Q2 2020 Gladstone Land Corp Earnings Call
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Okay. Thank you Kevin for that nice introduction. This is David Gladstone and welcome to the quarterly conference call for Gladstone land.
Thank you all for calling in today. We appreciate you taking time out of your data listen our presentation, let's start with Michael Macau see he's our general counsel on Secretary.
And he is also the president of Gladstone administration, which is the administrative for all the Gladstone funds. Michael why don't you go. Thanks, David Good morning, everybody sees report makes moved forward looking statements under the Securities Act of 1933 Securities Exchange Act like to 34, including those regarding our future performance. These forward looking statements involve certain risks.
Uncertainties that are based on our current plans, which we believe to be reasonable.
The main factors may cause our actual results to be materially different from any future results expressed or implied these forward looking statements, including all risk factors that we list. Our forms 10-K in 10-Q public documents, we filed with the FCC find them all on our website, which is www dot Gladstone arms Dot com.
Typically the impressive Investor relations. Please page on that website. You also got to the Fccs website www dot FCC that GLP.
We undertake no obligation to publicly update or revise any of these forward looking statements whether as a result of new information future events or otherwise except as required by law.
Today, we will discuss our football which as funds from operations I propose a non-GAAP accounting term defined as net income excluding the gains or losses from the sale of real estate and any impairment losses from property plus depreciation amortization of real estate assets will also discuss core if at all.
Generally defined as Epo adjusted for certain nonrecurring revenues and expenses, then adjusted Oh, which further adjusted core up I felt for certain non cash items, such as converting GAAP rents the normalized cash rents.
All we believe these are better indications <unk> operating results and allows better their ability of our period over period performance. Please take the opportunity to visit our website once again Gladstone farms dot com signup or email notification service. So you can stay up to date on the company you could also find us on Facebook keyword there is the Gladstone.
Companies and on Twitter handle their as bad Gladstonecomps and today's calls an overview of our results. We ask that you have your press release and form 10-Q, both of which were issued yesterday for more detailed information again, you can find them on the Investor Relations page of our website with that I'll turn the presentation back to David glass.
David I, Okay. Thank you Michael when it comes to buying additional farms things are still moving a bit slow for us I, we're seeing significantly more opportunities than we did earlier in the year.
Spec the activity to pick up for US we have four farms with the purchase agreements signed but we're in due diligence and they may fall out somewhere along the way it's about $70 million. There. We have four more farms, which are we're negotiating a P.S.A. and some of those are probably drop out, but that's about $80 million. So.
We're lining up things hopefully many of those can close before the ended the year I know many of the farmers have been extremely busy because sales in grocery stores have been up strong and that's where most of our tenant sell their crops.
We invested about $21 million, a new farms during the quarter operations on our farms remain strong and our team continues to have success, releasing our existing farms at increased rental rates. We believe these increased rental rates are indicative of the continued strong demand that we're seeing for farms that we own.
And products grown on our farms one thing to remember about the first quarter. That's when we received an early lease termination payment that is one of our tenants wanted to get out of their lease.
He said, that's fine, but we need to be paid and they paid us about $3 million a suicide large long term lease this $3 million is a non carrying a then of course all of you know that and we immediately lease the farm out to a different grower under a new long term lease so two things that you should keep.
In mind, when you're looking at the second quarter first leases up about one fourth of our farms include what we call participating rent.
That's where we receive certain percentage or the gross revenue earned on the farm from the grower selling his or her crops.
This participation rent is in addition to the minimum fixed base guaranteed under the leap.
We don't know, whether we get anything on to that or not at the crops come out strong we got.
Plenty of a it doesn't obviously, we don't get anything there.
How are these are not known until really the second half of the year Asics face expectation is that these rents will provide us with earnings boost in the third and fourth quarter as they did last year. When we had recorded about $2.3 million and participation rents of course the size of the crops.
Can't be much smaller, meaning we get less I don't put a lot of stock or that we're going to get all of that money every year.
The second thing you should know is that each year, we receive a refund for a portion of our interest.
That we paid all loans, if we borrowed the money from the farm credit group during the prior calendar year. This is called patronage and those payments are generally recorded during the first quarter of the year, we recorded about $1.3 million of income.
Like that from last quarter.
Not last quarter, meaning second, but the first quarter.
The second quarter is usually status quo.
Yes, it's a lot it was as it was last year and we think we came out fine from an operating standpoint.
On a year to date basis.
We have about nine cents per share excess dividend coverage with adjusted at that both.
Through the second quarter now just to provide an update on the impact of the government's closings are having on our farms.
About 90, 95% of the proud of products grown by the farmers who lease our farms.
Sold her grocery stores like Kroger, Safeway, Cosco, Walmart and similar outlets very little other produce is being sold to the food service industry, including restaurants and institutions like schools, a that's where product sales have been hurt I bought a corona virus.
Reduction and openings demand for produce and most other foods at grocery stores remains high just read an article it says those sales are up by 10% over 2019, we expect this to continue to be the case for the rest of the year people, obviously have to eat and so they behind their food.
And at the grocery stores since you're not going out to the restaurant.
So in short our farmers are not seeing significant impact from the government shutdown.
On their operations supply chains are still tracking and running smoothly and prices remain very good for most of the crops. So we feel like we're not an area that has not being impacted very much an area, where we are seeing impact is the timing of payments from the processors.
To the growers.
At this particular those farmers growing permanent crops like knutsen blueberries.
With the government mandated shutdowns, forcing many offices to close and the country a lot of the smaller companies don't have the ability to get checks out.
And they awfully often time hard just not getting into the office at all payments from other third parties to these processors are getting delayed and that delay trickles down to some of our growers and ultimately to us it's not a huge.
Problem in the sense that there's a lot of money, but his just nuisance you're always fighting to get a few payments in.
In the fresh produce side, there's less there because.
This is sold directly to the market at with no intermediaries to speak about it but in the permanent crops. These are not and these kinds of things like blueberries, even the processor to the grow or takes about an extra three months.
You know they got to crack they arm ones and get the almonds out of than not and then drive them and those kind of things and while they're doing that they're not going to make any payments until they sell it.
So that does slow down because of what's going on in the marketplace.
Because of this situation, we granted rent deferrals to two blueberry growers, who are waiting who waiting from payments from their respective processes. The products have actually been sold and the processor is getting ready for delivery.
This rent on the blueberry side is not a.
Really not a concern for us as just a matter of timing.
We have agreed to give them extra time up to 120 days and we should get those payments in October and November.
It's about $343000 a the rent that we deferred which is actually less than 1% of projected 2020 cash rents based on our current online unfolding.
Other than that we have other tenants to.
Every now and then we get a few weeks behind.
Smaller situations all of our other tenants our current on their rental payments to us.
Moving onto the farmland ownership. We currently have about 89000 acres 115 farms valued at about $912 million. These farms are located in 10 different states and more importantly, and 24 different growing regions.
Our farms continued to be a 100% occupied and a lease to 70 different tenants all of whom are unrelated to us.
And the tenant operating these farms are growing about 50 different crops, we now own a good number of farms in enough different regions with many different farmers in many different types of crops. So that there is sufficient diversification in our holdings to provide some safety hopefully a lot of safety and security for cash flows coming in.
And.
As a use of course to pay dividends to our shareholders.
Recent activity during the second quarter. The team acquired two farms for about $18 million and also invested another $3 million in existing farms.
We needed to obtain approval from Napa County for example.
For additional venue to be planted on property we own there.
It's just additional time to get things done well that $3 million is being put in its counted against us on the valuations. So.
A counted against us because we put the money out but they havent been appraised since that things have gone in and as a result, it looks like we're.
Values are going down overall, the initial net cash yield to us on these investments that we make.
Like this $3 million about 6.2% and the leases on these farms also contains certain provisions such as annual Escalations that should push that figure higher in the future.
And just as a reminder, this year figure does account for operating expenses responsibilities under the respective leases. So if we're supposed to pay the taxes, which sometimes we do enter into that these leases are mostly triple net so they shouldn't be too many expenses incurred by a company.
On the leasing front during and after the quarter ending June 30, we.
Either executed new leases or extend existing leases on three of our properties located in California, and some in Florida in total the new leases are expected to result in a total increase in annual net income of about $173000, which is about 24, 24% over that of the price.
Our leases.
Looking ahead, we have form leases scheduled to expire in 2020. These all expire in the fourth quarter of the year and total make up less than 5% of our total annualized loose leases.
We are in discussions with the existing tenants.
And some potential news tenants all that we hope all the people that are leasing our properties will continue we aren't expecting any downtime animal on these leases overall, we expect the new leases on these renewals to be pretty neutral from where they are today, maybe up a little bit.
Finally, just a quick update on the impact of our farms. The current wildfires in California in the Hurricane on the East Coast, we reached out to our eastern located tenants and they reported no damage in Florida on our farms and in California, and none of the recent viruses have posed a threat to any of our farms, though the.
Largest fire out there the Apple fire is more than three hours away from our nearest farm, they're usually up in the mountains, where there's a lot of brush. So we don't really expect fires in California in fact in past, we've not lost anything.
Well that's enough about the operations them and turn it over to our Chief Financial Officer Lewis Parrish to talk to you about the numbers Lewis I. Thank you David Good morning, everyone again with our balance sheet.
One quarter or total assets increased by about $16 million, primarily due to new farm acquisitions and proceeds from equity issuances.
From a financing perspective, we procured about $16 million of new long term borrowings during the quarter.
At a weighted average rate of 2.81%, which is fixed for the next nine plus years.
On the equity side during and subsequent to the quarter ended June Thirtyth, we've raised about $6 million of net proceeds through sales of our common stock under the ATM program.
We also started selling our series C preferred stock during the second quarter. After completing the offering of the series B preferred stock during the first quarter.
So far we've raised about $6 million a net proceeds from sales of the series C preferred stock.
As of the series B, our plan, but the series C preferred stock is to sell it and small amounts over the course of the next several years. So we're better able to timely acquisition of farms with the proceeds as they come in.
And just to remind everyone.
In the process of selling the series B and now this series C preferred stock, we do pay certain commissions and fees to glatfelter securities and affiliated broker dealer of hours. However, glass. Those securities is just the conduit this offering as it pays out about 94% of these fees to other third parties.
Including brokers and wholesalers, who are helping to sell the shares.
And the rest of the fees kept by Glatfelter securities that remaining 6%.
He that these amounts are used to cover various expenses related to selling the stock which were actually greater than the feeds retained by glass on securities.
And please note that the preferred stock is not included in the calculation of the fees, we paid to our advisor and it has never resulted in an additional fee paid to the advisor.
Now I'll move on to our operating results for the quarter.
First I'll note that we had net income of about $182000 in a net loss to common shareholders of about $2.1 million or 9.5 cents per common share.
Adjusted FFO for the current quarter was 10.1 cents per share versus 25.3 cents per share the first quarter.
Dividends declared were 13.4 cents per share in each quarter.
We had a sizable decrease in adjusted FFO, but that was mainly due to the two significant events in the first quarter that David mentioned, rather than short bread have been shortcomings in the current quarter, that's the $3 million lease termination payment and a $1.3 million of interest patronage that were both recorded during Q1.
On a quarter over quarter basis cash rents decreased by about $139000 or 1%, primarily due to a lease we executed during the first quarter that include the rent free period for calendar year 2020.
This decrease was partially offset by additional rent earned on recent acquisitions.
On the expense side, our core operating expenses decreased by about $1.3 million on a quarter over quarter basis, which is driven by incentive fee earned by our advisor in the first quarter.
Yes.
Removing related party fees, our core operating expenses increased by about $92000. This was largely due to additional repairs and maintenance costs.
Legal fees incurred on certain properties, partially offset by a decrease in gene a expenses.
As if we lower corporate legal fees and advertising costs.
Moving on to net asset value, we add 44 farms, we value during the quarter and these are all via independent third party appraisals.
Overall, these farms decreased by about $700000 or 0.4% from their previous valuations from about a year ago.
As of June Thirtyth, our farms were valued at about $912 million all of which was valued basically to third party appraisals or the actual purchase price.
And based on these updated valuations and including the fair value of our debt and all preferred stock.
Our net asset value per common share at June Thirtyth was $11 of six cents.
Which is down by 40 cents or 3.5% from last quarter. The main drivers of the decrease were ongoing capital improvements on certain properties and an increase in the fair value of our long term borrowings due to changes in market rates.
One note on the ongoing capital improvements.
To the farms, we acquired in Q3 of last year were purchase with the intention of spending some money on improving irrigation infrastructure and other improvements on the farms.
Essentially buying a b farm and turning it into an eight farm, we spent about $3 million fixing up those farms and with the projects nearing completion, we're hopeful of being able to recoup at least the majority of those costs from those farms or reappraised and a couple of months.
Turning to our capital makeup and overall liquidity from a leverage standpoint, our loan to value ratio and our total farm and holdings on a fair value basis, and net of cash was about 52% at June Thirtyth and we're comfortable at this level given the relative low risk of high quality farmland as an overall asset class.
In addition over 99% of our borrowings are currently at fixed rates and our weighted average basis. These rates are fixed at 3.55% for another six years out.
So we believe we're currently well protected on the debt side against any future interest rate volatility.
And with the weighted average maturity of these borrowings being 10 plus years out. We also feel that were protected against any potential liquidity issues should the current recession continue for a prolonged period.
Regarding upcoming debt maturities, we have about $26 million coming due over the next 12 months, our $14 million of that represents the maturities of two bullet loans coming due towards the end of this year.
The two properties Collateralizing. These loans have increased in value by a total of $2.3 million since their respective acquisitions. So we do not foresee any problems refinancing either of these loans.
So rude removing those maturities, we only have about $11 million of amortizing principal payments coming due over the next 12 months or about 2% of our total debt outstanding.
From a liquidity standpoint, including availability on our lines of credit. We currently have over $50 million of dry powder and regarding our access to additional credit based on conversations we've had with our lenders. We do not currently foresee a credit for use on AG lending in the near term future credit continues to be readily available to us and at very favorable terms.
We have ample availability under our largest bond facility and we continued being in discussions with potential new lenders for additional borrowings. We also had the ability and intent to issue New LP units as consideration for purchases should the opportunity arise.
So in short we have plenty of room and ability to continue borrowing and buying new farms that meet our investment criteria.
Finally, I'll touch on our common distributions. We recently raised our common dividend again to 4.48 cents per share per month over the past 22 quarters. We've raised our common dividend 19 times, resulting in an overall increase of 49.3% in our monthly common distributions over this time.
Since 2013, we paid 90 consecutive monthly dividends to common shareholders totaling $4, a 71 cents per share in total distributions.
Paying dividends to our shareholders is paramount to our business plan and our goal continues to be to increase the dividend at a rate that outpaces inflation, we're not quite there yet, but we believe we're heading into right direction.
At our current distribution run rate and with this with where our stock prices today the yield on our stock is about 3.3% and when considering the relative stability and security of the underlying assets. We believe this stock offers a compelling investment alternatives.
And with that I'll turn to program back over to David Okay. Nice report. Louis currently I think the farmers who grow produce sold to the grocery stores are flat out working night and day as much as possible. So they can make as much money as they can.
And it's it's impacting our ability to buy more farms. The farmers out busy working on the pharmacy Doesnt have time to spend time negotiating contracts and those kind of things. In addition, when doing our due diligence on titles in other legal records. Many of the government offices are just closed.
So we can't close on our loan not knowing whether there is liens out there are problems on the property. So it's taking longer to determine the title. If the title is clean or if there are other problems with the property also the offices of some of the mortgage lenders, who finance our acquisitions and not fully staffed our FIFO.
In the office. So it just takes a little longer to do everything, but we are seeing a good amount of opportunities coming our way now, it's just taking a bit longer to than normal to get things through the system that we put it through call that due diligence couple of points to make we believe investing in farmland.
And growing crops contributes to help growing crops that contribute to a healthy lifestyles, such as fruits and vegetables and nuts, followed the trend we're seeing in the market. Today currently about 85% of our total revenue comes from farms that are growing the type of food you find in either produce section of net section of your local grocery store.
We consider these foods to be among the healthiest type foods, and we continue to see a growing trend toward organic among those foods.
About 40% of our fresh produce acreages, either organic or transitioning that way in over 10% of our permanent crops.
Acres falls into the organic category, we believe the organic section, we'll continue to be a strong growth area for us in addition.
The non GMO of our products is.
More than 95% of our non GMO.
Another major reason why our business strategy is focused on farmland growing fresh produce is due to the effect of inflation on particular segments. According to the Bureau of Labor statistics. The overall annual food Cpis generally keeps pace with inflation. However over the past 40 years the fresh fruit.
Yes, and vegetable segment of the food category has outpaced the total cpis by multiple up 1.6 times.
And while the prices of commodity grain crops like corn and wheat. These are typically more volatile volatile and susceptible to global supply and demand fresh produce is mostly insulated from global.
Volatility, mainly because the crops. So generally consumed locally within a short time after being harvested so as not as much in the way of storage cost and other things to get it to the consumer.
Im telling you this because often we're often confused with owning farms, where farmers are growing corn soy and wheat, those grain crops and we mostly stay clear of these crops because they have to compete with other countries like Brazil in Ukraine, where the cost of production.
And that government subsidized and even after shipping is cost they are much lower than ours and those farmers can undercut the price of our grain farmers pretty pretty easily.
Overall demand for prime farmland growing berries, and vegetables remained stable to strong in this environment and almost all the areas where our farms are located particularly among the west coast, including most of California, Oregon, and Washington, and the East Coast, especially Florida.
And overall farmland continues to perform well compared to other asset classes. Despite some recent downturns in certain regions. The knee Creed farmland index, which is currently made up of about 11.9 billion dollars' worth of agricultural properties, including ours.
It has averaged an annual return of about 13.6% over the past 15 years compared to the fifth 10.5% in the S&P Index you should know during those 15 years, the pharma and index did not have a negative year. Unlike the S&P, which I think had three negative years over this.
Same period.
Farmland has generally provide investors with a safe haven during turbulent times and this turbulent time that were in is no exception.
And as both land prices in food prices, especially for fresh produce have continued to rise steadily.
Please remember that purchasing the stock in this company is a long term investment it's not going to have a spike tomorrow morning, I think investments in stock and our stock. It really has two parts similar to go it's hard asset farmland dirt is not going away has an intrinsic value.
Because there's just a limited amount of it and is being used up by dense urban development, especially in California, and Florida, where we have many farms. So one day, you wake up and they want to take your farm and turn it into a school and pay you a good amount for it.
And second you should remember that unlike goal and other alternative assets, it's an active investment with cash flow to investors and we believe were better than a bond fund because we can keep increasing the dividend.
We expect inflation, particularly in the food sector to grow and we expect the values of the loan underlying farmland will increase as a result, and we expect this to be true in fresh produce as people in the us or eating healthier.
I think a good way to look at our farmland fine as a hedge against inflation, both in food prices and value the underlying land use to grow the food.
It makes a great stock to own once you get just a little bit larger in terms of asset size.
Hopeful that will get listed on the RMC index sets for real estate investment companies and that'll bring in additional institution ownership increased the daily liquidity or stock.
But folks Gladstone land wouldn't be anything without the good people that we have we have.
We have great operators, great buyers were managing that we keep up with everything buying and leasing and farmland is a complex business and I think we're doing a good job.
So if you like what you're hearing leads by some stock eating fresh fruits and vegetables, and nuts and now I'm going to stop in the operator will come on we'll be able to answer some of your pressing questions.
Ladies and gentlemen, you have a question or comment at this time. Please press the star them a one key on your Touchtone phone. If your question has been answered you were still yourself from the Q. Please press the pound.
Our first question comes from correct, we serve with B. Riley FBR.
Okay.
We can't.
Sorry about that.
Hey.
Yes, just wanted as you mentioned that you're seeing more opportunities than you were earlier this year.
Do you have any sense of what you would attribute that she was.
Yeah. The farmers are busy as can be and so as a result, they don't get out of the farm as long as their farming. So they're out there and the farm backing up the truck and getting as much stuff in the truck and take it to town as they possibly can they are very very busy right. Now so that's been our problem and then the local governments and.
Their reaction to the Corona virus.
Or should we say the Chinese virus has been extreme in terms of shutting down thing. So there's been problems in getting people to do what you need to do to get something get something purchased.
The lawyers are all there we can get the lawyers to work, but some of the government workers in some of the others that are in our need to.
Find out things just aren't in the in the shop. So takes a little time to get that done. So I think we're now getting to the point, where some of the things that we started even last year are coming through and I think this will be a good quarter or maybe not as good as we had hoped but by that time year incomes, we should have done.
On a pretty good job of buying this year.
You have another question Greg.
Yes, yes, I do actually I was going to ask.
It sounds like there's a lot of sort of the procedural and institutional challenges just related to cobot has that impacted pricing at all or is that.
Remained fairly steady.
Oh, it's fairly steady.
Grocery store prices are up about 10% specially in may be more in the produce section I don't know, where we get some information from the department of agriculture, but it's spotty. They do a good job of bringing together the prices that are going from field to to the buyer, but we don't know how much.
The.
Stores are marking up the product and sometimes that marking it down in order to blow it through they have.
There's a lot of strawberries and blueberries in the marketplace today and.
Sometimes they use the strawberry as a marketing mechanism to get the buyer.
Come into this store because the buyer of strawberries tends to by four times more produce than anybody else. So when you look in the newspaper you'll see the discounting on strawberries in order to make guess somebody come in and BIME strawberries, but at the same time by all the other things that they bind the fresh fruit section.
Got it so I feel like earlier this year you felt that even though there was an initial spike in sort of pricing.
That it wasn't that Elas sounds like things are maybe up 10% spaced on your commentary does that lead you to be a little bit more confident about maybe seeing some rising percentage rent in the back half of this year.
I hope so I love percentage rents, it's the easy way for us to participate in the farming operation rather than owning the farm things just a good way to get them. Another bite at the Apple No pun intended.
Got it so.
Just based on the commentary add on.
Some of the opportunities you're looking at I think you mentioned you had four farms.
That were a little closer to maybe closing at about 70 million another four for 80.
I would you handicap, what you think you're going to close by year end of that 150 million.
Oh, you're doing your projections again aren't you.
Yes.
I think we'll close the four farms, the 70 million, whether how much we get of the 80 million I don't know and we may have we've got a couple of people that say they now want to close before year end and we don't have anything from them other than a good discussion going.
Craig has got to know nowhere handicapping that you just never now.
That's fair and you mentioned using units I know you don't have a tremendous amount of older units outstanding but are any of the potential acquisitions you're looking at.
Okay, that's coming up in the discussion.
There are always into discussion and we push it pretty hard but I.
I don't know.
It's hard to sell O P units to somebody for their farm because many of the people are want to buy another farm and you can't use the LP units for that so they're usually like any business. This dependent on real estate they need the cash to buy the next whatever.
Next farm next warehouse whatever thereby.
So that makes sense.
And you mentioned Capex can you remind us of what you expect your capex budget will be for the rest of the year.
Louis what you got so most of the.
We don't we don't.
We're disclosing the capex cap for the rest of year, but most of the projects that we have been doing so far for the first half a year are nearing completion. So we do think you will see depressed amounts.
Through the third and fourth quarters versus what they were in the first half of the year.
Got it and one more for me I know earlier. This summer you were looking at the Walnut business have you come to conclusion or whether that that's a business that fits for the Gladstone land.
Well, we have some but not a lot.
It's a little worrisome on on the wallet side, it's a good product but I.
I don't know, we go back and forth on those and if you sell me a farm cheap enough will will be it in the business, but not going to pay out walnuts are little hard to forecast right now.
Alright sounds good thats it for me thanks, guys.
Okay next question.
Our next question comes from James a lot of Ladenburg.
Good morning, Josh morning.
As we move into Q3 has the transit transaction trouble you pad you've mentioned about local governments is that true.
In Q2, and how do you see it's better now Yeah go ahead finished Jane.
Yes.
As you move in the back half of 2020 do you expect there'd be some pent up acquisitions.
I wish I knew I think people are thinking about it I think cobot 19 push somebody over that some people over the edge and they now want to sell a farm and get some liquidity and just rent rather than have a lot of capital tied up in and land. They don't know what tomorrow will break.
In terms of this.
China virus that we're fighting.
I just don't know.
It's really hard in this business because there is unlike if you're in the real estate business line wholesale.
There's no way. This is all done retail our people are out actually talking to the pharma that owns it rather than talking to the broker who's talking it many of the real estate companies as you probably know.
Our all based on brokers in the feel and they'll list that product you get 10 bids arms are knocking on doors and talking to people in somebody heard from.
Okay.
From Joe below that.
Joe as selling is.
As land and renting it back and they want to know how we do that and so there's a lot of.
A lot of shoe leather put into getting these things done and a lot of discussions in educating people because it's not well known how this works in the farming business.
Yeah I understand that this one more question for me up are you all I guess when you when you look at when you're dealing with these farmers who are looking for a little liquidity.
Are you competing with federal aid programs that are just coming online.
Yes in the wake of this.
This Chinese virus.
I don't know do we have any competition with any of the farming products I don't think so they really have a chance to borrow money from the farm credit and those kind of people or ensure.
Some of their.
Products, it's it's not a very well organized.
Our parts of department of Agriculture that are extremely well organised the disposition of farms and financing of farms unless you look at the farm credit people a farmer Mac.
Our not as well organized as other other products out there I mean, if you've got a warehouse or there are lot of buyers that obi warehouses today. So I think we're in the early stages of it being organize and if we can just capture part of the $1.7 billion that we see out there.
I'll be very happy.
Yeah, that's adult remain.
Thanks, Matt the color.
Next question.
Again, ladies and gentlemen, the ship question or comment at this time. Please press Star then one key on your touched on so.
And I'm not showing any further questions at this time.
Okay, well I'll just add one question was asked of US why aren't we issuing more common stock and it's cheap compared to where it was and quite frankly, I think it's still undervalued, we should be a $20 stock given the.
Given the asset value and strength of our assets that were holding and given the consistency of getting paid over and over no matter. What I mean this is the worst precession I've ever been through and these farmers continue to sell.
And as only only one phrase to.
Set that in your mind as people got to eat so as a result as long as the products keep coming in they do the farms are not going to stop producing.
It's it's great PREIT, great place for us to be so that's the end until next time. So we'll see you next quarter and thank you very much for calling in.
Ladies and gentlemen. This concludes today's presentation. You may now disconnect have a wonderful day.