Q4 2020 Ventas Inc Earnings Call
Yes.
Ladies and gentlemen, thank you for standing by and.
And welcome to the Ventas fourth quarter, 'twenty and 'twenty earnings call.
At this time all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session.
To ask a question. During this time, we will need to press Star then one on the telephone.
If you require any further assistance. Please press star then zero and an operator will come back on to assist you.
I would now like to hand, the conference over to your first speaker today John.
Whitford director of Investor Relations. Please go ahead.
Thanks, Amy good morning, and welcome to the Ventas sports quarter.
<unk> results conference call.
Earlier. This morning, we issued our fourth quarter earnings release supplemental and Investor presentation.
Materials are available on the Ventas website, and I are dot Ventas REIT dotcom.
As a reminder remarks made today may include forward looking statements, including certain expectations related to COVID-19, and other matters.
Forward looking statements are subject to risks and uncertainties and a variety of factors may cause actual results to differ materially from those contemplated by such statements.
For a more detailed discussion of those factors. Please refer to our earnings release for this quarter and to our most recent SEC filings all of which are available on the Ventas website.
Certain non-GAAP financial measures will also be discussed on this call for a reconciliation of these measures to the most closely comparable GAAP measures. Please refer to our supplemental posted on the Investor Relations section and never website.
I will now turn over the call to Debra Cafaro, Chairman and CEO.
Thank you Sarah and good morning to all of our shareholders and other participants on behalf of all my colleagues, we want to welcome you to the Ventas fourth quarter and year end 2020 earnings call.
Let me begin by expressing my deep gratitude and optimism born of the strength resilience and innovation. So many have demonstrated over the past year.
And the positive developments, we are seeing on the ground and our portfolio virtually every day.
Our results and the fourth quarter demonstrates and fantastic resilience with normalized debt that though reported that 83 cents per share and 74 cents and much appreciated and funded from HHS to our senior living communities that have been affected by COVID-19.
Inc.
I've reflected on the grueling year, we've all had.
And I couldn't be prouder of our productive and skilled team, our enterprise and our capable and dedicated partner.
After a fast and positive start to 2020 and the last year has been dominated by the COVID-19, pandemic and punctuated by extreme weather disruptions both of which have continued into the first quarter of 2021.
Throughout we've put the full force of our firm's resources and energy behind keeping people safe demonstrating remarkable resilience and becoming part of the solution whether in employee testing advocacy or assistance to tenants and operators who need a day.
If I may actually through our foresight, our long standing diversification strategy and our decisive action, we've kept our enterprise strong and stable generating almost the same EBITDA and <unk> 'twenty and 'twenty as we did in 2019 and benefiting from our invest.
And then from people systems, and preparedness, our balance sheet flexibility and our embedded relationships with best in class partners.
And we found ways to grow and advance our strategic objectives, including building value through acquisition and development and life Sciences and <unk>.
And that's being and reboot, Mauritius and attractive senior housing development pipeline, creating new partnerships and establishing a third party investment management platform that will provide more options for future growth.
We remain committed to our core values and respect and integrity and accelerated our action to promote sustainability diversity and social justice and our company our communities and our country.
Finally, we were very fortunate to recently add to topnotch directors to the company, one a leader and health care and the other in real estate and REIT.
My gratitude and optimism also flow from the lifesaving COVID-19 vaccine discovery by doctors and scientists and record time and the recent acceleration and vaccine delivery by the by the administration.
Nationally and then COVID-19, it's foundational to spur sustained economic recovery and REIT store vitality to so many businesses and households and workers.
And then we're proud of that 100% of our U S shock al and memory care community have already received the vaccine and nearly 90% of them will complete their second dose by the and this month.
Notably senior housing vaccine delivery represents one of the shine and successes and our fight against COVID-19.
And our shop communities. It is wonderful to know and about 30000 and vulnerable residents have already been vaccinated and are one step closer to feeling safe seeing loved one and enjoying a Richard life.
From a real time data. We also know that confirmed COVID-19 cases, and our community have recently begun to improve significantly, creating and enhance sensitive wellbeing and enabling more operators to open communities to new move ins.
And leads and our communities built to their highest level since the pandemic began in January and once again demonstrated the strength of the value proposition of senior housing and the resilient demand for the services our care providers deliver.
While we expect sharp first quarter, NOI and occupancy, which are lagging indicators to decline sequentially as a result.
November to January and extreme COVID-19 conditions, we are encouraged by the breadth and consistency of all positive leading indicators can.
Conditions remain dynamic and it is too early to declare a definitive trend, but we like the picture we are starting to see.
Post pandemic senior housing gross represents and incredibly significant value creation opportunity for our shareholders.
Turning to our investment outlook, our diversified asset base with five vertical has given us the ability to continue to successfully allocating capital over time and through cycles.
For example, we've created tremendous values since our early cycle investments and our research and innovation business and 2016.
We continue to find meaningful opportunities to drive that business forward and both ground up development and asset acquisition with University and and cluster markets alike.
And our decision to add life Sciences to our enterprise has provided uplift to our results our investment activity and our value here. A couple of current examples are $280 million life Sciences project known as Juan Your city and the thriving research Submarket of Philadelphia.
Yes, which is bookended by 10, and Drexel is attracting significant leasing interest.
In addition to the nearly 1 billion dollar ground up development projects already underway.
Our University based development pipeline continues to hold about another $1 billion and active potential projects with both new and existing University relationships.
In particular with Westbury, we are in the design and development phase of and nearly half a billion dollar project with a major research University on the West coast that is substantially pre leased.
We look forward to sharing more information with you later this year.
Outside of research and innovation, we continue to allocate capital to develop large class day independent living communities with our partner L T N and Quebec.
We've had five projects underway with investment also totaling nearly half a billion dollars and two of the projects were delivered and the fourth quarter.
We are pleased to report that the two open communities have leased up quickly and occupancy is already nearly 80%.
In addition, our pipeline of potential acquisition and all five of our verticals is active and growing well.
We continue to invest with an eye toward growing reliable cash flow and favorable risk adjusted return.
We will also continue to evaluate and execute opportunities to recycle capital as well.
Both Justin and people have been working with our deal teams to target about $1 billion of disposition during the year to optimize our portfolio.
Finally, our institutional investment capital management platform continues to grow and succeed with well over $3 billion and assets under management, bringing.
Bringing together, our pre existing and new third party capital vehicles under one umbrella the Ventas investment management business includes our life Sciences and health care funds.
And the Ventas funds stands out as one of the most successful launches of a first time real estate funds and any asset class.
Okay.
Our investment management platform provides a significant competitive advantage to them.
It broadens our capital sources augments, our investment capacity expands our footprint leverages, our team and industry expertise and improves our financial flexibility and liquidity and ads and incremental source of earnings.
There is a tremendous market opportunity with it and life Science Medical office and senior housing real estate, and we are well positioned to capitalize it on capitalized on AR and multiple way.
In closing, let me reiterate that demographically driven demand is right in front of us the leading.
Indicators and senior housing are improving rapidly vaccine delivery is accelerating and the long term thesis for all of our asset classes and core Fantast remains firmly positive on all of us at Ventas, Kevin abiding commitment to staying strong and steady and winning the recovery.
On behalf of all of our stakeholders now I'm pleased to turn the call over to Justin Hutchens.
Thank you Debbie.
I'd like to begin by highlighting our fourth quarter performance and first quarter performance expectations.
First I would like to mention that we are humbled and grateful that HHS continues to recognize the crucial role senior living plays and protecting vulnerable older Americans.
Through the cares Act HHS has provided several rounds of funding to assisted living communities to partially mitigate losses directly suffered because of the COVID-19 pandemic.
Through this program applicable to sequential same store shop assets, our communities have received $34 million and the fourth quarter and $13 million to date and the first quarter, which has been applied as a contra expense to offset COVID-19 related expenses incurred.
After a challenging fourth quarter and January and which the national spread of COVID-19 hit all time highs our communities experienced an increase from resident cases, and we have more communities close to move ins.
Leading indicators have followed a similar pattern.
Leads and move ins drifted down throughout November and December while at the same time move outs were elevated.
Although the fourth quarter was a challenging quarter. We are pleased our occupancy hung in there with a 90 basis point decline.
Looking ahead to the remainder of the first quarter.
For the forecast Q1 sequential same store shop portfolio, we expect cash NOI to decline from the fourth quarter to the first quarter, excluding HHS grants of $34 million and $13 million to date and each respective period.
This NOI deterioration is driven by a 250 to 325 basis point expected occupancy declines, partially offset by modest rate increase.
We expect to see continued elevated operating expenses into the first quarter.
And well we are seeing continued high levels of Covid related costs. These are partially mitigated by $13 million of phase III HHS Grant money received to date and the first quarter.
I'll add that recent severe winter weather across the country could cause additional expenses as well as delays and movements. We haven't included any impacts if any and our guidance.
While we are experiencing choppy waters at this stage of the pandemic I would like to highlight green shoots that support a more optimistic outlook ahead.
I'll start by highlighting our improving clinical trends consistent with the U S. Covid case trends our shop communities are experiencing significant declines and new Covid cases, and the most recent week. We are averaging nine cases per day, which is the lowest since October and down from 92 cases per.
Day at the peak in January.
We couldnt be more relieved about this improvement knowing this means less illness and less people potentially dying from COVID-19.
This positive clinical trend is also important to local health departments support of our community's ability to accept new move ins and to offer a more robust living experience for our residents.
I'd like to comment on the early success of our operators have had deployed and the vaccine to residents and employees within our shop portfolio as Debbie mentioned, 100% of our assisted living and memory care communities have hosted their first vaccine clinic and.
And other good news related to the vaccine two studies from Spain, and Israel have come out showing favorable data.
Net people, who are vaccinated and still contract COVID-19 are far less likely to spread the illness to others than if they were not vaccinated.
Execution of the vaccine is a massively important steps towards the stabilization and growth and our senior housing platform.
I'll note that 95% of our communities are already opened and move ins, which is near a pandemic high.
I'll remind you of the importance of the segments mentioned and our business update currently 80% of our communities are operating and segment three.
This is up from 64% a month ago.
Segment, three is the least restrictive operating environment.
Communities and this segment offer a more robust living experience.
So it's a more open dining experience and smaller group activities. Most importantly, it allows for less restrictive visitation between residents and their loved ones.
As more communities expand their service offering demand for our services should improve.
Leads and move and starting to pick up again in January was the highest number of leads we have witnessed since the beginning of the pandemic, we have seen broad based strength and lead volume across regions and the initial indication is that this momentum has continued into February.
The increase and leads have been bolstered by very strong growth and our le Groupe Maurice portfolio, and Canada and consistent strong lead performance by Atria and the U S.
To summarize our optimism.
New Kay New Covid cases down.
Vaccine distribution on track.
Leading to a more robust living experience and all combining to support higher leads.
We continue to monitor and are these positive trends on a real time basis and remain focused on supporting our operating partners as they get in position to win the recovery.
Moving on to Triple net senior housing.
And the fourth quarter and through January Ventas received all of its expected Triple net senior housing cash rent.
Our underlying triple net senior housing portfolio performance continues to be impacted by COVID-19, However, due to a mix of lease resolutions executed in 'twenty and 'twenty government subsidies, including PPP loans, and HHS funds and other tenant resources, our tenants have continued to pay as expected.
Our trailing 12 month cash flow coverage for senior housing is one three times respectively.
I'll comment on the senior housing industry outlook.
Our competitive outlook has continued to evolve amid the pandemic and 'twenty and 'twenty construction starts.
Nationally, we're down 50% year over year and deliveries were at their lowest level since 2013.
Our shop markets witnessed particularly favorable supply trends with starts down 66% versus the prior year, 66% versus the prior year and deliveries down over 40%.
We are optimistic about the long term impact from lower construction starts.
Fewer starts today combined with our compelling aging demographic trends, where the 80 plus population is expected to grow nearly 15% between now and now on 2024, which is five times faster than the broader population will provide a potent tailwind over the next few years.
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Moving on to the final comments.
I'd like to comment on the tremendous job well done our operator partners and frontline staff have done prioritizing the health and safety of our residents and employees throughout a very challenging period.
We couldnt be more proud of their focus determination and courage and perseverance throughout the pandemic.
I'd also like to note, our excitement and support for Jack Callison, the new CEO of Sunrise senior living.
We know Jack to be and uncomplicated and charismatic leader, who is extremely qualified to lead sunrise.
I'll finish by reiterating our optimistic outlook as we consider the improving clinical trends vaccine rollout.
Communities opening for move ins with a more robust living experience and post pandemic supply and demand tailwind that give us continued confidence and a very strong positive growth trajectory and senior housing.
With that I'll hand, the call to Pete.
Thanks, Justin I'll cover the office and health care Triple net segments.
Together these segments represent 47% of Ventas as NOI.
And they continue to produce strong results showcasing their value proposition and financial strength for months at most.
And the pandemic.
In fact from the full year 2020. These segments combined to generate same store cash NOI growth of 3%.
First I'll cover office and movies and research and innovation centers and two lines of business within our office portfolio.
Play a key role and the delivery of crucial healthcare services and research for lifesaving vaccines and therapeutics. The office portfolio continued to provide steady growth delivering $128 million, our same store cash NOI and the fourth quarter. This.
And this represents a one 5% sequential growth led by on R&R portfolio, which generated 3.6% same store cash NOI growth.
Moreover, full year office same store cash NOI grew three 3% versus 2019.
Near the midpoint of our original 2020 office guidance of 3% to 4% despite the impacts of COVID-19.
Normalizing for a paid parking shortfall you increased cleaning costs due to COVID-19 same store cash NOI grew 4.5% suppressed suppressed surpassing our pre COVID-19 guidance range and.
In terms of rent receipts office tenants paid industry, leading 99, 2% of contractual rents and the fourth quarter for the entire period from April through December tenants paid 99, 4% of contractual rent. This is without ddos or deferrals, which were de minimis.
So essentially all granted deferrals have been repaid and new deferrals were negligible during the fourth quarter.
Continuing the trend we have collected 98% of January contractual rents on track to meet or exceed the fourth quarter collection rate February to day collection results are also strong and on a consistent pace when compared to the fourth quarter.
This strong performance has enabled by the mission critical nature of our portfolio and by our high quality credit worthy tenancy.
And our medical office portfolio, nearly 85% of our NOI comes from investment grade rated tenants and HCA and.
And our Rmi portfolio, 76% of our revenues come directly from investment grade rated organizations and publicly traded companies medical office and a record level of retention of 88% for the fourth quarter and 87% for the trailing 12 months.
Driven by this retention total losses leasing was 700000 square feet for the quarter and $3 4 million square feet for the full year of 2020.
This includes 540000 square feet of new leasing total leasing far exceeded our pre Covid 2020 plan.
All of our movie properties are and elective surgery restrictions free locations and as a result, we are seeing positive utilization trends the mere increase admissions and surgery volumes being reported by the health systems and as an example.
Paid parking receipts during the second quarter of 2020, we're only 46% of normal.
During the fourth quarter, however, paid parking recovered 271% of normal.
And as Debbie mentioned, we continue to be excited about the office business, and particularly investment opportunities and the RNA space and the fourth quarter. We closed our acquisition of the three asset 800000 square foot Trophy life Sciences portfolio in San Francisco.
Since last quarter's announcement, we renewed a large tenants and <unk>.
And two new leases, bringing the building to 100% leased.
On a clear demonstration of the attractiveness of these buildings to the marketplace. We also opened our $80 million R&R development on the campus.
Arizona State located within the Phoenix Biomedical campus, a 30 acre innovation district, and established by the city of Phoenix and the heart of downtown.
The building is over 50% pre leased and is ahead of pro forma.
Now, let's turn to healthcare Triple net.
During the fourth quarter, our health care Triple net assets showed continued strength.
We have received 100% of fourth quarter rents as well as 100% of January and a 100% of February rents.
Trailing 12 month, EBITDA and cash flow coverage improved sequentially for all our healthcare triple net asset classes, except skilled nursing despite COVID-19.
Acute and post acute providers had early access a significant government funding to create liquidity and mitigate pandemic related losses.
Q care hospitals trailing 12 month coverage was a strong three three and the third quarter.
2020 basis points sequential improvement driven by a rebound and elective surgical procedures and prudent expense management as well as government funding.
Art and continues to perform extremely well and this dynamic market condition and all of art and hospitals reside and jurisdictions that are open for elective procedures. We are excited to continue growing with arent and during the fourth quarter Arden opened a new outpatient cancer center and the campus their hospital and <unk>.
<unk>, Texas you Cancer Center features best in class equipment and facilities for radiation therapy chemotherapy and cancer care and we invested approximately $30 million at a near 8% stabilized yield.
First on LTE coverage improved 10 basis points to one six times and the third quarter buoyed by strong business results and government funding.
In particular kindred has demonstrated its core competency and treating complex patient cases census levels continued to be very high and.
And finally within our loan portfolio, our colony holiday and Brookdale loans are all fully current.
And I'd like to close with and thank you a sincere. Thank you to our frontline staff, who have kept these critical facilities open during this difficult time, you're all heroes with that I'll turn the call over to Bob.
Thanks Pete.
And my remarks today I'll cover our 2020 enterprise fourth quarter results, our expectations for the first quarter of 2021 and.
And our recent liquidity balance sheet and capital activities.
Let's start with our fourth quarter financial performance.
<unk> reported fourth quarter net income attributable to common stockholders of <unk> 29 per share.
And normalized funds from operations of <unk> 83 per share or.
74 cents, excluding the nine cents and HHS grants received and shop and Q4.
Other sequential fourth quarter drivers to highlight.
Include four cents of income recorded and in our unconsolidated entities all.
And I'll set by <unk>, Q4, sequential decline and NOI, principally and shop.
Meanwhile, office and Triple net healthcare was stable on a sequential basis in the fourth quarter.
That's a good segue to our Q1 guidance as Q4 is an appropriate start point for our first quarter 'twenty and 'twenty one expectations.
The key components of our Q1 guidance are as follows.
Net income attributable to common stockholders is estimated to range between minus seven and minus one cents per fully diluted share.
Normalized <unk> is forecast to range from 66 to 71 per share.
The midpoint of our <unk> guidance 68 cents per share.
It represents a 15% sequential decline from the fourth quarter.
This change can be largely explained by a 9% reduction and HHS grant income.
And income from unconsolidated entities.
The balance is driven by a 5% reduction and organic shop NOI performance.
A few of the key shop Q1 assumptions include.
Q1, 2021 average occupancy ranging from 250 to 325 basis points lower versus the fourth quarter average.
Sequential growth and Rev for as a result of the annual in place rent increases implemented at the start of 2021.
And continued elevated levels of operating expenses, driven by Covid labor and testing.
Outside of shop, we expect our property NOI to be stable on a sequential basis and the first quarter.
Our normalized <unk> per share bridge from our fourth quarter to our first quarter 'twenty 'twenty one guidance midpoint.
And with key assumptions.
It can be found in our press release, and our business update presentation posted to our website today.
I'll close with our balance sheet and capital activity.
I'm proud of the actions of the Ventas team has taken to manage our balance sheet leverage and liquidity.
We have navigated the disruption created by Covid.
And kept ventas strong and stable while protecting shareholder capital.
I'd highlight a few of our most recent recent actions and our results.
First some key stats from 2020.
We finished 2020 with full year net debt to EBITDA of $6 one times.
Maintained a strong maturity profile with duration exceeding six years.
Had held a total debt to gross asset value at 37%.
Reduced our net debt at year end by over $500 million year over year and.
And retained robust liquidity exceeding $3 billion.
And 2020, we also took advantage of the strong bid for health care real estate and realized over $1 billion and asset sales and.
On a blended five 3% cash yield.
And 2021, we're targeting an additional $1 billion and asset sales across our verticals and the second half of the year.
Proceeds from dispositions are expected to be used to reduce debt and to fund future growth through development and redevelopment capital spend.
And January 2021, we closed on a new four year 275 billion unsecured credit facility.
We had great demand from 24, new and incumbent and financial institutions.
And we're able to realize better pricing.
I'd like to personally thank our banking partners for their support of Ventas.
And they are critical to our success.
And finally and in March 2021, Ventas will use cash on hand from recent dispositions.
To reduce our near term maturities by fully repaying $400 million of our three 1% senior notes due January 2023.
As a result of these and other actions.
We're positioned to capitalize on the powerful upside across our business.
Once the pandemic is finally in the rearview mirror.
That concludes our prepared remarks.
Before we start with Q&A, we're limiting each caller to two questions to be respectful to everyone on the line.
With that I will turn the call back to the operator.
At this time, ladies and gentlemen, if you would like to ask a question. Please go ahead and press star and the number one on your telephone keypad.
And that is star then one to ask a question.
Your first question today comes from the line of Juan Stan <unk> with BMO capital markets. Please.
Please proceed with your question.
Hi, good morning.
Good morning, good morning.
I was just hoping Debbie.
Debbie maybe you could provide a little color on the acquisition pipeline and you talked about it being robust across your various verticals.
So I guess I'm curious what.
And so the texture of the most interest you've been kind of quiet on the seniors housing acquisition for a while it seems like art and might have some new opportunities emerge is from my point.
And curious if that acquisition pipeline is more focused on balance sheet or through the fund.
Well, it's great to hear from you and I would say that we have.
A lot of options now as we look at investment opportunities and not only can we look across the five asset type and also we have a number of tools, we can use to add.
And to acquire assets, either on balance sheet or and our investment management business and so I'd say, we're really looking across the board with guidance.
Obviously, a lot of life Sciences, and research and innovation sales grew.
Roundup development as well as.
Acquisition activity.
We've got CAD seven senior housing possibility in.
And the pipeline.
And savvy free doing well and we continue to look for similarly high quality opportunities in that space and so it really is.
Quite interesting and across the board and as I mentioned, we're continuing to invest without TM.
And they have done just an incredible job both on me and management of the stable portfolio, but also and.
Eloping and leasing up very quickly these class a assets and we're looking forward to doing more of that with RCM as flat.
Okay. Thanks, and then just from my follow up on the disposition from switching the opposite side the $1 billion for 'twenty, one that you've targeted for the second half could you provide any color on the types of assets you saw.
And so I think about this time last year, you talked about may be joint venturing eclipse. He had some atria assets that were on the blocks that you can just give us a little bit more color on the flavor there Greg.
And I gave a little clear when we talked about just and and Pete really optimizing the portfolio. So while we're really looking across the board I would say that senior housing and maybe some select mlb's cake.
And fall within that disposition pipeline.
Thank you.
Thanks Juan.
Your next question comes from the line of Nick Joseph with Citi. Please proceed with your question. Thank.
Thank you maybe just following up on that question.
I know you said, it's the back half of the year, but just curious what the timing is and then the cap rates on any of those asset sales and try and get a sense of any potential dilution and the back half of this year into 2022.
Yeah, I mean, obviously, we're going to look to be smart about when and how we do it.
I would I would basically just refer you to kind of the back half and you.
And so you can make it.
Our weighted assumption around timing and so obviously TBD and.
You know cap rate also TBD, but we would look really to find lower cap rate.
Debt that we could.
And that we could just fell and then on.
<unk> you can see and the market there so really strong big across the board and these asset classes and.
And that is.
You know a very good sign for our ability to execute and a really effective way.
Thanks, and then maybe just on the senior housing side.
Looking at your business update with the move outs trended higher at least through January.
What percentage of those were voluntary and on how have voluntary move outs trended over the past few months.
Yes, and then ill turn it over to Justin.
And we've mentioned I mean, the key points are really around the clinical results because.
You really have to think about leading indicators teen cases.
And and mortality and then.
When does it start to improve significantly as we've seen the lagging indicators of NOI and occupancy.
Tend to follow so I'll turn it over to Justin So he can really address your question.
And specific.
Hi Tech.
And regards to set a recent trend upwards and move outs, that's mostly clinically related hospitalizations.
Deaths.
On the voluntary move out questions come up we really haven't seen a high number of discretionary move outs that are for reasons other than clinical purposes.
Thank you.
Thank you.
Your next question today comes from the line of OMA tail or container with Mizuho.
Please proceed with your question.
Yes, good morning, everyone hope, everyone is safe and healthy.
Two quick ones for you.
My pleasure two quick ones from me Rep core growth and the quarter.
What kind of down meaningfully.
And I think it was negative three 3% or so could you talk a little bit about kind of what caused that I think you had made some comments about kind of.
<unk> and discounts and things like that and.
And of hows that trending and the early stages of 2021.
Yes, I mean, we are projecting positive sales Rep force sequentially and I'll turn it over to Bob to elaborate.
Alright, cool, so fourth quarter, you're right to say day.
And on Rev core Tayo really to two drivers there one is is simply.
Discounting you know and.
And the and the effort to get occupancy definitely seeing that and the marketplace and the second is mix with.
And with Canada, continuing to perform really strongly Canada has a lower Rev core.
You see a mix impact if it's a combination of those two things on a sequential basis.
Which drives the number you see on Revpar.
Positively looking ahead to Q1, you know, we're expecting growth and again that in place increase.
Very much in line with what we've seen historically, which is quite positive.
And so expect to see that as a as a tailwind and the first quarter on revenue.
And so no additional debt.
All discounting concession and thing that's not kind of <unk>.
And riding through the first quarter of plenty Juan.
So I think that will likely carry on at least and the short run, but you see the lift of the of the in place rents, which happens Jan one across a good part of the population so that that really benefits the first quarter.
Great and then on the government reimbursement side and.
La store any estimate on reserves.
And then you may be due on the kind of like the phase two and phase three.
Programs from last year and generally what are you hearing about future government support.
And given the change and administration.
Right.
We've had and.
With our industry partners that really does that.
Yes.
Public outreach on.
To this exact point of really the impact of COVID-19 on these communities and on.
Seniors and we have made.
So much progress tayo.
And as evidenced by the willingness of HHS to mitigate some of the COVID-19 impacts by the amounts that we've received to date, which for US has been I think about $48 million or so.
And we're very grateful for that as Justin mentioned Rick.
And what we're focused on going forward is there continues to be significant daily units remaining in the HHS funds well first of all phase three could result in additional funding. That's an unknown. There is also multiple tens of billions remaining and.
And the HHS funds, which hopefully can be.
Utilized beyond phase three.
Core that healthcare providers writ large including senior housing.
And then in terms of additional Covid relief packages.
And would endeavor to make the case that.
Some of those funds should be either earmarked for or certainly available to be used to mitigate the continuing impact of COVID-19 on.
On the ordinary and 2 million seniors.
And who are cared for and senior living.
That's the framework and we'll continue to try and make the effective advocate with policymakers too.
Pretty good.
A favorable and I think very justifiable.
Outcome on a public health and.
Priority basis.
That's a key and fighting the fight thank you.
Thank you.
Your next question comes from the line of Michael Carroll with RBC Capital markets. Please proceed with your question.
Yes. Thank you I wonder if you could provide some color on the occupancy expectation going into the first quarter of 'twenty. One I guess, the 250 to 325 basis point decline and average occupancy I mean, what does that trend look like on a I guess the week to week or month to month basis on the LOE and <unk>.
The high and I mean, do you expect declines to continue at this pace through February and then start to moderate and in March or how should we think about that.
Yes.
Good question I mean, it and.
And then ill turn it over to my colleagues that and again I think and laid out the conditions in January we are.
Feel that our portfolio and to really hanging in there in terms of leads and.
And occupancy so I'll turn it over to the team to answer the specific question that you're asking.
Sure I'll I'll take that so you can see on page 12 of our.
Investor presentation, and some of the most recent data on the on the trends and the quarter on on occupancy.
If you look at it quarter to date on average were down about 210 basis points quarter to date really driven by that January.
And at January a result.
If you just extrapolated that to the full quarter I kind of baked what we have and held from there we'd be at the better and.
The guidance range of 250 basis points down if the trend continue down.
As we've seen and the first quarter two day and carried on that would be.
The lower and I, either worse and to the range and so it's really kind of that's the guardrails if you like stable.
Stabilization versus continuation of the trend if you wanted to think about it that way.
Okay, Great and then I guess on the New then obviously there was an uptick on an absolute basis and January but it still looks like the percentage compared to 2019 actually dropped.
It's a good way to think about that is is that the seasonal nature of leaves probably is not holding right now and just given the COVID-19 impact and you're just more optimistic because the absolute number is actually increasing.
And I think what is incredibly encouraging is debt to Clint.
Clinical conditions and January were the worst they've been really since the beginning of the pandemic and you can see that on the slide yes, we are getting incredible demand and my opinion in January and Nonetheless triple.
And you know moving and that to me is an incredible.
Combination and and one that is.
And just really heartening about this being a kind of a need based business that is going to be resilient and that happened during the toughest time and so that's what that is the key point, Mike. Thank you for Richard.
Great. Thank you.
Yes.
Your next question comes from the line of Nick <unk> with.
Scotiabank. Please proceed with your question.
Oh, Thanks, good morning, everyone.
I guess, just first off maybe if you wouldn't mind providing.
Does that give the vaccine data, which which was good on number of residents number of staffs.
Do you have that in terms of a percentage.
On the resident and out of the stats we've gotten the.
The vaccine and so far and <unk>.
Yes.
And in general the uptake with the resident has been really really high.
And then around the 90% range and probably even higher if you take out people who were ineligible either because they had no cash.
Covid or something like that or another medical condition.
And amongst our staff and it's really been.
In that 40 ish plus or minus at the beginning on the first clinic, but we're seeing higher uptake of employees getting that first shot at the second and clinic and so those numbers are going much higher.
Both because of and increasing comfort level with the vaccine and also.
Operator.
We'll call it incentives and requirements and just and maybe you can touch on touch on.
And what the operators are doing.
And in the vaccine can make the uptake better.
Absolutely. So there's been you know.
The standard practice across the sector as you know.
And Acacia and incentive it was bringing a lot of attention and and.
And quite frankly with celebration around the vaccine.
And that's been very successful we have operators that have mandated vaccine as well.
And where that's happened we've seen the employee numbers tick up significantly and.
And we know of at least two that have made the decision day mandates. There are several others that we're we know it's under consideration and it's been met with a lot of success where were those employee numbers are closer to 80%.
Okay, great and so it's very helpful. Just second question is on the leads.
Having picked up.
You know I guess are you are you getting any information from your perspective tenants about at what point.
They're gonna increasingly convert that lead into a moving.
And it had something to do with the percentage of people on that facility that Iraq same or a.
Reduced rate of program and if and so I guess, we just try and should understand what point.
Beads are down and still around 20% moving down around 20% at some point and get closer to a 100%, but what are you getting any information from prospective tenants about about debt. Thanks.
Yeah, I can definitely give you some color.
One point about our leads is that you know leads are actually stronger and our U S portfolio, but our move ins have been stronger and Canada.
So when you think about us think about a higher conversion rate, Canada, there's less dependency on external agencies too to get move ins, but your phone.
And then on the U S. One thing that we found interesting is that debt. The lead volume is very high as Debbie mentioned in spite of the clinical backdrop, but we're also still missing out on some typical sources for leads and that includes respite and that includes personal and professional referral sources, which are all our highest converting leads.
So as the lead bank starts to materialize and get back to normal not only with the lights go out, but but our conversion should go with it. So our operators are fairly bullish on on on the outlook, but.
That remains to be same out obviously.
Thank you.
Your next question comes from the line of corners.
Mirsky with Brendan Burke. Please proceed with your question.
Good morning, everybody and thank you for having me on the call.
Yeah.
You had mentioned in the prepared remarks, just switching gears to the art and I portfolio that you city was attracting some significant leasing interest and I'm. Just wondering if you can quantify at all how this is progressing.
And then what the path looks up to stabilization on that and.
And.
Good day have you I'm going to turn that over to our team to talk about debt.
Significant leasing interest there and the Sydney market.
John did you want to take that.
Sure. Yeah. This is John Cobb and I think we have.
Lot of good leads and I think were shopping a lot of LOI is back and forth, but the interest is high.
And.
And.
And.
When you start building the interest and you start going vertical and the interest is much higher when you're doing that.
Okay. Thanks for that and then just related to the development of the independent living communities and Quebec with so with the group and <unk>.
I'm just wondering if that occupancy metrics you guys provided does that take into account. The 800 units that have just recently opened.
Yeah, well that's it.
And I believe is does 800 units. So this is what is remarkable and we're trying to have at rub off on US here South of the border is LG and balance. These large project's class day for independent living and younger healthier senior.
And they're really viewed a fall we hope to take you there some day and then they have a really significant.
Pre marketing effort, a lot of pre leasing and deposits and.
These communities open in the fourth quarter, and they're already nearly 80% occupied.
Alright, that's all from me thank you very much.
Thank you.
Your next question comes from the line of Daniel Bernstein with capital. One. Please proceed with your question.
Hi, good morning.
Glad to hear and upbeat.
Tone and outlook.
The question I do have though and I think the moving or kind of rather simple.
Simple math.
Demographics going up construction going down.
And with levels going down, but I'm trying to understand a little bit better the move outs.
And particularly if you have any color on average entrance age of residents coming in and and thoughts on length of stay and whether that's going to offset.
Some of the improvement.
It seems likely to come on the moving side.
Hi, Dan and Justin.
You mentioned I'll start with the second part of your question on length of stay has actually gone up.
And the reason for that is because rasp. It stays over this past year far less so that that average is up without the short term stays of respite.
In terms of the type of resident moving in and we also haven't seen a lot of change there either.
There's.
The age group debt.
Mcgrath and the type of resident care needs everything has been relatively consistent.
And we just need more of them.
And as we mess and leads there are certainly on their way up.
Okay.
And then the other question I had on shop.
I don't know if you can give inc.
Kind of a general idea of what the rent increases.
And then our and <unk> versus maybe historical and whether those are you know.
And what we should be thinking about when we model that versus historical one and two increases less.
And Thats a modeling one Bob do you want to take that and I love the modeling ones. So.
And historically.
We've seen sort of mid single digit in place increases.
Every nearly every year and that's again sort of AR and overarching.
Number two to think about that from there, though a few considerations and theres always a percentage of the population to whom that does not apply.
And that could be those who are on and anniversary renewal, where those who came in and moved and late in the year and aren't subject to and things like that so.
All of that said it blends in on our sequential Q4 to Q1 revpar basis to improve ROE poor overall and that is one of the powers of having the occupancy in place and December is to have that have that benefit.
Okay. Okay I appreciate it good day you bet.
Your next question comes from the line of Rich Anderson with S. M. D. C. Please proceed with your question. Thanks, Good morning, everybody.
So.
And if investment activity can be used as a proxy for perhaps your level of confidence and things going forward.
Our company and the history is sort of hunkering down at the right times I recall back and one 809 timeframe you were quick to protect the balance sheet.
Like a lot of your peers, but I remember that in particular.
And now a $1 billion of asset sales, you referred to paying down debt with that and at least and part. But then you also talk about this pipeline of activity. So on.
I can't get a good sense of where you were at on a net disposition on net acquisition perspective or are you kind of still on the point, where you're just sort of hedging your bet.
Could go on with one direction or another or are you sort of thinking along the lines of sort of neutral.
Impact.
Well, we are thank you and it's really good to hear from you and then we are continuing to and that you know very carefully.
And as I mentioned and lifestyles and Nissan GM developments, we give it and acquisition pipeline.
Really is a case by case basis, and we continue to evaluate conditions very carefully and.
Really in a great position given all of the things that we've done and all the pieces, we have put in place to be.
Be able to really.
Operating this decree and.
And when we believe the circumstances are appropriate based on risk adjusted return.
And so and I feel good about where we are and we have a long history as you know of doing two or $3 billion a year.
Investment activity and debt.
We're in the market and all the verticals and have the team and the capital options and.
So it will be based upon what opportunities become available fair enough, Okay and then.
And on the HHS grants you guys were perhaps earlier than some others in terms of getting getting your hands on it.
But nonetheless, it impacts the assisted living side more obviously.
Thank you, 60%, Alf and 40% and.
Dependent may correct me, if I'm wrong on that I could have that backwards, but does this inform you about what are the opportunities might exist going forward in terms of that specific.
Debate between IL and Al F.
Well I think we would based on our investment decisions and our portfolio composition and really on the fundamental opportunities that we see and and <unk>.
Rather than.
What I would call bridge support.
For the pandemic impact so I think you're roughly in the ballpark on the 60 40, but I'll turn it over to Justin really to talk about how he thinks about those.
Asset classes and me the differences and opportunities and we had before and before you do that Justin and I was thinking in terms of perhaps being there some disruption and the ILS site, which is would make you more interested today.
And this and from the standpoint of there being better opportunities because of the lack of HHS and anyway that was the basis on my question go ahead, sorry, and IC Yep.
Hi, it's Justin Yeah, and in terms of the disruption and <unk>.
Really held up Okay, and you know a help on early going based on.
And we're having a lower move outs longer length of stay move ins have continued and the IL setting there.
There are generally a higher margin business. So they had a little more room to work with as occupancy has fallen.
And they don't benefit from from HHS funds, though a little later to the same from a vaccine standpoint, but vaccine clinics RV and set up and the IL setting. So that's on that point and then in general you know the first thing we're always going to look at is the market and the debt we have with and are.
Dataset over 100, Msas that we study.
And within those we can determine which products will work, which price points appropriate could be I L. A L memory care.
But well we would always start there and then look at you know so market and then the quality of property and its opportunity for successful execution.
Okay. Good enough thanks very much.
Thanks.
Your next question comes from the line of Jordan Sadler with Keybanc capital markets. Please.
Please proceed with your question.
Thank you and good morning.
Good morning, just wanted to morning so.
Just and I was I wanted to just.
Get your take on sort of historical seasonality I know how familiar you are with this business.
And to shop.
What percentage of annual move ins take place in December and January February and.
On the shop portfolio generally.
So there's a little bit on the seasonality.
When you look at it on a quarterly basis.
And there is not.
A big change and ins or outs you tend to have.
Relatively higher move outs and the <unk>.
And fourth quarter, and the first quarter, and then lower move outs and the third and fourth and then move ins will they'll move within quarters. Some months that jump out to me or January on.
September.
You know, where you get a little bit of a spike you know April may or usually some good move and months, but on a quarter on a core basis. It's the only on like a percent change from one quarter to the next and and you just kind of usually you have.
Opportunities to net significantly during those times when wouldn't move outs are lower.
I'm not sure if that's helpful and I'm sure you're doing.
That's helpful.
Go ahead finish thing.
Yeah, I was just going to say in this setting seasonality hasn't really held up because the clinical impacts have been so severe at times that set and.
Impacts on demand and then of course, I mentioned, the difference and our lead bank and that Theres, a lot more opportunity for that to get back to a normalized level and.
So it's really.
Hard to a point to seasonality and this the.
Current environment.
And it sounds like typically you are saying and you see higher move outs and <unk> and <unk>, but move ins you generally are more steady.
Yeah, that's about right.
Okay and then.
And then sort of non sequitur follow up.
On the disposition guidance for 'twenty, and 'twenty, one Debbie and Bob.
And what portion of that is scheduled or expected loan repayments.
Yeah.
What's the mix of debt reduction versus other investments in other words Jordan.
Yes, I think anywhere from $1 billion of disposed disposition guidance for the year on it like is there any about loan repayments, Oh, I see which I see the question and I know, it's a majority asset asset sales.
The vast majority loan repayments or would that be over and above or you. Just don't expect any and then maybe some but it's moving.
And if majority will be asset sales.
As it was in 'twenty and 'twenty.
Okay, because I know you have some maturities and.
<unk> 'twenty 'twenty, one, but those could be extended.
Yep.
Okay.
Thank you.
Thanks.
Your next question comes from the line of Vikram Malhotra with Morgan Stanley. Please proceed with a question.
Thanks for taking the question just maybe first one on on senior housing overall now that you have a.
A high percentage vaccinated, you've got your rents in place in January for sure.
And you sort of pointed at some light at the end of the tunnel and I'm just wondering higher level is there a.
Initial sort of preliminary strategy you can lay out for us in terms of how youre thinking to start getting back to this occupancy and demand will come when it is but just in terms of flexing.
Rents versus occupancy.
High level kind of is there a is there a strategy that you can lay out and does that differ by product type or geography.
Hmm.
Yes, and different operators take different views as well.
Just on that particular condition.
On.
And in markets as you pointed out suggest and do you want to.
Interest income question. Please.
Absolutely Yeah. So you know I mentioned.
I would probably like to step back for a second and just reiterate the underlying demand and the operators are facing and how they're trying to play into that.
I had mentioned.
Before.
You know that that leads are.
Our very strong and we're missing parts of a typical lead bank that could help bolster things, but if you look back a little bit and you look back into September October.
If you look at our leads and our move ins you can see that we are running 80, and 90% respectively. No vaccine on site at the time.
The underlying demand it remains really strong our operators are well aware of that we even had at that time and October almost 60% of our communities that are achieving 100%.
Or more of their their prior to Covid typical move and run rate.
So all of that bodes well and as operators and try to play into that and then what's the backdrop of course, the clinical trends they were facing throughout the end of last year beginning of this year is taking different approaches one I'll highlight.
As atria and I mentioned that that they have bolstered our overall lead grew.
Growth and volume and they've done that with the help of discounting and it's worked.
Because they've had higher occupancy higher leads as a result, we've had others that have been a little more of a local market focus holding back a little bit to preserve rates and and.
And.
And that worked as well and moving ahead I think what every operator is focused on is the wide variety of different referral sources that they've relied on in the past how to rejuvenate those moving forward and to play into that.
And that you know.
The optimistic kind of supply and demand outlook I gave as well as the trends that that are positioning our communities to accept move ins again.
Okay. That's helpful. Yeah, and it's interesting to your point, even if you look back a year ago, just based on the number you gave it doesn't seem like the conversion rates have fallen off dramatically and.
Terms of leads to move and it seems like those rates are maybe a little lower but not dramatically lower.
So that debt.
Another positive I guess just on the Triple net side.
Two quick clarification. So you do have your EBITDA is probably closer to the low ones and some not wrong.
And you have a minimum four years left on maturity for a lot of these needs that are kind of in that range or below so I'm just wondering if.
There is a there is a need or Qatar or are you just you know to adjust rents or convert some of these core idea.
And could you just clarify in debt and debt.
Cash flow coverage.
And maybe thinking wrong about this but in the quarter on historically are there and just the last two quarters is there any is the the provider funds on the relief funds and they're not factored into that company Jonathan.
Yes.
Take that so look I mean, we have been really successful during 2020.
Since gesture and spin here and really having some outstanding resolution.
The bigger relationships, we have with <unk>.
Partners like Brookdale on holiday and.
And others and that that's been really helpful and we received significant cash upfront as well as participation.
And the upside.
It's really they're more in store, you know and conversions to management contract. So those have been really well received and rightly so.
Our operators as you mentioned really has been.
And the beneficiaries and some cases of.
Government funding that would principally be in the fourth quarter of course that would benefit coverage.
But our statistics are really through the end of the third quarter, which.
It's always on a one quarter lag as you know so they will be factored in and there'll be called out separately as we have with some of the health care providers on net.
And the supplemental materials.
And so you'll be able to do your own analysis, but again remember that the funding is really intended to be a bridge. If you will to replace NOI that would otherwise be there and hopefully will otherwise be there and the future. So that's how we've been thinking about it.
Fair enough, but just to clarify you don't anticipate the need given what you did in 'twenty and 'twenty you don't anticipate the need for more rent adjustments on conversions near term.
And it really depends on Covid just like on list. Every every other answer we can give you on the call today.
And you narrowed the operators are really hanging in there as Justin said their daily and an incredible job on him.
And safety.
And right now you know, we're getting all the rent that we expect to receive and the operators start getting government funding in many cases. So that's a good that's a good picture and if the leading indicators that we've discussed.
And really take hold and gain traction and you know.
Result in improved occupancy and NOI and we look forward and the year then I think we feel we feel okay about where we are.
Great. Thank you Debbie.
Thank you.
Your next question comes from the line of Steven Valiquette with Barclays. Please proceed with your question.
Great. Thanks, and good morning, everyone. Thanks for taking the questions.
And so.
And I guess first one just regarding the percent of shop communities open for move ins.
That data on the bottom of page 11.
And looks pretty positive on that metric jumping up from around 80%.
In early January to now and 95% just from last month or so gross communities available for <unk>.
And for move ins.
So I guess I'm, just curious to hear more color or is that driven more by either voluntary policy changes by the operators or is it more just changes and local government guidelines and how much of this is simply driven by the benefits of the Covid vaccine and if we're able to get from any extra color around all of that as far as that improvement. Thanks.
Hi, it's Justin Yeah, so what you'll see is the.
First of all a 95% of our communities are open to move in and then we segment of them based on just the restrictive environment and what drives that some segments and segment three segments, where is the most up and most consistent with with pre COVID-19 lifestyle segments, who has some.
Restrictions, but you can certainly take move ins and the state.
State and local health departments that are really.
Weighing and on how open a community it can be and.
And so those conversations are happening constantly and it's very much driven by recent COVID-19 activity, sometimes and the broader community sometimes within our own communities.
So that's fluid.
But as you can tell from the overall picture of that debt, new cases are down and and open communities are up so it's looking good across the board.
Yep, Okay and.
And one other quick question since we spend it feels like half this call discussing leads and moves and move ins.
I think and just confirm that the definition of a lead hasn't really changed for today versus 2019, and when youre showing that data on page 12 and that there is just a quick one liner on what officially defined the lead for you it'd be great just to remind you that as well and that can differ sometimes from one company to the index.
Sure. So a lead is to find really another another way to put it as an inquiry and.
And its distinct and and so it's new so each month when you see our data all the leads that we're representing our new to that month, we don't carry forward and it's from it's any source.
And you know it could be through the internet could be through referrals.
It could be a drive by for instance, any source that that's interested and moving is characterized as the leads.
Okay, Alright, thats helpful and Thats remained that's remained consistent.
Okay. Thanks again.
Thank you.
Your next question comes from the line of Lukas <unk> with Green Street. Please proceed with your question.
Just one left for me so it looks like the majority of your loan investments are maturing or it can be repaid early in 2021. So just hoping you could provide a little bit color and what you expect around that.
Right right now as it is.
As you point out they are open to repayment and some are also open to extension.
Our current expectation is.
Extension, but of course and.
And that could change and.
We always like to be repaid.
No.
Either way I think.
We're in good shape.
Thank you.
Thank you.
Your next question comes from the line of Joshua Denison with Bank of America. Please proceed with your question.
Yes, thanks, everyone.
And maybe a follow up on Steve's question earlier on the vaccination and Covid cases coming down.
When you guys think like Big picture, everyone. It seems like by the end of this month everyone's going to be back David within your shop portfolio.
Do you think you start seeing a pick up and move ins because of that were the customer's mindset overall.
Covid level across their community.
And then how.
How are your operators I guess going to respond to.
Vaccinations like will they be able to increase visits because that sounds like one of the big hurdles to getting people to move their parents and.
Hi, it's Justin Yeah. So.
First of all just the <unk>.
Fact that there has been vaccines available.
And played a role and some of the uptick and leads so certainly there is an expectation that when the vaccines are fully executed.
That debt that attracts.
Higher leads more potential demand that would make perfect sense.
In terms of defining the lifestyle and moving forward I mentioned that the health departments play an important role and working with operators to define that certainly the operators want.
Our robust living experience as I mentioned for their residents, they're working hard to give you the.
And the best lifestyle available, but theyre going to work with him Health Department guidelines and I would expect that to.
And to continue for a period of time and you know.
And as they work through this.
This next phase.
Okay and then.
Maybe just a follow up from on the opening comments you mentioned that the severe weather.
Hitting the country and now isn't in guidance if any of your facilities been impacted by the power outages and in Texas.
No, but this time.
And.
Yes, I mean, it's been a biblical year, when you really want to think about it with COVID-19 and wildfires and.
Hurricanes and now we have this debt does that severe winter storms and places you at least expect debt. So.
Yes, I mean, I think everyone.
And many people and the real estate business has significant investments and Texas and almost all of them will be affected by the power outages and related.
The storm impact and that would include us and again our operators are taking extraordinary measures in the case of senior housing to make sure that employees and residents are state and often we see and senior housing that after something like this we see an uptick and interest.
And a lot of people are alone and their homes and net debt.
And youre better off kind of together when things like this happen.
Yes, I mean, we have we have investments and taxes across the board and we like others would be affected by something as significant as that the recent store.
Alright, Thanks Debbie.
Thank you.
And your last question in queue comes from the line of Mike Mueller from J P. Morgan. Please proceed with your question.
Yes, hi, it looks like the shop occupancy losses have been greater and the primary versus secondary and what you call other markets.
What do you think in terms of recovery do you think the primary markets recover faster and are you seeing any differences and fee trends so far.
Good question John.
The leading indicators you know are flashing green and Justin.
And so your segmentation question.
Thanks.
And so you know there's been you know we've.
Studied the the performance throughout the pandemic, there's a little bit of a disconnection and terms though.
Our expectations relative to.
Covid impacts on on move ins and geographies because of the viruses.
It's really become.
And through the fourth quarter became more widespread and more impactful. So as we look ahead, but really just looking into local markets and and looking at the fundamentals I mentioned earlier.
Relative to our position and that market and and.
And if some of the primary markets are really benefiting from a reduction and.
Construction as a percentage of inventory and what's really support as well.
But I think to get a real good read on to answer your question I think where.
We have to go a little further beyond the pandemic and to get a clear view.
Got it okay that was it thank you.
Greg.
Anything further.
And there are no further questions in queue at this time.
I.
And Gary.
Evolved and theory patients and I want to thank you as always for your interest in and your support of our company.
And we look forward to seeing you soon and we hope that you and your families stay healthy happy and optimistic.
And this concludes today's conference call. Thank you for your participation you may now disconnect.
Okay.
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