Q2 2020 STAG Industrial Inc Earnings Call
Greetings and welcome to the Stag industrial second quarter 2020 earnings Conference call.
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A brief question and answer session will follow the formal presentation.
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It is now my pleasure to introduce your host that's been hard senior Vice President Investor Relations. Thank you Sir you may begin.
Thank you welcome to stack Industrials conference call covering the second quarter 2020 result. In addition to persuade distributed yesterday, we posted an unaudited quarterly supplemental information presentation on the company's website at stag industrial Dot com under the Investor Relations section.
Today's call the company's prepared remarks and answers to your question what contain forward looking statements as defined in the private Securities Litigation Reform Act like a 95.
Forward looking statements address matters are subject to risks and uncertainties.
Cause actual results to differ from those discuss today. Examples of forward looking statements include statements willing to earnings trends Genie amounts.
And just admission volumes retention rates that capacity dividend rate innocent economic trends another not it.
We encourage all of our listeners to review the more detailed discussion later these forward looking statements contained the company's filings with the actually seen the definitions and reconciliations of non-GAAP measures contained the supplemental information package, which is available on the company's website as a reminder.
Your statements represent management's estimates that gets you got stag industrial assumes no obligation to update any forward looking statements.
On today's call, you'll hear from Ben Butcher, Our Chief Executive Officer, and Bill Crooker, Our Chief Financial Officer, I will now turn the call but about.
Thank you Matt.
Good morning, everybody and welcome to the second quarter earnings call for Stag Industrial we're pleased to have you join us and look forward to telling you about our second quarter results [noise].
Presenting today in addition to myself well be Bill Crooker, our Chief Financial Officer will discuss the bulk of the financial and operational data also with me today or Steve Mecke, Our Chief operating officer, and Dave King Our director of real estate operations, there will be available to answer questions specific to their areas of focus as we enter the month of August there continue to be more questions thing.
Concrete answers around important items that impact all of our daily lives.
Well there'd be a second wave of cobot 19, if so how will this impact reopening of our economy.
Students returned to the classroom are being educated virtually well employees return to the office or continue to work from home.
On top of these unanswered questions, we have the upcoming presidential election in November amid excessive levels of polarization.
However, we do know the consumer behavior has been changed by necessity and the acceleration of already in place trends. Many of these changes are likely permanent as we settle into the post cobot new normal.
The issue, whether an ecommerce presence and associated supply chain are required is no longer a question for most businesses upsize and ecommerce presence is required to compete effectively.
Not surprisingly in this environment Amazon continues to be our largest tenet. This dominated ecommerce company now accounts for 2.5% of rain laws base revenue.
Includes the recent leasing activity, we have specifically discussed in conference calls and on conference and that conferences across our platform. We continue to see the build out of E commerce supply chain as a large and growing demand driver for industrial real estate.
I mean I'll go over the leasing status for the four buildings that have been highlighted in our recent communications.
Our ability didn't Hampstead, Maryland, a 1 million square foot believed to be vacated by solar Cup in July has seen a healthy amount of leasing activity over the past two months. Our initial expectation was it would take 12 to 18 months to accomplish the release of this building.
Based on current information that we expect to outperform that estimate.
Our value add project in time, Massachusetts, a 350000 square foot building was acquired last year subject to a short term lease twin known Vacates Tenet building received strong leasing that's just from a variety of tenants mostly for ecommerce she is.
We are happy to report that we have signed an 11 year lease to a dominant E commerce tenant for the full building. In addition, we see they termination fee of over half a million dollars from the vacating tenet.
The resulting zero downtime any achieves rent significantly outperformed our budget and expectations for these metrics.
Our speculative development abroad to New Jersey at 250000 square foot building that sits in one of the strongest strategic distribution markets on the East Coast Axis six day in New Jersey Turnpike.
Happy to confirm the we've executed a full building lease to a dominant ecommerce tenant again outperforming our expectations on both rent and lease up time.
Finally, we have determined the optimal path forward for other built in Burlington, New Jersey, the 1 million square foot building that Geo say will vacate in December.
You May recall. This asset also includes 40 acres of land adjacent to the building the development potential of over 500000 square feet.
After evaluating multiple potential pass will be moving forward to release, the existing building and two separately continuing to pursue permitting of the development parcel.
Decision was driven by the continued strong leasing velocity in the exit six a submarket. This strength has been evidenced by the multiple discussions we're having a potential full build then users. We look forward to updating everybody with details on both components in the near future.
In short on these assets and across the portfolio, some very solid performance bar experience and capable asset management team.
With that I'll turn it over to Bill will discuss our second quarter operational results and updates to our 2020 guidance.
Thank you Ben good morning, everyone.
Core FFO was 47 cents for the quarter, an increase of 4.4% compared to the second quarter of 29 team.
Leverage remains at the low end of our guidance at quarter end, and we expect leverage to normalize and as we increase our acquisition activity moving into the second half of the year.
Net debt to run rate adjusted EBITDA is 4.3 times prior to factoring in the outside forward equity proceeds related to our January equity offering and 3.9 times when those proceeds are included.
Acquisition volume for the second quarter totaled $11.9 million will stabilize cash and straight line cap rates of 6.4% and 6.8% respectively.
Year to date, our acquisitions totaled $131.3 million.
As stated in our guidance, we expect acquisition volume to increase in the second half the year.
For the quarter 2.7 million square feet of operating leasing activity commenced with cash and straight line rent leasing spreads of 1.6% and 9.6% respectively.
Note that the releasing spreads within our disclosure exclude the impact of short term leases.
Additionally, we leased 480000 square feet of value add buildings during the quarter.
Retention was 100% for the quarter and is 95% for the year.
Same store cash NOI grew by 2.1% for the quarter and 2.3% year to date, largely driven by or attach rate of 95%.
For the quarter reflected 98% of our base rental billings.
The remaining 2% of uncollected right, 1.4% has been deferred with repayment generally expected by year end.
As of July 28, we.
We've collected 90.9% of our July base rental billings, an additional 4.6% of July base rental billings, yet to be received relates to investment grade tenants and tenants who pay in arrears.
We expect these tenants to remit payments within the next two weeks, bringing the total to 95.5%.
The timing of these expected payments, it's consistent with past practices.
2.8% of the remaining 4.5% of uncollected base rental billings has been to for the remaining uncollected base rental billings is associated with smaller tenants that have been impacted by the pandemic.
Today, we have received rapidly for quest totaling 5.3% of baby, our or $21.1 million.
Of the $21.1 million early requested we have granted rent relief of approximately $2.1 million equal to 52 basis points they'd be are.
General framework includes Appirio, Brent deferral as opposed to abate in what the deferred right amounts we paid within the next 12 months.
As of today, we have six tenants on cash basis accounting given their financial situation and our view of their ability to pay due to the economic climate.
We incurred a total of $1.5 million of credit loss related to be six tenants.
Approximately $900000 up that loss, what it took a write off the straight line rent.
Proximately $600000 about loss relates to cash credit loss, the cash credit loss equates to 20 basis points of our current same store cash NOI credit loss guidance.
These specific tenants to account for approximately $4.2 million baby are.
Our credit loss guidance, but 2020 include the impact relating to these tests.
Moving to the capital market activity on April 17, we refinanced term loan B and C totaling $300 million, which was scheduled to mature this September and March of next year.
Yeah, I got a sole discretion has the option to execute to one year extension periods, which it both exercise would result in an outside maturity date in April of 2023.
The term one is fully swapped within all in fixed rate of 1.78% through April 2023.
As a result this transaction we have no debt maturing until March 2022, we're exercising their rights to extend.
We have updated guidance based on our view of the remainder of 2020, we acknowledge some continued uncertainty related to the health of the economy and we'll continue to update the market as warranted.
Components of our updated 2020 guidance are as follows.
We maintain the expected acquisition volume up between $300 million and $600 million from 20, Twond. We continue to expect all acquisitions to be stabilized assets with an expected cash cap rate range of 6.25% to 6.75%.
It is the expectation will hold and not sell the G.S.A. building in Burlington, New Jersey, we've reduced our disposition volume range to between $100 million and $150 million.
We continue to expect retention to within a range of 60 and 70%.
The drivers for the lower than historical retention include the known non intentions with solo Cup and GSK.
We expect the 2020 annual same store pools cash NOI growth to be between zero and 100 basis points for the year.
This range includes a credit loss range of 100 250 basis points.
We continue to expect gene aid to be between 39 and $41 million for the year.
We expect to run leverage between 4.5 times and 5.25 times for the year with leverage increasing from the low end as we acquire more in the second half of the year.
Capital expenditures per average square foot still expected to between 27 and 31 cents from here.
We continue to expected range of core AFFO per share between $1.80 and $1.88 for the year.
I'll now turn back over to that.
Thank you Bill.
In closing, let me touch on two topics that have been at the forefront of national attention recently that pandemic and persistent issues of inequality in our society.
Our office has been open for almost two months on a voluntary basis. However for the most part employers have continued to work from home and worked collaboratively and effectively.
Often at the procedures, we haven't place will allow a safe return for all employees or office when conditions permit.
We've always been proud to stack is a place of opportunity and that we are a company that always tries to err on the side of doing the right thing.
We have that causes we believe in with both direct financial support and with paid volunteer hours.
However, recent events have caused us to reflect and made us realize that we could and should do more.
More as a company and for many of us more as individuals.
Some of the things we're doing as a company.
We have significant increased or I know budget for financial support a social causes works also expand the opportunity for our employees engaged in volunteer work in the community.
Before providing an educational opportunities for our employees to further awareness and understanding is on these subjects are hiring practices are being modified to ensure a broader and more diverse African pool, both full time and in turn hiring.
We realized that as one small company there's only so much we can do we hope to the steps outlined above and others. We are taking will add to the progress of making both our community and society more equitable and just.
Thank you very time, this morning, and I'll turn it back to the operator for questions.
Thank you we will now be conducting a question answer session.
I would like to ask your question. Please press star one on your telephone keypad.
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Thank you. Our first question comes the line of Manny Korchman with Citi. Please proceed with your question.
Good morning, Katy Mcconnell on for Manny.
That's based on the high level tension achieved year to date can you walk us through the downside scenario factored into your on changed guidance range and what degree of confidence.
That's great.
So the would tend to spend the retention numbers for the remainder of the year are down in large part because two known vacates that will occur in the third and fourth quarter, the ER GSK building and and Burlington, a jersey on the socket building in a handset, Maryland, we're very confident of our.
Operations and execution on those buildings with those those are the big factors oral a result in lower of attention over the remainder of the year.
Okay got it and then can you discuss the percentage of leases that were signed a short term basis this quarter and economic yeah.
Yeah, I'll give me I mean, obviously in a in a downturn a recession you all see more short term leasing activity I'll ask Dave to provide a little more detail.
Hey, anecdotally.
There are some tenants who were looking to move to other buildings have built to suits et cetera that were delayed by a co related work stoppages. So we benefited from that in terms of short term renewals.
Okay, great. Thank you.
Our next question comes from the line of Sheila Mcgrath with Evercore. Please proceed with your question.
Yes, good morning to.
The value add project that you mentioned in Massachusetts, and also the development project in New Jersey. The speculative one appeared to have it had good outcomes any insights on the how the yield on cost on these projects will shake out and how that compares to your typical acquisition yield.
Well the the yield on cost is a little easier on the dollar progress because it's just one one product and that's all goes in it at one time. So you have on cost there was a term I would say dramatically higher than expectations near double digits.
Straight yield on cost so I'm, a very successful project the yield on costs on a.
Tom facility is a little harder to because you're buying a building and then applying additional cost to it. So it gets split out between the two but certainly met our investment thresholds by actually by quite a wide margin. Those are those are both buildings that we.
I expect to enjoy very solid cash flows from a long time for a longer time.
Okay, Great and then on acquisition guidance that remains on changed year to date, you heard about 131 million that would imply very active third and fourth quarter I'm. Just wondering if the pipeline shaping up to <unk> with a lot more acquisitions, you know to occur pretty soon.
So she lives you as you probably recall, a third and fourth quarter almost always our biggest quarters in normal times. So there's a little bit of that but also were.
I have seen our pipeline reduced during their first onset of the pandemic, but it's now.
No filling back up again, we're very confident about the because the fact that pipeline a billion. A today is still made up a whole lot of individual assets and our and we're bidding on a more assets I think were pretty common of the our ability to execute on the bill do you something there that are yeah. In addition to or <unk>.
Yes, it's on 1.8 billion and we expect that to increase.
With more assets coming to market in August and September sellers did pull some other portfolios and larger assets drawing.
The onset and those are expected to come back to the market in the third quarter.
And do you think the forward is enough equity that to fund your.
Current expectations or do you think it would require additional equity.
This year, it's not our expectation will be back in the equity markets given our current guidance leveraged as I said in the prepared remarks leveraged six it sits at 3.9 times when including the forward equity so sufficient capital to acquire even the high end of our acquisition guidance and without hitting.
Equity markets.
Okay, great. Thank you.
Thanks, Joe here.
Our next question comes in light of James Feldman with Bank of America Merrill Lynch. Please proceed with your question.
Good morning, guys. This is all this on for Jamie.
Just touching upon Sheilas question, there on funding and you highlighted that potentially you'll do some more equity in the future can you can you talk about how much of the acquisition pipeline. You think you can't do it to you end up at the higher end to that range at the end of this you only thanks, just not enough product.
Allison simple math is no we're not limited by capital in our acquisitions on the simple math as we can do about we can stay inside the the new guidance of upper end of the new guys as five in a quarter for this year longer term our guidance is as high as a six times or foundry quarter times, but we can satisfy that five on a core.
Right and so far 600 million of assets over the remainder of the year from where we are today that would be well above our total guidance for acquisitions for the year, though they closer to three quarters 1 billion for the year.
Got it and is there is there anything that you're seeing that gives you sort of more confidence that maybe you could do more than what you're you're stating obviously your stock prices back up at a level.
That makes it sort of accretive to continue to do these deals. So just trying to get understanding of what can change here in the back half year, given the strong industrial.
One of the things that we can look at the world in at the or a little part of the world than say, there's a lot of uncertainty.
So.
Develop any greater degree of certainly these are normal times, but as Bill has mentioned we are expecting that have heard from numerous brokerage shops that the expectations are that that assets that have been l. at a market.
Didn't come to market or for whatever reason are going to it'd be kind of start coming back in August September assemblies second supply to be a enhance the pipeline. We have today, we'll certainly we believe strongly will get us into our guidance numbers.
But is that and yes that supply of assets to for us to evaluate comes back end markets.
We believe that that will allow us to move through the ramp into the further into the management of our guidance.
Okay, and just one more for me. So I know we've talked about is probably a little bit more offline and online, but just the benefits that you're starting to see in your portfolio or any early indications are signs of re shoring and you know tenants starting to talk about you know using your assets or markets to bring somebody.
Factoring back to the U.S.
Yeah, I mean, I think it's still a pretty early days on that I think we know the big question Mark on regional rent is at what cost and so I think there's I don't think the U.S. consumers can agree to pay two or three X times simply because assessment and U.S. Diana. So I think the history has been reassuring.
Something that happens when it happens gradually I know you and you can you can't draw a plan and a couple days its a.
Theres a lot of planning and obviously development time as required to do that southern process by which Reashure in occurs is what I'm going for the pandemic, perhaps of the accelerated by the pandemic almost certainly will be but it still takes a fair amount of time may extend it for instance, and a lot of talking about bringing pharma back on onshore.
I've heard you know people talking about the lead time to develop have them by far and manufacturing plants can be two to three years. So it's not a not an instantaneous things are assets are well positioned there around population centers.
Okay, well positioned to benefit from that when it happens.
As well as being a traditional production areas like Wisconsin.
Great. That's very helpful. Thanks, guys.
Our next question comes from the line of Brendan thing with Wells Fargo. Please proceed with your question.
Hey, guys. Good morning, I guess, Ben in your opening remarks, you talked a lot about E. Commerce. So I guess can you just comment.
Maybe on the trajectory of demands from ecommerce tenants. It seems like initially we had a pretty good serves as demand, but has got a I guess leasing velocity of demand for these types of tenants leveled off as we've gotten.
Into later Q2 in early Q3.
I mean, I think very high level, there's an expectation that maybe it will slow down there was such a massive brushes. It as a pandemic came on but I think we're still seeing a lot of people positioning themselves for the further increases in ecommerce activity that will and assume as we move.
So hopefully out of the pandemic era, but certainly as we continue through the pandemic area Bill I'm, assuming they give.
So let's say initially the E commerce share was very high because most other participants and received from the market as they've come back the share has gone down we do see broad based demand and and let's say pretty close to normal demand in our vacancies near term roles and it's it's across a wide variety of industries.
Okay. That's that's a.
And then just on deferrals it looked like a deferred rents picked up a little bit lie relative to your average.
Monthly to fill rate for Q2, so I guess.
He trends or can you talk about what types of some of those are now maybe receiving deferred grants that were not in Q2.
Hey, Brian It's bill this the tenants that received deferred rent in Q2 in July it's the same.
Population of of tenants. They increase in July is really driven by some of those Pat tenants paying April and May rat, and then agreeing to deferrals and.
Later in the quarter.
I think it builds correct, we haven't had any new deferral requests for sometime very limited amount of deferral requests yourself.
The total number of times it received deferrals from Brian is about eight is eight tenants today.
Gotcha, alright, thanks, guys.
Our next question comes from the line of Michael Carroll with RBC. Please proceed with your question.
Yes. Thanks, Ben can you talk some more color on some of those larger blocks available space that you highlighted I guess, specifically, we could start with a solo Cup I know a few months ago. It sounded like you had a lot of tenants that are looking at that space. I mean, how should we think about a lease being signed is that could that occur relative.
We soon and if we can see that lease actually commenced before year end I guess, what's the timing expectations there.
So I mean, I'd without going too deeply into ongoing negotiations that were very very confident that we'll have a lease in place this year.
Okay.
And then I guess similarly, with the the G. I say property I guess can you talk a little bit about the seems like you have a for several full building users I know usually takes about 12 months. They you underwrite 12 months of downtime, but since you started earlier can we assume that those leases could occur.
Much sooner than that typical phone downtime.
Yes, I mean, when there's a lot of activity around that building, we're very confident we'll get something done.
Hello, and in a shorter timeframe than that.
Great and it can you remind us where in place rents are relative to market on that Ah, Yes, just say property.
Obviously, the the variability about lease termination tea.
Thanks for pretty close to market, maybe slightly pretty classic pretty close to mark.
Okay, Great and then the the land parcel that the Jason today, what's your expectations there in Munich, I guess I don't know if I missed this on your prepared remarks do you plan on on building or developing an asset on that parcel and and if so would you pursue that on a spec basis.
[noise], where our plans to further the permitting to increase the viable and parcel and then evaluate whether whether it will sell to somebody else to build the dream or obviously, we had a very good experience not very far away in terms or return on development. We will continue to evaluate that that opportunity important thing as you move before you noted.
And our position, where we are somebody else can build on it. So the market right now its is a a recently full of activity a speculative basis. So.
We're pretty sure that someone is going to want to build on it whether it's us or somebody else.
Okay, and then how long does it take for the entitlement process. I mean are you able to start that right now or does the GRC at least kind of make it a little bit more difficult until that lease expires.
We're able to start the process and then do you have started the process of.
A permanent.
Good.
The the process is ongoing.
Okay, and then lastly from me as can you talk a little bit about the lease commencements at the Burlington site in the Massachusetts property.
When does rent actually start hitting the piano.
Others are hitting the PML are already Mike just because.
I think one of them as one month of free rent, but that's coming in through straight line, so they're starting to hitting the piano.
I want the Taunton one was in Q2 and the Burlington one starting in Q3.
Okay, great. Thank you.
So.
Our next question comes from the line of Dave Rodgers with Baird. Please proceed with your question.
Hi, Good morning wanted to follow up on something I think Dave King It that earlier with respect to doing short term renewals for tenant that had planned to move out to build to suit I mean is that in kind of the solo cut nature are these additional move outs, we should be expecting six months down the road and in their tenant retention or is this an early 21, we'll see kind of a higher overall proportion of move.
As you push these leases out a little bit anymore color helpful.
I was just in reference to a couple of instances, where we had tenants extend for a year because their projects, we're not ready and there you know, they're small 200 kind of 50000 foot leases.
There and there is also activity generally I don't we haven't seen as much of a development activity generally I'm glad to be sort of the uncertainty with tenants doing shorter leases. We've actually one of the surprises I think to watch operationally has been how much demand there has been for longer term leases in a recession and again typically typical recession playbook.
As everybody does the shorter leases.
But we've seen pretty strong demand for longer leases.
To some of our activity.
Oh, how would you I guess, maybe in the same vein Ben how would you discuss kinda rent negotiations with tenants and whether you know what's happened to market rates and spreads in concessions overall just on the transactions that you've been negotiating or we had pretty cold with levels are you know have things, taking a little bit of a pause in terms of growth would have you seen in your market.
No I think that there was certainly a pause at the outset, but I don't think theres been any great ammunition that trend line, maybe flattened a little but I don't think it's.
Certainly didn't turn down I think the tenants are approaching this is a long term lease long term situation that might have a short term disruption, so I think pricing or or or rent levels haven't really moved much.
The national absorption and supply numbers, the mass find him in numbers.
Our both of both supply and demand are forecast to be down.
We have not seen.
Most of that in the current leasing markets.
Maybe they'll be bumpy down at a level, where it doesn't really impact pricing.
Okay and then maybe just last question for me with regard to acquisition have you seen a change in pricing and it looks like your cap rate expectations largely similar to what they were before but wondering if the product you're looking at today, if that's coming to market is less risky and that keeping prices a little bit tighter.
If you've seen any again diminishing in pricing in terms of the bid ask spread for for what you're looking to acquire here in the second half of the here.
Yes, do I mean, the bid ask spread is pretty narrow industrial how we were able to two deals. We closed in June were able to get.
Some price deducts from from pre covert pricing I'm, one of them as much as 2.6% fall where expectations expecting I'm very similar pricings that with a slight maybe discount.
Going forward, but nothing material I think the or your question as to Rick I think the assets. The continued due to track along during the early parts of the pandemic are probably the lower risk has the same sort of sale through and Didnt have a whole lot of price adjustment.
The assets, we expect to.
Come to market in August and September prior a wider range or different different risk.
Profiles and perhaps you saw in April in March and Matt.
And your appetite been for those riskier assets at this point things like that would be a good use of capital for you guys, but but your thought yeah.
Good to not to be the I mean, we're looking for over last we're looking to be paid overpaid for the risks that we pay so where we have guard rails in there. So we're not taking too much risk. So we're certainly looking to be paid for it and then we're happy to buy a tiny or Amazon lease in Ontario, California, but we.
I want to six cap.
Probably not six cap, but we certainly want to be paid more than what the market is for south for an asset like that.
All right, you're making them. Thank you.
Our next question comes from the line of Mike Mauler with JP Morgan. Please proceed with your question.
Oh, just a quick one I was wondering can you give us a little color on the didn't make it is leasing spreads on the new leases during the quarter.
Sure.
I guess over all the same is that we the new leases are about 11, and a half years and turn on the comparable prior leases for about three and half years. So in the trade off between turn on rate.
Which we've chosen to determine and taking a bit of a hit on rate and then in one instance.
We had effectively an over market deals that benefited from a tax abatement that rolled off.
As anticipated and us as we underwrote.
And that that accounts for about half of the delta in the and a lower new routes.
Got it okay that was that thank you.
Thank you.
Our next question comes relied have John the Sogo with Ladenburg Thalmann. Please proceed with your question.
Good morning.
John.
[laughter] touching on acquisition.
And just given that we you guys didn't close anything subsequent quarter end as at this point I mean, how should we think about cadence over the remainder of the year should it be I know Fourq was always your most robust quarter in terms of acquisitions, but it should be almost we all weighted towards Fourq, you or would you kind of expect the kind of them.
I find you've been able to put in place and things reopened to kind of come to fruition here in the next two months or so.
Yes, I expect some acquisitions to closing at the end of Q3 and the bulk of the remaining acquisitions to close in Q4 of the two that we did close in June a those were deals we had to under either price agreement or contract and we put those deals on hold for middle of May and then we revisited those deals.
In the middle of May we're able to close those in June so as more transaction started to come and come to market. In May we started underwrite evaluate and takes at least 60 days to close so end of Q3 and into Q4.
Okay understood and then I'm sorry, if I missed this in the prepared remarks, but assuming there's no resumption of rent from the six leases that went to cash accounting what kind of a recovery are you expecting there.
Oh, that's all baked into our credit loss guidance, our AFFO guidance that our same store guidance for the year.
But in terms of just the either recovery on cost or or new leases I mean, what kind of.
Yeah right now.
Hi, guys, it's close to zero for this year, John It's just a matter of getting goes tenants weather.
Yeah, they vacate the space and we can get those spaces back and release those but for the remainder of the year, It's it's close to zero.
That's it for me thank you very much.
You're welcome.
Our next question comes relate a bill Crow with Raymond James. Please proceed with your question.
Hey, good morning, Ben.
Stepping outside stag for a second to look in big picture, how vital is new absorption from Amazon and how much attention do you paid.
The second derivative of the Theyre leasing activity annually.
Amazon, obviously has been a huge huge.
Absorber of space this year and certainly at the end of last year their appetite is.
Can I don't believe it can continue with the pace at OSAT today, but you know I've heard a million or half a week.
Well, maybe is a million an avid data okay. It sounds very large number so that the second there of Amazon demand. It's certainly a asset it has to turn that they can't continue to absorb at that level.
Forever, but they're not the only engine in town for E Commerce, there, they're the most aggressive.
But we're seeing other tenants with E commerce demand as part of the interest we've had in some of our big business hours are smaller buildings. So.
Although that's certainly something to wash and they're very important tenant they're not be on a game.
Okay. That's all I had thank you.
Thank you Bill.
As a reminder, if he would like to ask a question press star one on your telephone keypad.
Our next question comes the line of Chris Lucas with capital. One. Please proceed with your question.
Hey, good morning, guys. They built a couple of housekeeping question. When you on the lease termination income what was that specifically for the for the quarter.
The the cash or the or the gap side of it.
The total termination income was that was a million dollars.
All of which $740000 was cash.
And then you.
Kind of lumpy topics together.
Adjusted EBITDA page the solar income is that a recurring.
Scream or is that a one off.
Oh, that's a recurring for GAAP purposes is amortize over the.
Life for the contract and then for for cash its onetime.
So.
For.
CAD purposes is about $400000 included in CAD this quarter related to solar income.
And about $18000 included in cost profile. So you can see how long this leases are amortizing that income over.
Super that's only had thank you.
Okay.
We have no further questions at this time, Mr, which I would now like turn the floor back over to you for closing comments.
Thank you operator, so thank you all for joining us this morning.
Stacks isn't a really good place where as we've talked about our balance sheet is in great positioned our employees are engaging and they're looking at a lot of opportunity our asset managers are a constant great things on leasing from.
Despite the fact, we said in a and pretty a unsettled tonsils err on the pandemic in the political turmoil the industrial sector as well position insides extremely well positioned within the industrial sector. We're looking forward to a great second half the year and to success beyond that thank you again.
Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.