Pennsylvania Real Estate Investment Trust (NYSE:PEI)
Q1 2016 Results Earnings Conference Call
April 28, 2016 11:00 AM ET
Heather Crowell - SVP, IR and Corporate Communications
Joe Coradino - CEO
Bob McCadden - CFO
Ki Bin Kim - SunTrust
Christy McElroy - Citi
Floris Van Dijkum - Boenning
Lina Rudashevski - JPMorgan
DJ Busch - Green Street Advisors
Good morning and welcome to the PREIT First Quarter 2016 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.
I would now like to turn the conference over to Heather Crowell, Senior Vice President of Investor Relations and Corporate Communications. Please go ahead.
Good morning and thank you all for joining us for PREIT’s first quarter 2016 earnings call. During this call, we will make certain forward-looking statement within the meaning of federal securities laws. These statements relate to expectations, beliefs, projections, trends and other matters that are not historical facts and are subject to risks and uncertainties that might affect future events or results. Descriptions of these risks are set forth in the Company’s SEC filings. Statements that PREIT makes today might be accurate only as of today, April 27, 2016, and PREIT makes no undertaking to update any such statements. Also, certain non-GAAP measures will be discussed. PREIT has included reconciliations of such measures to the comparable GAAP measures in its earnings release and other documents filed with the SEC. Members of management on the call today are Joe Coradino, PREIT CEO; and Bob McCadden, our CFO. It is now my pleasure to turn the call over to Joe Coradino.
Good morning. We’re excited to be here today to discuss our strong results, which reflect the redefined portfolio. Our performance is clear evidence that we’ve executed on our strategy and redefined PREIT as a top-tier mall Company. The PREIT team is delivering results across the entire operating platform, this includes sales growth, revenue generation, expense control, extended debt maturities and reduced interest expense. Today, with stronger demographics, a powerful portfolio with a compelling tenant lineup and four new anchors under construction, we present a new face to retailers, positioning us well for the future.
We were confident that successfully executing on our disposition and remerchandising efforts will create shareholder value. We knew that taking these steps will increase our portfolio sales. This has obviously occurred. And today, we have grown our sales from approximately $330 per square foot to $460 per square foot with a clear path to $500. This is a new beginning and sets the stage for our future performance. It better positions the PREIT team to deliver results for retailers and investors that are consistent with our top tier mall peers.
Last evening, we shared the highlights of these results confirming the successful implementation of our strategy. With retailers, we now negotiate from a position of strength, as existing leases come up for a newer, evidenced by the continued growth in the spreads on our new rents. This quarter we achieved 17.2% average renewal spreads which on a cash basis is 10.9%, a Company record.
To add some color and illustrate the point, during the quarter we finalized the package of transactions that originally included seven locations, two those locations were of properties we sold. The tenant was attempting to use their continued occupancy at the lower productivity malls to reduce their overall economics. Eliminating these two properties from the pool of transactions had a 350 basis-point positive impact on the cash renewal spread. This represents a very real opportunity to continue to drive rents.
We’re now presenting better opportunities to retailers, allowing us to get more traction and lease more space. Putting it in perspective, at the end of the first quarter, we had signed leases for 542,000 square feet that hadn’t yet taken occupancy. This is a 58% increase over the same time last year with a smaller portfolio. The level of interest from retailers is improved dramatically and with it the opportunity to drive NOI and shareholder value. We’ve also opened doors to discussions with retailers we haven’t previously done business with. During this quarter alone, we signed leases with Round One Entertainment and Exton Square, Saks OFF 5th at Springfield Town Center and Dry Goods at Woodland Mall, a theme you will continue to sing. It is particularly noteworthy that common area of revenues, an area that we’ve identified as a key growth component, increased by 15.1% in the quarter. We have improved our operating margins by 180 basis points, all of this resulted in a 4.1% increase in same-store NOI for the quarter.
From an operational perspective, we’re off to a good start and our expectations for the balance of the year remain positive. We acknowledge there are challenges ahead but know that we’re better positioned that these bankruptcies, store closings and anchor repositioning that we’ve ever been in our history. With our transition to a top tier mall Company, we’re now able to focus our capital resources on projects with higher value creation potential. Along these lines, we have several anchor replacements underway. We recently announced that we’re recapturing the Sears box at Viewmont Mall to allow for Dick’s Sporting Goods and Field & Stream combo store along with the potential phase 2 to include additional boxes and restaurants.
As we’ve discussed in the past, Viewmont Mall has recently undergone a comprehensive remerchandising effort that has driven 20% increases in sales and NOI at the property. This proactive recapture is another step in our methodic reduction at Sears locations in our portfolio from 29 in 2012, to 16 following this recapture. This summer we also welcome the second Primark to the Philadelphia area in a portion of the Sears box at Willow Grove Park. We believe that not having any Sears on the most recent closing list is another reflection of the enhanced quality of our portfolio.
At Exton Square, the demolition of the former Kmart is on underway to make way for a fall ‘17 opening of Whole Foods and work is under way in the former J.C Penney store to add Round One Entertainment before the end of this year. These exciting editions will certainly bring additional customers to our door as we contemplate a phase 2 reconfiguration. At Cumberland Mall, construction is under way for Dick’s Sporting Goods to replace J.C. Penney. This store is expected to open in the fourth quarter.
We have a number of other redevelopments and remerchandising efforts in process. At the Fashion Outlets of Philadelphia work is underway in the close portion of the project. The opening is planned for 2018. Toward this end, we continue to move transactions through the leasing continuum and look forward to an exciting ICSC convention in Las Vegas for this project. The project cost is expected to range from $305 million to $365 million with a net investment of $275 million to $335 million. We continue to work towards securing the remaining piece of public financing in the near future.
We are one the way with the remerchandising and cosmetic renovation at Mall of Price Georges outside of D.C. where we’ve 65% of the space committed with exciting retailers and restaurants. The plan will improve the merchandising mix and curb appeal, making better use of the surrounding densification, engaging with the 25,000 cars per day in front of the mall and the pedestrian activity too from the metro station. We’ve a 20,000 square foot H&M set to open later this year. The project will span 2016 and 2017, reaching stabilization in 2018, strengthening this $459 per square foot asset and the dominant position we’ve gained in this market to our Springfield Town Center acquisition. At Plymouth Meeting, work continues on the new Legoland Discovery Center, scheduled to open spring of ‘17. This anticipated addition has already spurred great interest from tenants looking to co-tenant with this experience, and we look forward to advancing our remerchandising plans for this property. Upon their opening, occupancy of the property should increase by approximately 200 basis points, before any incremental leasing activity.
Another key element in our growth and portfolio improvement strategy was the acquisition at Springfield Town Center. March 31st marked the one year anniversary of the acquisitions and we’re pleased with the results to-date. Sales have come out of the gates at a strong $508 per square foot, Macy’s is underway with their transformative renovation that will bring an improved overall experience and higher end brands to satisfy the expanded customer base.
Department store sales have trended well, up 30% on average since the centre reopened. Restaurant and entertainment sales continue to impress set to eclipse $80 million. With over 70,000 square feet of stores under construction occupancy is set to continue to move towards stabilization this year, notably Saks OFF 5th is under construction to open in the fall. This addition will build on strong fashion mix and be a great complement to the existing Nordstrom Rack.
So one year later, we believe this center has room to grow its sales, occupancy and NOI. All of these portfolio improvement efforts have allowed us to create stronger balance sheet as well. With the recent financing of Woodland Mall and pay off of Valley Mall, we have no debt maturities until June of ‘17. We have reduced our overall interest expense from 3.94% with 91.6% fixed or swap to fix and extended our average time to maturity to 6 years, providing security for the future. We’re exploring JV opportunities at some of our B and A minus quality assets as a means to accelerate levered reduction. We’ve been in touch with several interested prospects who we will continue to evaluate as we move towards price discussions. We continue advanced discussion on the sale of our JV interest in our remaining power centers.
These are all steps we are taking to reduce our leverage and be more in line with our top tier mall peers. As it relates to additional dispositions, we continue marketing Washington Crown Center which is the remaining mall in our plan program. We expect to solidify interest in a next month, have meeting scheduled at ICSC to advance the interest and go forward to finalizing bids following that. As it relates to the Philadelphia Street retail properties, we are progressing towards closing, which we anticipate will occur in the third quarter.
Our move to quality has been decisive and we’re generating results. We’ve taken our portfolio from sales of 334 per square foot to 460 per square foot today, a sea change in the position of this Company. We have demonstrated the impact this has on our ability attract talented employees and quality of retailers. We’re also gaining recognition with investors and sale side analysts and expect our multiple to continue to expand in line with the portfolio we’ve created and the opportunities it represents in yielding results for shareholders. We believe we’re well positioned for the future and consider ourselves at the beginning of the next phase in our evolution with continued opportunities to close the NAV gap.
With that, I’ll turn it over to Bob McCadden who will review our quarterly results and expectations for the balance of the year.
Thanks, Joe. We’re building on the momentum generated during the second half of last year. We’re starting off 2016 with solid financial results and improving operating metrics. Same store NOI excluding lease terminations increased by 4.1% over the prior year’s quarter. Factors contributing to the improved performance included a 2.5% increase in base rents, from new store openings, higher average rents and the increase in common areas revenues that Joe mentioned among other factors. While expense reimbursement revenue was down, reflecting lower operating expenses, improvements in our CAM and utility margins contributed to our bottom line growth for the quarter.
Our same store expense recovery ratio increased by 40 basis points to 88.5% in the period, as we continued to realize margin benefits from our shift to fixed CAM leases. Same store NOI was favorably impacted by the inclusion of Springfield Town Center and the opening of Gloucester Premium Outlets in August 2015. Offsetting these favorable contributions was the loss of income from property sold subsequent to March 31, 2015. The 2015 and 2016 property sales were approximately $0.04 per share dilutive for the quarter. We continue to make progress on our objective of keeping our overhead cost in line with a size of our portfolio. G&A expenses were approximately 4% lower in the first quarter of 2016 compared to last year.
Our weighted average debt balance of $2.035 billion was approximately $300 million higher than the first quarter of 2015, reflecting borrowings associated with the acquisition of Springfield Town Center. However, a 73 basis-point reduction in the Company’s average interest rate over that period largely mitigated the increase in borrowings. Lower hedging effectiveness in this year’s quarter combined with the capitalization of interest on redevelopment projects resulted in a reduction of interest expense of approximately $858,000 compared to last year’s first quarter.
FFO as adjusted per diluted share for the quarter was $0.43 compared to $0.40 last year and FFO per share was $0.42 compared to $0.34 in 2015. The FFO adjustments in 2016 include employee separation costs while last year’s quarter included costs related to the Springfield Town Center acquisition, both periods included hedging effectiveness resulting from the early repayment of debt.
There have been a number of questions raised occupancy levels at several properties in our portfolio. As we touched on previously, we have been taking advantage of the bankruptcy related closings that occurred last year as an opportunity to improve the tenant mix in our upgraded portfolio. To this trend, we have six new H&M stores under construction which average 20,000 square feet in size and require us to aggregate small shop space to accommodate them. With the opening of these new H&M stores and others, we expect to recognize 250 to 300 basis-point increase in non-anchor occupancy with the same store properties by the end of this year.
We’ve modified the lease activity summary on page 8 of our supplemental to make our reported metrics more comfortable to those reported by our mall peers. We’re introducing an average rent spread metric to supplement our traditional cash basis renewal spreads. The average rent spread compares the average rent per square foot under the new lease term to the final rent per square foot amount and the expiring leases. We have also included the average lease term for executed leases for the presentation.
We added a vacant anchor summary on page 17 of the supplemental. To-date, we have executed leases covering approximately 250,000 square feet to backfill majority of the space left vacant by four of the five anchor tenants in the portfolio. We continue to work on prospects for the remaining vacancy.
At the end of March, we had over $250 million of immediate liquidity including cash and amounts available under our credit facility. At the end of March, our bank leverage ratio was 52.8%, a 350 basis-point increase from the end of 2015. It’s important to note that our net debt to EBITDA ratio versus approximately eight times at the end of March is not impacted by this leverage change. As mentioned in our year-end earnings call, our bank leverage ratio increased primarily due to the formula used to calculate gross asset value in our bank facilities. During the first year after acquisition, we received value equal to the purchase price for our property, thereafter bank gross asset value was determined by capitalizing growing 12-month NOI at 6.5% or 7.5% capitalization rate. The increase in leverage will moderate as Springfield Town Center moves toward stabilization. Our average interest rate excluding non-cash financing fee amortization of the end of the quarter was 4.11%. Following the April refinancing of Woodland Mall, this rate was further reduced to 3.94%, a 42 basis-point reduction from a year ago. Our debt maturities are well laddered and we’ve addressed all loans maturing until June of 2017. At the end of the quarter, only 8% of our debt carried floating interest rates or is not hedged, leaving us well- positioned to mitigate the impact of any increases in short term interest rates.
On our property redevelopment summary on page 25, we’ve added the mall at Prince Georges. Spending for this project will take place over the next three years and was contemplated in a capital plan that was laid out at Investor Day in January. For the balance of this year, we expect our redevelopment capital spending to be in the range of 90 million to a 100 million. With regard to guidance, we are reaffirming our most recent estimates of FFO per diluted share for 2016. The Company estimates FFO will be between $1.79 and $1.87 per diluted share; FFO as adjusted will be between a $1.80 and a $1.87 and net income attributable to PREIT common shareholders is estimated between $0.05 and $0.11 per share.
While our first results exceeded expectations, we’re still maintaining our 3% same-store NOI growth target for the full year. The uncertainty surrounding the outcome of the announced or possible bankruptcy filings by tenants should become more clear over the course of the next few months.
With that we’ll open it up for question.
We’ll begin the question-and-answer session. [Operator Instruction]. And our first question comes from Ki Bin Kim with SunTrust.
Ki Bin Kim
Could you first talk about the potential hurdles that you might face with Aéropostale -- I’m sorry, yes, Aéropostale and PacSun, their store closures, and how would you describe the quality of that space in terms of rent per square foot and what would the total rent exposure be for those two combined?
This is Joe. First off, we have about 34 stores combined with Aéro and PacSun. And it’s about 125,000 square feet space in total. If you think about this, we’ve really experienced a relatively low volume of bankruptcy. And while PacSun is filled, Aéro has not yet; it’s pretty early on in the discussions to be able to give a great deal of specificity. But I think it’s important to point out that over the past few years, we’ve right-sized their occupancy costs. And we think at least what we are learning from PacSun is it’s a minimal amount of closures. And so all things considered, we think we’re positioned to well absorb this, given the quality of the portfolio. And each of these represent less than 1% of the Company’s revenue. And we think there is an opportunity to enhance merchandising mix at these properties as a result of what we conclude, and again, some of this is a bit premature, will be a number of closings that probably will be less than 25% of their store base.
Ki Bin Kim
And what is the 125,000 square feet combined equal on a percent rent basis?
It’s about $7 million.
Ki Bin Kim
And could you talk a little bit about the traffic trends you’re seeing at Springfield Town Center? Obviously this is not fully stabilized yet. Could you just comment on…
We don’t have a large basis for comparison, number one, since we just hit our first anniversary. But if you look at the indictors there, I mean again, the restaurant sales are approaching $80 million; the anchor sales and the property are up, and this is average across the board for Macy’s, Target, Penneys, over 30%. And there is a significant renovation being underway in the Macy’s store right now to enhance both the store appearance as well as to enhance -- to upgrade the merchandise mix. So, in any event, I think relative -- the trends at Springfield Town Center are extremely positive. We think there is an opportunity to continue to drive sales north of the $508 a foot that it currently is at.
Our next question is from Christy McElroy with Citi
Just regarding your comments on the margin improvement and the shift to fixed CAM, given the decline in same-store expenses in Q1, what’s your expectation for operating expense trends into the rest of the year and how should we think about that margin improvement contribution overall same-store NOI growth rate of 3% that you’re expecting?
Yes. I think we continue to see expectation of -- if you look at it on a sequential basis or comparable basis for the same period the prior year, we’d expect to see continued margin improvement on the operating expenses. At this point, I’m not sure, if I can give you a good estimate for the full year, but we’re definitely, as we laid out at Investor Day, seeing the trend as each year rolls over with our fixed CAM program, we’re seeing improvement in overall CAM margins.
And then just following up on Ki Bin’s question, in terms of thinking about occupancy and bad debt, what level of potential closings is currently embedded in your 3% same store NOI growth forecast? What sort of buffer was in there before such that if we do see some closings from Aéropostale and PacSun that range could be affected?
I think, we’ve said in the past, we tended to look at stores on a individual basis as opposed to looking at specific retailers for potential closings. So, we’ve normally contemplated where we saw a tenant with high occupancy cost whether it’s PacSun or Aéropostale or anyone else, as a potential for either rightsizing or potential closing. So, I don’t if I can comment specifically on individual tenants but I’d say that as it relates to store closing for couple of these, we’ve contemplated minimal store closings in our 3% same store earnings guidance.
And then just lastly, just in the context of department store discussion; sorry if you’ve addressed this before. But Wyoming Valley Mall, you have three department store lease expirations in 2017, Bon-Ton, J. C. Penney and Sears. What are your expectations for that mall in terms of potentially getting any of those stores back?
We are in the process of extending one of those stores right now, and I believe we’ve reached agreement to extend the second store beyond those two dates. And we continue to work on an arrangement for the third department store, so that anchor situation we believe will resolve itself.
Our next question is from Floris Van Dijkum with Boenning. Please go ahead.
Floris Van Dijkum
Guys, I wanted to find out about the price discussions on your three power centers that you’ve put in the markets. You had previously mentioned a number of REITs are looking at that. Do you see any drop-off in terms of pricing expectations or do you think that that progress should continue, and it should be finished by the summer?
Well, we continue to make progress on the sale of our interest in those assets. From a pricing perspective, we think it is coming in essentially where we anticipated that it would come in at this point. We are trying to use the opportunity of competing bidders to enhance that and continue to work on moving that forward. So, I think at this point, we feel like we’re moving in the direction that we anticipated, both from a pricing and timing perspective.
Floris Van Dijkum
Great. And I know you’ve mentioned, Bob that you don’t really want to put any guidance out there. But, with the sale of the lower productivity malls do you foresee at some point over the next 12 months to 18 months that you will be more like your other mall peers and recover more than 100% of your expenses going forward or do you -- where do you think is the -- what timeline to expect to get all of your expense recoveries back?
Floris, roughly 12% to 15% of our leases roll over every year. So, it’s probably unrealistic to assume that we’re going to achieve that -- close that gap in the next 12 to 18 months. It will take us more than that period, just given the nature of the lease roll.
Floris Van Dijkum
Last question, I noted -- is there an earn out on the -- that you can get in terms of hitting certain operating metrics on your recent disposals? And if so what are those metrics?
The earn out is tied to anchor renewals at those properties.
Floris Van Dijkum
Our view of that is -- that was a crapshoot, because you know as well as I, this dialogue that we’re having on this call today is around anchor performance and they’re continued operation. So, when you think about where the highest risk of anchor closings are, lower quality malls from our perspective, we’ve seen that in the malls, we’ve sold already. So, it’s tied to continued occupancy of the anchors and it’s a crapshoot.
Our next question comes from Michael Mueller with JPMorgan. Please go ahead.
Hi. This is Lina on for Mike. What did you see as the steady state or like 3 to 5 year average NOI growth of the go forward stabilized mall portfolio?
I think we laid out at Investor Day that we would expect to be north of 3% as our target. So, we think in the 3% to 4% when you go out three or four years is where we would expect to be performing.
Our next question comes from DJ Busch with Green Street Advisors. Please go ahead.
Joe, the reconciliation of the portfolio sales per square foot you guys provided in the press release is super helpful. I noticed that the bankrupt tenant closing impact is marginal at this point. But when I look kind of at the property level metrics, it looks like there’s a couple assets, and I’ll just name off a couple, I think it’s Dartmouth Mall, Patrick Henry, and Capital City are the ones that come to mind where there was substantial declines in occupancy corresponding with substantial increases in sales productivity. I’m just wondering -- you don’t maybe have to address each one, but what’s going on in those that’s fueling the sales productivity but aren’t from the bankruptcies?
So, pretty sure to answer, H&M. Each of those centers is in the midst of various stages of 18,000 to 20,000 square foot H&M, which is close tenant relocations, closings, et cetera. And so that’s really what is driving that. And as part of that, I mean we took the opportunity to move out underperformers. We sort of saw this as a -- again if you think about this thing in steps, we got space back from tenants who -- all the fillings that occurred at last quarter ‘14 and first quarter of ‘15, we got space back; we took that space back, it clearly wasn’t large enough for an H&M; we did tenant relocations into some of those spaces, step one. Step two, exit the under performers. And step three was move the H&Ms into some of the 20-yard line 30-yard line space, if you will. And part of that -- part of it came about and part of that was the gap closings as well. So H&M is in essence replacing that merchandise category.
So, it’s move-outs of underperformers and then in addition other kind of shifting of retailers within the space that causes us big occupancy declines?
Yes. And up with space to lease that is well-located within your center.
I’ll just add one other comment, DJ. A number of those properties we actually had tenants that became comp tenants that were performing at higher than the previous mall average. So, they were also additive to the remerchandising that Joe described. They’ve already been in there but are now starting to report comp sales.
And then I had one question on Beaver Valley. I know it’s a very minimal amount of the portfolio. But it’s something that you guys addressed a couple of times last year as far as opportunities, given the Marcellus Shale, job creation and whatnot. It’s your lowest performing asset. It has a couple anchors, it has Sears I believe leaving this year, JCPenney’s lease is up next year. Is that still an opportunity for you guys as a relevant retail center, or are there other opportunities for that asset, just given where it’s at and some of the activity that’s going on in that region?
Well, again the tail wagging this dog is the Shell cracking plant. And not to get into a lot of detail but they’ve bought the land, they’re moving dirt, they just made another acquisition in the market, they just leased part of the Beaver Valley parking lot from us for a significant sum of money. And so all indications are that Shell is going to go forward. But also we know what’s happening to the price of gas et cetera. So, we continue to monitor that. As we think about Beaver Valley going forward, it continues to be a center where again, given Shell that we think it’s an opportunity to incorporate more of an open air centre kinds of tenants to service that these 10,000 jobs that will be created, hotels. We’re under agreement with the with the adjacent landowner. We have some additional land at that property; we’re under an agreement with an adjacent landowner to sell property, sell two pieces of property to one which will be an office building, for an office building that he is developing, not us. And he is also developing an apartment complex, which is in another portion of property and both of those are under agreement. Hopefully they’ll come to close. So again, closely monitoring Beaver. Understand your comment, it is -- we’re very clear that it’s our worst performing asset in our portfolio, but we just want to be at this point, we are so closed. We want to be very thoughtful and careful that whatever decision we make that we maximize the value of it.
Our next question is a follow-up from Ki Bin Kim with SunTrust. Please go ahead.
Ki Bin Kim
Thanks, a couple of quick ones. You have about 200 million of high cost preferred equity coming due in 2017, are your plans today to pay that off? And what would the source of funding be?
Ki Bin, it’s something that we’ve been discussing internally for some months. We will look at the possibilities to reissue another lower cost preferred stock and replacement but it’s still long way out, may have a year from now in October but certainly on our radar screen.
Ki Bin Kim
Okay. And I know you guys report occupancy on a fiscal basis and I believe that’s correct. Could you give some color around what that number, 94.4%, would look on a lease basis and then 91.3% for non-anchor space would look on a lease basis?
Ki Bin, I’m not sure if we have the ability to do that because of the fact that some of those tenants that are part of that 500,000 plus square feet that we mentioned are replacing existing tenants. But, we will endeavor to work in that. So, we’re prepare at the next earnings call to report that. As part of our regular reporting, it’s an area that I think it shows upside for the portfolio, we just didn’t have the ability to pull that information together for today’s call.
Ki Bin Kim
I guess that’s what I was alluding to. Is that a pretty positive spread?
Yes. And I think going forward, we should provide that information as part of our normal press release.
Ki Bin Kim
Okay. And correct me if I’m wrong, but I believe you don’t report tenant sales until a retailer has been there for two full years? Given that you’ve opened a lot of more productive retailers in the recent past year and a half like H&Ms, what would your sales per square foot look like for your portfolio? And maybe those are over 10,000 square feet but maybe we could just talk about this in a non-anchor basis, what was the generally pro forma sales per square foot look like for your portfolio if you true up for some of those more recent openings?
I don’t -- we can again answer that question, but I think your point is well taken as that over time, we’re expecting that we would continue to see improvement in some of that remerchandising tenants move into our comp store pool.
Ki Bin Kim
Okay, thank you guys.
Thank you. There were two good points, Ki Bin, and we’ll discuss them again on a going forward basis, look at incorporating them in our disclosure.
[Operator Instructions] At this time, I’m showing now further questions. So, I’d like to turn the conference back to Joe Coradino for any closing remarks.
Thank you all for joining us today. We’re looking forward to continuing to exploit the opportunities to grow the platform and a successful ICSC convention next month. We will highlight our new portfolio and sell the hell out of it. Thanks guys.
The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.
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