Q1 2020 Earnings Call
All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions.
Today's event is being recorded.
At this time I'd like to introduce your host for today's call Christopher Bose Chief Financial Officer residential Sir. Please go ahead.
Thank you and welcome to Bluerock residential growth rates first quarter 2020 earnings conference call. This morning tired of market open we issued our earnings press release in supplement.
Yes release can be found on our website at Bluerock residential dot com under the investors tab.
In addition, we anticipate filing our 10-Q later today.
Following the conclusion of our remarks, we'll be pleased to answer any questions you may have.
Before we begin please note that this call may contain forward looking statements. They are defined under the private Securities Litigation Reform Act 1995.
Our variety of risk and uncertainties associated with forward looking statements and actual results may differ from those set forth in such statements.
Our discussion of these risks and uncertainties you should review the forward looking statements disclosure in the earnings press release issued this morning, as well as their FCC filings.
With respect to non-GAAP measures be using this call. Please refer to our earnings supplement for a reconciliation to GAAP and the reason management uses these non-GAAP measures and the assumptions used with respect to our earnings guidance.
That I'll turn the call over to remain campfire, chairman and CEO, we record the rental growth rate.
Hi, good grass and good morning, everyone and additional took whereas with me to remotely today are several key members of for.
Executive team, including Jordan, Ruddy, our President and Chief operating Officer, Bryan Mcdonald, Our Chief acquisitions Officer, Jim Bap, Our Chief Investment Officer, Michael Franco Our executive Vice.
Vice President of operations I'll focus my remarks on the call that pandemic impact.
The national highlights key strategic accomplishments and some capital markets commentary afterwards wind will provide you a first quarter in April operational transaction on balance sheet detail.
We're getting into our results for the outbreak of the coal that.
Dan I kinda its wide, reaching impacts across the country in the world I want to express our sincere wishes.
I never want to say well and being healthy we have blue rock I, probably took a defensive posture with regard to our team our residents and our portfolio.
Early on even prior to that released the federal social distancing guidelines and the issuance of shelter in place orders at the state and local level at the beginning of March we proactively set up covert specific property guidelines are best practices across our onsite teams to prioritize and ensure the health which sets you apart residents.
Our employees and our partners as part of our covered mandate, we shut down all the farm entities executed only essential maintenance and moved to fully virtual leaching environment, which was well supported by our pre covert technology build outs.
We'll take a number of steps to provide a system to our residents, including Holton depictions for 60 days and temporarily suspending late fees in terms of four employees were pleased to have been able to maintain employment to add compensation levels and I want to thank all of my team members for their dedication flexibility and tremendous.
Hard work throughout this time.
I would also point out their asset management team has been very effective very active.
And in fact of interacting on site operating teams through the lot locked down we are now working with our operating partners establish best practices for the real putting up the common areas of our properties and our onsite servicing and leasing as government guidelines permit United Health and safety measures are implement.
Moving onto our results I'm pleased to report how strong numbers, we started off the year with Oh, what does all that up a quarter operationally. This was driven by solid organic rent growth and value creation from our renovation platform. We also executed ours strategic capital recycling plants, realizing strong disposition.
I used both before and after they outbreak of coal, but in the United States on the revenue front, we produce healthy 9% growth over the prior year period with the first quarter at 56.2 million driven by our significant investment activity. During the prior 12 month. In addition to our strong same store performance on a.
GAAP basis net loss to common stockholders was 70 cents a share compared to net loss of 53 cents a share for the prior year quarter. A the figures. Obviously include non cash expenses, which include depreciation and amortization of 88 cents and 74 cents per share for the current and prior year or.
This respectively.
Moving on to property level results.
We grew property I don't want 15% to 31.1 million in the quarter same store revenues and in a wide growth we accelerated in the quarter in came in at 3.1% and 2.6% respectively compared to the prior year period.
On the funds from operation side, a core FFO, which is maybe to AFFO would add back of certain noncash non operating items grew 10% to 22 cents per share versus 20 cents per share for the prior year period, our common dividend coverage remained strong with a CFO payout ratio for the quarter had 74%.
[music].
We continue to grow our asset breaks gross assets are up 23% for the quarter from the prior year period to over two and a half billion, which puts us at the larger end up our small cap multifamily peers. We're also very active on the capital allocation front through April completing transactions, which were all in.
Losses prior to the onset of the pound up we completed five dispositions totaling 272 million of which three closed in April purchases totaled 469.
Dispositions were executed at cap rates, averaging 4.3%.
And beyond you realize that blended 16% IR and 1.8 times multiple invested capital, while nothing 96 million impressions.
In the quarter, we close to acquisitions.
In Phoenix, Atlanta, totaling 138 million in gross asset value. We also invested 22 million or preferred equity a mezzanine loans, including two new operating preferred investments one new ground lease investment in additional schedule fundings said by ads for eight development investments.
With respect to our value add renovation program, we continue to achieve above market results across the board completing 120 units with an average ROI of 22% we've assumed a more conservative posture in view of Ur cobot I like that suspended most interior renovations at this point well continue to obviously evaluate the program.
At both the market and property level as we have more visibility on the emergence of economic recovery.
Shifting to capital markets, we raised $57 million adversity t. preferred during the quarter.
Putting 29 million in the month of March which was a record monthly map. Our post Q1 raise figures have been lower given the coal that impact on the public markets, but we have.
Continue to raise our series he had a run rate of just under 200 million dollar annually, which will provide us quite great flexibility to review potential opportunities over time.
As we've noted before the series D preferred provides a distinctive <unk> advantage for be Archie because it allows us to raise capital d. coupled from the volatility of all of the common equity capital markets and with the flexibility to convert into common equity at our option at a future date at the future common stock price and.
Back in the first quarter, we'd between 17 million up our preferred at an average common equity price up 11 79 per share.
Well the first quarter performance didn't incur significant impact from coal that from the covert pandemic. We continue its closely monitored over its impact on our business properties tenants and partners has obviously the full impact on our rental revenues and overall financial performance remains uncertain as Ryan will detail we've been encouraged.
My post quarter rent and occupancy information today.
We believe our class say affordable rent scratchy targeting the knowledge economy renters by choice positions us well with respect to the covert pandemic in order to continue to deliver shareholder value.
First we believe that our market an asset selection has positioned us well, we've assembled a well located highly amenitized live work play portfolio and knowledge economy growth markets targeting the highly compensated highly educated worker all of which had to help partially buffer us from the brunt of covet driven job losses and the downturn.
And should allow us to Reaccelerate went worth more quickly on the other side as economic recovery takes shake shack, and we're able to generate accretive capital through issuance of our series D preferred which gives us balance sheet flexibility and the potential to take advantage of opportunities that may arise over time third we continue to proactive.
Really make prudence in accretive capital allocation decisions for the company, including dispositions at very attractive cap rates, even post call that now that are well inside our market implied in consensus third party NAV cap rate estimates as we look ahead, we're confident that being well positioned to navigate through the challenges of cobot.
Believes the quality of our portfolio on balance sheet flexibility. That's that's up to outperform further we believe that overtime there could be obstetrical for structural operating expense savings from the large shift to virtual that we've all experience.
Which has served as additional long term catalyst for the business finally, I'd like to get enough that management is significantly aligned with shareholders and a number of first <unk> senior management have purchase equity in the open market enriched in recent months as the result of all of which management now owns approximately 29% of VR Jesus.
Fully diluted directly with that I'd like to turn the call over to lie.
Thank you remain and good morning, everyone.
The operating portfolio started off the year with strong performance across the majority of our metro's with a nine of 14, M.S. age posting rental rate growth, 2.5% or better in the quarter.
This was highlighted by continued outperformance in Atlanta, and Austin, and re acceleration and our Colorado properties as supply moderates there.
Portfolio wide.
Occupancy was 94.2%, which was 30 basis points higher compared to the prior year quarter.
Occupancy held strong throughout April, finishing the month at 94.3%.
And availability, which is a leading indicator for occupancy is strong at 8.2%, which is approximately 50 basis points ahead of where we were last year at the same time.
Overall same store revenue increased 3.1% over the prior year period, driven by a 2.9% increase in average rental rates and flat year over year occupancy.
Right growth was broad based with 25 of the 27 properties and the same store pool, recognizing year over year increases in average rental rates in the quarter.
On a sequential basis same store rental rates increased 50 basis point and revenue was up 1.1% over the prior quarter.
Moving onto rate growth.
During the quarter lease rate growth averaged 2.4% with renewals remaining strong at 3.8% and new lease rate growth slowing to 90 basis points.
New lease rates were partially impacted by a seasonally weaker part of the calendar and the initial stages of the code that endemic and mid to late March.
Consistent with improving seasonality trends, we saw lease rate growth climb on a sequential month over month basis throughout the quarter and despite the cobot in.
March finish 80 basis points higher than January.
In conjunction with the shelter in place requirements in our markets and our decision to move to a more defensive occupancy posture.
April lease rate growth trended lower averaging positive 10 basis points with renewals, yielding positive, 1.2% and new leases averaging negative 1.9%.
Through the first week of May new lease rate growth has trended back to positive territory, which has led to a blended lease rate for the week 60 basis points higher than April.
I'd also like to note that why we were aggressive in pulling back renewal increases across the board in late March and throughout April in response to the pandemic.
We expect to be able to start to implement increases in July and August and certain assets that are outperforming today.
Some of the markets include Atlanta, Austin, Colorado in Phoenix amongst others.
For the month of April we collected 97% of multifamily REIT, including payment plans of 1%, which was in line with March pre coded collection that metric.
These figures are generally in line with a normal environment, where we typically close out the month with receivables around 2%.
Work they are balance down to the next couple of months to approximately 50 basis points.
Moving onto May we started off in month with a very strong collection profile, having collected 92% of our runs through yesterday, including 2% on payment plans, which is approximately 1% ahead of April by the same day.
During the month of April we captured 88% of the prior year period, new lease volume, which was done solely with virtual leasing and no tours.
As reopening guidelines are implemented in our markets. We look forward to further supplementing virtual leasing was self guided tours.
Additionally for April retention was up a very strong 500 basis points on a year over year basis.
And we look forward to this elevated renewal trends to continue throughout the coming months.
On the expense front year over year same store expenses increased 3.7% during the quarter.
Taxes and insurance accounting for 3.4% of the increase.
As we can mean communicated in the past.
Utilizing technology to drive both topline revenue growth and controllable expense savings this strategic area of focus for us.
To that point, we are encouraged that some of the measures. We are implementing should result in control well expense savings with the majority of the future reduction coming in payroll.
We continue to be pleased with our value added renovation program.
Which delivered healthy results in the quarter.
During the quarter, we completed 120 unit renovations with an average ROI 22%.
And to date, we've completed approximately 2800 unit renovation at an average cost of roughly 5800 per unit, yielding a 24% ROI.
As remain referenced earlier, we've halted the majority of our interior capital renovation work with the exception of one asset in Phoenix, Arizona.
Once we resumed renovation work.
We estimate there are north of 4600 units remaining to be renovated and the current portfolio with comparable economics, which would significantly.
Be accretive to both CFO and they beat.
In terms of capital allocation during the quarter and post quarter end, we sold it combined five assets totaling 272 million in gross asset value.
And the sales yielded be RG, <unk> 96 million and net proceeds excluding partner buyout.
Of which 35 million was realized before quarter end.
The five dispositions were executed at an economic cap rate of 4.3%.
Based on 400 dollar per unit replacement reserves and the buyers year, one tax estimates.
The three dispositions post quarter end Anders place in Orlando, Florida, Ashton Reserve in Charlotte, North Carolina, and Marquee T P C and San Antonio, Texas <unk>.
Were executed post coded at an average cap rate of 4.7%.
Which was inline with our portfolio sale last year and substantially below our consensus and they'd be cap rate estimate.
Moving onto investments.
During the quarter, we completed two acquisitions totaling approximately 103 million and DRG investment.
And also made one preferred equity investment into two operating assets totaling approximately 8 million and DRG equity.
With an annual yield of 10 and one half percent.
The operating investments consisted of an acquisition of a 2013 built 254 unit apartment community in Phoenix, Arizona called Avenue Ptwenty five at a purchase price of 56 million.
And a 2019 built 356 unit apartment community in Atlanta, Georgia called falls at four sites at a purchase price of 83 million.
The assets were purchased at a combined stabilized cap rate of approximately 6%.
Which compares favorably to market cap rates in the fourth quarter to foreign three quarter percent range.
I'm pleased to report both assets are performing ahead of pro forma on an annualized basis.
At collections are within the top cortile of our portfolio.
Also during the quarter, we made our first ground lease investment into a new development project in Austin, Texas with an annual unlevered yield of 6%.
DRG invested 3 million during the quarter and is projected to fund up to 15 million to the project throughout the year.
Using the ground lease structure, we believe we will be able to generate attractive double digit risk adjusted ROI.
<unk> position in the capital structure ahead of the senior lender.
With each investment also providing potential future pipeline acquisition opportunities.
During the quarter.
RG acquired 138 million of operating assets, representing 103 million and be RG equity.
And made investments totaling 22 million into new and existing preferred equity mezzanine and ground. These investments.
Following the investments and disposition made in the quarter.
We are g.'s investment and preferred equity mezzanine loans and ground leases stands at 272 million, which represents approximately 11% of our total asset base and it's important to note of the 272 million north of 80% or 226 million.
Is invested in operating assets, which obviously have a lower risk profile and development assets under construction.
During the quarter, we refinanced our senior line of credit and increased availability from 75 to 100 million.
And significantly reduced pricing.
With the refinancing we were able to add ground leases to our borrowing base and reduce our spread on the facility at the top end of our range by over 80 basis points.
From a liquidity perspective.
Due to the uncertainties presented by the Cobot pandemic, we took a number of measures to increase our liquidity.
As of the end of the quarter DRG had approximately 120 million available for investment through a combination of cash and availability on our revolving credit facility.
At the end of April DRG had 124 million in cash plus 51 million in line of credit availability as needed.
And we expect to continue to grow our capital base through our series D preferred offering.
Although we intend to be prudent and our view a further coded developments. We believe we have sufficient liquidity to meet our primary cash requirements through this uncertain period.
As well as to invest in ongoing growth as conditions permit.
Shifting to our previously announced 2020 earnings guidance, while we are encouraged by the initial trends of our portfolio. Following the outbreak of cover to 19.
Given the change in the current environment versus the beginning of the year.
And the inherent uncertainty around the full scale of the economic and social disruption caused by coated 19 and the duration.
We believe it's prudent to withdraw our full year 2020 guide.
Which was included in our February 13, 2020 earnings release.
So to conclude I want to get reiterate that we are pleased with our first quarter an April operational performance and continue to actively manage our portfolio and capital in view of the coded pandemic.
We believe the quality of our multifamily portfolio and investment strategy will continue to provide outperformance in all parts of the cycle.
And with that we will open it up to QNX operator.
Ladies and gentlemen at this point, we will begin the question answer session to ask the question you May Press Star then one.
What you all your questions you May press star and too.
If you are using a speaker phone with you. After you. Please pick up the handset before pressing the numbers to ensure the best sound quality.
Once again that is star and then one to ask a question.
And our first question today comes from.
Not up from National Securities. Please go ahead with your question.
Thanks, Good morning.
First question on Yara on your preferred issuance I was hoping if you could provide some more color on what kind of demand you're seeing for the paper and have you seen any increase in redemption congrats.
Hi, good that's a that's romaine well you know we switched from the series B at the ended the year to the series he normally.
We see a significant drop off as you know the transition and would that transaction you have to go back and sign all the selling agreements again and ER. So we saw very actually very quick picop.
In terms of in terms of the sues t. demand in the first quarter. As we noted March was a record month for us notwithstanding not having a signed all the signing agreements just shot at 29 million, obviously, one the pandemic yet what the markets.
You know down 40% or whatever they want her the public markets that puts a puts us on a significantly different investment climate.
But were continuing so were lower than not gonna, we've seen a drop off from the record numbers in March, but we're still seeing very strong demand.
In terms of a in terms of the series team as we said we're running at about a 200 million dollar run right.
Which is which we and we think that this is kind of a base from which we're going to continue to bill because we've got additional selling agreements that are coming online and I think we we you know April witness a.
I'd have to initial Shaw.
A pandemic and Lovelock downs and everything else and obviously as you look at the public markets they've started to they'd regained a significant part of the down like now we're going into this.
Phase two and phase three of the locked down. So then the on block and then dealing with chronic issues et cetera, et cetera, but I think as things get closer we get pass the shock and things are Mark I get normalize will go from there, but today our run rate is about to just under 200 million, we've seen a modest pick up in redemptions not sick.
Secondly, a reduction is generally are not a very significant number for us that Chris you have that you have that number handy.
Yeah.
Oh, Hi, Paul.
Got it sounded to me why don't we go onto the next question and one way of local the numbers will well well give you an answer on this call. Her okay. That's fair and I guess you know as you think about your 200 million dollar run Greg how do you expect to deploy that capital in the current economic environment.
No. That's a that's a good question I think we've got I.
I think we've got plenty of opportunities.
Now where pass as I said were passed as international shock off.
Oh, the pandemic tend to lock down some we're gonna we're gonna open.
Okay in the markets opened the markets again, we don't know, but no one really knows I think how that's going to play out I'd say multifamily in terms of real estate does that as a well positioned asset class just because it's an essential need as opposed to.
I'll go into hotel or go into dropping off so we're fortunate that way and I think were in a different position in the 2008 in terms of lack of the a a significant other building on the condo side and a high extremely high leverage associated with those in the four clusters that came.
With that but I think as we you know as time goes on you're gonna see stress in the system and I think we're gonna be where no hard to deploy the capital today, we're well positioned in terms of our cash and were.
And we're building on that and we have we're saying plenty of opportunities today and when I think we're going to see continual.
Good and bad numbers, only going to go up or up for a period of time as we work through as we get from here to an economic recovery. So I think they'll be flat, if russia attractive opportunities for us.
Given given that we have access to capital.
Okay. Thank you that's all I had.
Our next question comes from Rob Stevenson from Janney. Please go ahead with your question.
Hi, Good morning, guys I remain just a follow up on that what are the plans at this point for the series a preferred or you guys anticipating redeeming that with series T or asset sales or leaving it in place.
Well, where you know I think it's very expensive.
Hi, add eight kind of quarter percent. We've you know we've looked at.
We were planning to where we're planning to redeem it we would like to redeem and at some point in time is then it's going to depend on.
That's one point in time it becomes a available for redemption. Later this year I think we've got a couple of years to redeem it before.
Before that interest rate I think starts picking up so we've got we've got plenty of time on that and that's one of the you know things that will be on the table, we're going to evaluate that versus other opportunities that we see in on terms of though in terms of their investment.
Landscape.
That's not what's on the table.
Alright, and then.
I guess the other question on a revolving around deployment of capital are you seeing much product if any in your markets.
That you would want to buy on the market today or did the market just come to a complete standstill with cold It and you could have to wait for things to reopen.
I think the markets at pretty much a complete stansell today, Ryan can give you his point of view because he's closer to the not that does not get a than I am on a day to day basis, but our sense is the markets that a complete stand so because it's a you've gone through the shock where everything's locked down.
People are kind of trying to figure out how to I, even do a unit tours, Mark well I guess my third parties and there, let's safra safra et cetera, So and I think there's there's going to be an adjustment period, but it between salaries that they have.
Pricing that you know that's there they're looking backwards on price today in terms of what they had a mine what they have in mind, and you know and and and buyers are looking at you know forward rising at a significant discount.
We I know that we have three deals.
That we have signed up to solve it we close and therefore, we weren't going to where we wanted the price name that we well that we have and ER, we're fortunate enough to.
It's at very attractive assets and very attractive markets only got we got our price.
But I think that's going to wet not everyone is going to have the financial flexibility that we have.
Hi, and and and and the end to end the Conservatives positioning going into this.
Particulate, so so I think.
Yeah. That's that's that's my point of view, Ryan feel free to add or subtract there.
No I think that that's spot on or I mean, I think you know waiting for sellers to.
To get a full understanding of kind of what the go forward landscape is going to look like is something that will take time and if you go back to the G.S. in fact.
Using that as a proxy for a downturn. It took a good six to 12 months to really shake loose or opportunities. So are we think there won't be opportunity, especially coming into the ended the year and into next year, but it but it will take time for some visibility to shake out.
[music].
Okay and are you guys I mean, what percentage of your assets have Fannie or Freddie financing on it and are you seeing much in a way of the the trade off for the mortgage forbearance ER versus the eviction ban on assets in your market and are you guys doing any of that.
Yes, or is the north of 80% of our operating assets have agency financing on it we're not seeing whether its ourselves or any of the other large owners. Many take advantage of the forbearance opportunities people are collecting rent I mean, we collected.
Secondly on line with where we were asked mugs pretty cold, but I think the NMHC and.
And the other large owners are north of 90%. So people can pay there and paid there or.
The rents and are paying the rents. So we have not seen a usage of that system nearly as much as probably we would have predicted or in mid March when they came out with the with the plan a with Russ.
With respect to.
Our market.
I think when we're not seeing really any any difference and evictions a them. We then we would preclude that we're not seeing people again not pay rent. So we don't have necessarily situations, where we've got massive actions that we that we.
Undertake because of the the Fannie Freddie guidelines.
Okay, and then last one from me we provide we found Oh.
Oh, that's sorry, I'm Oh on day, Fannie Freddie Forbearance I think it was it was a great. Thanks, it on to do and we put a task force together when it came out to cannot draw that answered and teach property map out if I don't want when he forbearance, but as we as we looked at the numbers and drill down into each property we.
You know it was clear that we don't need it.
And we're not going to take it I'm sure. There's someone out there a that does get other people out there who they are getting user given their leveraging their assets in their markets, but far markets for our tenants for our quality product. We you know as well we're not even close so okay.
And then last one for me we've heard from some of the peers different reasons for suspending redevelopment I mean from your standpoint, what was it what was the key item that sort of course, you guys were spend it was not likely to see the near term returns with a difficulty you know actually doing them in the current environment with a lot.
Got the contractors et cetera was it the 10, it's not wanting to contractors in the buildings.
Yeah, when you guys boil it down what was the sort of key reason why you guys decided to suspend the redevelopment program.
Trial from our point of view. It was you know it was lack of visibility.
I mean, just because we've suspended that yeah, yeah and like I said. This this is going to play out in phases, you've got to lock down without massive unemployment now the difference between us and GFC has a large part of that.
Should hopefully be temporary it's a chapter but.
Yeah, I don't think we have any oh, we should we say, we sad and a in the middle of March as we.
When looking at forbearance and everything else from a prudence point of view, let's just bad debt and we'll take a look at it and get out 60, 90 days as we get more visibility. So it's it's better today, but that doesn't mean that a quarter from now when we're talking them, we're not busy doing yet, but it will follow my guess is we're not we won't be doing it in.
Other properties, we where we will be doing get himself.
And there is no debt, it's not it's no different than our renewal strategy, which we effectively was flat and March April ER and now were revisiting it for July and August where there's obviously isolated opportunities, where we're seeing strength and we're going to take advantage that.
Okay, Thanks, guys be well.
Right. Thank you Rob so back to go Rob on the question, we pulled out of course pulled the numbers in order to today, we've had a 1.2 million and holder redemptions.
That's probably you had you know we we probably got about that number for the full quarters or they're running at let's say twice the normal pace, but.
You know it as you can see it's not that material amounts given them out of preferred that we had out there in general or you know the wraps and then last first look at it adds a pretty stable ER and.
You have a source of income that is and that has a stability and try to production with a common underlying yet.
And without the volatility that you're seeing the market. So we don't expect it to pick up materially from here.
Next.
Operator.
Our next question comes from Alex Cubist <unk> from Baird. Please go ahead with your question.
Good morning.
I have there been any requests for forbearance or deferral and your guys medical mezzanine loan or for portfolio just looking for an update on how those assets performed especially those in lease up under development just kind of curious what you guys have heard from your borrowers on that side.
Well.
Topline horrible things out.
I'm happy to take a couple of things so.
The answer is no we have not had any request for her barents on our on our capital everything is paying current I think if you look at it it's a function of a couple of different things. One is the quality of the assets that we invest for them as one and then too if you look at the leverage points, we're typically somewhere in the 85.
Two I'll call it high Eightys a percent of cost.
And so if you look at where our portfolio is today, we're talking 80% of it through construction at this point and so there's been significant value created a at each asset and so from an LTV standpoint were significantly below that so so we feel really comfortable I mean as a data point, we have oh, we have.
The Fort Lauderdale development deal, where we have a mezzanine loan investment ER and we did the deal. The 12 leases last week. So are we have another deal and Charlotte North Carolina, where we're doing seven leases a week were 40% preleased effectively it just open so we've had actually.
Okay, very very strong performance on that part of the book.
That's helpful color and not just one more for me probably remain best for here from you, but no what the stock today well below.
Just wondering how repurchasing stacks up against other investment opportunities out there you know just any color on your methodology on buybacks today would be appreciated.
Hi, I think.
Yeah, well, we haven't we haven't repurchase anything in and and the second quarter. If that's your question.
It is on the table along with other opportunities I think it's prudent.
To give it given that most of this is this is a different.
Hi downturn than everything Weve anyone on this call I think that's ever experienced because it's not just an economic recession. There is a health.
Health crisis overlay on top of it so while we think and we have a point of view in terms of how it'll play out no one really knows so.
And I think in that scenario given that given does that that lay the land I think it's our job to be prudent.
And exercising our duties to shareholder so as the buyback do we think the stock is very attractive at the price that it is today and very undervalued absolutely have we gone out as individuals, thereby stock and you know absolutely. If we get out of we had you know even.
If you look at.
Look at some of the compensation element a significant part of our management team has agreed to take.
You know its compensation equity into one and so forth. So it's on the table, but I think from not institutional point of view from the reached point of view, it's it's prudent to take a pause before we get out before and we have better visibility before we jump it and that's why you've seen so it's no different than.
You know than than that that our investment process, where we are again or what we've taken a pause from looking at the landscape of opportunities same in terms of use of capital for upgrades.
Or redemption off the redemption of the series J preferred stock buybacks, there will be in the market buying back stock absolutely.
I thought you know at the right time. So that's a that's that's something that we're going to be talking internally and to the board about.
Thanks, that's definitely robots, yeah, yeah, yeah definitely I think.
Thank you Alex.
Once again, if you would like to ask a question. Please press star in one survey yourself from the question can you May press star in too.
And ladies and gentlemen, we do have a question from Barry Oxford from D.A. Davidson. Please go ahead with your question.
Great. Thanks, guys.
Remain are you seeing opportunities he said that the kind of a you know kind of a pause on the apartment as far as acquisitions is there a more opportunity in the mezz or has that market kind of come to that you have kind of a grinding halt at this particular point.
I think there may be various some very interesting opportunities on the on them as preferred side, but I left right dealing with that on a day today. They said so I'll let rod.
Right answer that.
No no. That's that's exactly right I mean, I think there there's opportunities are certainly in the best space today that we're looking at a and then obviously.
On the cotton side, as well, but but again I think we're waiting probably the next couple of months to get better visibility on on what the recoveries going to look like but but absolutely.
Right have you seen a the rates of return move on the mess product.
The answer is yes slightly Barry.
Obviously, the a really strong projects are going to command a more premium pricing and we typically invest and projects that we want to own long term. So it's not just the mezzanine investment in the event that ultimately, we doing do need to own it or we want to buy it out but but.
I think there's probably been a widening or a couple of hundred basis points and total return a across the or the mezzanine preferred space since the beginning of the here.
Okay, Great and then last question, 92% collections rate so far for the month to make very good great job. It is there dispersion between markets or does that 92%. Yeah, you know get could give or take a couple percentage points hold across.
All of your markets.
Well, the Orlando and Vegas are generally trailing off although Orlando has actually trended pretty well of late.
You take April Thirtyth as a good proxy I think Orlando.
It was about 93% collected and Vegas, where we only have two very very small assets was 87% collected that being said post quarter end in Vegas in particular, we've collected an additional 500 basis points of a ours. So while we saw.
Probably delays and some of that structural in nature in Nevada, There's actually people tend to pay late because of the laws there aren't as aren't as impactful to lay payers. So we've seen we've seen vegas in particular, a catch up significantly or in May and late April.
Relative to where it was at the at the month and other than that it's generally pretty well dispersed across the board.
Okay, great. Thanks, so much guys.
Thank you bear Yep.
And ladies and gentlemen at this time I'd like to turn the conference call back over to management for any closing remarks.
Thank you operator, thank you ever on for.
Joining us today look forward to.
Continuing to report to you on our progress and.
Be healthy it'd be safe.
Yeah.
Ladies and gentlemen that does conclude today's presentation. We do thank you for joining you may now disconnect your lines.