Q4 2019 Earnings Call
I'd now like to hand, the call over to your speaker for today, Mr., Brian where you already Vice President Corporate communications. Thank you. Please go ahead Sir.
Thank you, Doug Hi, everybody and welcome thanks for joining us today in our fourth quarter 2019, earning to go.
I'll start the call blind, forming new that this call may include forward looking statements as defined in the private Securities litigation active 1995 identified by such words as will be intend continue believe may expect cope anticipate or other comparable terms.
The company's actual financial condition and the results of operations may vary materially that's contemplated by such forward looking statements discussion of these factors that could cause such results to differ materially from these forward looking statements or contained in the companys FCC filings, including the company's reports on form 10.
Okay and 10-Q.
Additionally, this call will contain references to certain non-GAAP measures, which we believe are useful in evaluating the company's performance. A reconciliation of these measures to the most directly comparable GAAP measures.
Or included in todays, earning to release and supplemental information furnished to the FCC under form 8-K.
If you wish to follow along today's earnings release supplemental and earnings call presentation or all available on the Investor Center page of the company's website Www <unk> PR Casey Dot com.
Now I'll turn the call over to the company's President and CEO, Greg Silvers, Thank you, Brian and good morning.
Let's begin today with our Q4 and year in headlines our first headline strategic refocus creates a stronger company.
Put simply we are better position for long term sustainable growth today than we were a year ago.
Our decision to sell our charter school portfolio reduced our income volatility strengthen our overall rent coverage and importantly positions us to focus on continuing to build the premier experiential right.
The experience or real estate opportunity is fueled by the two largest population segments baby boomers, who control products, but at least 70% of disposable income and millennials, who have a strong orientation toward experience will lifestyles.
Ultimately this refocused activates our time tested thesis that people have been in eight desire to connect congregate and to create memorable experiences.
As consumer goods become increasingly commoditized through online transactions simple experiences like watching a movie in a compelling theater environment, hitting a golf ball, while enjoying outstanding food at top golf are passing friends on the track it in ready Carty create memories that last a lifetime.
Our second headline experience will opportunity sets the stage for growth.
As we've highlighted our broader target experience will opportunity includes nine property types and an estimated addressable real estate market of 100 billion or more.
We are bullish on the opportunity set for quality experience will investments our intent is to further penetrate these opportunities in 2020.
Since 2018, we've made a concerted effort to broaden our traditional investment categories to include the nine categories. We've identified as premier experienced a real estate opportunities.
During 2019, our acquisitions team successfully invested in most of these categories with significant investments in theaters Eaton play ski experience will lodging and cultural.
As our investment guided guidance indicates our growth will continue to diversify our product categories and tenants and will reduce current concentrations overtime.
We believe our unique focus on the experience will spectrum will fuel outsize growth for years to come.
Three seizing the opportunity concerted acquisition process begins paying off.
Our primary investing objective is to cure rate a portfolio of real estate assets that delivers on the following characteristics.
One focused exposure to the experienced alcon of me to consistent and reliable cash flows three stable underlying asset values would durability through various economic cycles.
And for optimize risk return through asset and tenant diversity.
To execute our plan, it's critical to meet the operators at their offices to go to the industry conferences and to establish the relationships necessary to build a quality quality portfolio.
Our longstanding relationships along with new ones, we're creating continued to grow our industry, leading depth of knowledge and experience will real estate.
Just this month, along with most of our acquisitions team, Greg Zimmer Zimmerman and I were in Los Angeles for the sixth annual entertainment experience evolution.
We were impressed with the volume of creative new ideas and it remains clear that baby boomers and millennials continue to prefer experiences to physical goods.
We've also met with most of the major casino operators over the past year at a time when gaming companies are seeking diversified revenue beyond the casino floor, our broad knowledge of experience will opportunities is highly valued by these operators.
And finally, introducing guidance for 2020.
Today, we're introducing FFO as adjusted per share guidance of 519, defied 39, which at the midpoint represents nearly 4% growth after removing fees related to investments that were sold in 2019.
To accomplish this task. We're also introducing investments spending guidance of 1.6 billion to 1.8 billion.
This increase reflects our bullish outlook for experience will spending and includes a projected 1 billion dollar investment and a gaming property.
As we stated in our press release, we're making significant progress on the definitive agreements for this gaming property, we expect to execute definitive agreements within the coming weeks and to provide additional details at that time.
This transaction is expected to close in the second quarter.
Additionally, we are proud to continue our commitment of increasing dividends for our common shareholders and this increase reflects our 10th consecutive annual increase.
Now I'll turn the call over to Greg's increment to go through the quarter in greater detail.
Thanks, Greg at the end of the fourth quarter. Our total investments were approximately 6.7 billion with 370 properties and service that were 99% occupied.
During the quarter, our investment spending was 110 million and our proceeds from dispositions were $492.7 million of which 477.3 million was related to the sale of our entire charter school portfolio.
Our company level rent coverage was 1.92 times, demonstrating the continuing strength and consistency of our portfolio.
Our experience will portfolio comprises 282 properties with 48 operators is 99% occupied and accounts for nearly 6 billion of our 6.7 billion and total investments with two properties under development.
The bulk of our fourth quarter investment spending 104.7 million was in our experience will portfolio. The primary investments were $37 million mortgage note on the alyeska resort the Premier ski resort in Alaska, just south of Anchorage, and Girdwood and the acquisition of three high quality theater projects properties.
For a total of 48.6 million. The remaining investments consisted primarily of build to suit development and redevelopment projects.
I want to spend a moment on theaters the cinema industry has the most popular form of out of home entertainment in the us providing a low cost entertainment option, which draws more customers than all professional and collegiate sports combined 2019 was the second highest grossing box office of all time people still like to see movie.
He's in large auditoriums on the big screen. The cinema model is dynamic with new titles, arriving weekly, it's a content driven business with ups and downs corresponding to consumers interest in the movie slate.
As shown by this year's Oscar winner storytelling is becoming more and more diverse with the ability to reach wider audiences movie theaters have resisted any number of threats for as long as there have been movies. Our history demonstrates our theatre portfolio has been a steady generator of solid and reliable cash flows for over 20.
Many years highlighted by our consistent rent coverages, we expect that to continue in the future.
As we grow our experience will opportunities our first focus his understanding of business that the industry level, we look for proven business models and enduring cash flows as real estate investors. It goes without saying that we're also looking for great real estate high quality locations in strong competitive positions with good asset.
Based cash flows and rent coverages last but not least we want tenants with demonstrated success entrepreneurial vision and solid management.
As you can see from our robust and robust investment spending guidance. We're excited about the many opportunities that are experience will focus offers whether it's a 10 million dollar family Entertainment center or $1 billion gaming venture, we have the strategy the talent and the resources needed to exit execute simultaneously.
Both the flow business and transformative transactions to execute this strategy. It takes a deep understanding of experience will businesses combined with a strong proven underwriting team and process. We believe we're the only group that combines the skills in the entire experience will platform.
With that I'll turn it over to Mark for a discussion of the financials.
Thank you Greg.
I'll begin today by discussing our financial performance for the quarter and year.
FFO as adjusted for the quarter was $1.26 per share versus $1.39 in the prior year.
As Greg discussed we sold our remaining charter school portfolio during the fourth quarter. These sales were all recorded as discussed in our call in November and we've reclassified the financial performance of all charter schools sold in 2019 to discontinued operations.
Total revenue from continuing operations for the quarter increased by 13% versus prior year.
In addition to revenue associated with net new investments and experience will real estate. This increase was also due to the fact that the Cartwright resort indoor Waterpark continues to be operated under traditional riet lodging structure, which impacts other income included in total revenue as well as other expense.
In addition, 7.1 million of the revenue increase for the quarter relates to the adoption of the new lease accounting standard, which is offset by higher property operating expense as I have discussed on previous calls.
These increases were offset by the fact that the prior year included 7.4 million in prepayment fees for mortgage no pay offs and.
And there were no such prepayment fees in the current quarter.
Finally percentage rents and participating interest for the quarter totaled 6.4 million versus 5 million in the prior year.
DNA expense decreased to 10.8 million for the quarter compared to 12.2 million in the prior year, primarily due to a decrease in payroll and benefit costs, including stock grant amortization as well as professional fees.
Transaction costs were 5.8 million for the quarter related primarily to the transfer the remaining for seal Ace to cram. We're pleased that this transit position is now complete.
As a reminder transaction costs are excluded from FFO as adjusted.
Disposition proceeds received during the quarter totaled 492.7 million, bringing our year to date disposition proceeds of just under 883 million.
In addition to the charter schools sales I discussed earlier disposition proceeds for the quarter also included the sale of an attraction property and to land parcels with results, which resulted in the combined gain of 3.7 million.
For the full year 2019.
FFO as adjusted was $5.44 per share versus $6 in 10 cents in the prior year.
Note that during 2018, we recognize 71.3 million in prepayment fees related to the payoff of two non education mortgage notes.
If you exclude this income our FFO as adjusted per share for the year increased by 5% versus prior year.
Now, let's move to our balance sheet and capital market activities.
Our debt to adjusted EBITDA ratio was 4.7 times at quarter end.
If you adjust this ratio to annualize the dispositions that occurred during the quarter as well as other acquisitions and properties that went in service. This ratio was 4.8 times at quarter end, which is at the low end of our targeted range of 4.6 times to 5.6 times.
Our net debt to gross assets was 35% on a book basis and 31% on a market basis at December 30 Onest.
At year end, we had total outstanding debt of 3.1 billion.
All of which is either fixed rate debt or debt that has been fixed or interest rate swaps with a blended coupon of approximately 4.3%.
Additionally, our weighted average debt maturity is approximately seven years and we have no debt maturities until 2023.
Also during the quarter, we issued approximately $17 million in common equity on our direct stock share purchase plan or DSP plant. This brings our year to date issuance under this plan to approximately 306 million.
With low leverage 520 million of unrestricted cash and the bank at year end nothing outstanding on our $1 billion line of credit and no near term debt maturities our balance sheet is certainly well positioned to fund our investment opportunities.
Turning to the next slide we are introducing guidance for 2020 FFO as adjusted per share of 519 to 539.
And guidance for investments spending of 1.6 to 1.8 billion both of which include the anticipated 1 billion dollar investment in a gaming venue that Greg discussed earlier.
Disposition proceeds are expected to total 52 to 100 million for 2020.
Excluding termination and prepayment fees, primarily related to the charter school portfolio that was sold in 2019, the midpoint of our FFO as adjusted per share guidance for 2020 reflects approximately 4% growth despite coming off a year were dispositions exceeded investment spending.
With most of those dispositions occurring in the fourth quarter.
Guidance details can be found on page 24 of our supplemental.
As part of our year end, our yearend earnings release, we also announced an increase in the monthly common dividend of 2% beginning with the dividend payable April 15th to shareholders of record as of March 30, Onest. This represents the 10th straight year with a dividend increase.
Before concluding I would like to give some additional details regarding 2020 guidance.
With respect to the approximate $1 billion gaming venue investment that is expected to close in the second quarter, our strong balance sheet position provides us great flexibility as to how this transaction is funded due to our favorable liquidity position. We can fully fund this transaction at closing with cash on hand, and drawing a portion of our lineup.
Credit.
While we do have equity issuance and our plan to maintain our leverage metre metrics consistent with our stated target range, the timing and method of raising such equity will be based on market conditions and could be in the form of stock issuance under our DSP plan.
In which we can raise in excess of $70 million per month.
Or one or more offerings or a combination of both we could also rebalance our leverage by executing additional asset purchases funded substantially with common shares.
In addition, it should be noted that the remaining 600 800 million of other investments spending in our guidance is more heavily weighted to the second half of the year.
Lastly, due to the timing of the redeployment of the significant disposition proceeds we received in 2019 into new investments in 2020.
We anticipate that will report approximately 15 cents lower ffos adjusted per share in the first quarter.
Than the expectation for the full year divided by four.
Now with that ill turn it back over to Greg for his closing remarks, Thank you Mark.
Hopefully everyone's heard the message we're talking about this morning.
Ours return to growing net investment.
Over the last two years, we faced installed many challenges.
However, we've refocused our strategy and now will position to grow both net investments and earnings and we look forward to delivering superior was results as we continue to build the premier experience will repeat.
With that Deb, what are we opened it up for questions.
Maybe you would like to ask a question. Please press star one on your telephone keypad again that is bottom line to ask a question well pause for just a moment tick up have you done a roster.
And your first question comes from the line of Craig Melman Keybanc.
Good morning, guys.
Morning, Chris.
On the casino investment I think previously you guys had indicated maybe a more measured approach to to entering to the property type and this first deal is almost 15% of your total investment of the company could you just give some thoughts around kind of that decision to the jump in a little bit harder here.
I think Craig.
You always started off saying this is kind of that direction. We would we would like and I think we talked about I think slightly higher some in the 500 to 700 million, but when you are presented with an opportunity for a great asset it isn't often that you're able to say what I'd like to come get that when later.
Part of our deal is is if you get what we think is going to be.
Pretty well recognized as a premier kind of asset and it can anchor our our investment in gaming I think you Gotta look long and hard on those and I think when we're able to discuss this that there'll be a growing appreciation of that this quality of asset at the levels that were able to buy it at and Ed.
The coverage that we're able to get Doesnt present itself every day in the risk reward.
For us completely outweighed going a little deeper.
Okay.
Was this one kind of in the pipe when you gave kind of the dilution relative to where the charter schools sale to come in or.
Could this be a little bit of a lower yields than expected just given the size and may be prominence of it.
I think part of it is we were talking and have been talking to several people. So I don't think we we kind of identified this replacement asset because we were working on several things as we said there's lots of we still think there are many gaming opportunities for us out there. So I think really what we're.
Speaking about it we have to remember.
Yes, no when you go back and look.
We sell we as we talked about we sold slightly more than 450 million of charter schools, earning the 10 and then we had 30 million of approximately 30 million of fees. So you're down $75 million of revenue or are practically at dollar. So it wasn't we never set out to say hey, we've got to replace that but.
What we did is say if we find the right asset that makes sense for us I mean, we remain committed for only market dominant assets. If you look at our portfolio and what we've established over 22 years is that in our experience will.
Earlier, we own the best assets in the industry. So I think that kind of commitment led us to this asset, which I think we'll we'll be a great anchor for our introduction into the gaming space.
That's helpful. Then.
Maybe mark kind of what should we assume as a blended yield on the whole on 0.6 to 1.8 billion, what's kind of it that please.
Let's say for GAAP kind of low eights.
Roughly maybe a little slightly maybe let's call it around a blended okay.
Okay, and then just one last one from me I Wonder if you guys have this off hand, but just when Sars hit.
Early into 2000 is kind of do you remember what the impact was on theater attendance or kind of the experience Joel.
Retail tenants you guys kind of invest in vis-a-vis what could happen to kroner buyers continues to spill Stifel.
Sure. It's actually a great question, Craig and we went back and I've gone back and looked at it and it really did have a negligible effect. If you recall Sars actually effected Canada more than it did the us it showed up mainly in Toronto. So if you use that as a as a kind of a.
Set it was really impactful for about 20 to 35 days, but to the overall year it had a negligible effect.
Okay, great. Thank you.
Thank you.
Your next question comes from the line of Rob Stevenson with Janney.
Hi, Good morning, Greg could you describe the gaming purchases one asset so one asset in one market rather than a portfolio here.
That's a fair assessment.
Okay.
And then you've got I think some investors moved a little bit on the theater side by the horrible stock performance of AMC Centermark incentive world Regal in recent years, obviously, you're more concerned about the credit than the equity value, but can you talk about where your brand to our four wall coverage or whichever credit metric you guys used to monitor the theater Bill.
Business is on your assets today, and what you've seen in terms of the trend over the last couple of years.
Sure Thats actually great question Robin what let's let's talk about generally and if you look at our Investor package, our Investor presentation. We show you a 10 year.
Kind of Mark of our theater coverage and it's been within a very very tight range.
For all 10 years, so again, that's both down content years and up content years. The reality is that our theatre portfolio doesn't necessarily respond nearly as dramatically as people think two to the box office.
And it's that shows our entire theatre portfolio coverage and if you take a look at it I think it's probably traded within a range of one six to one eight for 20 years.
So it's been a a very very tight range.
Okay, and then can you talk about how Cartwright is performing today versus your expectations.
Yes, I think what we've said all along is last year was a year.
That we expected cartwright to lose money.
This year was kind of more of a breakeven year as we kind of ramp into this really as I've spoken to many of you. This is about growing into what we think will be another kind of launch point, which is the introduction of Lego land, which is much more a family friendly entertainment and we will fit handing glove.
With what we're doing up which is 2021 when we think.
Consistent with the plans of our operator, we can.
[music].
Code turned to to making money at that property.
Okay. Thanks, guys.
Thank you.
Your next question comes from Ki bin Kim Suntrust.
Thanks, Good morning.
So obviously you guys have good morning.
As you guys have some big plans for 2020 investment activity I was wondering if you can provide.
Color on pricing.
Mentioned, the carriage blend it but maybe for the casino gaming asset quality of the tenants or the assets that you're looking for.
I mean, I think keep in what we've said is and will have more information when we announced the transaction, but I think you know consistent kind of with where the market side I don't think for the quality were necessarily we're not going to be have to overpay for that quality I think also.
We've talked about kind of what kind of quality asset that we want to it which was kind of a market dominant kind of property of which I think as all of the analysts here, who have gaming analyst within their staff when they when we get to this announcement in they go back and talk to them. They will concur that this is a a great property.
As an anchor to anything that we would be going into end game.
Okay, and given that you suggested that you're going to close out the gaming asset into Q 20.
Is it fair to assume that this is a location where you already have a license.
No that would be I mean, again I think its falls to assume that we havent been doing things along the way to two to kind of deal with this so I think gets jurisdictional dependent and like I said, we didnt just fine this transaction.
A couple of weeks ago, there's work.
Going on with our team and with our gaming people, who we have on staff who have been working on this for some time.
Okay. Thank you.
Thank you.
Your next question comes from the line of Michael Carroll with RBC capital markets.
Yes, Thanks, Craig can you talk a little bit balance your I'm your thier exposure.
Is your exposure to theaters largely comprised in the three big Master leases that that you put in your supplements and what is the dispersion of that coverage I know that the total portfolio is around 176, Mr. Dispersion of those three master leases right around there.
Yes, I mean, if you look at generally I mean, just how big of a concentration. The if you look at our top 10 list with AMC Regal incentive Mark I think you couldn't you would get to the assumption that each one of those constitutes big enough that there it's reflective of the.
What we're talking about in the the overall rent coverage.
Okay. So it's pretty tight around that 176 and with those what's your management has always theres theres. Some degree of dispersion in there, but like I said over time, what we've seen is there's it's a relative kind of.
Comes to due to the median of that.
Within an operator so.
Okay, and what type of theaters are you targeting to invest today is the stuff that you're buying today different from five years ago, and I mean, what's the drive big.
Hi, Jeff factors I mean is it too many screens you try to shy away from that as the smaller boutique operators typically doing better I mean, what's the strategy there.
I think Michael it's we're still looking at Amenitized theaters I think the the market has kind of spoken that that the consumer likes the high Amenitized I would say we're not pursuing.
True kind of high intensity in theater dining.
But we do like the Amenitized theaters, the idea of big screens that really as I mean now those have been kind of out of both probably for 10 years. The sweet spot is probably somewhere in between 12, and 16 screens, Greg I don't yet and I would also add that we're looking at market dominant theaters.
The weather and they're in large TDMA zorn smaller damages that are more resistance any competition going forward and Michael I know you Didnt ask this question, but I want to go back to something and I apologize for this for Ki bins question, because he asked a question and I Didnt I didn't appreciate what he said, let me be clear to everyone on the phone. This is the asset.
We're talking about and gave me why can't give you a lot I could tell you it's not our New York asset. So those who are when he said is a place where licensed in meaning that you thought that we might be buying an asset it is not that asset.
Okay great.
And then.
No problem and then just I guess, how many theaters do you have right now that would be over 16 screens and is that the type of stuff that you've already disposed of or are you still happy holding.
I don't know, but we don't have I mean again like I said, it's really kind of market driven so if you have yet yet if you had the empire 25 year not worried about having over 16 screens in New York City. So.
I think it's it's not so much it's dependent upon the market, but I would say generally speaking the large kind of at 24 screens are going to be in major MSC days and.
New builds really are more fill in locations, which don't support that many screens.
Okay and then last question for me is the the additional $6 million to $800 million and investments outside of that gaming asset I mean is that largely dependent on your cost to capital and ability to fund those deals or do you feel pretty comfortable about doing those deals without meaningfully accessing the capital markets.
Well I mean, I think as a net lease investor you're always worried about your cost of capital and how you're going to do that as Mark talked about you know maintaining our kind of investment grade metrics are that so again, we will always be mindful of how we're going to fund that but also as he said there is of.
Variety of tools that we have two to affect our cost of capital worthy of a marketed deal and or DSPP. There's there's a lot of tools that we can use to effectuate that but I think we always have to be mindful of our cost of capital. We're not just focused on the near term.
Benefit of using low cost capital, obviously, we got cash in the bank and nothing on our line anything you do practically would be accretive we generally look at it we do look at it more permanent finance basis, and we will do those transaction that provided appropriate spread calculating that way.
Okay, great. Thanks.
Your next question comes from Nick Joseph seating.
Thanks for the $1 billion casino assets out of the 100% or will there be a JV partner.
Again like I said I think you know our we can tell you what our 10 has been to always is too is to be long term holders leased property rather than I don't want to give anything specific about this transaction, but we'll be glad hopefully in the coming weeks to go into detail but.
Our intent is to be a owner of a leased asset and that's what our strategy is.
Okay, maybe just more probably what sort of coverage do you underwrite gave me not to.
I think the markets kind of fairly establish those I mean again you know.
It around too I mean would we be happier with higher coverage no doubt so again I'd say stay too.
Alright, and then maybe just fine how large exposure do you want to gain needs and then what is the pipeline of other gaming assets behind the $1 billion.
Again, I think Dick it's the question I think makes a lot of sense in the sense that we're trying to rebalance and fine greater.
Kind of diversity across our overall portfolio so.
The difficulty of that is we don't get to pick when tenants want to to finance something we get to decide if we want to do it I think overall if you look at.
Kind of the experience you'll platform and you do our 100 billion dollar addressable immediately addressable market those could be kind of said, yes, 20, low 20%. That's you know gaming as an opportunity set.
The question is could you go outside that and then work yourself down because the right opportunity presented itself, we will have to see on that but I think the long term goal is to create diversity across all nine of those categories add kind of balanced them in relative proportion to the opportunity set.
Are there other gaming assets included a guidance.
There are at this point at this point Theres not it doesn't mean that that our guidance throughout the year couldn't couldn't go up because of the fact that we have and as Greg mentioned several ongoing discussions with with gaming operators.
Again, we've been met with a lot of interest of people, who you know for one reason like I said, our entire experience actual background and people wanting exposure to a lot of the tenants that we have so I think it there's a lot of operators who are seeing this as a win win and are definitely wanting to.
Discussions with us about how we could partner together.
Thank you.
Your next question comes from John Massocca with lagging Ladenburg Thalmann.
Good morning.
Good morning.
Pretty wide range for 2020 guidance I guess is there anything driving the difference between the high end in the low into that range. Besides the investment volume range and maybe I guess also the funding for the casino acquisition.
Well I think first of all I think it's less than 2% both ways, the 10 cents up down, but but as far as what can move the needle the timing and amount of investment spending how you finance. It obviously the Cartwright Waterpark is on the is an operating assets so that could could vary somewhat and then obviously.
Variability of percentage rents. So there's a number of things that can move it but I think on a percentage basis up down to up upward up or down 2% from the midpoint is.
Not that big a range in the Grand scheme of things.
Okay.
Sounds like it's basically Cartwright.
Funding of the Casino transaction, and then just investment volume.
Investment volume in the funding of that volume and the timing timing yet.
Okay, and then I guess on the disposition side I mean, how much of that disposition activity is going to be kind of legacy education assets versus.
Just kind of regular way pruning of the exterior annual portfolio.
Okay.
I said I think it's going to be more of the pruning of.
They're taking advantage of of improving the risk profile of our portfolio or if somebody wants to it was to pay a big number for something we're always in the market at this point, it's not so much of the the legacy education, and it's only pretty pretty modest at 50 to 100 million.
Understood I guess.
Could that potentially ramp as we get later in the year you feel like you can see.
Prune some of those education assets given the non core I mean, I know, there's probably a little bit of a balance you're trying to achieve as you redeploy proceeds here, but.
Yes, I mean, I think Thats, John you're dead on in the sense could there be yes, I mean, it's it's truly a function of I mean, if you look at the last two years, we've we've probably sold more stuff or right at about the same amount of stuff that we sold that we bought now we were able to achieve growth throughout that but.
It's still is a challenge so it's probably a function clearly we're getting calls in daily about our educational portfolio from a lot of our net lease competitors, who own those types of assets. So if the opportunity set was to grow substantially and present itself, yes that could be an opportunity but.
We are really focused after two years of.
Kind of lowered net asset growth that that are we need to we need to be focusing on growing the overall net investment spending.
Okay. That's it from me thank you very much.
Thanks.
Dan If you would like to ask your question. Please press star one on your telephone keypad.
We have no question. Thank you do you have any closing remarks.
Just want to say, thank you for everyone's time and attention and we look forward as we begin conference season to season you guys.
Outside of.
Of our offices and our call. So thank you guys. Thank you. Thanks.
Ladies and gentlemen, this does conclude today's conference call you may now disconnect.
[music].