Full Year 2020 Stratus Properties Inc Earnings Call
Good day and welcome to the Stratus properties year ended December 31, 2020 financial.
And the operational conference call.
Earlier this morning, Stratus issued a press release announcing its year ended December 31, 2020 financial results.
The press release is available on Stratasys website at Stratus properties dotcom.
Following management's remarks, we will host a question.
The answer session. Please.
Please note. This call is being recorded and will be available for replay on Stratasys website through March 20th 2021.
Anyone listening to the taped replay should note that all information presented is current as of today March 15th 2021 and.
And they are considered valid only as of the state.
As a reminder, today's press release and certain comments that will be made on this call include forward looking statements and the actual results may differ materially from those anticipated expected projected or assumed in the forward looking statements.
Please.
And should view and refer to the cautionary language included in Stratasys press release issued today and the risk factors described and Stratasys 2020 form 10-K that could cause actual results to differ materially from those projected by stratus.
In addition management will discuss earnings before interest taxes.
<unk> reviewed the depreciation and amortization also referred to as EBITDA and after tax net asset value per share or N. A V, which are financial measures not recognized under U S. Generally accepted accounting principles also referred to as GAAP as required by the S. E C rules and regulations. These.
Taxes GAAP financial measures are reconciled to their most comparable GAAP financial measures and the supplemental schedules of Stratasys press release issued today.
Earlier today the company published on its website under the investors tab and update to its and a V.
I would now like to turn the conference call over to Mr. Bo arm.
Non long chairman, President and Chief Executive Officer of Stratus properties.
Thank you for joining our year end December 31, 2020 financial and operational conference call, Our Chief Financial Officer, Erin Pickens is also here with me today.
I'd like to spend some time of today's call of briefly reviewing the.
The impact we have experienced over the past year or two to the COVID-19 pandemic announced.
Announcements, we have recently made including the sale of the Saint Mary.
Board composition refreshment.
Commentary on our multifamily retail and residential properties and Stratus has continued exploration of the potential REIT conversion.
And we'll speak to our business segments and will provide an overview of our 2020 financial results.
And will then close the call with some final remarks regarding our continued optimism around the Texas real estate markets.
Our world looks much different now than it did one year ago.
At this time last year restrictions.
And Susan gatherings were being implemented across the U S. Leading many people to work from home far fewer people traveling social distancing measures and local and state regulations to support the safety and health of our communities employees and businesses.
At the beginning of the COVID-19 pandemic Stratus.
On bid many other companies quickly shifted to a near term focus on managing its liquidity and evaluating options to support tenants by operating rent deferrals and other concessions as needed.
Thankfully, our overall tenant delinquency rate during 2020 for our retail and multifamily portfolio with significantly lower than our original forecast.
In fact.
By supporting our existing tenants and finding new tenants.
We generated record annual revenue from our leasing operations, primarily due to leases at the Saint Mary Kingwood place and the sand Tal.
We also significantly increased revenue from our real estate operations compared to 2019 due to the increased.
And single family residential properties in Texas, which we believe was the result of home centric trends from the pandemic.
Due to uncertainty about the duration and ultimate impact of the pandemic, we carefully managed our capital resources, focusing on creating value and ways that did not require large investments including.
Interest you needing to enhance our entitlements consistent with our established business strategy and pursuit of options to refinance or sell certain assets.
Understandably the COVID-19 pandemic has had a significant adverse impact on our hotel and entertainment segments, which are part of our block 21 property.
In.
In December 2019, we had entered into an agreement to sell block 21 for $275 million, which was estimated to generate and approximately $130 million pre tax gain to stress due.
Due to the pandemic the buyer terminated disagreement and may 'twenty, and 'twenty and forfeited its $15 million.
And King Stratus.
While our hotels remain open average occupancy during 2020 was only 23% and our entertainment venues we're able.
Two host only a limited number of events.
Block 21 continues to be a tremendous asset and we believe we can manage it successfully through a.
Posit to recovery.
The Stratus team has done a tremendous job of managing our limited events and artist and patrons Trust. The we will follow health and safety guidelines.
We will consider a gradual ramp up of the capacity and are of venues throughout this year to ensure we open safely and correctly.
Furthermore, I'm proud to say that who are quick work at the beginning of the pandemic, we were able to support the continued employment of all of our employees.
They will be critical true restoring the profitability of our business I want to thank our team, which has been resilient resourceful and quick to adapt to the challenges of the pandemic.
Although dependent.
And it will continue to adversely impact our business. This year I am hopeful that we will begin to see improvement and our markets, particularly as more people have access to the vaccine.
As I've said before Stratus properties play a critical role and our communities such as providing housing and locations for communities to obtain groceries and other goods and services.
Dependent and I'm proud to say that our teams upheld and unwavering commitment to serving our tenants customers and communities throughout these difficult times.
I'll now discuss several announcements we've made over the last few months.
In 2020, we focused on leasing up the St Marys and while we monitor the market for and opportunity to create substantial value for our.
As previously announced the Stratus subsidiary completed the sale of the Saint Mary for $60 million were and Austin record $250000 per unit and January 2021.
After closing costs and payment of the outstanding construction loan and the sale generated net proceeds of approximately $34 million.
Sure Aaron will provide further information regarding our proceeds and pretax gain in the moment.
The St. Mary is the 204 and unit Garden style apartment complex and the circle C community in Austin that remained ahead of schedule and on budget throughout the planning and construction phases in 2019.
Okay.
The sale of the Saint Mary demonstrates how.
The development strategy creates value for shareholders, we start with the piece of undeveloped land and our team then creates value first by working with the appropriate agencies and community leaders to obtain the necessary permits then by developing thoughtfully designed and constructed properties followed by leasing up these properties finally, we.
Now onto the market from the opportunity to realize value per shareholders through a sale or refinancing and act upon such opportunities when appropriate.
The Stratus team comprises many talented and experienced individuals who know how to navigate the highly complex entitlement and design construction and leasing processes to.
Monitoring market demand.
And the case of the Saint Mary the team raise third party capital arranged bank financing oversaw construction expedited lease up including virtual leasing necessitated by the pandemic and managed and closed the sale all and less than three years and despite the challenges of the pandemic.
We.
To me it was the right time and price to sell this property and are pleased with the outcome.
We monitor the market to determine when is the most opportunistic time to monetize. So this time line will change project to project.
I also want to note efforts of our board undertook to bring new talent and fresh.
We just such of the boardroom.
In December 2020, and January of 'twenty, and 'twenty, one we announced the appointments of Neville Rone Junior and Kate Henriksen, respectively to Stratasys Board of directors.
These appointments are a result of and continuation of Stratasys ongoing efforts to ensure it has access to the right mix of perspectives.
And skill sets.
<unk> brings valued expertise and real estate acquisitions across the country, including numerous successful projects in Texas and he has a track record of re imagining urban mixed use environments as co founder and managing partner of our capital partners.
Kate brings a deep understanding of real estate and investing and is overseeing.
And the underwriting on $8 billion of transactions as co Chief investment Officer of R. L. J lodging Trust I look forward to working with both <unk> and Kate.
I will now turn to a discussion of some of our active projects.
Our multifamily projects have continued to perform well throughout the pandemic as already noted we sold.
The Saint Mary and January from a record per unit price the.
Santo and there's also performed well the sand tall is our wholly owned and 448 unit Garden style apartment complex and Barton Creek and Austin.
Despite greater Austin department of rents being down nearly 4% and December 2020 from a year earlier average effective rents at the same total are currently.
The up four 4% year over year, two of $1 67 per square foot.
Occupancy is on targeted and 94, 4% heading into the peak spring leasing season, which should support additional upward pressure on rents.
We recently commenced initial site work on the St June project, which is of 100.
82 unit multifamily project within the Tomorrow subdivision and Barton Creek we.
We expect to begin project construction and the second quarter of 2021 subject to completion of financing.
Our retail properties are well located and we have benefited from our strong relationship with the Texas grocery store H E B y.
While many.
Any of our retail tenants remain adversely impacted by the pandemic kind of I'm pleased to report that all of our retail tenants that were opened before the pandemic are open today and continue to be and important members of our communities.
We continue to apply our decades of experience to new opportunities such as our Magnolia place project, which will be shadow anchored by HEB.
And this mixed use project and Magnolia, Texas, and the greater and Houston area is currently planned for 18410 square feet of commercial space nine pad sites.
And 194 single family lots and 495 multifamily units.
We expect to initiate construction and the first phase and mid 2020.
The one subject to financing and market conditions.
The HEB grocery store is currently expected to open and mid 2022. We are also evaluating sales of the single family residential land component of Magnolia place.
Turning to our residential portfolio.
Residential properties drive in 2020.
Again, demonstrating strong demand for residential real estate and the growing Austin market sales have exceeded our internal projections. We have sold essentially all of our Homesites and Barton Creek and of Mara Bills has performed exceptionally well and we continue to generate interest and execute contracts as of March nine 2021, we had two Omar.
Bill of homes under contract and five of Mara Bill of contracts out for signatures, which we expect to finalize in the coming days.
We also completed the sale of the last W. Austin Hotel and residences and February 2021, Aaron will provide more information on the sales and our real estate operations shortly.
Our proven success with our developments and Barton Creek position us well for the next development phase of section K L O and N.
For several years, we've been methodically working on section K L. O. Our last large residential community in Barton Creek to increase density and broadened our product types.
Using a combination of traditional single family.
And the lots and residential condominium units, which will allow more density.
Yeah.
And the engineering for roads and utilities for the initial phase of section Kalo has been completed and we anticipate securing final permits during the second quarter of 2021.
We are also evaluating the redesign.
And of session and if successful this new project would be designed as a dense mid rise mixed use projects surrounded by an extensive green space amenity, resulting in a significant potential increase in development density as compared to our prior plans.
We will provide updates as we have more to share but for now we remain on track.
And continue to advance the planning and permitting process.
Before I pass the call over to Aaron and I would like to reiterate that our board is still and the process of evaluating the potential conversion from a C Corp to real estate investment Trust also known as a REIT and we believe that the conversion could provide our company with substantial benefits including.
And more tax efficient structure regular distributions of income to shareholders and increased access to the real estate focused financial community.
If the board determines to move forward, we expect the conversion would occur and no earlier than 2022.
Once the board makes the determination.
We will provide our shareholders with detailed information.
And then ultimately it will be up to all of you our shareholders, where the stratus converse to of REIT should the board conclude that it isn't the best interest of all of our shareholders.
I will now turn the call over to Aaron for review of our 2020 financial results Erin.
Thank you Matt.
Please refer to the press release announcing our operational and financial results for the year ended December 31, 2020 issued this morning.
Stratus consolidated revenues totaled $61 million, and 2020, compared with $92 $2 million and 2019.
The decrease in revenue and 2020, primarily reflects the decrease.
Please and our hotel and entertainment segments.
Caused by the COVID-19, pandemic, partially offset by an increase in revenue for me understand and leasing operations.
Net loss attributable to common stockholders totaled $22 $8 million of.
And $2 78 per share and 2020 compared to $2 five.
$5 million or 30 cents per share and 2019.
The answer is resulting from the COVID-19 pandemic contributed to stratus recording of $10 $7 million noncash tax charge in 2020 day recorded evaluation allowance for stratus deferred tax assets.
EBITDA totaled $9.
And revenue for 2020, compared with $21 $1 million for 2019.
I also want to provide and update on our NAV published this morning.
<unk> reported and estimated after tax <unk> NAV per share of <unk> $40 65 as.
As of December 31, 2020, compared.
And to $45 55 as of December 31, 2019.
The decrease was primarily a result of the reduced valuation of block 21, following lower travel and entertainment demand during the COVID-19, pandemic and the terminated sale transaction.
This drop and estimated value shows how hard hit the hotel.
And entertainment industries have been this past year. However, we expect to see the value of this iconic property rebound as demand for travel and entertainment recovers from the pandemic.
I will now provide brief commentary on our reporting segments.
Revenue from our real estate operations segment, and 2020 totaled $22 $6 million.
Which is the significant increase of 64% compared to 2019, when we reported total revenue of $13 8 million. This increase in revenue primarily reflects the sale of two homes built on of Mara drive phase III lots and an increase and lot sales in 2020, including two premium of <unk> drive phase.
The top launch.
Operating income for the segment was $3 $9 million, and 2000, and 'twenty compared to $3 $8 million last year, which included $3 $4 million of municipal utility district reimbursements.
We sold seven of Mara drive Phase, two lots 12, and Mara drive phase III lots.
And two homes built on <unk> drive phase III lots for a total of $21 $8 million during 2020.
Further stratus hold of vacant pads side of West Killeen market from <unk> $7 million.
As of December 31, 2020, all developed Mara drive phase two lots had been sold and only five developed.
Developed Amara drive phase III lots remained unsold.
Subsequent to year end and through March 19, 2021, Stratus sold one of them are and drive phase III lot and multifamily multifamily attractive land and tomorrow drive and the last remaining condominium at the W. Austin residences for a total of $5 $8 million.
<unk>.
As of March nine 2021, the last four unsold of Mario drive Phase III lots and two of Mara Bill of homes are under contract one of which was under construction and of one of which we expect to begin construction in mid 2021.
As Bo mentioned, we have had and continued to experience significant interest.
And RMR of <unk> homes.
Revenue from our leasing operations segment, and 2020 totaled a record $24 $1 million and increase of 24% versus 2019, which totaled $19 $5 million.
This increase reflects the commencement of new leases at the Saint Mary Kingwood place and the phone Tal.
<unk>.
Operating income and our leasing operations segment, and 2020 totaled $3 3 million compared with $9 $6 million and 2019, which reflects a pre tax gain recognized from 2019 on the sale of assets totaling $5 $7 million, primarily related to the sales of Barton Creek village.
And of retail pad subject to a ground lease and the circle C community.
Operating income in 2020 includes higher rental cost of sales and depreciation expense, primarily as a result of the completion of construction and the starting of leasing operations at the Saint Mary and Kingwood place.
For the period between April and December 2000.
'twenty when our tenants were impacted by the pandemic, our retail and multifamily base rent collections were 5% lower than scheduled rents primarily due to the rent deferrals, we offered to manage the initial impact from the pandemic uncertain of our tenants.
During the COVID-19, pandemic stratus experienced increases in revenue and its real estate and leasing operations.
And <unk> segments.
As Bo mentioned, we believe the sales of residential real estate and leasing of our multifamily properties were positively impacted by home centric trends, resulting from the pandemic and increase interest and Austin as people and businesses continue to move to the city.
Conversely.
Independent of it continues to have a significant adverse.
<unk> impact on our hotel and entertainment segments, we expect the impact to continue in 2021 as the pandemic continues to affect travel and entertainment industries globally.
Stratus hotel revenues decreased to $10 million, and 2020, compared with $35 $5 million from 2019.
The segment's operating loss totaled $9 $2 million compared with operating income of $5 $2 million last year.
Revenue per available room, or Revpar was $61 and 2020 compared with $235 in 2019.
As we have previously disclosed R.
W. Hotel has remained open throughout the pandemic, but was significantly reduced occupancy average occupancy in 2020 was 23% compared to 73% and 2019.
Entertainment revenues declined to $5 $2 million and 2020 from $25 million and.
2019.
The segment's operating loss was $3 $5 million and 2020.
Compared with the operating income of $4 $7 million and 2019.
The number of events hosted at ACL live declined to 82 and 2020 from 264 events in 2019 and a.
A number of events hosted at 310, ACL live declined to 102 and 2020 from 201 and 2019.
Turning now to capital management at December 31, 2020, consolidated debt totaled $351 $1 million and consolidated cash totaled $12.
And in dollars.
Third with the consolidated debt of $343 $9 million and consolidated cash of $19 $2 million and December 31 2019.
As of year end, 2020, Stratus had $16 $5 million available under our $60 million Comerica Bank credit facility.
From the sale of the Saint Mary Stratus received $21 $3 million and expects to recognize a pretax gain on the sale net of Noncontrolling interest.
Of approximately $14 million and the first quarter of 2021.
The proceeds of the sales were primarily used to pay down of portion of the balance of our river.
Revolving credit facility.
And as a reminder, we received $15 million of forfeited earnest money. After the buyer terminated the transaction to purchase of our block 21 property for $275 million and May 2020, which was recorded as income in 2020.
Purchases and development of.
The real estate properties reflected in operating cash flows and capital expenditures reflected and investing cash flows totaled $20 million for 2020, primarily related to the development of Kingwood place Lantana place and Barton Creek properties as well as the purchase of an office building and Austin.
This compares with $73.
$8 million for 2019, primarily related to the development of the Saint Mary Kingwood place and Barton Creek properties.
Throughout this pandemic, we have remained focused and diligent and have maintained our liquidity. We continue to believe that we will be able to meet our debt service and other cash obligations for at least the next 12 months.
Thank you and I will now turn the call back to Bob for his closing remarks.
As we had the Scott strategy continued to advance several promising development projects and we continue to successfully execute upon our strategy of acquiring and developing properties and holding them for lease or selling them.
And such as we did with the sale of the Saint Mary.
Our team's knowledge.
And deep relationships and the Texas markets had been critical stratus of success and identifying attractive opportunities and securing the necessary entitlements and permits.
Additional support from our two new directors level and Kate.
Prove invaluable to our board and Stratus as we move forward.
Even during the pandemic that has significantly impacted our business and relevant industries, our teams of showing resiliency and have maintained strength and our strategy because of their hard work dedication to our development projects and focus.
And on maximizing shareholder value, we believe we are well positioned as the market recovers.
Awesome has continued to grow particularly in its retail single family multifamily markets and gained the attention as the desirable place to live Boston has always been key to our portfolio and I'm, even more encouraged to see an influx of.
The tech powerhouses and other businesses moving to Austin.
<unk> is expanding its 133 acre campus and 2022, and the alphabet, Amazon Oracle and Facebook of expanded or announced plans to expand and the area.
Tesla is building of new electric vehicle manufacturing plant for the popular cyber truck and other.
Other products and Austin.
Stratus indirectly benefit from these companies moving to Austin and I'm looking forward to seeing what value, we can create and the future.
Thank you all for listening in.
At this time I will ask the operator to open the line for questions.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you are using a speakerphone. Please pick up your handset before pressing of the keys to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Fred Burtner with burden of investments. Please go ahead.
Hi, good morning, bow and Erin.
Two questions for you.
Is the structure of the Saint Mary that you recently sold the good example of the future ownership structures and future development.
[laughter].
Pardon me this of the coffee shop here. It appears the speaker line has temporarily disconnected from the relocation and then I'll get them back on line, but please hold onto the line. Thank you.
Okay.
[music].
Hum.
Okay.
[music].
Pardon me. This is the conference and I think I was able to rejoin the speakers are Mr. Burton could you. Please repeat your question for them.
Oh sure.
The structure of it.
And the sale of the St Marys and structure.
All of what we'll see in terms of future development.
Good morning, and I'm, sorry, I got cut off I was just the droning on with my answer and we just still were alerted that we were we were offline. So I apologize for the delay.
Good question, Fred So let me at least take a moment to kind of recap the transaction. So.
The tip of the that circle C multifamily land assets with something that the company acquired and the.
I guess early nineties, it goes back and long way with the circle C acquisition, but we obviously held it for for many years waiting for the right moment to proceed with development and that particular instance, we raised third party equity capital line.
And promoted basis as we'd like to call it and the returns ultimately to the Stratus were I'm going from memory here, but I wanted to say from an equity multiple perspective. It was about a 3.9 equity multiple and I believe our internal rate of return with somewhere mid sixties, which are which are pretty extraordinary returns and so.
So I think the debt.
That is a good model for us and we would like to do that again, and again and again and I think we have the the team and the wherewithal to do that but that would've been potentially and asset that you may want to hold for a longer term. So we we ran a dual process to refinance or sell it.
And ultimately after evaluating both options determined and and this particular instance, it made more sense to sell now of course and it will have a we will have about of I guess about a $14 million gain on this and so we will.
The subject to C Corp, taxation on that but even even in light of that we felt that this made.
<unk> made good sense and again the answer your question I do believe that this is potentially a template for us going forward.
Thank you My next question is.
You spoke of that has the Austin market is strengthening with all of these.
The companies moving in.
How is that impacting stratasys.
<unk> operations and future development opportunities.
Well the the headlines that I spoke about are quite compelling names like Facebook, Google and Tesla in the those are those are obviously huge growth companies and these are the type of businesses that really all cities are.
Trying to attract so we are.
It's good for Austin, and I think Austin has historically been.
Clearly a growth market and I think this is just continuing with that as far as how it impacts the various kind of what we call food groups.
2020 was a very challenging.
And year, if I were just kind of go through each of the kind of the segments. If you look at office office was.
And I think a down year.
And obviously people weren't going to the office and so I think leasing was anemic at best I think or even for the year I want to say that we had negative absorption there was some sublease.
Deals, but from the most part I would I would say that office the office market in Austin, and 2020 was not a good year.
Retail was probably flat overall I think.
Like us and I think.
Most people were able to hang on to their tenants through.
Concessions are just working with them on some basis.
So I think retail was was flat.
Again, it depends on the type of property, but.
If you had for example of grocery store like we've had I think you did pretty well, but I think the retail has been quicker to come back and the office.
Obviously hospitality and hotels.
Terrible I mean, that's unlikely to be.
The challenge certainly some of these larger city center hotels, I think we will face.
And challenges through through this year until the the big events come back. The W is a little different in that we have a bit of.
Transient.
Just in this and so I think we're able to attract the Wii.
And crowd and the transient business during the week, but I still think 2000 twenty's going to be of challenge until.
The large groups of gathering and then of course on the music venue of I would say the same and and we are we're building shows for the.
The second and third quarter.
But just the net business.
It's just unfortunately slower to come back than we would like and we want to do it in such a way that we create confidence among our patrons and our and our performers such that we just don't have any setbacks and then the real bright spot has been the residential market I've been in Austin and since I went to school here and I think I've been through four cycles.
And in business and I've never seen the residential market as hard as it is now it is extraordinary.
The prices people are paying the.
And the lack of inventory so I think when you open the paper and you see Austin Hot Hot Hot I think of lot of that really that anecdotal evidence really emanates from the resident.
And so.
Component of our real estate market and not so much of the commercial stuff and now the commercial stuff as I said, we will come back.
2020 was a challenging year and we're just all kind of slowly building out of it.
The sum of the airline companies and the U S. You are talking about advanced bookings.
Then looking somewhat better are you seeing any evidence of that and and advanced bookings at the hotel.
We are we one of the things that we monitor pretty closely of these pace reports and we have had a lot of people that have had an event on the books last year and defer or move the move.
And going into 'twenty, and 'twenty, one and so that and there was a lot of just kicking the can down the road. If you will as the pandemic raged on but now it appears that there is some even though there's obviously a lot of suffering unfortunately, and it's still to come I think that there is light at the end of the tunnel and.
And people are in earnest bookings rebooking.
Of the image of events and were also seeing and on our private event side of the venue.
Large corporate and corporate events are now Rebooking and doing what we haven't seen which are on site tours and so thats. All of has picked up and I see that really beginning to impact us financially and the third and fourth quarter.
<unk>. Thank you.
In terms of the.
Conversion could you elaborate.
Beyond what you've already said it that way the conversion of its good for Stratus.
Well I want to be I want to be cautious and net we're still going through and evaluation process and it is it is a bit of a complicated.
And are putting exercise, but again, so far we're still optimistic that it could be a good option for the company and again it would be something that would be.
Would be voted on by the shareholders. So ultimately the shareholders will determine whether it's the right thing to do or not I think our job at this point is to frame up the opportunity and then and then.
Accounting of forward for the shareholders, but the one thing that just sticks out to me. Fred is this just the corporate the C. Corporate C Corp tax rate.
Currently at 21% and I just read this morning that there is some.
Some discussions around raising that to 28%. That's just that's just noncompetitive for real estate.
And like US the rights, which we really don't necessarily compete with but we.
Kind of do and they just don't have that level of taxation and that's just as a bit.
Anyway. So it just puts us at a disadvantage. So we would like nothing more than to eliminate that that second layer of taxation for our shareholders and there are other.
The company and things that come with that.
Requirement to distribute income and all of the things we know about rights, but we at this point feel like it is.
And certainly worth.
Continuing to pursue that option. So we'll be able to report more on that to our shareholders and the weeks and months ahead, but again, it's something that just from a pure.
And there are facts standpoint.
It seems to make a lot of sense.
Okay. My last question is is adding diverse director of the priority for the company.
That's a very good question I would tell you that the company's philosophy is that there is strength and diversity and.
And a variety of perspectives.
Pure tech rounds of life experiences et cetera. It leads to really good decision, making so and the word yes. It is something that the.
But we as a company and as a board believes strongly and as it pertains to Netherlands Kate.
Two newest directors they are both very thoughtful well educated seasoned real.
<unk> bag and investor operators, and we're excited to have them.
Excited to have them join the board.
But thank you.
Very topical question and something that we feel very strongly about the stratus.
Thank you and I appreciate that.
Okay keep coming all of them could do and the good work for us.
Thank you Fred nice.
Real estate moisture.
This concludes our question and answer session and the conference is also now concluded. Thank you for attending today's presentation. You may now disconnect.
Okay.
[music].
Just here.
[music].