Q4 2019 Earnings Call
Good day and welcome to the next point residential trash incorporated fourth quarter 2019 Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Jackie Graham. Please go ahead man.
Good day, everyone and welcome to nationally residential trusts conference call to review the company for adults.
Fourth quarter and full year ended December 31st on the call today, our brain Mets Executive Vice President and Chief Financial Officer, and not the Greener Executive Vice President and Chief Investment Officer. As a reminder, at this call is being webcast in the company's website at Www Dot net lending dock.
Before we begin I would like to remind everyone that this conference call contains forward looking statements within the meaning of the private Securities Litigation Reform Act 1995 that are based on management's current expectations assumption annually.
Forward looking statements can often be identified by words, such as expects anticipates intend and similar expressions and variations weren't even before.
These forward looking statements include but are not limited to statements regarding and expertise strategy and guidance for financial results for the first quarter and full year 2020.
Second acquisitions and dispositions expected redevelopment of unit he projected average rent change.
Page and rent and return on investment after redevelopment and new business metrics relating to the Las Vegas portfolio. They are not guarantees of future results and are subject to risks uncertainties assumptions that could cause actual results to differ materially from those expressed in any forward looking statement.
Listeners should not place undue reliance on any forward looking statement and are encouraged her view that companies. Most recent annual report on form 10-K, and the company's other filings with the FTC for a more complete discussion of risks and other factors that could affect the board looking statements.
That does required by law and its Turkey does not undertake any obligation to publicly update or revise any forward looking statements.
This conference call alternative analysis of funds from operations or SFL core funds from operation or core Oh, adjusted funds from operations or asset sales and net operating income or and a lot I live which are non-GAAP financial measures of performance. These non-GAAP measures should be use as a supplement to the end honest such that you.
For net income loss computed in accordance with gap.
For a more complete discussion of Oh for NFL, NFL and anywhere I see the company's earnings release that was filed earlier today I would now like to turn the call ever to bring that he's done right.
Thank you Jackie would welcome everyone to the and its 32019 fourth quarter conference call.
Today, we will discuss highlights for the year present, our results for 2019 provide guidance for 2020 and discuss recent acquisitions dispositions.
Our portfolio in general.
Markets and just what we've seen year ahead.
I'm joined here was not with grain or or Chief investment officer.
So all sort of high level 2019 was our most active year, so far on acquisition or disposition front.
We acquired a net of 587 million properties.
Same store NOI increased for the year of 6.7%, which was a 20 basis points above our midpoint guidance.
Consistent with the high growth strategy for 2019 reporting a 19% increase you core AFFO per share.
Which is a $1.93 per share 10 basis points above the midpoint or guidance.
During the year, we acquired 11 properties for 877 million consisting of 4583 units an increase in our redevelopment pipeline by nearly 3000 units.
We sold six properties during the year, consisting of 2218 units for sale price of 290 million and roll those net proceeds into than a couple of the new acquisitions.
Revenue for 2019 was 181 million in total in Hawaii was 103 million, which was an increase of 28.3% and 30, 28% year over year, respectively, reflecting the large that acquisition activity during the year.
And why margins increased 200 basis points to 56.7% for the year from 54.7% in 2018.
We continue to execute our value add business plan by completely 2516 full and partial renovations during the year.
It was 61671 of those units being leased achieving a 25.3% return on investment during the year.
Inception to date within property still in the portfolio is 12 31, we've completed 6927 full and partial upgrades achieving an average return on investments 24.5%.
Additionally for 2019, we completed smartphone technology installs in 8546 units.
Completed 1327, washer dryer installs for the year.
[noise], we utilized the ATM and 2019, raising gross proceeds of 72 million at an average price of $45.98 an increased our shares outstanding by approximately 1.6 million shares general use net proceeds and they tend to fund acquisitions and pay down.
Our revolver.
Based on updates.
Cap rates, which are based on tightening in the market.
Vince by transactions that were seeing as well as the NOI growth mentioned revising our NAV per share range upwards as follows on the low end $42, an eight cents on the high end $50.53 for mid point of $46.31, that's compared to midpoint of $40.
The six cents in the first quarter.
14.7% quarter over quarter increase and a midpoint of $35.09 at the end of 2017 or a I'm sorry 2018.
For a 32% year over year increase all our stock also returned 42%.
The fourth quarter, we paid a dividend of.
41.25 cents per share on December 31st and yesterday, the board declared a dividend per share a 31.25 cents payable on March 31st to shareholders of record on March 16.
To date or dividend is 1.7 times covered by core AFFO, making our payout ratio approximately 59% of core AFFO.
Going to or just high level results for 2019 as compared to 18.
As mentioned toll road visual 181 million 2019, as compared to 147 million in 2018% to 23% increase net operating income was 103 million in 2019 versus 80 million 2018 for 28% increase.
Sure. If AFFO was 47 million point 47.6 million or $1.93 cents per share versus 35.1 million, which was a 31 cents increase or 19.1% increase for the year.
Our same store pool, we have 25 properties.
Comprise of 9057 units or same store rent increase was 3.6% same store occupancy declined three basis points to 94.5%.
Same store revenues increased 4.3% to one or 19 million same store expenses increased 1.4% to 52.7 million.
Same store NOI was 66 million versus $62 million in 2018 were 6.7% increase.
Just real quick want to go through some of our historical performance since we're in a year and enrolling into a new year.
Core AFFO for the past three years is increased 31% or NAV at the midpoint as we calculated as increased 86%.
Increased our dividend substantially in our stock prices returned.
30.5 person on an annualized basis over the past three years.
We've issued 4.3 million shares the average price of $37 and 70 776 cents and bought back 730.
37000 shares at an average price of $22.64.
So overall, we think we've had a good.
Good capital allocation and we're carrying our.
Same store NOI growth down to the bottom line as evidenced by the increase in core FFO.
Or 2020 guidance, we will.
We made the following assumptions a range of 50 to 100 million for acquisitions.
Range of 50 to 100 million for dispositions and 40 million raised on our ATM to pay down the revolver or fund those acquisitions. So with those assumptions 2020 guidance is as follows our core AFFO per share on the diluted basis is 2015 cents and the low end two doors and 27.
Sensima high end and $2.21 in the midpoint.
Representing a 14.5% increase over 2019.
Same store revenue is estimated to be 5% increase in the low end, 6% increase in the high end with the increase of 5.5% at the midpoint.
Same store expenses, we expect you increased 5.3% on low end, 6.3% on the high end for mid point increase of 5.8%.
And then same store NOI, we expect to increase five person low and 7% on the high end.
Mid point increase of 6%.
So with that let me turn it over to Matt to go through the portfolio acquisitions dispositions.
Thanks, Brian let's start by going over our Q4, 2019 and or performance, let me start.
With our same store in our margins improving year over year by 250 basis points to 56.1%.
Rents were also up at least 3% in every market access Houston, which remained flat.
Ill strength across the entirety of the portfolio as usual with seven out of arts and market is growing in a wide by at least 5.2%.
That includes Dallas, Houston, Atlanta, Phoenix, Orlando DC in Tampa.
[noise]. The notable same store NOI growth markets for the fourth quarter were Dallas is 17.1% and continued acceleration in Atlanta, delivering robust, 20% and why growth largely driven by favorable real estate tax comps.
Operationally leasing activity revenue growth showed continued strength in the fourth quarter seven out of our 10 markets achieved revenue growth of at least 4.3% or better our top five five markets, where do you see at 9.1% Atlanta at 7% Phoenix at 6.1% Charlotte at 5.8% and DSW at Florida.
Percent.
Renewal conversions for the quarter were healthy 54% was six out of our 10 markets delivering renewed renewal rate growth of at least 3.13, 0.4%.
On the occupancy front I'm pleased to report that Q4 same store occupancy improved 110 basis points from the third quarter to 94.4% positioning us well for 2020.
For example, as of this morning, our portfolio sits at 96% lease with a healthy trend healthy 60 day trip trends at 91%.
Turning to full year 2019 same store NOI performance.
No I margin also improves for the year by 126 basis points to 55.6%.
Same store average rents in revenues, each increased 3.6% and 4.3% respectively.
I was strong again across the entire the entirety of the portfolio was nine out of our 10 markets growing in a wide by at least 4.5%. The notable same store NOI growth growth markets for the year, where Atlanta, Tampa at 11.8% and 9.1% respectively.
Operationally the portfolio experienced robust revenue growth in 2019 was eight out of our 10 markets achieving growth at at least 4.4% or better the top five markets here, where do you see a 75% Nashville, 6.8% Phoenix at 6.1% Atlanta, 6% Orlando at 5.5%.
Now turning to 2900 acquisitions and dispositions as Brian mentioned, we are quite active during the year 876 million of new properties were selling 290.
This activity of course allowed us to reload, our rehab pipeline by adding another 3000 units to renovate two largest components as you might remember of our 2019 acquisition activity were the as long as Pembroke Pines Las Vegas three portfolio. Both deals are performing extremely well as it sits today.
As a reminder, we purchased the Yvonne I've covered price for 322 million for now a year, one economic cap rate of 5%. We plan there to upgrade 938 units at an average cost of $15900 unit generate premiums of $234 unit in ROI is approximately 18%. We also plan.
And here to install smart tech packages, and every unit, which will generate a monthly premium of $45 unit.
As a result, as you may recall, our underwritten through your average same store NOI growth for this asset was 8.4% today, we're on that budget in fact, beating it by $260000 or 4.22% ahead of into why underwriting.
For Las Vegas, three portfolio, we purchased these three assets for totaled $241 million also year, one economic cap rate of 5%.
I recall, we plan to upgrade 392 units at an average cost of $9960 a unit generating premiums of $130 unit in ROI is approximately 15.4%. We also plan to install washer dryer said, some 588 units and expect to generate monthly premiums of $40 needed there spartech packages or.
To be insulin ever unit and expect to generate monthly premiums of $45 unit as a result, our underwritten three year average same store NOI growth for this portfolio 6%.
Now turning to 2020 guidance as Brian said, we're excited to guide, 5% to 7% same store NOI growth for 2023 months from a geographical perspective works expecting particular strength across the falling markets.
Like Phoenix to grow same store NOI by 11% do the strength of the rental market economic growth favorable supply demand for affordable housing our large interior renovation plans, which total altogether, a 0.1% budget revenue growth and 3.35% budgeted expense growth.
We expect naturally grow same store NOI by roughly 10.5% in 2020 again due to strength of rental market economic growth favorable supply demand for affordable housing and large interior renovation plans at Brandywine Arbors of for it wouldn't Glenview reserve all told here, we expect to generate revenue growth of 8% and 3.2.
To 2% budgeted total expense growth.
Finally, we expect Atlanta, Charlotte and Tampa, each grow approximately 7% due to continued strength in the middle income rental market here and 7% plus revenue growth in five plus five approximately 5% total expense growth for the market.
[noise] our 2020 guidance includes the following assumptions regarding our value add programs, we expect to complete 1373 volunteer upgrades at an average cost of $8500 per unit.
To generate $150 average monthly premium or approximately 21% our wise.
We expect to complete 550 partial interior upgrades at an average costs 2240 hours per unit generating $62 average monthly premiums or third or 33% ROI margin.
[noise] respect to upgrade another 1329 units in a bespoke upgrade for example, new backslashes appliances frame mirrors, new lighting et cetera at an average cost of $445 per unit generating an $18 average monthly premium or 48% return on investment.
We plan to install 859, washers and dryers during the year at an average cost of 819 per unit, which will generate $45 on average monthly premium were 65% ROI.
Finally, we plan to install 3000, additional smart home technology packages with expense coming online right away or with the Expensed coming along online right away, while income rolls out overtime [noise].
Recall 35 to $45 average monthly premium here 24 average.
$24 average operating expense was 52.5% profit margin.
Well the real estate property tax side, we are a budget growth of 9.25%, which we feel is appropriately conservative and provides the potential to be budget by aggressive tax management litigation.
Finally operationally so far in 2020, we're off to a great start in January and February January present preliminary revenue was right in line with budget.
In a wide budget be of 2.5%.
[noise] I'd like to finish my prepared remarks with a brief overview of our 2020 acquisition and disposition guidance.
We think will at least acquire 50 to 100 million properties. This year after a robust activity in 2019.
We've already identified an asset and Submarket of San Springs in Atlanta.
Which was sourced off market and has a purchase price of approximately $55 million, where best and final on into another.
Two or three deals and the Phoenix somebody the Phoenix market, and Charlotte market, which so about $120 million.
Our team is continually underwriting approximately 20 total assets today with a 1.4 billion in gross real estate value.
And we'll continue to look for accretive acquisitions during the year.
On the disposition side, we have two assets under contract to suffer sub 5% cap rates in Nashville, Willow Grove, and Woodbridge for $63 million fires Nonrefundable closing is expected to occur on March 30 Onest.
[noise], we're negotiating the contract on South point reserve for $23.5 million with a with.
I'm sorry closed they sometime in the second quarter approximately June.
In closing I'll, just reiterate that we're excited about 2020 as Brian said.
And we'll work hard to generate another year, 5.5% to 7% in why growth and double digit earnings growth. That's all I have for prepared remarks. Thanks to our teams here next point NVH for continuing to execute.
Thanks, Matt So before I turn it over to questions. There's one question we've seen in some of the notes earlier. This morning that all good news dress here, you've seen some changes within our rental income and other income from prior periods. That's a result of implementation of assay 842.
Two which is the new we standard.
So we did implement that in 2019.
Restated those numbers.
Retrospective basis will be more detail in the in the 10-K on that when it's filed so with that let me turn over to the operator to take questions.
Thank you, ladies and gentlemen at this time of would take well open the floor to questions. If you would like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speakerphone. Please make sure that your mute function is turned off to allow your signal to reach our equipment and again not a star one to ask a question well take our first question from Buck.
And with Raymond James.
Hi, Thanks.
Taking the call wanted to dive into the updated any be estimate maybe first of all and the updated.
Tightened up cap rate range you.
Thanks.
I'll just make it a little bit provide any more color on where you're seeing the numbers coming in because of.
Like pricing has tightened up considerably and if these are your.
Projections on you know value add class b assets or.
Just.
Do you have a source for this or is this kind of.
Where you're getting the data from internally just any additional color on on the pricing of assets in the market did that.
Behind the new any be estimates.
Yeah, Matt.
So primarily the change was driven by a transaction that was announced in January which was the acquisition of.
Aragon Holdings portfolios nation National portfolio, roughly 14000 units.
And the virus Please harbor group.
Two sophisticated parties.
From from our numbers and we and we looked at the transaction and then we confirm brokers that that went off at a 4.6%.
Tax adjusted.
Cap rate on on T., three NOI Richie 12 expenses, so that largely drove a I think a lot of the.
Changes that their portfolio.
The exception of a few assets in Denver basically overly.
With with ours pretty pretty well.
So that's that's kind of point number one point number two is as you know CVR Ian and.
In Green Street, Mark enough for Us every quarter and.
From our experience in the market today in terms of just acquiring deals are chasing deals.
It's really tough to find anything north of a 5% cap rate.
And that's just a nominal basis and then in markets such as Phoenix. You can you can expect to pay for in a quarter for value out assets today. So.
It did come down quite a bit but as I think it's still somewhat a conservative number, especially given the appetite and financing available for the assets.
Yeah, no mix makes sense not appreciated.
Your color there secondly on the the property that's had a tornado damage I guess, so cutters point could you provide any update on the damages. There do you anticipate any business interruption recoveries as 2020 goes on how do you or should we anticipate any other drag.
Or losses from the loss of they operations at that property.
Yeah. So.
That was the result of a tornado that came through in late October through the Dallas area.
We've taken all the units off line there and are beginning the the reconstruction process. We have full insurance coverage from total replacement cost of all the buildings as well as business interruption.
Insurance for example in the fourth quarter, we basically.
Had no difference from what we did budgeted on that property and we expect that to be the same thing in 2020, well you'll see in the fourth quarter is a casualty loss just the way GAAP accounting works and given that we had to booked out at the end of year, you'll see a slip.
In 2020, as we rebuild and get the insurance proceeds and ultimately you'll you'll see a accounting gain on that transaction, but economically there there will be no loss to an expertise as a result of that so we were fully covered.
Okay, great. Thanks, I'll jump back in the queue. Thank you.
Thanks.
Our next question comes from drew Bhavan with Baird.
Okay.
The Arbor group transaction, you mentioned, yeah, I think you mentioned that they looked at it you talk about.
What sort of held you back on that transaction the opportunity Im talking about the initial yield, but obviously longer term unlevered IR kind of where that stood relative to what our X or could it looks for and I guess kind of weighing that is the current environment do you see any deals out there right now on larger in size.
Do you see potentially closing or not.
Our next or can you, but in general over the next year.
Yeah, so fixtures, Matt the deal.
Yeah, we chased it for quite some time that is.
As attractive portfolio one at one of the things about that there was compelling was.
The units were fairly on talks are there was a true value add story to the interior program.
Couple of things hold us back.
For one there was a large in place.
Piece of amortizing.
Ones that you had to assume so given the low LTV and just the nature of the fixed rate debt that was agency that you guys assume the cash on cash returns.
We're in all that compelling.
Numbered number two.
We while we've looked at it we're not one to go out and.
Double the size of the company.
In a way that just so transformational without there being a.
Thoughtful approach to doing so we were very active during the year anyway kind of to the tune that 600 million and we think we can still move the needle as you'll see this year in our and our execution that.
So provides the same total return story for us so we.
We didnt, we didn't think so such a transformational asset and chasing it made sense.
In terms of deals out there in size theirs.
There's a few portfolios from ranging in $175 million to $250 million that are out there.
The the too that I know of are in the southeast and southwestern United States, our core markets.
Both of those are expected to be kind of four and 5% type numbers on cap rate, so I'm still up.
And we're not we're not chasing into one of those but still.
As I said very very compelling are very aggressive markets out there.
Appreciate that color and with the cap rate kind of convergence between suburban markets and urban markets value add and core.
Is there anything that an expertise looking at this year might look a little more kind of.
Urban edge and or core relative to the past or can we still expect.
Additions to the value add renovation pipeline or the steel.
Oh.
Yeah, we're going to stay our workforce housing value add company.
There is there's a convergence and cap rates the good news is.
We set ourselves up pretty.
Pretty pretty well 2092.
And execution year in 2021st and foremost and internal growth story, which will execute on and think that will drive double digit returns for us this year.
That being said there are.
There are instances, where we can be one off and I think maybe not in the first half a year when everyone has allocations and are eager to put money to work, but I do think in the second half of the year, which is the time period in which we're been historically more active that we can.
It will be on the look out whether you have.
He kind of election drama or or what have you been rate. So that's what we're going to try to hone in on in the second half of the year. By then we'll have some more ammo and the terms of our revolver, which we'll pay down.
So we'll be opportunistic probably more.
The second half, but still in workforce housing.
Okay, just one more for me to judging by the guidance assumptions themselves or should we expect any real change.
You ratio by the end of year will still be in that mid Fiftys Ranger, it's been underwear senior.
Yeah, I mean, I think I think no no material change unless we unless we like our stock later in the year, but but I wouldn't I would expect any material change in first half.
All right that's all for me thanks.
Thanks.
Our next question comes from Tayo Okusanya <unk> went missing.
Hi, Good morning, everyone. Just a quick question on guidance again.
I'm very strong the assumption.
Being built and but I'm, just kind of curious what I noticed strong year over year growth, but when I took into the fourth quarter at 54 cents.
Annualized that that's ready to 16, so I guess I'm, a little bit surprises that a you know just start up except the strong point out then every year, but for your guidance at the midpoint is ready to 21.
I guess, how much growth you're still expecting.
Oh I'll take the first stab at it I think that.
No were we can kind of reloaded hot in the fourth quarter with.
Yes, all the deals online that we were expecting to sell.
You had to any way to kind of pay down some of the leverage we took on in the fourth quarter to buy the Las Vegas three portfolios. We knew that we knew that kind of two or three deals are coming out of the system.
Anyway, so that pull those out of your numbers and then I do think that we're fairly conservative on a real estate tax or property tax side budgeting.
9% growth there.
So we.
I think from my perspective, those are the two factors but.
Yes in the fourth quarter 2019, you had some.
Tax refunds come back in that.
Impacted that that core FFO, so you're starting from a <unk>.
The point, that's probably a little higher than the run rate.
Back Kevin again, it as Matt said with the Conservative assumptions, we built in we've we still plan to do everything we do always in regard to taxes, which is fight them litigate.
Whatever we can do and its proven successful in the past although created some some chunkiness in the quarter over quarter results I think that's really what you're seeing in that 54 cents.
Right. Okay. That's helpful. Then just one other follow up <unk>.
The information you provided in regards to 2020 guidance around amount of a rig as you expect continued washer and dryer program as you expect spartech.
Hi, you expect all very helpful. The question I have is.
Much of that.
Of all those accent is actually you actually expect to translate.
Over into Twentytwenty earnings should it be thinking you know you do all this stuff, but only half of it is actually going to 2020 numbers based on timing.
I'm just kind of curious.
Yeah. There is some bandwidth in those numbers to provide for seasonality or or rent roll fluctuations, but I would expect that cost 75%.
As planned upgrades are in guidance.
Okay.
Right.
Thank you.
Thanks, though.
Our next question comes from John Masako.
Dark Selman.
Morning.
Well, John John just sticking on kind of the rehab you guys kind of mentioned that bespoke upgrade program, which seemed like it was kind of a new addition to your.
Redevelopment program, how is that going to essentially get rolled out is that kind of.
Yes are there kind of emplaced plans for each asset you own or is that kind of.
Time to time thing is as issues come up rise.
Yeah, the desires of tenants kind of change or just kind of how we should think about that program going forward would be helpful.
Yeah, no there are specific the bespoke programs are specific to assets.
That we have gone in and audited each unit in each of the property. So for example.
Eagle crest, Silvergrass, Tim Timberlake grab warm sable like all these have specific.
Your targeted into your upgrades like for for example on you.
Eagle crest, we're putting in new new lighting for $194 that we think we'll get you know 11 for $11 written premium at 67% estimate ROI. So like we think that there's.
Like I said 0.246, 810, 12 12 assets.
That are targeted for these programs.
And I guess, maybe why not do kind of full unit upgrades that because you're you're putting extra accessories and do already upgraded units or is it just the market won't bear had any additional rent from up from a full unit upgrade.
No.
It's on its honestly deals that we still like really well that have gone through first generation.
In some cases, maybe even a second.
And this is just an incremental.
Value add story that we can throw on and like if deal are still growing 4% to 5% organically and market rent, adding these can we can push it up about 5%. So deals we still want to hold onto not sell but there's so little bit of kind of differentiated meal.
I understood and then I'm thinking about kind of acquisitions dispositions, even given the kind of counterbalance each other but are you expecting any kind of maybe if you think about 2020 numbers just dilution given maybe the differential in pricing between value add units and units that are a little bit more kind of.
We updated and also just timing.
Yes, I mean, all the.
Yeah, everything I just discussed is neutral so you won't see any.
Any disruption in terms of earnings and there's no like material cap rate differential are there that that would be.
There would be on favorable to us Oh, I don't I wouldn't I Wouldnt expect I wouldn't speculate as to occur.
Okay. That's it for me thank you very much.
Sure.
Our next question comes from Rob Stevenson with Janney.
Hi, Good morning, guys, Matt did I hear you correctly that they'd be the Nashville assets, you're selling or 63 million in 23, and a half million for Fredericksburg.
That's right.
Okay. So if I do my math correctly, the Nashville assets are basically almost being sold for double once you bought and rehab them for and Fredericksburg, one is about 25% increase.
Yeah, that's around Fredericksburg, the national one's a little bit more unique as we refine those deals a few times, it's actually from what the effort from what the basis of the equity is when we bought them in 14, almost fourx little over Fourx.
Okay.
And so once you saw this fredericksburg asset am I correct that assuming that that exit you from your PC market.
Yes there.
Is that a market you pointed out to present that going forward or just you know not as compelling as the sunbelt markets.
Yes, I mean, we've we just haven't had as good of into experience. There is other markets. So we're not actively looking there and I wouldn't expect us to once were [laughter].
Absolutely.
Okay, and then last one from me you talked about the units that you guys playing to rehab how many properties would you actually be sort of Don with in 2020 to the point to where you know if the pricing was right that you'd be in a position to sell them versus ones, where you're still got you know a read.
Development work on it throughout 2021 and beyond.
Yeah. So every single deal.
The portfolio, including the ones were selling still have some rehab essential part of the story is really beat on the bone.
For the next for the next Sky in terms of like what we what we could so.
Yeah, I think are another maybe one or two in Dallas.
And that and that's probably it largely we.
With.
Yeah, I mean, we otherwise pretty pretty comfortable and loved the rest of portfolio.
Okay. So do they said that you guys see more acquisition opportunities.
It's likely could not be funded by dramatic amounts of additional dispositions, it's going to wind up being funded more on the equity side.
Correct, Yeah, I never say never but you want you're not going to probably see as drop at $300 million sale any this year as we did the as we did last year.
Okay. Thanks, guys appreciate.
Thanks, Rob.
Our next question comes from Barry, Oxford with D.A. Davidson.
Great. Thanks, guys.
Quick on on the 30 basis point declined in occupancy what was it was that a function of the you know maybe one particular property or was it more a function of you guys were pressing.
Lance and therefore achieved the higher and Hawaii out of the property like you lost some tenets, maybe kind of give me a little color.
Are you talking sequentially on the same store basis, yes, exactly yeah exactly.
Yeah, I mean is I think is timing just seasonality.
I think from the third quarter, which was our stated goal on it on the third quarter call. We made a lot of progress.
Yeah, 110 basis points from quarter over quarter in the same store pool, which.
Quite frankly, we weren't that pleased with our execution and the third quarter fourth quarter. We did we do the I'd say a fairly admirable job and then what's really probably important about this in general is that our first quarter 2020 set up to be pretty compelling in terms of the trend. So that's work.
Hi rough.
Okay. So as we moved through 2020, we should see occupancy the lack of a better what notching upward.
Yes, that's what it's one of the largest.
Goals for the company and 2020.
Okay. Thanks, guys appreciate it.
Ladies and gentlemen. This concludes today's question and answer session I will now turn it back to Brian that's for closing remarks.
Yeah. Thank you appreciate all the great questions and participation and look forward to a great year and thanks for everyone's time.
Ladies and gentlemen. This concludes today's teleconference. Thank you for your participation and you may now disconnect.
[noise].