95.8% current occupancy rate combined with our substantial $255.7 million acquisition pipeline 3.5 million square feet of high quality, single tenant, net leased industrial properties all secured by long-term leases primarily to investment grade tenants as well as our several building expansions and recently completed and current underway are all very clear indications of the long-term value that continues to be built here at Monmouth.

Over the past three years while maintaining our high standards with regards to asset quality and tenant quality we have been able to grow our portfolio by over 50% through the acquisition of brand new state-of-the-art industrial facilities.

By the end of next year, we will have more than doubled our portfolio over a five-year period, again all through the acquisition of brand new Class A industrial assets. With 86% of our rental revenues derived from investment grade tenants, our earnings quality is among the highest in the REIT sector.

We’d now be happy to take your questions.

Question-and-Answer Session

Operator

We will now begin the question-and-answer session. (Operator Instructions). And our first question will come from Paul Adornato of BMO Capital Markets.

Paul Adornato - BMO Capital Markets

You cited some lease renewals, or I should say new leases. In some cases, they were a reduction compared to the last rent; in some cases, they were an increase. Is it safe to say though that the rents that you get are market rents?

Michael Landy

Yes, when you market a vacant property, your asking rent is going to be the market rent. If the expiring lease was above market, you will see a loss to lease. If the expiring rent was below market as was the case in Carlstadt, we will pick up the new tenant at a higher rent.

As indicated in our prepared remarks, our average rents are $5.56 a square foot and average rents in the industrial sector are about $5.42. So we’re roughly in line. And I would point out our buildings are not average, they’re superior to average. So I think looking at the portfolio as a whole, we have very good prospects to re-tenant buildings at higher rents and of course, when you’re renewing a lease with an existing tenant, even a greater ability to capture a rental increase.

Paul Adornato - BMO Capital Markets

Okay. Great. And so the next question is at the beginning of a build-to-suit lease term, how is that rent set? Does that bear any resemblance to market rents or is that a premium, given the build-to-suit quality of the lease term?

Michael Landy

Yes. Market rents are a factor. Construction costs, land costs are factors as well. And the falling cap rates are another factor in the low interest rate environment, but Class A facilities are going to command a higher rent than average because the buildings are superior to average. Class A facilities have more land. And that’s a component that gets factored into rent. We measure rents on a pre-square-foot basis. But Class A Omni distribution facility is going to have substantially more acreage. So although you’re comparing units in the square foot metric, it’s not apples-to-apples when you have much -- over four times land to building coverage than in the average industrial arena. So those are all factors. Looking at our pipeline, average rents per square foot on our pipeline, Kev?

Kevin Miller

Yes. I don’t have the average rent handy, but we do have on our pipeline that the going-in cap rate is 6.62% and an average cap rate of 6.88% on our $255 million pipeline. And I guess I could take the -- I can calculate it real quick.

Michael Landy

While they’re doing that, I’d just point out that the new buildings that we buy, the builder built them on a competitive bid. So of course, they’re market rates. What’s the average rent, Kev?

Kevin Miller

The average rent is $5.09 on the pipeline.

Michael Landy

Yes. So $5.09. So averaging lower than the average market rent in the country.

Operator

And our next question will come from Craig Kucera of Wunderlich Securities.

Craig Kucera - Wunderlich Securities

At the time of the equity offering, the expectation was that the capital that was raised would be deployed here by the middle of your second quarter fiscal quarter, so basically, by first half of fiscal year '15. Are we still on track to do that?

Michael Landy

Yes. We are hoping of the $255.7 million in our current pipeline, that $50 million, just under $50 million will close before the end of this fiscal year, which ends September 30. So we have three deals queued up to close. I believe in two of the buildings, they’re complete and rent has commenced. So they’re just kind of tied up in the legal queue. But as soon as everything gets signed off on, we’ll close on two, if not three, of those before year-end and that will be $50 million, just under $50 million in acquisition, about 700,000 square feet. And then the remaining $207 million in acquisition in all lined up to close in fiscal 2015. Whether it slides into the fourth quarter or is all consummated in the first two or three quarters remains to be seen. But that’s the schedule at this point.

Craig Kucera - Wunderlich Securities

Got it. And when I think about G&A, as you’re expanding the Company with all these build-to-suit opportunities, you’re not necessarily needed to bring on more people next year to sort of, oversee. So should we expect kind of your G&A, which has been in the, call it, 1.4 million range, to hold steady through next year?

Michael Landy

Well, we run the company rounding up $6 million in G&A. So it’s under 10% of revenue, very lean overhead structure, but we’re growing the Company by leaps and bounds. So we’re going to grow our portfolio by 20% gross leasable area this year, 26% in fiscal 2015. We’re moving into new office space in October, which will give us more real estate. And so I could see G&A and headcount growing as the Company continues to grow.

Operator

Next we have a question from Louis Feldman of Wells Capital Management.

Louis Feldman - Wells Capital Management

A quick question for you, mostly for Kevin. You indicated in your prepared remarks that you had paid down a couple of mortgages and unencumbered the properties. Can you touch base on what your game plan is for that and or refinancing some of the other existing mortgages, potentially at lower rates, to improve the spread?

Kevin Miller

Right. Our game plan is to really, first of all, let me just start off by saying that we -- that our loans are by far amortizing loans. So as they get towards the end of the loan, if they’re not fully amortized, there’s usually a small balloon payment due. And what we try to do is pay them off as soon as possible if the prepayment penalty is worth it; if it’s not a big enough prepayment penalty that makes it worth to do. And in doing so we free up those assets unencumbered with adds to our borrowing availability against our line of credit and also improves our metrics as far as going for investment-grade. So all the current buildings that we have where the loans are paid off, instead of refinancing we’d rather just leave them unencumbered and increase our borrowing capabilities.

Michael Landy

Yes, Lou, if I could just add to that -- our projections are to have over $100 million in assets unencumbered by 2016. I think it’s a $160 million in assets unencumbered by 2016. So it’s all in our long-term plan of gaining an investment grade rating you heard our net debt to EBITDA is 4.9 times well in the investment grade parameters, 96% of our revenues secured by investment-grade tenants. So we see the company as investment grade in its cash flow and its balance sheet ratios, but in order to get the gold seal of approval from the rating agencies, we need to free up more assets and build up our encumbered pool. So that’s the rationale behind paying down these mortgages. As far as the slow interest rate environment and taking advantage of it, it wasn’t too long our weighted average interest rate was above 6.5 and that was 5.3 over time it’s continued to come down and interest is our biggest expense and we are really taking advantage of locking in these slow interest rates. On the deals in our pipeline, Kevin recently locked in again a sub 4% loan fully amortizing 15 year money. So we’re doing both, we’re borrowing secured and we’re building up unencumbered, unsecured asset base.

Kevin Miller

Wanted to just add that the 11 in the pipeline we’ve locked in seven loans for those and the rates range between 3.85% as a low range and one at 5.25 with the average, the weighted average of all of them 4.25%.

Operator

(Operator Instructions). And our next question will come from Jon Petersen of MLV & Company.

Jon Petersen - MLV & Company

I just wanted a few housekeeping items on the expansion pipeline. Did you complete any expansions in the -- I guess the fiscal third quarter? And how many?

Michael Landy

We certainly completed one right after the Cocoa, Florida. Did we complete any during the quarter, Kevin?

Kevin Miller

Not during the quarter but right at like beginning of July.

Jon Petersen - MLV & Company

Okay. I was just looking for a run rate. So $3.7 million in July. And then you have another $18 million that would be from now on, not including that $3.7 million? How much of that $18 million have you already spent? And how much do you have left to spend?

Michael Landy

I am showing $18.7 million in expansion costs and we’ve spent about $5.6 million through the most recent quarter that is about $13.1 million remaining.

Jon Petersen - MLV & Company

And then on the acquisition pipeline -- obviously throughout the nation, we're seeing cap rates on industrial properties coming down. 6.6% I think it's a little bit lower than it has been kind of in recent quarters. I guess my question is do you still see that as a 50-plus basis point spread over where you could go out and sell these properties today in the open market?

Michael Landy

Not only do we see that, because we locked in these deals 12 to 18 months ago, the developer would certainly love us to walk away so they could re-price the deal but we're happy with the deals we negotiated and we are looking forward to putting them on our balance sheet as soon as possible.

Operator

And the next question comes from Michael Boulegeris of Boulegeris Investments.

Michael Boulegeris - Boulegeris Investments

Michael, as you -- Monmouth is poised for highly qualitative growth in the balance of fiscal year ‘14 and into fiscal year ’15. How should investors think of the ability of Monmouth to sustain this prolific growth in the coming years? You've historically had your FedEx franchise and non-FedEx warehouses. And certainly it seems that the pace of these FedEx expansions are picking up quite a bit on a historic basis. So I thought maybe if you could comment on that, we would be interested.

Michael Landy

Yes it’s a provocative question. So I will try to be brief and let Gene I know would like to crack it that one. But the good news is industrial is the new retail. So there is going to be tremendous demand for quality industrial property space for many years to come. Unfortunately a lot of people woken up to that fact and you have more competition both domestic and foreign coming into the U.S. industrial arena. When we closed the $74 million in acquisitions in the first quarter, our spreads were 345 basis points wide and we were getting over 17% levered returns on brand new class A built-to-suit properties.

Now our pipeline has us getting about a 265 basis points, 270 basis points spread still 65 to 70 basis points above the historic norm of 200 basis points. But you can extrapolate these past trends into the future and see us getting to a point -- we’ve reached Green Street put out a report that most property types, not just industrial, are now trading above the 2007 high-water mark. And as that continues, I don’t think we’ll be able to generate the 26%, 30% gross leasable area growth year-over-year.

We’re happy we have this tremendous pipeline in place. We’ve locked in, as Kevin mentioned, the low interest rates. We’ve locked in the high cap rates. And so we’re locked in substantial per share FFO accretion going forward. But 2016, it’s too far away to comment upon. But I can tell you that brick and mortar retail is seeing diminishing traffic, and that’s going to continue. And FedEx is seeing double-digit growth and that’s going to continue. And so we’re sitting in the right place at the right time, but a lot of other capital is waking up to that fact. Gene?

Gene Lady

I’m more than bullish on the U.S. economy. We are projecting 3%, 4% growth and if you have 3%, 4% growth, you need 3%, 4% additional industrial space in the country. And if you put that into the square foot for your projections, we need a lot more square feet in a lot more buildings. And we could see that land costs can rise from $20, $25 a foot under the building to $30, $35 under the building. That’s a 40% increase in land costs. If the builders get more work that they can handle, the first thing they do is increase their margins, which can be 10% or 20% increases. So we think that replacement costs for industrial space is going to rise substantially. Now that’s only my opinion but -- and time will tell. But we’re very bullish on the sector and we note that many people in the REIT industry have looked at the industrial sector and agree with those projections.

Michael Boulegeris - Boulegeris Investments

And Gene, just following up on that, do you see the normalization of increase rates in '15, '16, '17 period perhaps reinforcing that, those higher replacement costs?

Gene Lady

Well, we see interest rates rising, which will put the federal government in a deficit, in a real bind. But the normal interest rates, which we’ve lived through over 30, 40 decades has been 5% 6%. And Kevin is out there getting us loans at 3.5%, 3.75%. So we’re not counting on that. We actually think interest rates will rise, which will increase the replacement cost of the property, which will increase the rents that you need to justify building properties. But that’s all bullish for the industry. We work on spreads and our spreads are the best in our history. And so we don’t think rising interest rate environment is going to hurt Monmouth Real Estate Investment Corp at all.

Michael Boulegeris - Boulegeris Investments

Okay. And Mike, just a couple of -- just housekeeping questions here. The industrial warehouse that was recently added to the pipeline, could you give us some color on that?

Michael Landy

Well, it’s a FedEx facility in the Charlotte, North Carolina market, very similar to the one at the Indianapolis International Airport we’ll be closing on in the next couple of weeks. So a very similar SmartPost facility. The three remaining deals this year will be FedEx deals. And then next year, with about $2.8 million square feet in closings under contract for next year, you will see the breakdown, 60% non-FedEx. So when you see several FedEx deals closing this year, we see that as, the high FedEx concentration is very intentional. It’s very positive. It’s a huge asset to us. But again, the pipeline is about 50-50 on a whole if you’re looking at 2014 and 2015 deals under contract.

Michael Boulegeris - Boulegeris Investments

Okay. And lastly, did you infuse the REIT portfolio with any of the proceeds? I saw sequentially, the value went from about $53 million to $60 million quarter-over-quarter?

Michael Landy

Yes. Selectively, but we’re sitting on, at the end of the quarter, $43 million in cash, $45 million in cash. So it’s hard to find compelling value in the liquid real estate market. There’s some exceptions. We’d like to think we’re one of them. But again, you see REITs on average, are yielding 4% and in an inflationary environment that sort of yield could be a negative real interest rate dividend rate. So I’m hesitant, our portfolio is 55% REIT preferreds and we feel more comfortable buying REIT preferreds at a discount to par, which you cannot do today. So we’re going slow, watching the securities market and the capital is earmarked for these main street acquisitions, not for securities.

Michael Boulegeris - Boulegeris Investments

That makes sense. And congratulations again on strong execution. And I just want to note to Gene, congratulations on being the recipient of Yale Law Schools Simeon Baldwin Award. What a high honor. Thank you.

Gene Lady

Well, it was a really nice ceremony and my classmate, who's a former dean of the school made the presentation. So thank you for bringing that to everyone’s attention.

Michael Landy

And just before we get to the next question, I just wanted to point out one of Jon Peterson’s question that I just wanted to correct my answer, when he asked about did we complete any expansions during the quarter and it slipped my mind because it wasn't a building expansion; it. Was a parking lot expansion completed in Tampa Florida, it was about $811 million….

Gene Lady

811,000.

Michael Landy

$811,000, I am sorry.

Operator

And at this time, I am showing no further questions. I would like to turn the conference back over to Michael Landy for closing remarks.

Michael Landy

Well, thank you Laura. Well, I’d like to thank everyone for joining us on this call, and for their continued support and interest in Monmouth. As always Kevin, Gene and I are available for any follow up questions. We look forward to reporting back to everyone in December after our fiscal year-end results. Thank you.

Operator

The conference is now concluded. Thank you for attending today’s presentation. The teleconference replay will be available in approximately one hour. To access this reply, please dial U.S. toll-free 877-344-7529, or international toll 1-412

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