Brookfield Property Partners L.P.
Q2 2015 Earnings Call Transcript

Published: 5 Aug 2015

[Operator:]

Welcome ladies and gentlemen to the Brookfield Property Partners 2015 Second Quarter Financial Results Conference Call. This call is being recorded. It is now my pleasure to turn the call over to Matthew Cherry, Vice President, Investor Relations and Communications. Please go ahead, sir.

[Matthew Cherry:]

Thank you and good morning. Before we begin our presentation let me caution you that our discussion will include forward-looking statements. These statements that relate to future results and events are based on our current expectations. Our actual results in future periods may differ materially from those currently expected because of the number of risks, uncertainties and assumptions. The risks, uncertainties and assumptions that we believe are material are outlined in our news release issued this morning. With that I will turn the call over to Chief Executive Officer, Ric Clark.

[Ric Clark:]

Thank you, Matt. Good morning everyone. On the call with me are Bryan Davis, our CFO; Brian Kingston, our President and CIO and John Stinebaugh, our Chief Operating Officer. Hopefully you would have all had a chance to look through our press release, letter to unitholders and supplemental information package this morning would show another active and productive quarter with solid quarterly financial results. Getting the call started I'll just turn the mic over to Bryan Davis who will take us through our financial report. Thanks, Bryan.

[Bryan Davis:]

Great, thank you Ric. The highlights for our second quarter performance include a company FFO of $198 million compared with $193 million for the same period in 2014. On a per unit basis FFO for the quarter was $0.28 per unit compared or which was consistent with the prior year. Net income for the quarter of $1.026 billion or $1.44 per unit compares with $892 million or $1.31 per unit in the prior year. Driving the increase in net income were fair value gains of $550 million coupled with an income tax benefit of $340 million as a result of a reduction in our effective tax rate. Total return for the quarter which is calculated as our company FFO plus capital appreciation was about $0.8 billion compared with $1.1 billion in the prior year. This represents an annualized return in line with our target of achieving 12% to 15% annualized total returns over the long term. And lastly, IFRS value per unit increase to $30 per unit up from $28 at the end of the year as a result of the contribution from FFO and value appreciation in excess of distributions to unitholders and the impact of our unhedged equity invested in foreign currencies. Unfortunately the performance of our units in the second quarter reversed the trend we witnessed in the first quarter and resulted in a widening of the discount. Capital outflows in real estate equities during the quarter had a similar effect on the index in many of our peers as well. In reviewing our funds from operations in a little bit more detail the main driver that contributed to the $5 million growth in company FFO to $198 million compared with the prior year was positive same-store growth in our office and retail sectors and positive contribution from our opportunistic acquisition activity including $8 million in positive contribution from our triple-net lease business, $4 million from our recent investment in our India office portfolio and $3 million from our recent investment in expanding of our multifamily platform. This was offset by the depreciation of our foreign currencies relative to the U.S. dollar which reduced FFO by $16 million. In arriving at company FFO which we detail on page 9 of our supplemental, we adjusted for $15 million in debt break fees as we retired $200 million in capital securities as part of the Canary Wharf acquisition and refinanced property level debt in our India office portfolio to take advantage of lower interest rates. We also had $10 million of transaction costs and added in the net contribution to company FFO of $10 million from our GGP warrants assuming they were net settled during the period. In the prior year we did adjust our company FFO for a $43 million gain on an investment in a piece of debt and $12 million of transaction cost primarily associated with the acquisition of Brookfield Office Properties and added in the net contribution to company FFO of $9 million from our GGP warrants to ensure a comparable figure. As mentioned in the highlights we reported fair value gains of $550 million during the quarter. The majority of these gains were from our office portfolio where we continued to see improved cash flows and transaction metrics, mainly in New York and in Sydney, the impact of which was a reduction in our discount rate applied to our office assets from 6.84% to 6.73%. Offsetting these gains we did recognize a loss on our GGP warrants of approximately $250 million to reflect the decline in the quarter of the market value of the underlying shares. In comparing our results to the first quarter of 2015 company FFO increased by $17 million from $181 earned in that period. And in reviewing our results by operating platform on that basis we saw our other opportunistic investments earn company FFO of $42 million which was an increase of $9 million from the prior quarter. The main drivers were a return on an investment secured by a European hotel portfolio and an increase in contribution from our multifamily and industrial operations. Retail company FFO increased to $119 million from $114 million in the prior quarter largely due to the benefit of lower interest expense as a result of lower average debt levels in that platform. And office FFO remained consistent at $170 million as our invested capital and occupancy remained largely consistent. Going into the second half of the year we expect to see contribution to our results from leases that have been signed but where criteria for revenue recognition up until now has not been met as Ric will highlight in his comments. On our proportionate balance sheet we had an increase in total assets of $1 billion compared to Q1 largely driven by fair value gains in our commercial properties, investments made in our development pipeline and the benefit of a stronger FX spot rate at the end of this quarter. As we have largely committed the equity required for our active developments the majority of our investment in expanding the development pipeline was funded through committed construction facilities which was the largest contributor to the increase in asset level debt to $25.3 billion or 40% of our total assets. Our corporate level debt decreased to $3.76 billion from $3.9 billion as we applied $500 million in proceeds raised from asset sales in the quarter to reduce the balance on our BPO acquisition facility to $660 million. At quarter end our partnership capital was just over $21.5 billion, resulting in a proportionate debt-to-capitalization of 52%. As mentioned in our letter to unitholders our target is to reduce this ratio to 50% or less through the repayment of the balance of our acquisition facility by the end of the year and to restock our credit facilities with proceeds raised through incremental asset sales. Finally we announced this morning the renewal of our normal course issuer bid and that our Board of Directors declared a quarterly distribution of $0.265 per unit to be paid at the end of September which is consistent with the dividend paid in June but represents a 6% annualized increase over the distributions in the prior year. Now with that I will turn the call back over to you Ric.

[Ric Clark:]

Thank you, Bryan. Economic data points coming out of our operating businesses continue to point towards a positive improving economic environment in most of the developed markets in which we operate. During the second quarter we continued to take advantage of this by leasing more space and at higher rents than projected in our business plans. In our office division our oil and commodity driven markets, largely Houston, Calgary and Perth have seen diminished tenant demand but we're well leased and positioned with among the best properties in those cities. Activities in these markets account for a small portion of our total NAV and as we have said in the past lower energy prices are a net benefit to the balance of our property holdings. Developing markets like Brazil, China and India all have their mini-headwinds which are creating cyclical opportunities for us. Investments that we've made in these markets in the recent past are performing exceptionally well I would add. Our core office operations continue to perform strongly with overall occupancy finishing the second quarter at 92.5% which was consistent with the previous quarter. Notwithstanding continued healthy demand by occupiers we had a few large lease expires at the end of Q2 which mitigated an otherwise strong leasing quarter. The performance of our largest office markets, notably London and New York City, have been an important catalyst to this strength. We leased 2.4 million square feet of space in the second quarter and have leased 4.3 million square feet overall of office space for the first half of 2015. Office leasing highlights for the quarter included a nine-year 544,000 square foot renewal with Public Works and Government services Canada at Jean Edmonds Tower in Ottawa, a five-year 97,000 square foot renewal with Latham & Watkins at Gas company Tower in Los Angeles, a 10-year 89,000 square foot new lease with South32 at 108 South George's Terrace in Perth, a 15-year 73,000 square foot lease with the U.S. Attorney's Office at 1801 California in Denver. And subsequent to the quarter we signed a new lease at top rents with KCG for 169,000 square feet at 300 Daisy Street reflecting the solid positioning of Brookfield Place New York in the rapidly reemerging lower Manhattan market. This lease covers a substantial portion of the space that NYMEX will be vacating once they consolidate into the bottom half of the building later this year. Overall remaining availability at Brookfield Place New York totals just shy of 500,000 square feet with about half of that total currently under active tenant negotiations. Our office redevelopment program continues to progress and pay off as well. At 5 Manhattan West, the former 450 West 33rd Street, we're well advanced for the $300 million redevelopment program. This has given us the ability to sign three recent leases for almost 500,000 square feet at starting rents over $70 per square foot, considerably higher than our acquisition underwriting, in fact almost double. Our other office developments in the U.S. have likewise been achieving strong success. At 2001 M Street in Washington, DC we signed our first new lease with the law firm Bracewell & Giuliani for 49,000 square feet. We also continue to lease up 1801 California in Denver. 1801 has gone from 37% occupied shortly after our acquisition in December 2011 to 95% leased today thanks to the signing of two leases covering 100,000 square feet during the second quarter. Now similar to office, our retail platforms continue to perform well with General Growth Properties, Rouse Properties, Canary Wharf and the Brookfield Place retail shops all maintaining strong occupancy. Our overall retail segment finished the quarter 94.8% occupied and we continue to see increasing tenant sales and further growth coming out of this business. I know the GGP and Rouse Properties earnings calls were a few hours ago and I'm guessing that many of you were on those calls. So as to avoid being repetitive we're not going to spend much time on retail during today's call. I will just say that our revamped retail and restaurant collection at Brookfield Place New York operationally for about four months now has been extremely popular with the diverse clientele in lower Manhattan. More importantly tenant sales for June came in over it $900 per square foot on an annualized basis which is a very good start even though we're just at the very beginning. I know many of you have visited Brookfield Place at various points over the past four years during the different stages of our retail redevelopment. But for those who haven't seen the new offering please come experience it. And hopefully you will also be able to join us on October 7 for our Annual Investor day which we'll be hosting downtown for the first time in several years. Now besides office and retail we have earmarked a portion of our balance sheet for investments that are opportunistic. These investments are made besides institutional investors in Brookfield-sponsored funds. These types of deals which leverage our real estate franchise earn outsized returns. Our ability to invest large sums of capital with institutional partners in varied markets and asset classes provides a competitive advantage and helps boost our overall returns beyond those of a typical REIT. Our opportunistic investment strategy currently represents about 10% of our balance sheet. Within Brookfield's multifamily, industrial and hospitality platforms or focus is mainly on acquiring underperforming assets, driving operational efficiencies, maximizing performance and then recycling the capital into the next opportunistic investment. As I mentioned hopefully you'll remember on our last call our $1.4 billion commitment to the Brookfield Strategic Real Estate Partners I or BSREP I fund has been virtually fully invested and we expect to be entering into the capital harvesting phase in the near-term. The capital and profits returned from BSREP I will be used to fund our commitment to BSREP II. Other than timing differences for the most part we expect our commitments to opportunistic investment initiatives to be self-funded from capital recycled from prior opportunistic funds. During the second quarter two large opportunistic transactions were announced for this second BSREP fund. The first, the acquisition of Associated Estates, an owner operator of 15,000 multifamily units throughout the U.S. which is expected to close on August 7. While the second, the acquisition of Center Parcs UK, a collection of five short break holiday destination villages in UK closed yesterday. Our proportionate equity commitment for these investments totals $775 million for $2 billion of assets. Now post-closing Associated Estates will be folded into Brookfield's multifamily group and Center Parcs into the hospitality division. Although both of these businesses are already producing steady cash flow we see opportunities to grow them and to enhance growth in investment returns. The plan for Associated Estates is the early sales of some stabilized properties, reinvesting the capital to upgrade others and completing construction of some attractive infill developments. With Center Parc, an expansion into Ireland where the company has an option on entitled land to build a new resort, the refurbishment of some of the older lodges and facilities and the enhancement of on-site customer spending through strategies many modern theme parks have utilized are all being considered. Prior to moving to your questions I wanted to provide an update on the progress that we've made so far this year against our strategic and growth objectives. With the closing in April of the acquisition of the Canary Wharf group with a joint venture partner we completed a second transformational transaction aimed to enhance our growth and to rationalize our structure. We went into considerable detail about Canary Wharf and that transaction on the last call. So I'll just say that we've successfully completed the integration of both our major transactions, the Canary Wharf transaction and the Brookfield Office Properties investment and are in the later stages of the repayment of the debt related to the Brookfield Office Properties acquisition. By the end of the year our balance sheet should be positioned for future growth. A second priority for us was to advance our development projects and to increase their pre-leasing levels. During the quarter, we commenced construction of our largest project to date, Manhattan West in New York City, with the signing of Skadden as a 25% anchor tenant for the first office tower. Activity at Manhattan West has picked up considerably since Skadden signed that lease when it was announced. In fact we're in ongoing discussions with eight tenants covering 2.5 million square feet of additional space for this project. While most of the demand is for the first tower, where Skadden will be, discussions have begun to spill over to the second tower as well as to the remaining space at 5 Manhattan West where availability is declining rapidly. In London we signed a second tenant at our London Wall Place project. Cleary, Gottlieb Steen & Hamilton is taking the top portion of 2 London Wall Place for about 60,000 square feet or 31% of that building. Coupled with Schroeder's commitment for the entire first building of this project we're well on our way to achieving our targeted pre-let and stabilized NOI levels prior to the project being delivered in 2017. We also commenced during the quarter our third London development, 100 Bishopsgate. We hope to be in a position to announce a 300,000 square foot anchor lease prior to the end of September and similar to Manhattan West in New York we have considerable additional tenant demand for this great project. Our development projects in Toronto, Calgary and Perth along with our other London development in Shoreditch, namely Principal Place, are all progressing according to schedule and budget and are all between 60% and 70% pre-leased. With the closing of the Canary Wharf deal we added significantly to our development pipeline as well. On the office side Canary Wharf is currently constructing 1 Bank Street for Societe Generale who is taking 40% of the building. Office development aside one of the most compelling considerations for us investing further in Canary Wharf was the pipeline the company has entitled in the residential sector. Particularly on luxury high-rise apartments which are an increasing high demand in London as home prices have soared and mortgage lenders have become more restrictive. Notwithstanding this trend condos continue to be attractive as well. The condos recently released to the market at Canary Wharf were all scooped up in a matter of weeks with buyers lining up to make down payments on these new offerings. Some of you may have seen this phenomenon mentioned in The Wall Street Journal just a few weeks ago. In total 210 units were released to the market completely spoken for in a matter of days. And this is out of a total project units of 350, the balance of which will be released later in the year or next year. We have a robust active development pipeline as outlined on page 35 of our supplemental which on average is 49% pre-leased with considerable time to go until we deliver these projects. On the surface the total capital cost of our program at roughly $8 billion seems substantial but the amount of additional equity required to complete these projects is readily manageable. To highlight this point we typically secure credit facilities sized to finance 65% of our construction cost. To fund our equity commitments we contribute to the land at its market value. Since our development program is highly concentrated in premium markets such as New York and London the land value normally equates to around 25% of the total cost, leaving a cash equity requirement of about 10% of project cost. Once certain construction milestones and leasing levels are achieved we have the opportunities to accretively raise additional capital by bringing equity partners into our development project. We're actively pursuing almost $1 billion of such equity syndications in the next 12 months. The net proceeds from these initiatives will serve to fund future developments as well as other opportunities that arise. The third and fourth priorities were centered around recycling capital and reducing leverage which we thought was important, so I think it's best to address these two together. During the first half of the year we've been quite active with asset sales, so I will start there. At the beginning of the year we had a goal of raising $1 billion to $1.5 billion through office asset sales. During Q2 we closed three such sales including our remaining interest in Met Park East and West in Seattle. We also sold a 49% interest in our Boston asset, 75 State Street and 49% of a portfolio of eight of our Washington, DC assets. Pension funds and sovereign wealth funds continue to show unabated appetite for investment in core real estate. The most efficient way for us to raise equity currently is to tap into this and to sell partial interest in mature assets while retaining asset management leasing and operational oversight, boosting returns by earning service and performance fees. Together these three asset sales raised $650 million of net proceeds, $500 million of which was used to repay our existing Brookfield Office Property acquisition debt which now stands at $660 million. Looking forward to the balance of the year we're in advanced discussions to sell an interest in 99 Bishopsgate in the city of London which we recently leased to full occupancy. That transaction is expected to close during the third quarter which will bring our total net proceeds raised for the year to $1 billion. We have begun preparing also to market interest in additional core assets which could raise a further $1 billion. All of these asset sale initiatives will allow us to pay off the balance of the BPO acquisition debt by year-end, significantly reducing our corporate level debt and positioning us closer to our long-term goal of operating with debt levels at less than 50% of our IFRS capitalization. So I think good progress against these 2015 objectives through the first six months of the year and a good plan to finish out the rest of the year. So finally, some quick biased commentary on the public equity markets and the recent performance of our unit price. Obviously real estate equities in general have been negatively affected by the anticipated rise in interest rates. Our view is that the prospect of rising interest rates has been on the table for several years now. Based on the measured recovery of the U.S. economy we've been making our real estate investment decisions under the assumption that the 10-year rates would increase in the near future. But the spread between cap rates and interest rates has been abnormally high in recent years which tells us the market has already been acting in anticipation of higher rates as well. But we don't believe 100 to 200 basis point rise in interest rates which are the more likely scenario will impact our business in any meaningful way. Although public real estate securities have been negatively impacted by rising interest rate commentary the appetite for premier commercial real estate by direct investors I think as you all know has not. There's a clear disconnect between how the public market is valuing real estate versus what we're seeing from institutional investors. And we'll continue to look for opportunities to capitalize on this arbitrage. We recognize the significant discount between the price of our public equity and the net asset value of our business and it's not something that we're ignoring. As you may have seen in our press release this morning and as Bryan Davis mentioned we renewed our normal course issuer bid which allows us to purchase up to 5% of our issued and outstanding units in the following 12 months. Given the historic discount between our unit price and underlying net asset value all things being equal we'll likely start to repurchase units starting when our quarterly trading blackout is lifted. Given our view on the value of our assets the increases coming in FFO and our pipeline of opportunities there's no better investment right now than our own units. As we have displayed in our letter to unitholders issued this morning which I'd encourage you to take a look at as well as in many of our recent investor presentations, we have robust earnings growth drivers embedded within the business that should increase NOI by over $1.2 billion over the next several years. In our U.S. office business alone we have approximately 3.4 million square feet of signed leases that are scheduled to begin contributing to earnings in the near-term and will provide on a proportionate basis an additional $10 million of income in the third quarter increasing to $25 million in the fourth quarter and $42.5 million by mid-2016 for an annualized run rate of $170 million in 2016. We're on target with our major leasing and development objectives which should help generate annual FFO growth between 15% and 20% annually over the next two years. Our unit price performance in recent months aside it's an exciting time for our business and we're pleased to share all of these activities with you today. With those remarks, we'd be happy to turn the call over to questions from analysts and investors. Operator?

[Operator:]

[Operator Instructions]. We will go now to Mark Rothschild with Canaccord.

[Mark Rothschild:]

Ric, you mentioned that for the first Brookfield Real Estate fund you're at the point where you're starting to harvest some of the investments. Can you give us some information on which are the large investments in that fund that might be at the harvesting stage?

[Ric Clark:]

So, Mark, I think to make sure I don't have my exact words in front of me but what it says we're at the phase where we're starting to focus on harvesting our investments. So we expect in the near-term that we'll start to do that, probably slowly at first and then we'll pick up pace over the next couple of years. And John, I don't know if you have anything you want to --

[John Stinebaugh:]

So Mark, as you know as Ric mentioned in his comments with our opportunistic investing strategy we buy properties that have got significant potential for increases in value. And once we're pretty well along the way with executing our value creation strategies and/or stabilizing the assets we will look to sell. So if I look at the portfolio probably the most mature that we're starting to sell. And I think it's going to be individual assets as opposed to necessarily sales of the entire companies or port folios that we've bought but multifamily is probably the first. Also industrial. Those will be probably the ones that we begin to monetize over the course of 2015 and into the first half of 2016. And then what you'll see is some of the other investments that we've made thereafter we'll begin to look to monetize as we stabilize and complete our value creation strategies.

[Mark Rothschild:]

Moving on, Ric you made some strong comments about the unit price and the normal course issuer bid. Can you give us some maybe quantification on what type of magnitude of a buyback would you like and will this impact at all the pace of acquisition? Will you hold off on maybe buying properties? You did note that your portfolio might be cheaper than anything you could find externally.

[Ric Clark:]

Yes, so no specific guidance on order of magnitude although the total normal course issuer bid is 13 million shares. So at today's price roughly $260 million is the outside amount. But absolutely we'll take into consideration the value of our units versus other opportunities as we see them.

[Operator:]

[Operator Instructions]. We will take our next question from Mario Saric with Scotiabank.

[Mario Saric:]

Just with respect to the asset disposition, you have assets for sale on the balance sheet right now net equity about $300 million or so. Is that the expected partial interest sale on Bishopsgate or is that something else?

[Bryan Davis:]

Sorry, can you just repeat that question, Mario?

[Mario Saric:]

Sure. So you have net assets for sale on the balance sheet of roughly about $300 million as of Q2. Is that Bishopsgate in London or is that comprised of other assets?

[Bryan Davis:]

Yes, that actually includes Bishopsgate in London and one asset in the Toronto market which has advanced since we had our conference call for the Canadian REIT to today. So both of those have been included in our assets held for sale.

[Mario Saric:]

Okay. And then the comment on potential incremental $1 billion of assets sales, is that a gross figure or a net equity figure?

[Ric Clark:]

It's net equity.

[Mario Saric:]

Okay. So then when we step back I think coming into the year you're targeting gross asset sales of $2 billion net equity of about $1 billion or so. With that in mind I guess it sounds like you'll sell a bit more than what you initially thought. Is that a fair comment?

[Ric Clark:]

Yes, Mario, that's our current expectation. As we mentioned there is no shortage of interest from institutional and sovereign wealth funds. And so we think it's a good time to recycle capital out of mature stabilized assets so we're capitalizing on that.

[Mario Saric:]

Okay and I guess several quarters ago there was some discussion of potentially looking at a partial sale of Brookfield Place New York. Now does that seem more or less attractive today then let's call it nine months ago A, given where the unit prices and B, given that appetite that you talked about?

[Ric Clark:]

Mario if I remember correctly that might've been a headline taken out of context. So we don't -- it's always possible at some point down the road we could sell an interest in any outset but I think at this point we still have some more space to lease and some more value to create. So that one isn't currently on the agenda.

[Mario Saric:]

Okay and then maybe two more questions. When you think about your cost of equity how do you think about it in internally, like various REITs or various real estate companies will look at it differently, so some may look at distribution yield, some may look at implied cap rate or some may look at on a full yield. How should we think about the way you think about your cost of equity internally?

[Bryan Davis:]

I will add my comments and then maybe the others around the room can chime in as well but we look at it on a long-term basis. Every investment opportunity that we look to make we're targeting 12% to 15% total return in aggregate to our equity holders. So that's the benchmark that we look to achieve as a cost of equity capital when we seek to invest in new acquisitions. Now that's a balance of an opportunistic pool of capital. It's a balance of a core plus pool of capital and it's the balance of owning our core assets that exist within our office and retail sectors.

[John Stinebaugh:]

And one way, Mario that we think about our cost of equity is if somebody buys our units today they will earn over if 5% dividend yield and we think that we should be able to deliver our targeted 5% to 8% distribution yield growth per annum. So that is a total yield of low teens that we think our unitholders are expecting that we would look at when we consider our cost of capital.

[Mario Saric:]

Okay. And then may be the last question, I guess Ric in letter to unitholders I think it was the first time that I've seen it specifically in the unitholder letter but there was a reference to Brookfield Asset Management being very focused on narrowing the discount to NAV which has expanded a little bit as you mentioned earlier on. Is there anything without I guess getting into a lot of detail but what is there that BAM could do to try to narrow that gap going forward?

[Ric Clark:]

Well, I think we're all part of the Brookfield team and so all of us every day are focused on narrowing the gap. So I think that's the best I could say.

[John Stinebaugh:]

In terms of theirs a number of specific initiatives we've got Mario. One is as we've discussed before we're looking to broaden the amount of analyst coverage that we've got so we'd like to get by the end of the year I'd say between six to eight analysts that are writing which will increase the exposure that we've got. We also think that BP-wise should be a very attractive investment for retail investors. So we have been trying to do brokerage teachings and things of that nature to try to increase the demand amongst retail investors. And an initiative we just started with the London investment tour is with particularly the amount of real estate we own in London and the exposure we've got on the continent to things that BP-wise should be a very good investment for European investors who would potentially value a globally diversified owner and operator of very high quality real estate. So we're looking to try to reach out and do more non-deal roadshows in that market and see if we can increase the demand for our units.

[Ric Clark:]

The other thing I would say is we have laid out on the call and in prior conversations and number of initiatives that are focused both on growth and reducing our debt. So I think the most important thing that BAM is doing is supporting all of these important initiatives which will contribute I think greatly to our growth in the very short future.

[Mario Saric:]

And sorry, just on that FFO growth Ric you mentioned about 15% to 20% annually over the next couple of years, is that roughly in line with the previous guidance of looking for roughly 8% to 11% FFO per unit growth on average over the next five years or has that kind of gone up or down?

[Ric Clark:]

No, I don't think the five-year forecast has changed considerably other than it might go up a little bit because the first couple of years are higher. But we've been very active in our developments and redevelopments in some of the other things that and the releasing of Brookfield Place and other assets which are all just beginning to come online in the next quarter. So we're pretty excited about what unitholders should see from our results over the next couple of years.

[Operator:]

It appears there were no further questions at this time. Mr. Clark, I would like to turn the conference back to you for any additional or closing remarks.

[Ric Clark:]

Okay, thank you operator. Thank you everyone for dialing in today and for your support. We look forward to meeting with you and talking to you on future calls. So thanks again.

[Operator:]

This does conclude today's conference. Thank you for your participation. You may now disconnect.