Columbia Property Trust, Inc.
Q4 2019 Earnings Call Transcript

Published: 14 Feb 2020

[Operator:]

Good afternoon, and welcome to the Columbia Property Trust Fourth Quarter 2019 Conference Call. All participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note that this event is being recorded.I would now like to turn the call over to Matt Stover, Director of Investor Relations. Please go ahead, sir.

[Matt Stover:]

Thank you. Good afternoon, everyone, and welcome to our fourth quarter 2019 Columbia Property Trust investor conference call. On the call with me today are Nelson Mills, President and Chief Executive Officer; Jim Fleming, Executive Vice President and Chief Financial Officer; and other members of our senior management team.Our results were released this afternoon in our quarterly supplemental package, which can be found on the Investor Relations section of our website and on file with the SEC on Form 8-K. We filed our 10-K with the SEC this afternoon. And an audio replay of this call will be available by this time tomorrow.Statements made on today's call regarding expected operating results and other future events are forward-looking statements and involve risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated, including those discussed in the Risk Factors section of our most recent Form 10-K.Forward-looking statements are made based on our current expectations, assumptions and beliefs as well as information available to us at this time. Columbia undertakes no obligation to update any information discussed on this conference call. During this call, we will also discuss certain non-GAAP financial measures. Reconciliations to comparable GAAP financial measures can be found in our supplemental financial data.With that, I will turn the call over to Nelson Mills.

[Nelson Mills:]

Thank you, Matt, and thank you everyone for joining us today. This afternoon we reported another quarter of strong results capping a banner year for Columbia Property Trust. This was the strongest year in the company's history, demonstrating the power of our unique strategy, the exceptional quality of the portfolio we’ve assembled and the dedication and capabilities of our expanded team. I'm very pleased to welcome the Normandy team to Colombia at this exciting time as we continue to move our company forward.After several years of successful strategic steps, we're now realizing the benefits of having one of the best position portfolios in the entire office sector. Our portfolio boasts modernized properties with attractive floor plates and amenities and some of the most desirable neighborhoods within high barrier gateway markets. Many of today's most forward-looking growth companies have turned to Columbia Property Trust to meet their facilities needs and their quest to attract, retain and inspire the dynamic workforce they require. You can see proof of this in our impressive tenant roster and increasingly in our solid operating metrics and financial results.2019 was a terrific year for us. One in which we raised our initial guidance for normalized FFO of three times. Strong demand for our properties drove more than 400,000 square feet of leasing during the fourth quarter, pushing our full year leasing to over 750,000 square feet. We ended the year with a lease rate of 97.1%. And just as important, our re-leasing spreads remained very strong. During the fourth quarter, we re-leased at a 20% spread on a cash basis and a 52% spread on a GAAP basis. Our eighth consecutive quarter of double-digit re-leasing spreads.The transformation we've accomplished at Columbia is the direct result of a well-defined strategy to strengthen our platform, grow our cash flow, enhance our net asset value and ultimately create shareholder value. We've been proactive, yet disciplined in the execution of our strategy, particularly as it relates to capital allocation, investment selection and leasing decisions. I’d like to walk you through some of the many recent examples that embody this approach.Our disciplined investment process is designed to create value for our shareholders while balancing compelling investment opportunities against market and execution risk. Our recent case in point was our acquisition of 201 California Street in San Francisco's Financial District for $239 million. This is an exceptionally well located 17 story Class A office tower at the corner of California and Front Streets. It's 99% leased with an impressive roster of tenants and with in-place rents averaging more than 15% below market. We expect to capture significant growth in cash flow over the next four to five years.Our fifth property in the Bay area 201 California is a terrific fit for our strategy with its prime location, attractive structural attributes and amenities. Our talented local team is laser focused on optimizing the performance of this latest addition to the Columbia portfolio. We also recently completed the acquisition of 101 Franklin Street, previously known as 250 Church Street for $206 million through our joint venture partnership with Normandy Fund IV. Our full redevelopment of the 16 story office tower in New York's Tribeca neighborhood is now underway and on track.As a reminder, 101 Franklin is in the heart of the high end residential sub-market with very little new office supply. Similar to our vision for 799 Broadway, we're creating modern boutique office space that will greatly appeal to attractive tenants at impressive rental rates. Speaking of 799 Broadway, the structure is rising quickly already at six stories and expected to top out near the end of this quarter. Tour activity is strong and ramping as the building rises and we hope to announce our first leases over the next several months.We're pleased to see high levels of interest from a great mix of companies, eager to embrace the building's top of the line features and its compelling location in this terrific live-work-play neighborhood near Union Square Park; another exciting project, just underway, is our vertical expansion at 80 M Street in Washington, D.C. This is a truly innovative project, the first office building in D.C. to utilize cutting edge and environmentally friendly mass timber construction. We'll be adding three new floors or 105,000 square feet to the top of this Class A office building in the desirable Capitol Riverfront District.Each new floor will feature dramatic 16 foot ceilings and 12 foot high windows and we'll connect to an additional 4,000 square feet of outdoor amenity space. We have already leased more than half of the new space to a terrific tenant looking to move its new headquarters by 2022. Speaking of leasing, our talented and motivated team continued to deliver. We successfully leased 418,000 square feet during the quarter, including a 332,000 square foot renewal with Pershing at 95 Columbus in Jersey City.This lease, which includes a substantial increase in rental rate, may expand to 410,000 square feet at the tenant’s option. We're very pleased that Pershing made the decision to keep its global headquarters in this building through 2037. We also had a very productive leasing year in San Francisco, which brought our Bay area portfolio to 90% leased. We executed almost 190,000 square feet of new and renewal leases in this market during the year with average rent rollups of 50% reflecting the unique appeal of our properties in this well-performing market.We expect our team to continue to capitalize on San Francisco's high demand and limited supply with double-digit rent rollup opportunities at all five of our Bay area properties. Before I turn it over to Jim to walk through our results and our updated guidance, I want to express how excited we are to have completed the acquisition of the operating platform and real property interests of Normandy Real Estate Management. As described last quarter, this was a relatively modest transaction in terms of size, but a key strategic step for Columbia that significantly enhances our capabilities, relationships and pipeline of opportunities in New York, D.C. and Boston.We knew that our two companies would have a strong operational and cultural fit and we're off to a terrific start as a combined platform. Our progress on 799 Broadway and 101 Franklin continues right on schedule as we absorbed several other exciting projects and perspective opportunities for our investors. We also announced several key leadership appointments this quarter and introduced dozens of very talented new team members to Columbia organization. We also announced as part of the Normandy acquisition, an agreement to commit $53 million to the Terminal Warehouse joint venture alongside Normandy Fund IV, L&L holding and a very impressive group of Capital Partners.L&L and Columbia will co-manage the terminal project, we spans a full city block just South of Hudson yards. Similar to Chelsea market, we envisioned turning this brick and beam 125-year-old industrial warehouse into a vibrant 1.2 million square foot Class A office and retail destination. With the acquisition of Normandy and the addition of our latest projects and investments, Columbia is an even more formidable competitor in New York City, Washington D.C. and Boston with deeper execution strength and greater access to capital.I'll summarize by noting that 2019 was not only another solid year for Columbia financially, but also a pivotal year in our multi-year transformation and we couldn't be more excited about the future. The combination of embedded growth in our existing properties, which fuelled our recent dividend increase, our expanding list of exciting value add projects, our strong balance sheet and now our expanded team. We're better positioned than ever to unlock value for our shareholders.I want to thank our hardworking team for the creativity and drive they bring to the business each and every day as we continue to demonstrate the effectiveness of our investment strategy. We are honoured by the trust of our shareholders and we'll continue to work very hard to reward you with the financial results you deserve. I look forward to updating you on our progress throughout the remainder of the year.I'll now hand the call over to Jim to walk us through our results in more detail and share our updated outlook for the new year.

[Jim Fleming:]

Thank you, Nelson, and thanks everyone for joining us today. Our fourth quarter capped a strong year for Columbia with normalized FFO of $0.35 per share, bringing the full year figure to $1.50, $0.01 above the high-end of our latest guidance range.Our year-end leased percentage of 97.1% is a testament to the quality of our portfolio and it was consistent with our 96% to 98% guidance range. Despite lower vacancy and limited roll over heading into the year, our team leased roughly 780,000 square feet during 2019, including 418,000 during the fourth quarter.Our leasing spreads remained robust at 20% on a cash basis and 52% on a GAAP basis, which continues to fuel our NOI and FFO growth going forward. We outperformed on our operating efficiency with our corporate G&A expense coming in at $32.8 million, which was better than our outlook range of $34 million to $36 million.Our same store NOI for 2019 was a robust 7.6% slightly below our estimated range of 8% to 10% only because of two factors. Our decision to hold the seventh floor of 80 M Street in Washington DC vacant, ahead of a vertical expansion we're embarking upon now, as well as the deferral of a tax abatement at 114 5th Avenue in New York from 2019 into 2020.However, now that we're expecting this tax abatement in 2020, we're raising the bottom-end of our same store NOI guidance range for 2020 from our previously announced 8% up to 9%, which should again put us at the front of the pack on this key metric.Columbia continues to have a strong balance sheet providing us capacity to execute our plan, to create shareholder value through compelling value add development, and redevelopment projects in our core markets.We ended the year with net debt-to-adjusted EBITDA of 6.3 times and net debt-to-gross real estate assets of 34.7%. Other than a small construction loan on 799 Broadway, we have no debt maturities until 2022 and we have more than $4 billion of unencumbered properties.Our financial strength allowed us to repurchase $33 million of our common stock during the fourth quarter at an average price of $20.72, which I will note is a 22% discount to the convertible preferred units we issued to complete the Normandy acquisition.We continue to consider our stock a compelling value and we had $166 million remaining at the end of December available under our repurchase authorization that went into effect in August.In December, we issued our preliminary guidance for 2020 including normalized FFO of a $1.46 to $1.51 and same store NOI growth of 8% to 11%. Today, as I mentioned, we're raising the low-end of our same store NOI growth range, providing a new range of 9% to 11%. And we're confirming our normalized FFO range at a $1.46 to $1.51In addition, we're introducing guidance for our year-end leased percentage of 95% to 97%. Full-year G&A expense of $35 million to $37 million reflecting the recent Normandy acquisition and weighted average diluted shares outstanding of 118 million.I want to emphasize that although our normalized FFO guidance range for 2020 is roughly in-line with what we produced in 2019 things have changed materially from last year.First, we've sold both Atlanta properties and our Pittsburgh property and we expect to sell our Pasadena asset very soon. These sales have focused our portfolio into just our four key high barrier markets. To replace these, we've bought 101 Franklin in New York, which is not yet producing income and 201 California in San Francisco, which has a much lower initial yield than the properties we sold.The reason our FFO is remaining at about the same level is that our cash flows are increasing substantially in our core markets because of the successes we've had over the past few years with our value add projects and our strong leasing results.Now that we've finished exiting non-core markets, our continued successes should lead to solid future growth. In closing, I'll echo Nelson's thoughts that 2019 was a tremendous year for Columbia. We outperformed our original expectations and made significant progress optimizing our portfolio in finding new ways to create shareholder value.Our team also continued to capitalize on opportunities with their hard work throughout the year. Columbia is going into 2020 in the strongest position in its history in terms of our team, our portfolio, our growth opportunities, and our financial strength. With that operator, we'd like to open the call for questions.

[Operator:]

[Operator Instructions] Your first question comes from Vikram Malhotra with Morgan Stanley. Your line is open.

[Vikram Malhotra:]

Thanks for taking the questions. So just as you mentioned you've sort of gone through or sold all the non-core assets. I'm just sort of wondering if we look at some of the more maybe markets where you have a smaller footprint like say Boston for example are you still looking to maybe narrow the footprint and sell sort of the one-off Boston and maybe, I know you just renewed its purging but like the New Jersey asset?

[Nelson Mills:]

Yes, Vikram, hi. Thanks for the question. So we only have one property in Boston. Normandy has a couple of projects there in Funds III and Funds IV. But in terms of our shareholders ownership, we really have the one property. It's been a great performing property. Given our team and capabilities and relationships in Boston, it is a market we will explore, but very much like San Francisco it is a very challenging market to win opportunities. So we'll see. Today we're about – we’re over 40% in Manhattan, over 30% San Francisco, 20 – low 20% DC in that range and then the property in Boston.So officially we're saying we have four markets, but we'll see how that goes. We're not going to buy there just for the sake of buying there. If we find the compelling opportunities, we'll do it. But we'll see in time, we may – we may very well just focus on the three key markets rest to be determined.

[Vikram Malhotra:]

Okay, that's helpful. And then just the 20% mark-to-market that you reported, I'm assuming most of that is Pershing. So Pershing took less space or, or they gave back some space, but then it's the, so is the per foot there rate renewed, is that higher? Is that the 20%?

[Jim Fleming:]

Hey, Vikram this is Jim. Yes. Pershing was a big part of it because they were obviously such a large square footage. We did have some other roles that were larger roll-ups. But Pershing was a big part of it and they did renew at a higher per square foot rate even though they're giving back some space.

[Vikram Malhotra:]

Okay. Great. And then just last one, any update on kind of how tenancies or tenants are looking at new developments in New York?

[Nelson Mills:]

Well the trend continues and it's been the case for awhile now that there are certain, some markets within the Midtown South and West Chelsea they continue to certainly have the strongest demand particularly for tech and media tenants. The other – and that continues, we continue to see that happening and we think our portfolio is well positioned for that.About two thirds of our tenants are tech and media and we're located in those markets. But the other, bifurcation in the market, which I think your question is really getting at Vikram is new and redeveloped properties versus existing. And we continue to see a strong demand in premium pricing, premium rental rates for new construction.Obviously it needs to be well located, well designed, but that's where a lot of the demand has been. We expect to take advantage of that as 799 Broadway and 101 Franklin and, and Terminal Warehouse as well.

[Vikram Malhotra:]

Okay, great. Thanks so much.

[Nelson Mills:]

Thanks Vikram.

[Operator:]

Your next question comes from Michael Lewis with SunTrust. Your line is open.

[Michael Lewis:]

Okay, great. Thank you. What do you assume for a timing for the Pasadena sale and should I assume that that there's no other acquisitions or dispositions besides Cranberry Woods and Pasadena in the guidance?

[Nelson Mills:]

So for guidance purposes, we – in reality, we expect to sell Pasadena that's all – that's on track to sell for the number we guided to. And these deals are never done until they're done, but we do expect to get that sold in the next month or so hopefully. And in terms of other assumptions in the actual guidance, I don't believe there's any – anything else there.We continue to have an active pipeline. We continue to look for opportunities. Obviously, if we do any significant further acquisitions or developments, it would most likely include bringing partners to the table. So we don't expect to use a large portion of our balance sheet on new investments this year. But we are keeping it – we do have an active pipeline. We continue to look for those opportunities. But in the guidance, Jim can weigh in this, but in the guidance, I don't think there's anything in there except just to sell Pasadena.

[Jim Fleming:]

Michael. That's right. We do have the Terminal Warehouse investment that we're assuming will get done this year, but that's really not going to contribute to anything this year and we don't have any other acquisitions or dispositions in the guidance this year.

[Michael Lewis:]

Okay. Thanks. And your guidance had no increase in corporate G&A. Could you talk about the incremental Normandy expenses? I assume they have been allocated elsewhere, like the asset management and property management expenses.

[Nelson Mills:]

Yes. It's a great question. We have provided a guidance range for this year for corporate G&A, that's $1 million higher than our guidance range was last year. So roughly flat, just slightly up. And that's a function of – there've been a number of separations from Columbia. There was some overlap between, and as it were from Normandy, there was some overlap between the teams. And so we lost some folks and are losing some folks on both sides. And so that's reduced some of the headcount and some of the costs on the Columbia side. We've added some folks from Normandy also obviously that are going to be working on the corporate side, Jeff Gronning the CIO and a number of others.And those came close to offsetting, it's a little bit of an increase but not much. The rest of the expense really is going to fall into what we're going to call management fee expense. We'll collect management fees for property management, assets management, construction leasing, all that sort of thing as Normandy has done in the past. And as we've done some of through our joint ventures with Allianz and Blackstone, but we'll collect management fees and we'll assign what we think an appropriate – the appropriate number is in terms of personnel costs and other expenses to that business. It's really a separate line of business than us owning and operating our own real estate.And that will be net positive we think. And we've sort of signaled this by enough to make the whole deal accretive slightly. And so that's kind of where we are, so that there will be cost of service associated with that business. And those, of course were underwritten when we looked into the Normandy transaction.

[Michael Lewis:]

So then lastly for me, I just wanted to ask about the rationale and how it came together for the vertical expansion in DC. It looks like you've pre-leased about half of the expansion. But the building I think is listed as only 80% leased, which means there's roughly that amount of space in the building. I realized that it might not stack-up the way the tenant wants it, but maybe you could just talk through that rationale a little bit in a market that has new supply and has a little bit of issues.

[Nelson Mills:]

So Michael, this really, this idea, this overbuild idea really came to us a couple of years ago through our brokers and others that is – that's a sub market, capital of sub-market has been very strong. And but as you mentioned there is plenty of new supply in DC. So to just build standard commodity space wouldn't have made any sense. And to build something without pre-leasing wouldn't have made any sense. We got terrific terms and rates from a good tenant on that property. It's a little over half, I guess about 60% of it is pre-leased. And I think, just based on having the pre-leasing based on the uniqueness of the opportunity it is special space, it is differentiated from other typical commodity space in DC and we think we can capitalize premium rents.In fact, we know we can, we've just demonstrated that with the first tenant but it was never something we were going to do on a spec basis. We were bringing along this tenant prospect at the same time we were exploring the opportunity.

[Michael Lewis:]

Do you have activity on the rest of the space?

[Jim Fleming:]

And Michael, hey, this is Jim. Just on the other part of your question. You're right, it's showing up about 80% leased that was actually intentional. So the building right now is seven floors. We're going to build eight, nine and 10. And the way this came together is the seventh floor tenant was rolling. And so we, in order to add on the additional floors, we have to use that seventh floor for staging and for construction work and that sort of thing. So it had to be vacant to be, it's not easy to add onto the top of the building. So we had to have it vacant. So we've held that space open a good chunk of 2019 and it's going to remain out of the lease for a little while. But that's where the vacancy is. That's really the bulk of the existing vacancy. So that was really a bad sign.

[Michael Lewis:]

That makes sense. Thanks for taking my question.

[Nelson Mills:]

Thanks Michael.

[Operator:]

Your next question comes from Frank Lee with BMO. Your line is open.

[Frank Lee:]

Hi. Can you provide us with an update on the current situation with WeWork at your 149 Madison project now that there's new leadership in place?

[Nelson Mills:]

Yes. So it's, pretty much in the same position we were in over the last few quarters. They are building out, WeWork is building out the space. What has changed several months ago – their plan was to move two of their subsidiaries into this space. With their repositioning of the company and the divesture of those subsidiaries, they're now going to use the building in their more traditional sense.We understand it will be some combination of enterprise. Their plan is some combination of enterprise tenants and more of the traditional coworking. They continue with the build out of the base building. They've done some of the tenant improvements as well, but I think they're waiting until they have a better feel for who the tenants are going to be before they move that forward. Rents began in July, and we've been in regular contact with WeWork including new leadership and they're giving us a strong indication that they have every intention of keeping this property, paying the rent for the long-term.And as we understand their expectation is to build, rebuild the business around just these kinds of properties, these well located gateway CBD location. So as we said before, it wouldn't really concern us to get the property back with the right economics. But we don't think we're going to have that option. We think we expect them to occupy and occupy this space and pay the rent. So that's the latest. But obviously we keep a very close eye on it.

[Frank Lee:]

Okay, great. And then you did some buybacks in the quarter. How should we think about the pace of repurchases going forward? And is there an amount of buybacks baked into your 2020 guidance?

[Jim Fleming:]

Well, Frank, the – I don't know that we can really comment too much on the pace. What I will say is we weren't able to buy shares back the first three quarters of last year because of this pending Normandy acquisition. Once that cleared, we get back shares as you know in the fourth quarter. And we thought they were compelling values then and we think the stock is a compelling value now. We do look at buybacks alongside other investment opportunities. And so, it will depend on our balance sheet, it will depend on in terms of the pace and the amount, it will depend on a balance sheet and availability of the capital and other uses for capital. But I will say we still view it as a compelling opportunity. We do think even though it's not strategic, it does boost the shareholder value. And so – and that's sort of our thinking on it. We don't have a lot factored into our guidance just to let you know that. But things could come up another acquisition, a disposition pretty unlikely at this point, but some share buybacks could happen.

[Frank Lee:]

Okay. Thank you.

[Operator:]

[Operator Instructions] Your next question comes from Sheila McGrath with Evercore. Your line is open.

[Sheila McGrath:]

Hi. Yes, good afternoon. Could you give us an update on the 799 Broadway, that leasing activity and when that building you expect completion of that project?

[Nelson Mills:]

Yes. Hi, Sheila. So the building is coming right along. I think as we mentioned we're at the sixth floor and we expect to top out the full 12 floors within the next couple of months so – or two to three months. And there is a lot of activity. The more – the further we progress with the physical construction, the more real that interest is getting. We're being – we're intentionally holding off and we think the right time to start to secure some leases will be probably this summer.But anyway – so we're very excited about that. It continues to get a lot of interest and we're very confident. We're going to be able to achieve our expectations on rents. So the building gets completed later this year and occupied well probably by fall or late in the year. And we hope to have leasing done – much of the leasing done by then as well. We do have an Investor Day coming up on February 27. I encourage all of you to come. If you could, we're going to in addition to meeting the Normandy team spending some time as we’re getting to know them. We'll actually tour that property and as well as Terminal Warehouse. So we look forward to showing you that more firsthand.

[Sheila McGrath:]

Great. And then on Terminal Warehouse, that's my next question. I think you said it was $50 million or $52 million investment. What percentage of the project will Columbia there and what will your interest be?

[Nelson Mills:]

Sheila, that's only about 8%. So the way that deal is structured, we are co-managers, co-GPs with L&L and Normandy Fund IV. So there is a three-way general partnerships, Normandy Fund IV, Columbia and L&L, and it's really a two way co-management between Columbia and L&L, since the management teams at Columbia and Normandy have been combined. But in terms of the investment, it's a relatively small percentage, less than 10%. And we looked at the – this was separate. And apart from the Normandy platform acquisition, but we did look at it, we think is a very attractive investment. We think coming in as the GP gave us some opportunities or that could be very compelling for our investors, so…

[Sheila McGrath:]

Okay, great. And then…

[Nelson Mills:]

Structured…

[Sheila McGrath:]

And then, Jim, can you re-explain the tax abatement that you mentioned in New York? I'm not sure if I fully understood that.

[Jim Fleming:]

Sure, Sheila. There are tax abatements available in a number of jurisdictions and in New York it's called ICAP and it provides a reduction in ad valorem taxes. And this is one that has been held up for a while because of some facade work that had to get finished, which has now been finished, but it didn't get cleared at the end of last year. And so, the tax abatement didn't kick-in in 2019. It will – it's now expected to kick-in in 2020. And so, it just was a little bit of income and same story in a while. They got pushed from one year to the next. So it actually helps 2020 and it pulled 2019 back just a little bit.

[Sheila McGrath:]

Okay, great. And one last question, Jim, with the other asset sales closing shortly, what – or just recently, what do you think roughly leverage net debt to EBITDA looks like at year end, contemplating no other acquisitions, just your current guidance.

[Jim Fleming:]

Yes. Sheila, that's a great question. We're in the – really in the low sixes at the beginning of the year. Without any other real activity, we'll invest a little bit in Terminal Warehouse, but we should be in the sixes is this year. Obviously, if we rent – if we bought a whole bunch of stock back that could drive it up a bit, but we expect to be in the sixes and nominal leverage somewhere in the mid-thirties.

[Sheila McGrath:]

Okay. And actually one other question on 80 M Street, maybe it's in the supplemental. Did you outline the cost on expansion and roughly the yield on cost that you're targeting?

[Jim Fleming:]

Sheila, I don't know if we have outlined a full cost. It's the yield on it. We expect kind of for the incremental yield on the overall building to be seven to a little bit better than that. And that really takes into account the new space and some changes being made to the building itself. And I'm just looking to see if we've got – I don't think we have it in our development pipeline. We put that in there next quarter because it hadn't really begun yet, I suppose, is the reason.

[Sheila McGrath:]

Okay. Thank you.

[Nelson Mills:]

And that yield that Jim mentioned also takes into account the vacant second floor space. So a pretty conservative calculation we get to 7% or 8%.

[Sheila McGrath:]

Okay, thanks.

[Operator:]

There are no further questions at this time. I will now turn the call back over to Nelson Mills for closing remarks.

[Nelson Mills:]

Well, thank you all so much for joining us and thanks for the great, great questions. We always appreciate your time and interest. Obviously, you can tell we're very excited about our current position and our opportunities going forward to create value and the team we've assembled to do so. We do hope – we really do hope to see you at our Investor Day on February 27 coming up in New York as I mentioned will be a chance to meet the expanded team and talk a bit more about our strategy going forward. And we have an exciting property tour on 799 Broadway our new ground up construction as well as a Terminal Warehouse, which is a very interesting project. I hope you can come join us. And thank you again for your time and please don't hesitate to reach out to any of us if you have any questions. Have a great evening.

[Operator:]

This concludes today's conference call. You may now disconnect.