Q3 2020 Cedar Realty Trust Inc Earnings Call
[music].
Ladies and gentlemen, and welcome to the third quarter tiny tiny Cedar Realty Trust earnings Conference call.
As a reminder, this conference is being recorded.
At this time.
All audience lines have been placed on mute you will conduct a question answer session. Following the formal presentation.
I will now turn the call over to Nicholas Partenza. Please proceed.
Good evening and thank you for joining us for <unk> third quarter 2020, Cedar Realty Trust earnings Conference call participating in todays call will be Bruce Schanzer, Chief Executive Officer, Robin Ziegler, Chief operating Officer, and Philip Mays, Chief Financial Officer.
Before we begin please be aware that statements made during the call that are not historical may be deemed forward looking statements and actual results may differ materially from those indicated by such forward looking statements.
These statements are subject to numerous risks and uncertainties, including those disclosed in the company's most recent form 10-K for the year ended 2019 as updated by our subsequently filed quarterly reports on form 10-Q, and other periodic filings with the SEC as a reminder, the forward looking statements speak.
Only of as of the date of this call October 29, 2020, and the company undertakes no duty to update them.
During this call management may refer to certain non-GAAP financial measures, including funds from operations and net operating income.
Please see Cedars earnings press release, and supplemental financial information posted on its website for reconciliations of these non-GAAP financial measures with the most directly comparable GAAP financial measures with that I will now turn the call over to Bruce Schanzer.
Thanks, Nick Good evening and welcome to the third quarter Twentytwenty earnings call for Cedar Realty Trust.
It has been a remarkable quarter and year to date and I wanted to thank the members of team Cedar not to mention our terrific board of directors for their focus and efforts on behalf of the company. During these unprecedented times.
As you all realize this has been and continues to be a time of incredible stress with many folks worrying about contracting a frightening fibers and managing all of the personal challenges. This pandemic has engendered.
Although we usually describe our grocery anchored shopping center assets as being resilient I can proudly say that the members of team Cedar our most valuable assets have proven themselves to be even more resilient than our shopping centers as they have performed their jobs with a characteristic focus on everyday excellence collegiality and co.
Aberration.
Since the outset of the pandemic, we have focused on a number of pressing matters in order for us to emerge from this period on a strong footing as possible.
First and foremost we have endeavored to help our tenants survive the economic shutdown and I do we pay their rents were at a minimum agreed to a forbearance arrangement, whereby we have the right to collect the rent in the future.
Second we have a weighted the reopening of the real estate debt capital markets in order to arrange the refinancing of our 75 million dollar term loan maturing in February 2021.
As well as addressing our other upcoming debt maturities.
Third we have advanced our redevelopment projects, while exploring joint venture arrangements for the initial phases, especially the recently announced Dgs building.
Fourth we have used this period to take a rigorous zero based approach to many DNA categories and have identified substantial savings that we anticipate benefiting from not only in 2020, but more generally and 2021 and beyond when we see the full year impact of some of these measures.
Before walking through each of these areas of focus during the pandemic. It is worth reflecting on a remarkable revelation afforded by this period.
At Cedar we have consistently articulated a two pronged long term business strategy that we have steadfastly pursued for many years through the ups and downs of the market and our stock price performance first.
First we are focused on a core portfolio a grocery anchored shopping centers in the DC to Boston corridor and have therefore systematically divested non core assets.
Second we have pursued mixed use urban redevelopment projects in high population density Submarkets within our DC to Boston footprint with a particular focus on building affordable at market rate workforce housing out these projects.
Remarkably the pandemic has highlighted the very trends, we have anticipated at that building towards with our two pronged strategic plant.
Specifically the accelerated secular demise in many bricks and mortar retail cat or categories as lets a grocery anchored shopping centers being the strongest performing category within retail real estate.
Notably our grocery anchors have experienced a growth in sales during this period and the inline tenants and junior anchors in our centers have benefited from the strong traffic and overall sensor vitality, resulting from the strong gross or performance.
Additionally, the pandemic triggered a wave of de urbanization for upset your cities and significant pressure on the higher end multifamily, while highlighting the inequality of housing opportunities within our cities and the growing need for attractive and reasonably priced workforce housing.
Thus, the particular multifamily market opportunity, which we are targeting with our mixed use projects has grown deeper during this period.
We felt this was a prudent move since while we are comfortable at the mortgage debt markets are open and attractive we didn't want to have to worry about the closing dragging a bit nor do we want to have to deal with the possibility of further dislocation in the capital markets, owing to a second wave than the coming winter months.
I still will describe ear appear to be interesting and attractive refinancing options for both the term loan as well as our other near term financing needs.
Third as was announced in July and discuss in our second quarter earnings call. We have finalized a 20 year built to suit office deal with D. G. S. At our northeast Heights project in Washington D C.
This building will serve as an anchor for the project and also represents the first feet. The first phase of the project.
We have been actively engage with various debt and equity financing sources and are optimistic that we will be able to finalize an arrangement later this year or early next that will allow us to break ground. It get started with this exciting project.
More generally much as our strategic decision early on to focus on grocery anchored to the exclusion of other retail acid types has proven to be a good decision.
Our particular redevelopments have proven to be well positioned as we begin to hopefully come out of this pandemic period.
Fourth we've taken a zero based approach to our G N a and evaluating many corporate expenses.
A great example of how this approach has borne fruit is our decision to relocate our headquarters office from a building in Port Washington Long Island, where we rent space on a lease expiring in February of 2021 to the back of a Karremans Plaza shopping center in Massapequa Long Island, where we are converting a space that has been essentially on rentable during my.
Tenure into office space, which we will occupy rent free.
Considering that are full your rent expenses approximately $500000. This is a terrific G N a savings opportunity.
More generally we anticipate reducing year over year G N a I in excess of $2 million through the zero based cost savings approach.
And some we have navigated through this period of unprecedented personal and professional stress remarkably well thus far.
First we have managed to bounce back from the initial shock to our business with a collections level this past quarter of 91% representing among the better performances through the third quarter among retail roots.
We've addressed our near term debt maturities and are optimistic about closing on a permanent refinancing later this year or in early 2021.
Third we are similarly focused on finalizing both the debt and equity financing needs a redevelopment projects, especially the D. G S building, which will position us to commence the project in early 2021.
Last we have tightened up our overhead in the face of all distress with full your G. A day savings anticipated to be in excess of $2 million and 2021.
Our progress to this point is not an accident. It begins with my colleagues I teach theatre, who haven't who have conducted themselves with exceptional resilience and professionalism. During this time of great stress.
They supported by decisions, we have made many years ago to focus strategically on grocery anchored shopping centers in the D C to Boston corridor.
And an urban mixed use projects within affordable or market rate workhorse housing component.
In the coming months and quarters, we look forward to announcing continued progress on all these endeavors, while we hope that there was no second wave and that is terrible pandemic receipts into the rearview mirror with that I give you Robyn to provide greater detail any of these topics.
Thanks breath good evening.
Not only are we living in unprecedented time, but we are operating shopping centers and unprecedented times as well.
Well our team has been focused on working the tenants through deferral negotiations in the collections process. We are also laser focused on what happens on the other side of the pandemic, what do our tenants need from their landlord to maximize their ability to provide them.
How can we help our tenants pursue omnichannel operating measures to hedge their risks can fit that into a new operating environment, what cost savings measures can be put into place to help out the tenant and the landlord from a calm and capital expenditure standpoint.
These are among the topics we are addressing as we deliberately thoughtfully and strategically advance our operations.
The professionalism of our team has been exemplary as they deal with not only ordinary course business challenges of daily operation, but astutely balancing those with a video conference or field visit and the ongoing impact from social unrest and some of our urban market.
Our centers remained open during the third quarter with 96% of our tenants open for business. They use is that have not reopened are mainly movie theaters fitness and buffet style restaurant.
We have had another successful quarter of rent collections, reaching our highest yeah collection right since the inception of Covid of 91%.
Moreover October collections are currently at 91%, which does not reflect one high credit anchor that pays at the end of the month, which will take us to approximately 92.5% for October.
In order to ensure tenet health and occupancy we have actively engaged with almost all of our over 800 tenants. During the pandemic. We completed 105 deferral and waiver agreement through September 30th 2020, totalling $3 million, a deferred rent with a required payback beginning over.
For a period ranging between July 2020, and March 2021, the number of months deferred average is four months for an average payback period of 10.
$900000 of Brent was waived as of September 30th 2020, or an average of four months. These.
These agreements were made with tenants in an effort to not only sustain their viability, but also to achieve some landlord favorable concessions, including sales reporting Additionally term and modification of Kiwis prevention.
Despite the pandemic are losing momentum remains strong 32 liters resign this quarter eight new deals totaling 72800 square feet and 24 renewals totaling 167300 square feet.
The new deals executed we're at a positive spread of 21.5% and include to anchor deal Shockers World is Jordan Lane at a spread of 44% in America afraid of Golden triangle at a spread of 23%.
The renewals for agenda that negative spread of 3.1% when analyzing total the.
The negative spread as a result of anchor in junior anchor renewals with home goods and New London Mall goodwill at Groton, and yes organic at shops that Arts district, which we're done with the objective of retaining these important anchor in junior anchor Occupancies that let's see Ah Miss the pandemic pandemic.
The spread increases a positive 2.8% excluding these three tenants.
As of September 30th 2020 are currently same center occupancy is 91.7%.
0.2% increase from prior quarter.
We continue to have momentum on our redevelopment and value add renovation.
Had fish down crossing Starbucks Pat their Grand opening in September Gamestop and T. Mobile have relocated Nifty 50 was delivered in August and the original Hotdog factory was delivered in September we expect the Iga grocery store facade renovation to be completed by the end of the year and the remaining facade renovation for the rest of the center to be.
Completed in 2021.
Also in Philadelphia, we're making progress on site plan amendments to our Revelry project are original site plan was based on a movie theater anchor since the pandemic shutdowns United artists cinema as Ravelry has not yet reopened we are in discussions with a potential replacement anchor tenant for this project and we expect to regain possessed.
One of the theater space effective in November 2020 incident to the termination of their tendency we think that the potential alternative anchor will be a great catalyst for the ravelry redevelopment.
North East highest continues to progress at a steady pace as well we continue laugh I'm, sorry, we announced last quarter that at least was executed with the district of Columbia for 260000 square foot office building, including ground floor retail for the department of General services.
This government agency comprises more than 700 skilled professional employees with expertise in the areas of construction building management and maintenance portfolio management sustainability and security at districts owned properties. This.
This office building is slated to be billed as part of the first phase of northeast height, but.
The D C. F. Lee structure includes a 20 year 10 month term based on a net rent up $22.52 per square foot and a gross rent a $56 and 43 per square foot, which includes a T I amortization of $14 nine per square foot.
Plans are underway to commence construction.
In early 2021.
The D. G S building as a central element of theatres vision to realize that true metamorphosis rewards seven and is emblematic of the type of neighborhood. We are endeavoring to create with north These type.
That's always our team remains focused and motivated to continue to create value even during these unprecedented time.
With that I will give you fell.
Thanks Robyn.
Today, we announce sequential quarterly improvements in both F F O and same property NOI.
F F O increase to $8 million or nine cents per share compared to five $7 million for six cents per share reported for the previous quarter.
Same property, you know why decreased 9.1% over the comparable period in 2019 and marked improvement from the 14th six decrease we reported in the previous quarter.
Both of these improvements were driven by a strong cast collections that Bruce and Robin discussed.
Last quarter I walk through our cash collections and revenue recognition and a fair amount of detail and we.
Leave comments that it was very helpful in understanding our results accordingly.
Accordingly, I'm gonna take a minute to once again walk through our revenue recognition in detail.
Our total tenet billings for basement and recoveries combined for this quarter were $31.6 million.
During the quarter, we collected and recognizes revenue $31 million or 91% of these buildings.
Additionally, we recognize another $1.1 million or 3%.
As revenue that we determined to be collectable, the majority of which is covered by sign deferral agreements.
Accordingly for this quarter, we recognized as revenue, 94% of our build rent and recoveries for the quarter.
The $1.9 million or 6% that we did not recognize consists of $1.8 million that was not paid by tenants in which we have determined at this time should be accounted for in a cash basis and 100000 that we agreed to wave.
As a reminder, just because we are placed certain tenants on the cash basis does not mean, we will not collect anything from them.
Cash basis tenants may fail, we expect some will simply make inconsistent payments are partial payments.
Which we will recognize as revenue if and when received.
Moving to the balance sheet on our prior quarter call. We discussed that we were exploring secured debt to refinance our $75 million term loan that was scheduled to mature in February of 2021.
As a secured financing market is open for pressured anchored shopping centers with high cash collection rates.
We have engaged with two financial institutions to assist with placing secured debt.
We are working diligently towards closing secured loans, an amount equal to or greater than.
$75 million in early 2021.
To that end earlier this week, we utilized a revolving credit facility and retired to $75 million term loan scheduled to mature in February of 2021.
A revolving credit facility matures in September of 2021 and has a one year extension option.
Accordingly is Bruce noted this provides us with flexibility concerning the timing of closing the secured loans and they have been a second wave of Covid should again temporarily dislocate the capital markets.
Another note worth the balance sheet matter is receivable, we now have for deferrals agreements is.
Is Robyn noted we assigned a formal agreements for $3 million of which approximately 250000 was repaid this quarter.
And 250000 relates to the remainder of the year.
Resulting in is carrying a $2.5 million receivable for deferral agreements at the end of this quarter.
The vast majority of this receivable is scheduled to be repaid in 2021 with approximately $700000 in each Q1, and Q2 of 2021 and approximately 500000 and each Q3 and Q4 of 2021.
The collection of these amounts will increase our cash flows from operations in 2021, but will not impact earnings as they've already been recognized.
One final note.
As noted in our press release, our board of Directors has approved a one for six six reverse common split.
To be completed prior to the end of this year.
This reverse split will not only assist with maintaining compliance with the New York stock exchange lifting requirements, but will also reset our share price above the five dollar minimum requirement of some investment funds and do so while keeping more than 10 million shares outstanding to assist with trading liquidity.
With that I'll open the call to questions.
Thank you.
People now begin the question and answer session to join the question queue. You May press far then one on your telephone keypad.
You will hear a tone acknowledging your request.
If you're using a speaker phone please pick up your handset before pressing any Keith to withdraw your question. Please press star than to be.
We will pause for a moment his college trying to Q.
The first question comes from Todd Thomas of Keybanc Capital markets. Please go ahead.
Hi, good afternoon.
Bruce first question you mentioned that you expect to be in a position to break ground on the D. G. S Office building an early 21 can you just provide us an update on your thinking around funding that build out and sort of how you are weighing all of your options today.
Thanks, tired and I.
She ate you're calling in and asking about that with respect to GGS. The plan is fairly simple. We're speaking with your classic capital partners on the equity side, with whom will partner and then.
Then we'll.
Couple.
Couple of that equity joint venture with construction financing so fairly straightforward and we're in the process. So I'll be transferring all of those conversations.
Is there any update on pre leasing for the ground floor retail and and are you moving forward I believe there were some other phases of northeast Heights.
You're moving forward at all and making progress on on additional phases at this time.
I'm going to let Robyn take hi.
Hi, I Todd how are you we're actually looking at relocating several of our East River tenants to the ground floor of D. G. As in we're in the middle of negotiating some of those deals so it would be the Dennis.
One of the banks.
And a couple of the other tenants that are existing east river tenants that we want to keep them a project. We're looking at moving into the ground floor D. G. As if we complete that relocation program me would have about 5000 square feet left in the D. G S retail and we're looking.
At fast casual restaurants service type users you know think you know the type of service providers that would be conducive to office tendency as well as fast casual type restaurants for the balance of the 5000 square feet.
Okay. That's helpful in terms of disposition.
Dispositions I was just wondering if you could talk a little bit about the market for for as a sales today in general what you are seeing.
You know, whether we should expect to see an increase in activity in the in the coming months and then maybe you could just touch on Glenn Allen and maybe talk about pricing for that disposition.
Sure the the the the the fear disposition program is one topic and then I can give you a little bit of color around what's happening in the.
Market more generally just cause I've described in the past yeah. We.
Pretty carefully track all the deal activity in our market the transactions that we have been advancing are pretty consistent in as much as they are all alright.
Single asset pad deals and.
And generally speaking I intended to address just some fairly simple liquidity concerns that we had as everybody else did at the outset of the pandemic. So we started marketing some pads alright and were you able to get.
Reasonably compelling.
Offers on them and are now closing on those deals that we took to market alright in the spring.
In terms of Gwent Island in particular that.
Asset clothes. It was it was a net lease public's in a closed in the mid fives.
In terms of the.
But again it too.
I don't know if it's necessary reflective anything other than just the appetite for high credit quality.
Net lease grocers.
The.
Market more generally for grocery anchored centers is fairly strong in our market right now so while there hasn't been a huge amount the transaction activity. There are a number of deals that we've been tracking that are teed up.
Many of these deals are in the <unk>.
Low seven there's a deal that we're tracking right now it's in the low six is alright. These are generally speaking grocery anchored centers much like our assets they've had pretty strong collections through the pandemic period and one of the things that we're seeing which I think is supportive of this type.
[noise] of pricing is that the financing markets are fairly receptive to these types of prior to these types of assets as I shall describe so when you have hi, cash collections grocery anchored centers that seem to have been.
Fairly successful navigating through the pandemic, you've had a real world stress test of an asset and that is something that lenders fine encouraging. So again, although these aren't cedar assets. These are very comparable to the assets that we own and we are seeing a fairly healthy transaction market right now some of these clothes and some of these are too dark.
<unk>, So I think as we get towards the end of the year will probably have some clarity around if nothing else what.
Is the warranted cap rate for Cedars portfolio, and therefore, maybe have an even crisper view on the disconnect between our share price center that as a guy.
Okay, that's helpful and and Phil you know sort of I guess pro forma the the pay down to the the February term loan on the line and I was just wondering how much borrowing capacity you have remaining on the line today I don't know if there's any there are any constraints.
It's drawing down.
The remaining.
Amount that's available and and also can you talk a little bit more about you know the terms you're seeing in the mortgage market today. It sounds like it's sort of you know pegged for like an early 21 transaction and you know of at least $75 million, but can you just talk.
A little bit more about you know some of the terms you're seeing it in the market today and what that might look like.
Yeah, Todd so and our queue, we disclosed the remaining capacity on our line.
Which is about almost $45 million as we speak.
Plus we have some cash so approaching kind of $50 million of liquidity there between the line capacity and.
Cash on hand.
Just keep in mind, you that is a rolling for quarter covenant so that.
That could turn that will turn down over the next couple of quarters as we get four full quarters in the calculation that are impacted.
By Covid.
But I think that rolled down will be offset with the pad sales that Bruce discussed along with thank you familiar or sand sushi asset in San Sushi, Marilyn had the JV partner, but the way the waterfall work was completely buried so we expect for.
A couple of hundred thousand dollars to close out the by out of that partner and once that occurs will be able to add that to the borrowing base.
So when you combine that for along.
Along with the pad site that should mitigate any roll down and NOI or the next six months and I don't mean roll down like sequentially, but just as you get for a full quarters into the calculation that's been negatively impacted by.
Covid.
With regards to this occurred financing yeah for grocery anchored centers.
With you know other tenets that fall kind of in the central bucket.
Hi cash collections.
There is cmea's appetite, there's life company appetite.
Generally alone to values are 65%, but let's just say 60% to 65%.
You can if there is a fair amount of term lift on the anchors you can get some I O with that.
May be significant Io, depending on the remaining Tom and.
And rates generally kind of in the mid three's.
That's what we're seeing right now.
Okay telephone just one last one so the percentage rent in the quarter.
Was higher meaningfully higher is that sales based rent that you moved certain tenants to in the quarter.
Yeah, there was a couple of tenants that moved.
From base rent too.
Percentage rent one in particular because of a code tendency provision makes up a lot of that the majority of that and that code tendency provision should be corrected.
I think around your in but.
But that's why it was elevated and just moved from base rate was more geography moved from base rent two percentage sales did wrote down a little when the guy got to convert the percentage sales, but that should correct itself around.
Around the end of the year.
Okay, Great alright, thank you.
Thanks, a lot.
Thank you once again, if you have a question. Please press star than one on your telephone keypad.
The next question comes from Flores <unk> from Compass point. Please go ahead.
[noise] afternoon, guys. Thanks for taking my question a quick update obviously very I think.
Investors would be very keen to hear about the the refinancing.
It sounds like it's Gonna go via C B S and it.
Sounds like there's you know there you know.
Based on the numbers you were talking about it so it's not it's not punitive, which which would be very encouraging.
Maybe if you can you know you've got a number of assets held for sale how much liquidity do you think you can raise and timing wise Ah on if you were to get rid of the four assets that you listed hold for sale.
I guess I'll take that.
These are assets yet are all fairly small.
As you could see even with.
Activity since the commencement of the pandemic. These singles do add up and so you know for example, we've been able to raise about $30 million.
Since the beginning of the pandemic, just selling off relatively small assets and I would suspect that.
These for assets are probably going to be quality.
In the high teens to around $20 million in total.
When.
When they were all divested.
More generally floors the way to think about it is.
We approach.
Discuss it.
Our portfolio management, the Gauci, Patrick pretty dynamically alright, the again the backstory behind how these pads came to be sold is really bad.
When the pandemic started not knowing what the future look like the recognizing the deadline for 10 30 ones was extended get the financing market for single tenant at least assets were still pretty frothy. We started made sense to bring those assets to market in order to tap or the capital available on that market at a relatively low cost that's something.
That we continue to monitor obviously as.
Phil has described and I'm gonna ask him to go into a little more detail on the financing of these particular.
Alright.
Could do with financing that we're looking at for later this year early next at this point, we have other sources of capital and so while we're continuing to advance the accents they're held for sale.
The notion of continuing to bring out other assets is something that while we monitor we're not as active.
Actively pursuing.
So I don't know if you want to comment a little bit on on the secured financier expand on what you said earlier.
Yeah.
Florence I think you'll see us have a preference for a life company secured dead oversee MBS.
But we will be looking at both but definitely towards the with a preference towards the life company.
To extent, where it around I don't want to get to all the math around on a revolver in line of credit, but extent where around to 65% loan to evaluate generally pick up a little incremental capacity on a revolver. When we do that extent were down around the 60% loan to value. It's generally close to neutral as far as creating additional capacity.
Right now we are seeing loans clothes at 65%.
So if the market hold steady here.
We should be able to.
Play some secured debt on properties and turn out the line a little bit.
And maybe even pick up a little capacity on top of that.
Oh, no that's helpful and just the when do you expect the people who will be the the buyers of your assets that are held for sale are those financeable accessing your viewers that's gonna be cash buyers.
That's <unk> that's a great question.
Some of these assets are definitely being sold per pound and those will be cash buyers are low value assets I think the stabilized assets yeah.
Are are more rural could probably be financed again I'm not an expert in this but just we at this point R.
Becoming pretty knowledgeable about this market and just based on what.
We're hearing they could probably be financed but not add that kind of level that for.
L. T V perspective that we're seeing with respect to the assets that are part of our core portfolio that we're looking to finance. So you could probably put some dead on it but again it would it be at that 65% level again based on just what we're seeing in the market right now.
Great.
One last question in terms of your lease think obviously very encouraging new lease spreads I noticed the ti numbers were down.
It is sustainable where there's some one off in there.
Mm thank right now.
Oh, Yeah, we're not together.
And signaling Theresa [laughter], yeah. So so.
Forgive forgive our our dance is not as elegant as it as it sometimes is.
Waited too leasing N T I I I never wanted to have a crystal ball from quarter to quarter as far as how how that will be I mean, we always looked at each deal strategically and making sure that we are getting the best net effective brand on each deal.
As a comes through and making sure that for him you know put HDL that we're getting the the highest rent that we can get in and paying the least amount of capital to attract that to attract that tendency. So you know the.
As far as taking.
Taking a trend in saying that you know T I will be lower or any specific dollar amount for for the theme foreseeable future I wouldn't.
I wouldn't say that but I wouldn't necessarily say, it's going to be higher either what I would say is that the.
The same strategic thought an approach that we take an ideal by diel basis, we will continue from corner to corner.
[noise] right. Thanks Robyn.
Thank you.
This concludes the question and answer session I would like to turn the conference back over to <unk> for closing remarks.
Thank you all for joining us this evening.
We wish you all good health and look forward to continuing to advance the interests of theater and its shareholders in the months ahead.
Thank you.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
[noise].
[music].
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Ladies and gentlemen, and welcome to the third quarter 2020, Cedar Realty Trust earnings Conference call.
As a reminder, this conference is being recorded.
At this time all audience lines have been placed on mute.
Well conduct a question and answer session. Following the formal presentation.
I will now turn the call over to Nicholas Partenza. Please proceed.
Good evening and thank you for joining us the third quarter 2020, Cedar Realty Trust earnings conference call participating in todays call will be Bruce Schanzer, Chief Executive Officer, Robin Ziegler, Chief Operating Officer, Philip Mays, Chief Financial Officer.
Before we begin please be aware that statements made during the call that are not historical maybe deemed forward looking statements actual results may differ materially from those indicated by such forward looking statements.
These statements are subject to numerous risks and uncertainties, including those disclosed in the company's most recent form 10-K for the year ended 2018 as updated by our subsequently filed quarterly reports on form 10-Q.
Other periodic filings with the FCC.
As a reminder, forward looking statements speak only as of the date of this call October 29, 2020, and the company undertakes no duty to update them.
During this call management may refer to certain non-GAAP financial measures, including funds from operations and net operating income please.
Cedars earnings press release, and supplemental financial information posted on its website for reconciliations of these non-GAAP financial measures with the most directly comparable GAAP financial measures with that I will now turn the call but are Bruce Schanzer.
Thanks, Nick Good evening and welcome to the third quarter Twentytwenty earnings call for Cedar Realty Trust. It has been a remarkable quarter and year to date and I wanted to thank the members of team theater not to mention our terrific board of directors for their focus and efforts on behalf of the company during these.
Unprecedented times.
As you all realize this has been and continues to be a time I'd incredible stress with many folks worrying about contracting a frightening bloggers and managing all the personal challenges. This pandemic has engendered.
Although we usually describe our grocery anchored shopping center assets as being resilient.
I can proudly say that the members of team theater, our most valuable assets have proven themselves to be even more resilient than her shopping centers as they have reported their jobs with a characteristic focus on everyday excellence collegiality and collaboration.
Since the outset of the pandemic, we're focused on a number of pressing batters in order for us to emerge from this period I got stronger footing as possible.
First and foremost we have endeavored to help our tenets survived the economic shut down.
We pay their rents rather minimum agreed tweet forbearance arrangement, whereby we have the right to collect the rent in the future. So.
Second we have a weighted the reopening of the real estate debt capital markets in order to arrange the refinancing of our 75 million dollar term loan maturing in February 2021.
As well as addressing our other upcoming debt maturities.
Third we have advanced our redevelopment projects, while exploring joint venture arrangements for the initial phases, especially the recently announced Dgs building.
Fourth we have used this period to take a rigorous zero based approach to many DNA categories and have identified substantial savings that we anticipate benefiting from not only in 2020, but more generally 2021 and beyond when we see the full year impact of some of these matters.
Before walking through each of these areas of focus during the pandemic.
It is worth reflecting on the remarkable revelation afforded by this period.
Theater, we've consistently articulated a two pronged long term business strategy that we have steadfast we pursued for many years through the ups and downs of the market and our stock price performance.
First we are focused on a core portfolio of grocery anchored shopping centers in the DC to Boston corridor and have therefore systematically divested non core assets.
Second we have pursued mixed use urban redevelopment projects high population density Submarkets within our DC to Boston footprint with a particular focus on building affordable at market rate workforce housing out these projects.
Remarkably the pandemic as highlighted very trends, we ever anticipated and building towards with our two pronged strategic plan.
Specifically the accelerated secular demise in many bricks and mortar retail chatter categories has led to grocery anchored shopping centers being the strongest performing category within retail real estate.
Notably our grocery anchors have experienced a growth in sales during this period and the inline tenants at junior anchors in our centers have benefited from the strong traffic and overall sensor vitality, resulting from the strong gross or performance.
Additionally, the pandemic triggered a wave of de urbanization from central cities and significant pressure on higher Ed multifamily, while highlighting the inequality of housing opportunities within our cities and the growing need for attractive and reasonably priced workforce housing.
The particular multifamily market opportunity, which we are targeting with our mixed use projects has grown deeper during this period.
Now some comments on our four primary focus areas over the last few months.
First on the collections front as was mentioned in our earnings release, we had been particularly effective in growing our collections efforts to 91% for the third quarter.
This appears to be among the better collection rates for all reach out in the third quarter.
Theaters relatively high degree of success is the direct result of the tireless this with which the team approach the challenges presented by the pandemic as well as the aforementioned decision made when we arrived at Cedar back in 2011 to hone our portfolio to focus on a core portfolio grocery anchored shopping centers in the DC to Boston corridor.
At the outset of pandemic, we formed a cross functional committee within SEDAR been engaged with all of our tenants in an effort to make sure that they adore and come out of this crisis as favorably positions as possible.
In addition, this cross functional committee laid the groundwork for a highly detailed and analytical approach that included using legal tools center at tenet monitoring as well as repeated tended to outreach as they say the proof is in the putting it apparently our approach has proven effective as measured by our red collections.
Over the past two quarters.
Second on the refinancing fraud as we also disclosed in our earnings release. This evening, we retired our $75 million unsecured February term loan by putting it on our unsecured revolving credit facility as we advance a long term take out with mortgage debt.
We felt this was a prudent move since while we're comfortable that the mortgage debt markets are open and attractive we didn't want to have to worry about the closing dragging a bit nor do we want to have to deal with the possibility of further dislocation in the capital markets owing to a second wave in the coming winter months.
As Phil will describe your appear to be interesting and attractive refinancing options for both the term loan as well as our other near term financing needs.
Third as was announced in July as discussed at our second quarter earnings call. We have finalized a 20 year build to suit office deal with Dgs at our northeast Heights project in Washington DC.
This building will serve as an anchor for the project and also represents the first the first phase of the project.
We've been actively engage with various debt and equity financing sources and are optimistic that we will be able to finalize an arrangement later this year or early next that will allow us to break ground. They get started with this exciting project.
More generally much as our strategic decision early on to focus on grocery anchored to the exclusion of other retail asset types has proven to be a good decision.
Our particular redevelopment that proved to be well positioned as we begin to hope we come out of this pandemic period.
Fourth we have taken a zero based approach to our DNA in evaluating many corporate expenses.
A great example of how this approach has borne fruit is our decision to relocate our headquarters office from a building in Port Washington Long Island, where we rent space on a lease expiring in February of Twentytwenty, one to the back of apartments Plaza shopping center in mass of people long Island, where we are converting a space that has been essentially on rentable during <unk>.
Tenure into office space, which we will occupy rent free.
Considering that our full year rent expenses approximately $500000. This is a terrific get a savings opportunity well.
More generally we anticipate reducing year over year DNA by in excess of $2 million through the zero based cost savings approach.
In sum, we have navigated through this period of unprecedented personal and professional stress remarkably well thus far.
First we have managed to bounce back from the initial shocks to our business with the collections level. This past quarter of 91% representing among the better performance is through the third quarter about retail Reits that.
Second we've addressed our near term debt maturities and are optimistic about closing on a permanent refinancing later this year or in early 2021.
Third we are similarly focused on finalizing both the debt and equity financing needs of our redevelopment projects, especially the Dgs building, which will position us to commence the project in early 2021.
Last we have tightened up our overhead in the base of all the stress with full year GE they savings anticipated to be in excess of $2 billion in 2021.
Our progress to this point, it's not an accident.
It begins with my colleagues I team Cedar, who even who have conducted themselves with exceptional resilience and professionalism. During this time of great stress.
Supported by decisions, we have made many years ago to focus strategically a grocery anchored shopping centers in the DC to Boston corridor.
[noise] urban mixed use projects within affordable or market rate workforce housing component.
In the coming months and quarters, we look forward to announcing continued progress on all these endeavors, while we hope that there is no second wave and that this terrible pandemic recede into the rearview mirror.
With that I give you Robyn will provide greater detail on many of these topics.
Thanks Bruce.
Good evening.
Not only are we living in unprecedented times, but we are operating shopping center is an unprecedented times as well.
While our team has been focused on working with tenants through deferral negotiations on the collections process. We're also laser focused on what happens on the other side of that spend them as.
What do our tenants need from their landlord to maximize their ability to provide that.
How can we help our tenants personal omni channel operating measures to hedge their risk and pivot into a new operating environment, what cost savings measures can be put into place to help both the tenant and the landlord from a cam and capital expenditure standpoint.
These are among the topic, we are addressing as we deliberately thoughtfully and strategically advance our operations.
The professionalism of our team has been exemplary as they deal with not only ordinary course of business challenges of daily operation, but astutely balancing those with a video conference there field visits and the ongoing impact from social unrest in some of our urban markets.
Our centers remained open during the third quarter, but 96% of our tenants open for business in.
The uses that have not reopened are mainly movie theaters fitness and buffet style restaurant.
We have had another successful quarter of rent collections, reaching our highest collection rates since the inception of Cove it up 91%.
Moreover, October's collections are currently at 91%, which does not reflect one high credit anchor that paid at the end of the month, which will take us to approximately 92.5% for October.
In order to ensure tenant health and occupancy we have actively engaged with almost all of our over 800 tenants. During the pandemic, we completed 105 deferral and waiver agreements through September Thirtyth, 2020, totaling $3 million of deferred rent with the required payback beginning over.
Hi period, ranging between July 2020, and March 2021, the number of months deferred average is four months for an average payback period of 10.
$900000 of rent was waived as of September Thirtyth 2020, what average it's more about these.
These agreements were made with tenants in an effort to not only sustain their viability, but also to achieve some landlord favorable concessions, including sales reporting additional lease term and modification of key lease prevention.
Despite the pandemic our leasing momentum remained strong 32 leases were signed this quarter eight new deals totaling 72800 square feet and 24 renewals totaling 167300 square feet then.
The new deals executed were at a positive spread up 21.5% and included two anchor deal shoppers World as Florida and lane at a spread of 44% and Americas sprayed at Golden triangle at a spread of 23%.
The renewals were done at a negative spread of 3.1% when analyzed in total.
The negative spread as a result of anchor and junior anchor renewals with home goods and New London Mall goodwill at Groton, and yes, organic Thats Shoppes at Arts District, which were done with the objective of retaining these important anchor and junior anchor occupancy that lifted I Miss the Pembina pandemic.
The spread increase it's a positive 2.8% excluding these three tenants.
As of September Thirtyth 2020 are currently same center occupancy is 91.7% at 0.2% increase from prior quarter.
We continue to have momentum on our redevelopment and value add of innovation and fish sound crossing Starbuck that their grand opening in September game stop and T. Mobile have relocated nifty 50 with deliberate in August and the original Hotdog factory was delivered in September.
We expect the Ivy a grocery store facade renovation to be completed by the end of the year and the remaining facade renovation for the rest of the center to be completed in 2021.
Also in Philadelphia, we are making progress on site plan amendments to our Revelry project. Our original site plan was based on a movie theater anchor since the pandemic shutdown United artists and robbery has not yet reopened we are in discussions with a potential replacement anchor tenant for this project and we expect to regain because.
Thats one of the theater space effective in November 2020 incident, the termination or their tenancy we.
We think that the potential alternate alternative anchor would be a great catalyst for the robbery redevelopment.
Northeast Heights continues to progress at a steady pace as well.
We continue laugh when I am sorry, we announced last quarter that a lease was executed with the district of Columbia, where a 260000 square foot office building, including ground floor retail for the department of General services.
This government agency comprises more than 700 skilled professional employees with expertise in the areas of construction building management and maintenance portfolio management sustainability and security at district owned property.
This office building is slated to be built as part of the first phase of northeast height.
The Dcs lease structure includes a 20 year 10 month term based on a net rent up $22 or 52 cents per square foot and a gross rent a $56 or 43 cents per square foot, which include the T.I. amortization of $14, a nine cents per square foot.
Plans are underway to commence construction in early 2021.
The D.S. building is a central element of theaters vision to realize a true metamorphosis reward seven and is emblematic of the type of neighborhood. We are endeavoring to create these high.
As always our team remains focused and motivated to continue to create value. Even during these are profit then a time with that I will give you Phil.
Thanks Robin.
Today, we announced sequential quarterly improvements in both FFO and same property NOI.
FFO increased to $8 million or nine cents per share compared to $5.7 million or six cents per share reported for the previous quarter.
Same property NOI decreased 9.1% over the comparable period in 2019, a marked improvement from the 14.6 decrease we reported in the previous quarter.
Both of these improvements were driven by our strong cash collections that Bruce and Robin discussed.
Last quarter I walk through our cash collections and revenue recognition in a fair amount of detail receive comments that was very helpful. In understanding our results.
Accordingly, I'm going to take a minute to once again walk through our revenue recognition in detail.
Our total tenant billings for base rent and recoveries combined for this quarter.
$31.6 million.
During the quarter, we collect it recognizes revenue $30.1 million or 91% of these buildings.
Additionally, we recognized another $1.1 million or 3%.
As revenue that we determined to be collectible the majority of which is covered by sign deferral agreements.
Accordingly for this quarter, we recognized as revenue, 94% of our billed rent and recoveries for the quarter.
The $1.9 million or 6% that we did not recognize concept. The 1.8 million that was not paid by tenants and which we have determined at this time should be accounted for on a cash basis and 100000 that we agreed to waive.
As a reminder, just because we have placed certain tenants on the cash basis.
Does not mean, we will not collect anything from them.
Some cash basis tenants may fail, we expect some with simply make inconsistent payments or partial payments.
We will recognize as revenue if and when received.
Moving to the balance sheet.
Third quarter call. We discussed that we were exploring secured debt to refinance our $75 million term loan that was scheduled to mature in February of 2021.
At the secured financing market has opened for pressured anchored shopping centers with high cash collection rate.
We have engaged with two financial institutions to assist with placing secured debt.
We are working diligently towards closing secured loans, an amount equal to or greater than 70.
$75 million in early 2021.
To that end earlier this week, we utilized our revolving credit facility and retired the $75 million term loan scheduled to mature in February of 2021.
Our revolving credit facility matures in September of 2021 and has a one year extension option.
Accordingly, as Bruce noted this provides us with flexibility concerning the timing of closing these secured loans.
Then a second wave of co it should again temporarily dislocated capital markets.
Another noteworthy the balance sheet matter as a receivable we now have for deferrals agreements.
As Robin noted, we have signed up for all agreements for $3 million of which approximately 250000 was repaid this quarter.
And 250000 relates to the remainder of the year.
Resulting in us carrying a $2.5 million receivable or deferral agreement at the end of this quarter.
The vast majority of this receivable is scheduled to be repaid in 2021.
Approximately $700000 in each Q1, and Q2 of 2021 and approximately 500000 in each Q3 and Q4 of 2021.
The collection of these amounts will increase our cash flows from operations in 2021, but will not impact earnings as they've already been recognized.
One final note.
As noted in our press release, our board of Directors has approved a one or 6.6 reverse common split.
To be completed prior to the end of this year.
This reverse split will not only assist with maintaining compliance with the New York stock exchange listing requirements, but will also reset our share price above the $5 minimum requirement of some investment funds and do so while keeping more than 10 million shares outstanding to assist with trading liquidity.
With that I'll open the call to questions.
Thank you.
We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad.
You will hear a tone acknowledging your request.
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We will pause for a moment as callers trying to Q.
The first question comes from Todd Thomas of Keybanc Capital markets. Please go ahead.
Hi, Good afternoon. Bruce first question, you mentioned that you expect to be in a position to break ground on Ddgs office building in early 21.
Provide us an update on your thinking around funding that build out and sort of how you're weighing all of your options today.
Thanks, Todd and.
I appreciate you, calling in and asking about that well.
With respect to these yes. The plan is fairly simple we're speaking with your classic capital partners on the equity side, whom will partner.
And then we'll.
Uh huh.
Couple of that equity joint venture with a construction financing so fairly straightforward and we're in the process of addressing all those conversations.
Is there any update on pre leasing for the ground floor retail and and are you moving forward I believe there were some other phases of northeast Heights, you moving forward at all or are and making progress on on additional phases at this time.
I'm going to let Robin hi.
Hi, Hi, Todd how are you all that we are actually looking at relocating several of our east River tenant to the ground floor of Vod DGF and we're in the middle of negotiating.
Some of those deals so it would be.
The Dennis one of the bank.
And a couple of the other tenants that are existing east river tenants that we want to keep on the project. We're looking at moving into the ground floor. While these he asked if we complete that relocation program. We would have about 5000 square feet last in Ddgs retail and we're looking.
And fast casual restaurants all service.
Type users you know think.
You know the type of service providers that would be conducive to office tenancy as.
Hello.
Casual type restaurants for the balance of the 5000 square feet.
Okay. That's helpful in terms of disposition.
Dispositions I was just wondering if you could talk a little bit about the market for for asset sales today in general what you're seeing.
And whether we should expect to see an increase in activity in the in the coming months and then maybe you could just touch on Glen Allen and maybe talk about pricing for.
For that disposition.
Sure the but the theater disposition program is one topic and then I can give you a little bit of color around what's happening in the.
Market more generally just because as I've described in the past we.
I'm pretty carefully track all the deal activity in our market.
Transactions that we have been advancing are pretty consistent and as much as they are all.
Single asset had deals and.
And generally speaking.
Intended to.
Address.
Just some fairly simple liquidity concerns that we had as everybody else did at the outset of the pandemic. So we started marketing some pads.
And were you able to get reasonably compelling.
Offers on them and are now closing on those deals that we took to market.
In the spring.
In terms of Glen Allen in particular.
That.
Asset close it was and it was a net lease publics and it closed in the mid fives.
In terms of the.
Got it got it it's Adam I don't know because that's very reflective of anything other than just the appetite for high credit quality.
Net lease grocers.
The.
Market more generally for grocery anchored centers is fairly strong in our market right now so while there hasn't been a huge amounts of transaction activity. There are a number of deals that weve been tracking that are teed up now.
Many of these deals are in the.
Low seven there's a deal that we're tracking right now it's in the low sixs.
These are generally speaking grocery anchored centers.
Much like our assets they've had pretty strong collections through the pandemic period and one of the things that were seeing which I think is supportive of this type of pricing is that the financing markets are fairly receptive to these types of prior to these types of assets is as Phil described so when you.
You have a.
Hi, cash collections grocery anchored centers. The teams have been fairly successful navigating through the pandemic, you've had or a real world stress test of an asset in that is something that lenders find encouraging. So again. Although these are teeter assets. These are very comparable to the assets that we own and we are seeing a fairly healthy.
The transaction market right now some of these closing some of these are teed up to close it. So I think as we got towards the end of the year, we'll probably have some clarity around if nothing else what.
Is the warranted cap rate for Cedars portfolio, and therefore, maybe haven't even crisper view on the disconnect between our share price and our net asset value.
Okay.
Helpful and and Phil.
You know sort of a I guess pro forma the you know the pay down of the February term loan on the line I was just wondering how much borrowing capacity you have remaining on the line today I don't know if there's any are there any constraints against drawing down the remaining.
Amount that's available and and also can you talk a little bit more about the terms you're seeing in the mortgage market today it sounds like it's sort of.
Like for like an early 21.
Transaction and you know of at least $75 million, but can you just talk a little bit more about you know some of the terms you're seeing it.
In the market today, and what that might look like.
Yeah, Todd so.
In our Q, we disclosed the remaining capacity on our line, which.
Which is about almost 40.
5 million as we speak.
Plus we have some cash so approaching 50 million of liquidity there between the line capacity and.
Cash on hand, just keep in mind, you that is a rolling four quarter covenant, so that could trend that will trend down over the next couple of quarters as we get four full quarters and the calculation that are impacted.
By Cove, it, but I think that roll down will be offset with the pad sales that Bruce discussed.
Along with thank.
I think you're familiar you know our stance sushi asset and San Sushi, Maryland has a JV partner, but the way. The waterfall work was completely buried so we expect for a couple hundred thousand dollars to close out the buyout of that partner and once that occurs we'll be able to add that to the borrowing base.
So when you combine that for.
Along with the pad site that should mitigate any roll down and then over the next six months and I don't mean roll down like sequentially, but just as you get four full quarters into that calculation that's been negatively impacted by a.
Covance.
With regard to this occurred financing yeah for grocery anchored centers with no other tenant that fall kind of an essential bucket Uh huh.
High cash collections.
There is CMBS appetite there is life company appetite.
Generally loan to values are 65%, but let's just say 60% to 65%.
You can if theres a fair amount of term left on the anchors you can get some io with that.
Maybe significant io depending on the remaining term.
And rates generally kind of in the mid threes.
That's what we're seeing right now.
Okay. That's helpful and just one last one Phil the percentage rent in the quarter.
Was higher meaningfully higher is that sales base rent.
That you moved certain tenants to in the quarter.
Yeah. There was a couple of tenants that moved from base rent to.
Percentage rent one in particular because of a co tenancy provision makes up a lot of that the majority of that and that co tenancy provision should be corrected I.
I think around year end, but.
But that's why it was elevated it just moved from base rent was more geography, you know moved from base rent to percentage sales did roll down a little when the guy got to convert to percentage sales, but that should correct itself around the end of the year.
Okay, Great all right. Thank you.
Hi, Scott.
Thank you.
Once again, if you have a question. Please press Star then one on your telephone keypad.
The next question comes from Floris Van Dijkum from Compass point. Please go ahead.
Oh.
Operator and guidance. Thanks for taking my question quick update I'm, obviously, very you know I think that.
It would be very keen to hear about the.
The refinancing.
It sounds like it's going to go via CMBS and it sounds like there's there.
Based on the numbers you're talking about it you know it's not a it's not punitive.
Which is which would be very encouraging.
Maybe if you can you know you've got a number of assets held for sale how much liquidity do you think you can raise it and timing wise on if you were to get rid of the four assets that you listed held for sale.
Hi.
Okay.
I guess I'll take that.
No. These are assets that are all fairly small you know guys as.
As you can see even with the activity since the commencement of the pandemic. These.
Singles do add up and so for example, we've been able to raise about $30 million since the beginning of the pandemic just selling off relatively small assets and I would suspect that these four assets are probably going to be call. It you know.
In the high teens to around $20 million in total.
And if and when they were all divested more.
More generally floors the way to think about it is we approach.
Scott said, Oh, our portfolio management, and Bouchie Asher pretty dynamically.
Again, the backstory behind how are these pads came to be sold is really that.
When the pandemic started not knowing what the future look like but recognizing that the deadline for tenthirty ones was extended at the financing market for single tenant net lease assets was still pretty frothy, we thought it made sense to bring those assets to market in order to tap the capital available in that market at a relatively low cost.
That's something that we continue to monitor obviously as Phil.
Bill has described and I'm asking to go into a little more detail on the financing of these particular.
The particular financing that we're looking at for later this year early next at this point, we have other sources of capital and so while we are continuing to advance the assets that are held for sale.
Notion of continuing to bring out other assets is something that while we monitor it we're not.
As actively.
Actively pursuing.
So I don't know if you want to comment a little bit on the secured financing or expand on what you said earlier.
Yeah floors, I think you will see us have a preference for a life company a secured debt over CMBS.
But you know we will be looking at both.
Definitely towards a with a preference towards the life company.
To extent, we're at around I don't want to get into all the math around our revolver and line of credit, but to extent where around the 65% loan to value. We generally picked up a little incremental capacity on our revolver. When we do that to extent were down around the 60% loan to value. It's generally close to neutral as far as creating additional capacity.
Right now we are seeing loans close at 65%.
So you know if the market holds steady here you know we should be able to play.
Play some secured debt on properties and that term out the line a little bit and maybe even pick up a little capacity on top of that.
Thanks, Bill no that's helpful and just the.
Do you expect the people who will be the buyers of your assets that are held for sale are those financeable assets in your view or is it was it's going to be cash buyers.
Thats floors, that's a great question.
Some of these assets are definitely being sold per pound and those will be cash buyers are low value assets I think I.
The stabilized assets that are more rural could probably be finance again I'm not an expert on this but just we at this point there.
Becoming pretty knowledgeable about this market and just based on what we're hearing they could probably be financed but not at that kind of level that you know from.
From an LTV perspective that we're seeing with respect to the assets that are part of our core portfolio that we're looking to finance. So you could probably put some data on it but again it wouldn't be at that 65% level again based on just what we're seeing in the market right now.
Great. One last question in terms of your leasing call, obviously very encouraging new lease spreads I noticed the T.I. numbers were down as well.
Yes.
The animal where there's some one offs in there.
I think right now.
Yes.
Yeah, So a lot together, but were so high and signaling through [laughter], though so.
So forget forgive our our dances not as elegant as it as it sometimes it you know related to leasing and T.I. I never want to have a crystal ball from quarter to quarter as far as how how that will be I mean, we always look at each.
Steel strategically and making sure that we are getting the best net effective rent on each deal as they come through and making sure that war.
You know each deal that we're getting the the highest rent that we can get and paying the least amount of capital to attract that to attract that tenancy. So you know the as far as taking a trend in saying that you know T I will be lower.
Or any specific dollar amounts for the foreseeable future I wouldn't.
Let's say that but I wouldn't necessarily say, it's going to be higher either what I would say is that.
The same strategic thought an approach that we take on a deal by deal basis, we will continue from quarter to quarter.
Great. Thanks Robin.
Thank you this.
This concludes the question answer session I would like to turn the conference back over to Bruce Schanzer for closing remarks.
Thank you all for joining us this evening.
We wish you all good health and look forward to continuing to advance the interests of Cedar and its shareholders in the months ahead.
Thank you.
This concludes today's conference call you may disconnect your line. Thank.
Thank you for participating and have a pleasant day.