Q1 2020 Earnings Call
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Welcome to the Alexander involvement first quarter 2020 earnings conference call.
At this time all participants on the only mode.
I see this presentation there will be a question answer session.
Two questions on its actually read the press star one when you talk about.
He's been property on the call it Jim Accordingly.
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Our garage.
Oh, nothing on the topic of TC could today, it's a deep breath and destination or please go ahead.
Thank you Hello, and welcome to our call to discuss how its entered Goldman's first quarter 2020 earnings.
With me today, starting beach, President and CEO, Chris Benjamin and Brown CFO.
We're also dealing by lashed Parker and these cheat real estate officer, including churn Chief Accounting officer, who are available to participate.
In the Q and a portion of this call.
Before we commence please note which statements in this call and pre.
Within the meaning that the private Securities Litigation Reform Act.
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95.
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And by development forward looking statements.
These forward looking statements include I don't I'm, turning the two statements regarding possible or assumed future results of operations.
Strategies.
Opportunities.
This.
As well as rapidly changing challenges with the company's plans and responses to the novel, Florida virus 'cause it 19 pandemic and related economic.
Disruptions.
Such forward looking statements speak only as of the data statements were made in are not guarantees of future want US forward looking statements are subject to a number of risks uncertainties assumptions and other factors that could cause actual results and timing of certain events to differ materially from those expressed in corn.
Plant by the forward looking statements.
These factors include but are not limited to prevailing market conditions and other factors related to the company's reach status.
In this business is associated with the Coca Duchene and its impact on the company's business.
This is open operations liquidity so condition.
Produced by the company related to cereals and construction business.
And the company's from pension related to the developing a new York generally discussing the company's most recent form 10-K form 10-Q, and other filings with the FCC.
Information is really should be evaluating right of these important risks you do not undertake any obligation to update the company's woman Sussex.
Management will be referring to non-GAAP financial measures during our call today, including in the appendix of today's presentation slides.
Mistaken regarding our use of these non-GAAP measures reconciliation.
Slides from his presentation are available for download at our website.
Okay interval in Dot com.
Chris will open up case presentation, where the strategic and operational update ill then turn the presentation.
One of the breadth and we'll discuss financial matters, Chris will return for some closing remarks, and then we'll open it up for your question.
With that let me turn it over to Chris.
Thanks, Steve and good afternoon into our listeners.
Today, I will provide an overview of our first quarter results in activity and then just scarping accuracy from Covidien seen any actions. We are hearing response, Greg will then review our financial and operational results in more detail.
Summarize our balance sheet.
And liquidity position then we'll open the call to your questions.
Let me begin marketing you hope everyone on the call as well as our your balance.
Over 19 pandemic and its associated in passive and felt by many including our communities here in Hawaii.
We are fortunate that the health in class of the grown of ours have been relatively minimal on why personal hold the pandemic and associated closures.
Although significant than it is elsewhere.
Our first priority has been health and safety of our employees our tenants in prior extended in recent memory.
With all the moving parts associated with Covance 19, I'd like to summarize the five key takeaways I. Thank our most critical to understand NVS position right now.
First while there are some very positive signs regarding how Hawaii, and Andy Naysayer relative to other markets and our repairs.
It is far too early to Nick.
Forecast of the timing of a return to normalcy and the performance of our clients.
Positive signs include the truly remarkable containment.
Covert 19 in Hawaii, and the fact that our commercial portfolio is relatively needs based and essential.
Year to a local resident population.
But hawaii success in protecting.
Public health comes from our ability to manage upload visitors into the state and recovery of our economy understanding ability of local residents will depend on safety risk restarting that well, it's unclear how and when that will happen.
Great confidence in our local leaders and are optimistic, but not taking anything for gathering.
Second I've never been more proud of the people living in the.
Most of our employees have been working remotely since March 12, and I want to thank them for their dedication and hard work to keep all our properties in businesses.
Operational through this difficult period.
Our team on managed through this as well in any could and I've been overwhelmed by the tenacity demand as centers and work with our tenants or close the books on our first quarter entirely virtual rate.
Or continue to.
Performed safely and many jobs across our company that are essential to keeping Hawaii running including construction energy generation and equipment maintenance.
Our team is doing a phenomenal job.
Third we are guiding daily by our values and our objective is to be partners for Hawaii.
That's not an easy thing to define your timeline because when we can't single the single handedly solve every problem.
What we can do as a locally managed locally based company is worked closely with our tenants to help from remain open when possible provide marketing support. So those are you running over.
And and help others pursue available resources to offset the financial losses they are experiencing.
Of course, we are offering really for every county, but also asking all our tenants to recognize that our mutual success is critical to long term survival and so we must together.
Curves that many potential buyers both land and operating assets have remained engaged I believe this is a reflection of the essential in the sense of nature of our assets.
Even in good times, we refrain from forecast in the sales of brand assets and operating businesses.
More than hopeful that we can maintain momentum in the simplification of our business.
I'm with you need so much progress in recent years.
Finally, we're going to be prudent management of our financial position.
And ensure that we are ready for whatever comes we're going to plans for and pursue the best outcomes.
We're going to anticipate and prepare for the worse.
At this early stages, a pandemic cautions warranted and you'll see that reflected in our actions, including our decisions.
The sustained or dividend until we have greater visibility that does that reflect any change in our policy of paying out 100% of our re taxable income.
But it does acknowledge the unpredictability of our environment.
Turning now to our first quarter commercial real estate.
This does not significantly impacted by covering related backers. We had strong results that were largely inline with expectations.
Total CRT revenues increased by 17.9.
First one is running our commercial real estate portfolio was 94.7% occupied which.
It is 180 basis points higher than same quarter of the prior year.
Results going forward clearly will not be the strong but we are.
Our fortunate to have entered the pandemic with solid performance and high occupancy.
Well capital preservation is priority as its time, we will be continuing with our value add repositioning program at I highly encourage shopping center.
Modest covert 19 related timing impacts are not expected to delay overall project completion.
We completed our landlord work with the demolition of the theater space.
And we will provide updates as we progress.
Additionally, our asset monetization program continues as we stated both simplify our company and improve our liquidity.
We closed on sales totaling 1.8 acres in our business, our and one unit.
The increase during the quarter.
And we have additional potential sales in escrow.
Our interest thus far appears fairly resilient at both projects.
Finally regarding Grace Pacific in our materials and construction business we continue.
Our efforts to stabilize operations.
Wetter project delays in Coven 19 set as a set us back again and our first quarter results reflect that where we were encouraged by progress in reducing costs and winning new business. It grace, including large paving projects on Oahu Hawaii.
The essential nature of this business should help increase volumes as year goes on the volumes have been challenged so far in the second quarter as we work with government agencies to initiate work on projects. We've won quicker, which we are awaiting contrast.
We remain focused on the eventual sale of this asset while acknowledging that the current economic environment may impact timing.
Now, let's take a few months to discuss the coding hearing back more specifically and how we believe we are positioned moving forward.
In early March as the global spread of the virus accelerated Hawaii started to see a downward shift in tourism and reduced consumer activity.
As of March 20 acre Governor Hawaii officially in Cosan mandatory stay at home corridor.
Closing on central businesses in implementing social distancing measures as we sit here in the last April it seems that so far Hawaii has been spared from the worst and we're hopeful that weakens geographical return of normal activities and movement within Hawaii again, you may well remains uncertain as rental growth will be pretty to come back to the state.
I'm pointing out on a couple of our centers realized significantly I'm sure most traffic matures and does drive the broader health of our economy and it's important.
Any of our tenants.
We are certainly supportive of protecting the health and safety of our communities.
Well that Hawaii is remarkably good progress in flattening curve will facilitate initial steps to open of our economy during may.
With respect to our portfolio all our properties.
Energy assets are also considering the essential as a result, we believe our business model is relatively defensive in that sense as uncertainty.
At this time, we had confirming received 62% of April rents.
With 38% of tennis requests in some form of rationally.
I believe rent receives might have been higher had we not chosen who worked proactively with our tenants to help protect their long term health and cash flows, which we believe will provide a JV with greater stability over time.
We are working with each impacted tenant on a case by case basis.
Finally, given the unpredictability. These times, we are being conservative and management of our business and balance sheet.
Implemented a number of expansion capital reductions in our regular remodeling potential financial scenarios based on the latest economic and kind of data we have.
As you can imagine however, the range of potential outcomes for 2020 earnings as wide.
For that reason and as I mentioned earlier, our board has decided to suspend our dividends in anticipation of reduce the difficult to predict.
Taxable income.
We intend to continue paying out 100% of our Retaxable income Brasil as prudently reevaluate our outlook for the year progresses and update our dividend policy when we have greater visibility.
With that I'll now turn the call over to Brad who will discuss our operational and financial results in more detail.
Thanks, Chris on good afternoon, everyone. Let me begin with our financial results for the third quarter, we recorded net income of $6.2 million or nine cents per share compared to $9 million.
For 12 cents per share in the same quarter, including 19.
For reduced net income is largely due to decreased revenue from land operations and our materials and construction segment, which was partially offset by growth in our series segment.
This quarter, we're also introducing effort though.
Metrics as we work with positive this quarter for our largest operating segments commercial real estate.
The should also provide better comparability of our results with peers, although I remind you that the company continues to operate other vendors businesses.
For the first quarter 2000 square.
Quarterly funds from operations of 59.
22 cents per share.
$60.4 million for 23 cents per share respectively for the same quarter to prior year.
Core FFO was $18.3 million for 25 cents per share compared to 12 point.
Or 17 cents per share respectively.
Or.
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The increase in the core AFFO was driven by new acquisitions, we completed.
During the first 20 therapy as well as Ron the same store portfolio.
No definition full reconciliation of non-GAAP measures.
Supplemental post on our website.
Regarding performance within the commercial real estate segment.
Page recorded 11 were up 17.9% for $6.6 million over the prior quarter.
Gold portfolio cash NOI increase $4.7 million or inkling quarters.
The same period last year.
As year over year growth was driven primarily by new acquisitions as part of the commercial real estate investments. We have made in the last 12 months as well as growth in the same store portfolio.
Same store cash NOI for the third quarter increased by $900000 for 3.7% to $24 million.
Moving onto our land operations.
As you produced revenue of $11 million during the first quarter 2020, and generated EBITDA of $5.4 million in the quarter as a result of sales and earnings or joint venture related.
From joint ventures related to land and development, Brazil projects.
During the quarter, we completed sales totaling 1.8 acres.
Our business bar and one year Camilo.
With respect our materials and construction segment, you just feels better than the first quarter uncoated 19, but we continue to believe our work to reduce cost and improve operational there through this year.
First quarter adjusted EBITDA was negative 100000 hours as compared to negative $1.4 million in the same quarter over the prior year.
Additionally, increasing were to rightsize our expense structure.
Operating costs and expenses decreased by 38.8% from the prior year quarter due to significantly lower operating expenses in the land operation.
Yes, and materials and construction segments.
LNG and expenses decreased 11% to $13.8 million in the first quarter 20 play.
Fair to 15, and a half million dollars in the first quarter 2019, due primarily to cost reduction and operational improvement initiatives in the materials and construction segment.
Now, let's take a few last update you on our balance sheet and liquidity metrics. We believe that the work is done over the past several years to stabilize our cash flow will carry income and more recently to reduce leverage has strengthened our position as we enter this period of uncertainty.
Well with regard to debt maturities you had just one monitoring and 20, Tony is a key 2 million dollar unsecured Elvis we repaid in large have onto small mortgage loan maturing in 2021 totaling $14.6 million.
And the first quarter of the cautionary leisure we proactively grew 120.
Billion dollars on our credit facilities to provide additional financial flexibility.
At March 31.
Finally, with respect to our dividend the board of directors is temporarily suspended quarterly dividend distributions, given the uncertainty or the current economic environment.
We will continue to evaluate dividend declarations each quarter with the intention of paying 100% of reduced tax legal and will maintain compliance with retaxable income distribution requirements for the full year of 21.
Also based on uncertainty related to Gildanize, CNS unprecedented economic and social impact.
John guidance at this time.
So scenarios and ongoing risks handling Vera incredibly in this current uncertainty.
Hey mountains situation in future and provide updates as appropriate.
We expected gradual returns a little more normal state starting in may and making retailers could begin reopening, but it will be they will be space and there's no certainty regarding how long it will take.
In the meantime, <unk> okay.
And being partners for Hawaii in this crisis has given us another opportunity to live out our values.
Company will commit 20% of his 2020 charitable budget to Kobe Bryant even related initiatives.
We are working with trusted nonprofit partners to understand immediate than longterm needs and will allocate funding programs that sheet families provide emergency rental assistance.
Position our communities for a full recovery.
<unk> communities in which we operate we're confident that overtime.
Will all emerged from this pandemic stronger than ever.
Yeah.
They said my opening remarks, I believe we are well positioned as a state and as a company, but there's there's no time for both predictions of rapid recovery.
Menu to be focusing diligent as we managed through an unpredictable time.
With that we will now open the call your questions.
And sound mind your cats, a question you will need to pass star wanting a telephone to try your question <unk>. Please stand by what we can <unk>.
Our first question <unk>.
<unk> Yeah, my it's okay.
Ah yes, good afternoon, I kind of wondering if you could give us a little bit more insight.
And on the April collection I you in discussions with most of the discussions regarding deferrals to and then pay back over time, and then I'm just very surprised to see the index shell and ground meat collections wouldn't be higher given those sectors.
So if you could give us a little more insight there as well.
Sure sure if you don't mind, all have Lance address those questions.
Hi, Sheila good afternoon.
Hi, My name so.
I'd say a couple of things about our collections for April 1st.
You know despite the maybe the surprise, we we do like the mix of our portfolio with a different NASA classes, we do things that that helps with diversification and will allow our numbers to remain up as we work our way through three things that being said you know we do have a couple of our industrial users.
That are tied to a really retail operations that I've been deemed none of central.
So that's one thing that drove maybe a lower collection for that asset class and then on the the ground only side you know there's a couple of.
Pieces that are tied to owner users that are similarly that were deemed not essential.
But you know a few other comments I guess I would make one on the retail side is Chris indicated in his remarks, we made a strategic decision to be proactive with a subset of our tents.
We really do want to you know despite all the disruption. We're currently seeing really want to take the long term perspective here and realize that value and success is going to be measured and how quickly we can get our tendons open.
So that once they're physically allowed to do so there are financially able to do so.
So we went after what we viewed as are most at risk tenants, which really our our local non essential retailers as well as restaurants and proactively offered deferral for for the month of April So if not for that we would have expected to see I'm slightly higher recoveries and then I guess, one last point that I wouldn't.
I mean, as we sit here on the 30th of the month.
I do still expect collections to occur for the month of April So I've had personal conversations with tenants that I do expect to pay.
You know what we do have 10 said really far struggling we have others that are just being cautious but have the ability to pay and we do expect them to do so.
Okay, Great and then pressed on Grace Pacific in your pets or at least you said that they share it might be possible to swing to profitability, which is very positive needed to in my mind can you just talk about factors that give you confidence that that.
<unk>.
Two times it is eat the dot either die this year.
Yeah.
Sure. Let me, let me talk about the positive things that I'm seeing business, you I think that in like.
Environment that we're in right now and he unpredictability of whether there can be a second surgeon and all that sort of thing we we have to qualify.
Any forward looking statements in that respect so I'll stop short of predicting profitability, but I'd be happy to talk about some of the positive things M.C.N.N. business first thing is that we've reduced our costs structure quite a bit from where it was a year ago and that's both on the G.N.A. side as well as the operating inside and I think that's that's an important start.
Point, just to lower the the revenue and gross margin threshold that we need to hit in order to achieve profitability second we have increased our backlog and increase the rate at which we are being successful in between jobs.
Of that is you know just just a result of the competitive environment, but I think a lot of it is a result of just a very strong methodical and thoughtful approach to how we're bidding jobs and we're we're seeing better results.
There and I'm confident that we are a bit in these jobs at at.
Levels, where we can be profitable on them and we're having more success as well so I feel good about that.
Some of the mitigating factors and the things that are impacting this year to date and still in April.
Are that it has been tough to get some of those jobs that we've won contracted and got getting getting the work going in some of that is certainly coded related with government agencies, you know bogged down working remotely and and that sort of thing. So what we're focused on right now and we're working.
Proactively with the government agencies goes to county level in the state level is taking some of these maintenance contracts that we have because a lot of work is specific to a a defined piece of paving for example defined rode a a certain area, but a lot of the contracts that we.
Have our broader maintenance contracts, where the contract can be used to do paving in a variety of areas are on a number of different roads. So what we're trying to do is take some of these maintenance contracts that we already have in place and see if we can work with the government agencies to identify paving work that can be done under those contracts while the roads are.
<unk>.
Very busy right now to perfect time to be doing paperwork. So you know I would've liked to have gotten more of that going in April and and we didn't but we're working very proactively to try to get some of that we're going in may so that just to to shorten this probably too long answer I would say that I'm I'm pleased with both.
The operational and administrative discipline that we have in the business in the way that has helped our costs structure and I'm pleased by the book a business that were gradually building as we win more jobs and so the the final missing a link is just making sure that our crews can move about [noise] between the islands safely.
That we've got the the the contracts from the government agencies to get to work done, but I think we are positioned for what could be a a much more successful year. This year, if a few things just fill in place.
Okay. One last one for me it could you just give us some insight on to the.
Retail tenant watch list <unk>, you know how that is shaping up right now and how that compared to a year ago.
She led slants [noise].
You know I guess I would answer that by saying you know we don't typically disclose hard time watch list I mean, obviously tenet health is you know top of mind to us not just.
For our National is that May typically make the list, but for our locals as well in so.
As we're having our individual discussions with each tended to best understand their needs and how we may be able to pass assist them.
We've got to make sure that they have the financial capability to to really survive long term and that's going to drive a lot of decisions that we make in the near term.
Okay. Thank you.
Thank you I'm expressing concern Alexandra Goldfarb Piper Sandler Yeah mine is nothing.
Oh, Hey, good I guess, it's a good day out there so.
I won't even divided.
Well just see you don't get jealous, it's like low forties and rain here the northeast. So I don't want you guys to get too jealous.
Let me just ask a few questions first first thank you very much I have to say since I've been asking for thank you for providing F.F. So so really appreciate that <unk> and team. Thank you and hopefully the next thing that you guys can do for US is to release earn earnings a bit.
More than 30 minutes ahead of the call we didn't get the email alert till about 30 minutes before the call. So if we get out some more time in the future be awesome, let's just go to the yeah. What's going on you know obviously you know Hawaii has come a long way, but as you point out is still tourism dependent great that the state will start to reopen.
Clearly a while before the tourism, especially the overseas tourism you know comes back you know how do you see your portfolio ferrying because it seems like it's going to be a while before comes back.
This time versus prior downturn. So when you look at where your rent levels are now brochure tenant productivity how does it seem for your tenants now versus where it was back in Oh wait and then you know where it was back in prior downturns and the blind economy.
Well.
Oh, So I'll start this is Chris and then I'll invite lance or anyone else to chime in I think this is really this whole situation. As you can appreciate is kind of totally uncomfortable to what we went through back and <unk>, Oh, nine and so I I don't know how relevant comparisons are did that timeframe, what I can say.
Is that we are hopeful as you indicated that.
[noise] within [noise].
We'll have a reopening within Hawaii.
Driver or the broader economic health and the state is gonna be when can we open up from the mainland and get people back here and I've I've I'm on calls daily as I'm sure. Most of our listeners are on various webinars and talking to local business groups I've been on calls the last couple of days and there's no doubt that there is keen awareness of.
The importance of finding save ways to bring into a tourist back in but I think.
Also an urgency to just get the local activity going get movement between the islands get a shopping centers are fully open even though our centers are all open the a lot of stores or not open get that going first try to get some economic activity happening for our our tenants and then get it back to normal as soon as it can by bringing.
A tourist back in so [noise], not necessarily saying anything new here, but what I am teen up is the fact that the health of our tenants is really going to depend on the timing of that and it's going to it's a very very different calculus and equation. Then it was back in Oh wait Oh nine.
Having said that Lance if you want to add anything on the outlook I I I would just say that again and we are pleased that that all of our centers are open when we we've made a point of getting out there and driving through the parking lot and see any activity and actually it we've been relatively pleased at the number of car.
As in the parking lot and the fact that there is a activity it a lot of our tenants and we're hoping that that various steadily increase is one thing I I didn't know is that just yesterday, both some of the mayors and the governor came out with the first round of additional retail reopenings that there okay.
And so I think that that's going to be a steady flow as we go through may.
Okay. And then next question is which sort of goes to that point about the month of May given the that this has been yeah. The impact has been building over time.
Easy to presume that you know the tenants had the April rent payments already in the bag you know in March, but obviously now with two months since wait so is it your expectation that may rent.
Collections are gonna be even lower just given that scenario.
When she wanted to address them short.
<unk>.
You know I think.
The one of the the key milestones for US is how quickly our times can open if if you look at the numbers that we provided on the slide 11.
It's not coincidental that we had 62% collections and 62% of our tenants are open for business.
So.
The most important thing again process is to try to get them open physically but also make sure that they're financially able to do so.
That said you know obviously the the longer that they're closed it's going to put a more more of a strain on their ability to to make rent and I have no doubt that some of them are gonna have difficulties skin reopening. So I think it's really challenging for us right now to give any sort of forecast intimate it's just really.
Too early to do so.
Okay and then just my final question and you know I can't resist asking a question about Grace you guys before had spoken about going after cry legacy jobs that had never been finished and therefore they were still outstanding receivables. How do you stand on that are you basically caught up now.
<unk> have you you know gone through that whole backlog and now everyone's paid up or is there still a little bit more to go just curious where we stand on that.
So I'm not let Clayton jump in here, Alex what I will say that we had another good a quarter in the first quarter of collecting some some receivables and I think it actually at the Grace level help us generate some positive cash despite the the negative right, earning yeah, that's right, Chris and Alex the only.
Thing I would add is that that a our collection is continuing to be a focus area for progress and frankly, all P.M.B., but we're happy with the progress with me on that front and teams.
Gently working too close out any unfinished work that may still be outstanding. So it's it's come a long way, but we're still focused on a are.
Showing a percentage basis, how much of a are still needs to be collected as it you still have another 10% to go 20 per cent 30%.
You mean from where we were say six nine months ago.
Yes, he gave us a sense of progression from where you were last quarter, where you are now and then how much more you have to your fully caught up.
Oh, so the nature of the the receivable balances, it's a little different from your commercial real estate in the fact that these are our contracts and you go through a a process to close out jobs, which.
Inherently takes time just because of.
How did you get introduction this physical work that has done an <unk> an inspector so the the natural collection cycle is is always going to be more drawn out and then you see and the commercial real estate side. We we've historically haven't provided that level of granularity for receivables, what what I say is that we.
We haven't made a lot of collections over the past couple quarters.
And the receivable balance that we have left we are I I wouldn't say are primarily attributed to long outstanding contracts.
Yeah.
Okay. Okay got it got it okay. Thank you.
Thanks.
Thank you on a question comes from Stephen here with ability in company I mean, it's okay.
Yeah I, thanks, taking a question.
<unk>.
Hi, I'm just curious on the you know the non payment and you know how that would work can you just talk about how you structuring that for for different tenants.
Yeah, Let's do you mind, describing <unk>, okay. So our our preferred.
Method to dealing with our 10th right now is to for all the.
And as I had as I had mentioned earlier, we did offered to furrow to a number of what we deem to be our our most at need tenants for the month of April and so that represented $1.1 million in April rent.
Which is about 8.7% of the month billings and 73 bits. If you were to annualized that so that's like I said are preferred choice.
But are we haven't sitting down with the majority of our attendance and just dealing on a one off basis to better understand what their situation is and what's the best options are for assistance, whether it's different or or other things.
And that you know holds true for tennis that are open in terms of increased marketing that we've been able to do to support them, making sure. If you know we've got easy curbside access for their customers to tennis at or close and thinking about how best to to reopen there is just wants to be able to do so.
Okay, Okay, and then just.
You know the portfolio and the way.
This is impacted it and and maybe you know can you just talk about you know are there asset classes that you kind of wish you were in you know that you think or maybe you know more.
You know less susceptible to Jewish use you know or other areas, where you think you're you know maybe in the future you keep position something out of it I mean, obviously, there's something that you know we don't know.
Yeah, we don't have a good handle on you know exactly what's going to have obviously, but I mean I'm. Just wondering if you know in the early days here. You know you kind of have a feeling of maybe you know the way you might position things going forward or anything like that.
<unk>, let me this is Chris let me start and if restaurants to try and then well compared to do that I actually feel very good about our portfolio is a hawaii sharpshooter focused on the local market.
I think that we're in some of the best asset classes, we can be and on the retail side. We're in grocery anchored we're not in malls. It's all needs based as I said virtually every parking lot is relatively busy it's not it's not as far as it would be if everyone were open but our senators still have activity and I think that activity will just steadily increased.
In May I would be far you know less optimistic if if we were in the mall space as far as a retail goes and then of course, we're not in office. We're not in hotel those are asset classes that I I think not only have near term well, but for hotel it's near term.
For office I think there are longer term questions about the impacts of of Cove. It in in this whole remote working thing. So I'm very pleased with the asset classes were in in being an industrial and and of course, our ground. When he says I think they are relatively a better position than the other aspect classes.
We could be in in in Hawaii, and frankly, I'm I'm pleased to be in Hawaii, because our flattening of the car the way we've been able to demonstrate.
Control of the so far anyway, we know that that it's not over by a long shot, but so far we've had great big control of the curve. So I'm feeling very good about our geographic and asset concentration. The one area, where I think we'll be doing a lot of thinking is industrial and what sort of growth opportunities. There are there.
Think that goes in 19 could present interesting growth opportunities for industrial and and that's been an identified growth area for us. So I think that we may grow more there, but overall I'm pleased with our portfolio distribution in light of what's going on.
Yeah, I would just heckle, Chris his thoughts and.
<unk>.
Basically I think any of US would have been challenged to think about what a pandemic proof portfolio would look like.
[laughter], Yeah definitely have had to live through this now for you know for a couple of months I think one of the.
Trusting things that have been reinforced to me is the importance of our community and neighborhood base centres and what they represent.
The local population here not just a need space place to get groceries and stock up for a stay at home, but really a last mile distribution for food too needy families that we've been able to support through our locations and just that proximity to the neighborhood and well, it's probably too early to draw any sort of.
Long term trends are thoughts yeah, I think one of the things that we've certainly learned his steps work at home is is working and so I think the neighborhood centers and the ability for people to be at home and have close proximity and access to goods at least in the long term certainly in the near term.
It a lot of disruption, but in the long term that could play out to be pretty favorable.
Okay. That's helpful and maybe lastly, you know <unk>. It's like one Q. was you know maybe better than I was expecting or you know it seemed like a groceries was stronger is there something.
<unk> is that the case or is it more or less in line with your expectations heading in I mean, obviously.
Less of a factor at this point, but if you could just asking about that that'd be great.
I would say it was it was in line with our expectations. So we had shrunk leasing, particularly on the industrial site.
Which drove you know a big portion of our performance, particularly on occupancy we had we've been talking about our come on our industrial park for a number of quarters had an opportunity that we had there that we were able to to lease and bring occupancy they're up to 100%.
And then if you looked at it sorta year over year with some of the acquisitions, we made and being able to backfill some of those spaces early on.
You are really able to see the the performance of that piece of the portfolio in particular.
Okay, Alright, thank you very much appreciated thanks, Dave <unk>.
Thank you and okay. So no further questions about this time I tend to call back over S.D. sweats or closing remarks.
Thank you Shannon and thank you all for joining us today.
Have any follow up questions. Please feel free to call us at 8085 to 58475.
<unk> industrial relations at A.B.H.I. Dot com.
Hello, Huh, they have a great debt.
Well you see I'm ended complexities concepts. Thank you for participating leaving out the Tonight.
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