Q1 2020 Earnings Call

[music].

Everyone welcome to be five holdings first quarter 2020 conference call.

All participants are in listen only mode.

This conference call.

Today's call May include forward looking statements regarding this financial condition operation cash flow strategy and prospects are forward looking statements represent only five point estimates on the data This conference call and Urata tended to give any assurance.

Actual future results.

Forward looking statements relate to matters.

These statements are inherently subject to risks and uncertainties. Many factors could affect future results and may cost five points actual activities our results to differ materially from the activities and results anticipated and forward looking statements. These factors include those described in today's press release, and five point I see filings, including those in there.

Factors section of the most recent annual report on form 10-K.

The report on form 10-Q.

C C personal data points assumes no obligation to update any forward looking statements and now let's turn call over to Mr. meal, Dod Chairman and CEO Fivepoint. Please go ahead Sir.

Thank you very much.

Good afternoon, Thank you for joining us.

I hope that that'd be one on your side is healthy.

Oh today I'm joined by then you can always chief operating officer bite at the chickens, Oh, Chief Financial Officer and by month about Oh excuse me good obviously.

On March 16, we had always fourth quarter cool.

And I shared with you that the previous part D., we have asked all the board associates to once again.

I also told you that we always around the company.

Well the plan, which is ready to be implemented in getting something unexpected event.

Creates a major southern shift.

And that they just doesn't get nothing about them.

She was comprised of to follow.

One.

Considering the potential for no bank cells Impolite show.

I'm, a big part for the remainder of 2020.

We are managing land development operations to support so all we support the health, which I would guess builders.

So moving forward the construction activity.

And then that's the biggest earlier.

We need the books and keep 45 days to finish development upon such that'd be great Board.

And the balance Yep.

We have inventory I think that's true.

We have benefited from the fact that the bloxom to do catch up all open expenditure valuable calls.

HM.

We also shows in the past, the 50% or G. and alienate them to our employment costs all discretionary bonuses, we think in January.

That's good luck, we happen to be took a use G and H significantly.

Without the need to use our workforce, if we elect not to pay or did you it's always discussion boards.

Hey.

Yeah numbers I wouldn't Dermot Boyd mentioned that sort of policies to limit the ability to commit to complete a binding contracts.

It appears invoices.

The only people who help that's a part of being sent them on our CFO.

She old CMO and me.

Or.

Since more 16.

Affordable Sabine I'd be office every day.

Making sure that the plan is implemented.

Oh, no associates are well.

And that we are doing what is needed a responsible corporate citizen.

On the transaction sorry.

Since the middle of March and you didn't know state that's all those here in California.

We closed the second thing Donald taking for home sites that'd be great Park.

20.8 million.

And 70 home side, Steve you see sold in Valencia.

For 16 doesn't help millions.

We can't isn't on that deal that is due at the end of the.

We use these transactions.

The vote of confidence and alkermes is by I would guess the those.

Speaks to our strategic partnership with this business.

Yeah, I don't even if they can get first step number wise, our strategic partnership will disappear hope by closing on the sale of an office building. Its fight them gave you campus, which will be developed and ultimately the comprehensive cancer Center.

This was doing this closing is much more than a transaction.

It does this strategic partnerships, which in collaboration with all the healthcare with all those what do you envision, but you're still telco and new concepts of health care Good Liberty no communities.

This was the vishay before gold with my team.

And the impact of the virus lives emphasized the need.

What about the way it's helped the Liberty utilizing technology.

It will still do does that we started gardening quite a substantial portion of all numbers mentioned them.

To be even want to split healthcare.

So why does have these steps.

In terms of dozens home sales at the Gate Board.

The first five weeks of the stay at home or the.

We saw no home sales.

Shutdowns that sales offices and started selling budget.

Over the past four weeks however.

We started seeing weekly sales go back almost be calls it might be levels.

Lastly, we have done that sales, which is pretty much I just thought it could average for the baseball.

Well, that's up inventory of homes in general.

And then all the markets in particular.

Has been maintained home values and bodes well for the future of the residential markets.

This is especially true what did this coupled with its probably couldn't be low mortgage rates.

On a different.

I have been out so from the government stuff sports on business and jobs to the comedy.

And I, Unfortunately, the capital markets and interest taxes.

The task force is not only looking at set themselves to the I think is going as economy.

Let me exactly as it think tank.

Oh, yes.

Lumped initiatives Rainsy 10000 feet innovation deployment change.

No.

Do I think who will report that all the GM financial results.

Thanks Bill.

Our Q.

She was filed on May 11, and a summary of our financial results is included in the earnings release issued earlier today.

I didn't know noted the first quarter, it's an interesting one and we adjusted our business to address the potential impacts from the Kogan 19.

In response to the Thursday night, you're taking immediate steps to protect their health and wellbeing associates extra preserved the financial strength as a company.

Our associates are working remotely and a few years and watching your entire before anything else.

I was quite a bit.

Our financial performance in the first quarter affects our investment in inventory expenditure difference here.

The collection of management fees.

And then accounting valuation adjustment to our equity method investment integrate architecture.

Well, starting with our consolidated results coming address each one of our four segments.

The company's consolidated revenues for the first quarter totaled 9.2 married and primarily reflect the recognition of revenue generated from managing services.

What are your loss from our two consolidated entities, it's 30.9 million for the quarter.

This includes the 26.9 billion, apparently which recorded against starting dressing is great venture.

Total consolidated cost and expenses were 32 point, sixmillion, including 24.6 million like selling general and administrative expenses for the quarter.

Net loss for the quarter was 53.2 million of which 20.4 million was allocated to the more controlling interests, leaving 24.8 million attributable to the company.

Moving to the segment results.

Let's see if second is consolidated for accounting purposes revenue skirt, unless you're saying it will point 8 million primarily related to agriculture and energy operations asking your day expenses totaled 3.7 million through the quarter.

It was actually a segment loss for the quarter is 4.8 million.

The San Francisco second there's also a consolidated for accounting purposes.

And you see the San Francisco second is approximately 1 billion.

Primarily related to answering services.

As soon as expenses were 3.6 million for the quarter.

Segment loss for the quarter is 3.1 night.

The Great Park segment increased operations of the Great Park venture no wonder in great part neighborhoods as well as management services provided by the nursery company to the great that's true.

Just as a reminder, we have 37.5 percents or the non legacy percentage interest as a great venture and 100% as a management company.

The grey card ventures, an unconsolidated entity.

That's the name of venture accounted for under the equity method of accounting.

For segment reporting we agreed the full results every day parts venture <unk> ventures historical basis, So the counties.

Great part that your self funding operation with no debt.

The Grey card segment revenues were 29.5 million for the first quarter of which 22.2 million related to the great start venture and 7.3 billion was related to the management company.

The grey card venture close 35 home sites during the quarter, which was the second and final take there from a sales contract that was closed in the fourth quarter 2019, the base purchase price screws home sites was 20.3 million.

The first quarter net loss for the Great Park segments totaled 2.5 billion.

Consisting of 1.8 Marine and nothing Kinda later to the management company.

The loss of 4.3 million for the Grey card venture operations.

The company recognize a loss of 30.4 billion on its investing in a great part venture.

Which includes our share the Great Park ventures loss and the 29 to 26.9 billion that kinda they recognized against our investment balance.

Great commercial segment and includes the operations of Gateway commercial venture and management services provided by the management company to degrade cars to the great Gateway commercial venture.

We have 75% gateway commercial ventures, and 100% of the magic.

The gateway commercial ventures, I know it consolidated entities with our investment in the venture, California, you equity method of accounting.

Commercial segment revenues were 8.6 million for the quarter.

Operating expenses interest depreciation and amortization totaled 9.2 million.

The commercial segment last quarter was point Sixmillion comprised 2.1 billion of income related to the management company.

Offset by point Sevenmillion loss for the gateway commercial venture operations.

The company recognize the loss of <unk> point, Sixmillion I think some best in gateway commercial venture.

I wanted I took a few comments related to our balance sheet in liquidity position.

As of yet another quarter total liquidity was approximately 372 million.

Which was comprised of cash and cash equivalents totaling 248 million.

And borrowing availability.

124 million under our corporate revolver.

Our balance sheet and start the debt to total capital ratio of 25 right.

Let me turn it back to the operator, well now open it up for questions.

Thank you at this time, if you do have a question that will be star one again.

A question, what's your first today from Stephen Kim with Evercore ISI.

Thanks, a lot guys.

So I wanted to ask you a.

Bigger picture question.

First.

Or that the pandemics driving a pretty significant shifts in attitudes towards.

Home buying as well as recreation.

With regard to either home site Densification working from home communal venues and stuff like that.

Oh wondering what's your be shifts you think are temporary in which you think are likely to be more lasting a in can you give us an idea of how you think maybe some of them longer lasting changes will influence what would be the optimal design of a master plan communities such as yours in the future.

Well. Thank you that's us. This question. It's a question that we obviously ocelot and.

My my experience and conditions like this or that I've had that than previous life you have to be very careful about extrapolating from the moment in time, when we had an old behaving as they I'm not sort of way because we're supposed to do it.

And I think about that to be mistake to assume that because people today for instance, or a really about being in higher density places that means we're never going to see higher density I think what is what do you have to wait for is.

What does the behavior of the consumer goods it looked like.

One this issues behind us because there's no doubt, but then you'd be a modification to the consumer today I mean that'd be the simply simplest example is there's a certain segments of population does is the elderly people that was not comfortable using.

Online shopping and because now the supposed to do it.

They found that the this convenient I'm sure.

That's actually part of the consumption is going to change because a lot of people have said, it's nice to this thing was being delivered Paul.

I think that he worked at home is going to actually force all of us as companies spot that he thinking our whole model that we've been dealing with all three employment for the last several decades I'll be the mine supply them. All these things that I think what a product also.

The videos.

So the thus evolution and the fact.

That means that you were gonna have to start thinking more about maybe some of our workforce my what fourth time or maybe even full time I'll do at home and therefore, we shouldn't be thinking about.

Designing homes with a much more.

Oh really slipped.

Office I personally think that technology.

And diagnostics upon and telemedicine is going to become a report and I think as a pause we will probably start thinking side.

I can give you put us as a company we are not ready yet to jump into any conclusion.

When we see what the consumers looking for up to this thing is behind US now the good news for US is when you come to a good part.

You know the way we designed the good paused with a lot of sales and open space and lot of areas. Today is proving to be very helpful. What I'll residence, because people are going up on lots and being able to actually have that desktop ability, whereas in other things as they go on but I'm not in a position right now to jump to anything.

I think it's too early and we have anybody I'm not sure the.

So do you expect them.

Yeah that makes sense and certainly the Great Park, you know you're committed to a little bit more of the health care focus certainly seems pretty process.

Point.

Oh I'm sorry. This is give me an issue, we'll hear more and we'll discuss.

In the month and your that probably.

Second question relates more specifically to new all Im just curious as to when you think you may.

I have another round of land sales and starts are thinking evolved or change in any way regarding the next set of up land sales there.

Sure So I'm going to take you back to before the end of 2019, when you are guiding above our.

A number of home sites, but we would expect him to sell and at that time, you were talking about something it on 500.

Well, we had was the man.

And as a result, we ended up doing these 784 other puts the 711 closed in the where we just announced the I actually said Hey, do on and we just announced the a the closing of the other 70.

That leads US was about 257 of inventory.

Standing back now and and I can share with you that we have business was now already started talking to us and I have an interest in and in doing that and actually moving forward with some of these transactions.

Well what does.

In need of it.

We're not gonna for certain you want to make sure that the but those who are actually already closed on the transactions are moving forward and im comfortable.

But I would not be supplies.

If you're going to hear.

Some announcements in the near future about transactions with other builders. So we're gonna do what the builders feels comfortable doing and we're not going to force anything I have zero interest and discounting land over that and and all but I think that based on what you're seeing right now I think.

But those who believed that the month of like doesn't isn't demand of housing and the environment is like.

Thanks very much.

Of course.

Well hear next from.

Wells Fargo.

Hi, Good afternoon, guys and I am glad to hear you all are healthy. It's the first question on being Paramount agreed park for 27 million dollar pair make can you just elaborate on that a little bit.

You know what occurred I imagine that's from writing off for land and possibly some lower pricing, but can you just from a certain moving parts of that and some of your assumptions.

Thanks, Susan I was hoping that somebody lost that's got some because it's probably one of those are areas that people are just understanding not because if anything it's just because it say, it's a little bit I'll say, oh and odd situation that has to do with accounting. So let me take a shot that it did not do you need any more color.

Did you got sold out two methods.

Methods that you use a T analyzing all.

Oh, the close enough that applies to wholly owned assets, where it's a statistical analysis, it's like yourselves, if I look at the life.

Also any deal but on a.

And then at the end of the day.

I am able to prove that I'm going to be covered my investment blossom dollar.

Let me start them, but.

So, it's really specialty well assets, but that's not the size of all the assets and take a long.

You look at the massive themselves if I have to time.

And I look at it I'm going to be able to recover my investment plus abolish.

That's why you don't see any anything close to impediments on.

On the other two assets if he would have applied the same methods.

The assets itself, you know today, but it wouldn't be in but I love it.

Yeah, I don't think rules says that if we are in and then on consolidated adventure.

We have to do an analysis of our distributions from that venture.

And do a discovering method, which is another that's present value opt out seam of distribution.

So because they punitive because now you're not looking at this topic analysis, you look we've got to cash flow and the good to talk with cash flow.

And the reason why we ended up in a impediment oh it investments.

Because we have a CMO gosh slow that's what's coming out of that based on distributions and we've been doing this analysis every quarter since we didn't do consolidation and back in 2016.

And we haven't given that again.

Well, what we did now after the call that 19 is we assume that's home prices are going to stay flat.

Or 2020.

And I would be close we delayed.

Land sales that ended up this thing back our distributions from the venture.

And the combination of the team when you discount the than we use a 9% I'm just kind of the discount rate.

The net negative arbitrage that ends up creating an impediment to all bases, because we must always basis up in 2016 to market and that's really why you have this has done again, if I went and looked at as I guess I'm looking at it at the asset level.

This would be far from being into.

Because of the method of accounting for unconsolidated ventures, you end up having to bio investments.

Okay, and if I'm understanding this correctly as well I'm thinking of.

Maybe you all did that analysis ended the quarter at the end of March whenever conditions were much more uncertain, whereas today I believe you said Greek park to me I'm going back to pre cold at levels I would imagine if you did that analysis today you might not have written off the land is that a fair assumption.

Well, it's a very interesting point, because we have that discussion even without a conference and that is actually need to get that any way for us to look at the situation.

As a temporary situation then does for Oh, we pick up waited until.

We see what happens and then make a decision whether there's an impediment lots and they and the you know second Dulles Airport.

Because we are using a gosh slow right now for an ongoing from some and that's the cash flow, that's we're using but on the business.

I, just love to get comfortable that all making stuff subjective decisions. That's all right well did not just telling us based on on cost was using.

That would have put us any position to look like we were trying to avoid them, but if the mouse at that moment sold them and Berman.

We made its isn't as big an important unexplained what it does and the fact that there's some pent up has nothing to do with the value of the office. It just has to do with the way the math works for the non Ponson David Thanks.

Okay. Okay. This next question.

It is also in great part thing you know, it's kind of a multipart question, but.

Could you just given your the builder orders cadence for March through May or may be a little bit more color as well as what incentives are doing there.

And then I can give you.

Okay.

Yes.

Sorry could you also discuss youre lot sales in great part, how you're thinking about those in 2020, and whether or not you're seeing builder starting to add to their lot positions or want to have the there lot positions in southern California, because we've been hearing a lot of builders are completely pulling back on the land market, maybe more recently over the past.

Last week or two they've started to reengage and that a little bit more but wanted to understand that a little better.

Sure. So let me give you the Oh I'm going to use of sales numbers net sales numbers as of the beginning of months on the week by week basis.

And.

Actually I'm Gonna go back even beginning about so that everybody has a clear idea as to how this the sales of <unk>.

So in the first week of the Yeah. We had 10 net sales then they love them.

He then.

Nine.

And 16.

Nine nine.

Then 14.

When we jumped to 21 and 20 eights. That's the beginning of March then we go to nine.

And that's when we started to stay at home, where there's been California. That's one thing done we had zero sales.

We had mega before I get this city.

Then for sales and zero sales still saw the five weeks following the stay at home.

We ended up having line sales seven city last weekend on that basis.

So that's basically has been the age of sales and as you look when you look at all about that then is pretty much is I've ever. Its mind you, let's buildings I think except for maybe one because I still selling virtually nothing nothing from sales offices. So hopefully some what I said.

Tend not to sales without any interaction with salespeople or going and see models, it's pretty impressive actually so and you know we're watching to try and let me answer the second part of the question, which as you know homesite sales.

So I think they bought.

Because we have a cadence of Upsells, what we do is we usually end up making sure that we monitor that April sales that's locked.

And how it's moving and as a result, we then bring on a product that would be the replacement or something that will be similar to that product exactly at the same time. So we have about standing between when one product is almost sold off and another product that is competing with other comes online.

And we do that's what I'll be season, because we don't want to much overlap otherwise you start compromising home values. So you know what we will do is we will monitor them to self support that's why you see me looking at these sales every day and what I'm getting into you insulting sales, but when I look at them in the team looks at them.

As we look at them actually on a product like what we then we'll start not extrapolating and nothing for wood.

What each up to what the bugs products looked like in terms of to burn off.

And that's when we bring that product line and put it out. So you know educate board it's different in Valencia, well we've not.

Waking floor builders to calm and access and then.

We will it product Oh, one good thing the timing is right.

A de because of the fact that when we started seeing sales go down to zero its during that period.

That we made the decision that if the market, there's not going to combat that we probably would not have any sales at the gate Park until next year upon science based on debate that you're looking at no.

If we maintain this rate over here, but I think we couldn't be in a position to sell home sites by the end of this yet.

Does that help.

Well.

Oh, yeah, sorry about that.

Oh, that's all that I, just want to make sure that this bucket, but yeah, yeah that definitely help sorry.

One other item or the incentives or how is the builder incentives are trending.

How do you mean the into some business.

Yeah, the homebuilder incentive.

Some incentives I, you know, but I don't think we've seen any villans, making some there's just nothing that this unusual it's probably very consistent with the same type of incentives you would see the good when they want to close the almost to a band of applause.

Okay. Thank you.

Yes.

Your next from Michael Rehaut JP Morgan.

Hi, This is a lot on for Mike. Thank you. So that's probably the color you gave on sales strength and we felt very helpful.

I just wanted to dive into the drivers of some of the move.

Maybe first Jeff.

Yeah, what what do you think way sort of the driver of the big job at the end of February early March.

I know sales per week went up.

In that 20 sales per week I.

Type range, and you're going a little higher and then secondly, more recently.

There was that that maybe two weeks ago. So it went from the year arrange to nine setting and then get down to three and backup and.

What do you think it's kind of driving from the moves.

Well I mean, I think that's the massive them do lifting weights is yes, I think about two different periods I think that's what we see what we started seeing.

In the be why those behind why all of US something we jumped to 21 28.

In the beginning of two weeks of watch honestly I think that it probably was and what I'm looking at the which ones where the sales they were driven by two different seasons. One we have a lot of sales on the first week, which is weak the way you sold 21.

No the bar, which is the small plugs into very affordable products and I think it might have been driven by people's expectations that rates were going to go down and that thought like is it really it probably is a competes with with rental.

In this market so I'm speculating that it's probably people who would understood then a price point and then and then the a week. After other the 28, we had 12 other flies, which is our new communities as we open and we typically see a jump in the a and b opening up the music what movies and one is excitement.

And do you would have had a lot of build as well that's had an interest from buyers and the convert them within a week and definitely you see a jump. So that's probably wouldn't be those would be the two factors in terms of the last four weeks.

You know honestly I think today, a lot of the driving factors beyond buying Audi emotional and all driven by whatever the news is telling you.

[music].

If you looked at the news today and the fact that people are starting to talk about you know depression and lots of jobs and all of that and you're still selling homes.

Such that doesn't something so I don't know, it's you're asking about why we had three in the last four weeks versus 97 them done I just you can't tell you why.

Okay fair enough. Thank you.

Then my second question, it's just kind of shifting over to your land development activity and HM kind as a pure you'd be opening a lot of those if you're starting to build towards bad and.

Yeah, if you pushed out on the home site delivery a.

So you're expecting kind of how far or what you're thinking it's about petros hanging around whether anything.

And I learned button.

So.

So I said I mean, I'm going to think each of its easy separately so in Valencia.

We have 257 home sites and then really.

And we could.

Yeah, that's it quickly develop another 200 uncertainty.

Oh, So you know we would go through the stemming inventory Roseland and if there's a enough buys for them a drug value and building steel like it's time for them to move them as a sub we've had people who have expressed interest.

So we don't do you need to spend.

Much in land development to sell the first one of its up 57, and a lot of the major them develop and for the other two facilities already done.

And so as it is all do we have basically stopped land development.

For any of the future.

Deliveries at the as Valencia, except for any activity that supports the bill does a construction and movement <unk> moving forward.

Good for.

We basically have seen but now that we're not going to have any that's something you made when you put this down together what does that make it to have any homesite sales until next year and therefore rebuilding stopped land development.

But as we said.

If we see that they but there's an opportunity to move up the net sales and we will Oh. We can go ahead and do that they got 45 days from when we start land development again.

When you finish line side. So you can have the living so you know we're monitoring get every day as a sub one of us altogether everyday and we have monitoring every one of these situations and real time ourselves and we make divide this isn't about that I signed but it takes a set of says about 45 days to deliver the home sites and the great bargain.

And I can tell you if we see a rate of sales similar to what we've seen in the last two weeks.

Somewhere between nine and 10.

Then chances are gonna be higher, but we're going to have more deliveries.

What else do you have the differences than we thought.

Great Okay.

Sure.

As a reminder that is one for questions.

Zelman and associates Alan Ratner.

Hey, guys. Good afternoon, I'm glad to hear everyone's doing well thanks for all the detail.

First just on a great Park.

Given that you kind of just went through the analysis I know you had been expecting.

Distribution this year it sounds like that's getting pushed out so it's safe to assume now that kind of your your internal expectations is now 2021 is when kind of cash will start coming in the door from great parking and if so.

Can you share.

To that that you're currently anticipated.

Let me wise I mean, if we if.

If we end up performing well actually ended up moving forward based on our existing plan. That's we've just started implementing in March we would have made distributions out of a good part and 2020, we will have a decisions when 21.

Mind you.

That that's an asset that self funding and has enough cash over that to some funds. So that doesn't require any cash and because of all of the measures that they've been to conserve cash we feel very comfortable with what we ought in terms of liquidity and therefore, the fact that we will have a delay in just the Houston so.

Okay, great, but there's not there's going to have any impacts on our liquidity on our ability to to go forward.

Got it okay.

That's helpful and I guess the second one.

I fully appreciate the comments I agree with them as far as not.

You know extrapolating, what that is going on today as far as longer term investment decisions, but at the same time.

I know you guys are you know in the midst of the planning process.

Up in San Francisco and that was a project as a project where there was a very large commercial component to it and a young for that matter all of your projects have that but specifically San Francisco 'cause it and planning now.

How are you thinking about the future of commercial real estate, because you know I know office use was certainly big.

Expectation, there and now with a remote working and that's just a lot of ideas that perhaps.

You might not be as much need for as much office space going forward are you thinking about adjusting those plans are contemplating that at all or or maybe just kind of pushed out a little bit until there's a clear picture about what what the future might look like.

So I think as I said before Oh, we have been thinking Oh the uses of out so much so starting with.

Retailing and what we live in San Francisco, when we came to conclusion.

But the outset mode is not the right to answer them and we went through a couple of years on one bad.

We started we thinking that's hold up you know component of in each of the communities in the game boy.

Oh, we concluded that it wouldn't be partnership that we have now with the city a pole and others that will come soon we have made its isn't to pivot wonderful to pivot to a healthcare related uses over here than we have a lot of into a size now.

Basically because the the city a poll is a big catalysts for all of that than lot of people want to be and that's all.

Yeah. So yes, it's easy with some kids is what we want that and we lifting get it as a as if you're looking at a campus when looking at their health care.

Providers, but he sets with housing with lifestyle with schools with all the elements to start to mitigate bugs as they as a campus and medicines.

The main source all saw you know what the main commercial source being to help get.

Same thing in the lens actually we started a while ago looking that than we otherwise it flows.

Village over the first neighborhood, we have 750000 square feet up all the most of your logs for health data, we have a lot of interested parties of that in San Francisco <unk> commercial is divided into a hunters point and campus thinks on campus thing you have a million square.

All of US there's about 300000 square feet of lifestyle retail I love, what 7000 homes, that's what Kansas to give them as we said before leaving whats cannibalistic as always was.

As always first.

Phase.

I can tell you that there's a very good sense, but the million square feet might also also be healthcare related.

I can't speak about again, I don't know that I, you know we have anything.

But I don't be surprised if that's also something does such as healthcare as well.

We can't does he but.

If all of the difference.

Segments of commercial.

Nobody industrial and healthcare the safest right now.

And you know land is not yeah.

Needs for industrial so expensive. So that's why I think you know the long assets. We question has helped US help there's no question.

No. That's that's very helpful. Appreciate that.

And then just a final one on.

It's kind of more builder appetite for land than others, but a few questions and it sounds like builders have been performing on the take downs at this point.

The public's when they were reporting there in your first quarter you know they said that they've been re negotiating extensions on take downs 90 days, it et cetera, and it didn't sound like you guys experience that much side here is there any sense just from looking not necessarily in your communities, but elsewhere can you talk to I'd have to builders I come back off the sidelines again in terms of.

Their appetite for land or are they still seemingly proceeding cautiously because it gives you. The sales results you know to your point.

Rebounded quite nicely. So I'm just curious at what point do they do you feel comfortable enough to return to the the level they were at before.

So I'm going to put them in three different categories. One category as a group that are never stopped talking to us.

And ER and we have have discussions the bias on the well then suicide could have easily walked away from the deal and honestly speaking Alan this is because Kb home.

I call them, I know disguise very well on and in light of the fact that well chip that since we did the deal with them.

And in light of the fact that they'll be building was accused publicly saying theyre going to shut down that land up a acquisition, which is the usable.

I told them and they will come from the up and said look you know if you I'm not something for with the last thing I want to sort of any of my visits once you do move forward feeling like they don't do and get the notice or im not to be the deposit so she wants.

But it does.

And we will talk to assets over 19, it's just 11 interest or if you want to move forward I'm willing to look at what's your needs odd and work through a deal but it looks very comfortable they came back that said no. We would like to move but if you could give us an ability to close with the mill.

The gets paid by the end of the yet after that you have been publicly or something like that because they didn't live up to 50 it.

We'll do that and that's exactly what we've done so young people, who still wasn't Gigi with us and be goes up all the actions of the because we've got a onetime sell it.

I would especially with the business is doing what about the partnership we have another believes that the that wasn't just the but didn't want to close before you had to him.

We have engaged with us, but we're talking to them and we basically having the same conversation if there's something that works for everybody because we're living in the environment. That's on you and so you have been does not do you have a group of business second group that well inside them and then in the last one of the we go to start.

Making calls in talking to lend than others about hey are you, having nothing to be like yet, but it sounds like you might be able to start.

Looking at acquisition again, and if we're going to do that we want to be looking in the month Institute a comfortable and you know the once you have the good clause of easy wants to look out I know, we have a group of those who have basically stood said that's been a mandates on corporate no acquisition and therefore, we can talk about anything, but we'll see what happens in the future.

Any investor groups or a large number picked or is it.

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You don't like it's interesting because.

You know the goupil because in totality he's got loved large anymore, I mean with the consolidation and we decided we have some of those who are not even in our markets. I mean, we're talking but let me, but less than 10 buildings that we actually thought too. So I would say Oh the books category there's about.

Sorry.

On the second thing that set categorize about.

All three of them and then they lost anybody the same so to speak about because its a.

Got it okay. No that's really helpful. I appreciate it thanks a lot.

Sure.

The other questions.

No other questions on behalf.

I'd like.

Sure. Thank everyone for participating in today's call and that will conclude todays.

That's correct.

Thank you everyone.

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Oh.

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