Q1 2021 Cedar Realty Trust Inc Earnings Call
[music].
Welcome to the the first quarter of 2021, Cedar Realty Trust earnings Conference call. As a reminder of this conference is being recorded at this time all any of the science has been placed on mute the.
We will conduct of question and answer session. Following the formal presentation.
I will now turn the call of her to Jennifer Vitamin. Please proceed.
Good evening and thank you for Johnny at the the first quiet 20th Funny Y Theater B L. P Trust conference call, Okay City and state that'd be Bruce standard Chief Executive off the bat, Robyn Ziegler, Chief operating officer, and felt Mad Chief Financial Officer the.
For we begin C. B of Weird I got the statements made during the call that are not historical maybe the and forward looking statements and ask for statements made it for materially from those indicated by such as the all right.
Looking statement.
The statements are subject numerous risks and uncertainty of including those to flow and the company is the most recent for them 10-K for the year end of 2020 at updated by herself. So let me find out quarterly reports I for I'm 10 killed and other periodic filing for the S. E C.
As a reminder of the forward looking statements speak only as the date of of this call may 6th.
2021, and the company undertakes no Judy the update them.
Trying to call Madison M. They refer to certain non-GAAP by national measures, including funds from out where you chose a net operating income.
The theaters earnings price really it and supplement the financial inform me said posted on the website for reconciliation of these non-GAAP financial measures with the most directly comparable get financial matters.
With that I have on the I'll turn the call over to Bruce Shafter Bruce.
Thank you Jennifer and thank you all for joining us for the Cedar Realty Trust first quarter 2021 earnings call.
Before diving into a discussion of our accomplishments for the quarter. That's significant the activities since the end of the quarter I would like to take a moment and recognize my teeth Cedar colleagues, who of continued working tirelessly with the commitment the collaboration of collegiality as well as the dedication to every day excellence.
In the first quarter and since our last call in February we've accomplished a lot with positive progress continuing into this week as evidenced by the closing of the joint venture for the first phase of out of the northeast Heights redevelopment. The closing of the 114 billion dollar financing that will address our 2021 for you.
<unk> and the closing of the sale of the comments do boys, Pennsylvania for roughly $10 million.
For the first quarter of of collections were strong at nearly 96 per cent with another 100 basis points of improvement in April.
Our collections rate is now approaching pre COVID-19 levels with a bit more improvement hopefully to come.
This remarkable performance is of credit to the Industriousness of my team Cedar colleagues into our decision many years ago to focus our portfolio of grocery anchored shopping centers, which are proven to be ideal retail real estate of assets.
Moreover, we're seeing leafing volume pick up and positive leasing spreads, especially with our new leases the.
Or the green shoots we I've been anticipating with the resolution of of the pandemic as their of leasing pipeline has begun to build of deals are starting to get done.
The economic tail ones are real and palpable.
We anticipate significant growth in the occupancy the NOI. During this recovery phase and are keenly focused on execution to make sure the opportunity is fully exploited.
However, the attractiveness of the Cedar platform as it has come to be revealed during the pandemic period is not simply that we have grocery anchored centers, which I've proven to be resilient and that we have a team particularly of depth at running the centers rather it is the fact that the stable portfolio of cash flow of shopping centers is.
And that did buy of redevelopment platform that as advanced projects, which are attracted to the most sophisticated institutional investors and represent significant sources of both the potential value creation and diversification.
The joint venture announced yesterday with Goldman Sachs in Iceland for the construction of the D. G. S office building at an estimated cost of approximately $150 million is being financed within the approximately 105 million dollar construction loan from J P. Morgan is a prime example of how far we of calm and the value creation opportunity now at hand.
The D. G. S building is the first phase of the northeast Heights redevelopment project and sets the stage for the successful financing of the balance of this project.
I know I speak for Greg Gonzales, our chairman and acknowledging where the thrill. It is to partner with our alma mater Goldman Sachs on the significant transaction I would like to thank Dan Alger and his team at the urban investment group cause their commitment to us and for this project.
Similarly, I would like to acknowledge Jim Simmons from Azlan for his invaluable assistance of getting the joint venture structured and clothes lastly, I'd like to recognize rollin merchant and the J O L team for sourcing both the equity of debt and for their patient enable stewardship of this matter.
Before concluding on the D. G. S. J V I would be remiss, if I did not sincerely, thank and acknowledge Robbins Ziegler and the development team of theater for their incredible efforts Robyn in particular is the individual who has driven this transaction from the outset.
And it is due to her professionalism and energy as well as your commitment to the cause of helping the local community that we were able to finalize the joint venture and get out of northeast tight redevelopment project out of the ground.
And so I'd be half of the theater shareholders not to mention the citizens of board seven I want to commend Robyn for her efforts Amish deal Sam.
Sadly Robyn we now have to actually get the building built so there'll be no rest for the weary.
Yeah.
And the similar vein filmmaker our C F O who I might add is approaching his tenure anniversary with me at Cedar in a few weeks did an outstanding job getting are $114 million secured financing transaction clothes.
As you might imagine getting a secured loan on retail assets effectively placed priced enclosed in today's environment with the backdrop of the pandemic was not a simple feet and we were thrilled to have it closed.
The secured financing sets us up well for refinancing out of 2021, and 22 maturities. The combination of loan proceeds asset sales proceeds and a new bank facility.
It should be noted the valuations for of properties in connection with the financing is similar to the levels of which we are seeing other shopping centers price and our markets and for sale transactions.
For example, the assets that we send the that's where valued at apply the 6.7 per cent cap rate.
And we're seeing other comparable assets price for sale at similar cap right levels within the hour geographic footprint.
Importantly, these are not properties with significantly depressed N O Y where the cap rate is artificially lowered because there is that there is a lot of upside of the N O Y rather this observable market dynamic is simply a function of the disconnect between the public markets and institutional investors on the one hand, who of a day.
<unk> for you of retail up all retail real estate together.
And the private investors and single asset financing markets on the other hand recognized the extraordinary resilience of grocery anchored shopping centers in particular within the larger universe of retail real estate.
It is this backdrop for an informed our willingness to place the camp Hill shopping center other contract after receiving an unsolicited purchase offer as you may have noticed in our filing for this quarter.
The contract is still in the due diligence phase. So we will have more to report on it if and when the transaction closes which might be in the second quarter.
While we do not publish or a navy.
And will not be starting to do so at this time.
I would note that applying a seven per cent cap rate to our first quarter annualized N. O Y would result in a value per share <unk> after subtracting debt and preferred of over $26 per share.
With the valuation described to Ah recently financed assets and the transaction activity. We are currently observing.
I certainly do not think a seven per cent cap rate is a stretch it applying a warranted cap rate procedures portfolio today rat.
Rather would I do think is the stretch is it at our current share price of roughly $16 per share we're being valued at over an eight per cent cap rate, which is wildly off market.
Keep in mind, none of these cap right or N O I figures capture the additional upside from our redevelopment projects.
I would conclude with the mention of our recent board related announcement.
As you may have seen we decided to reconstitute the board by adding three new directors Darcy Maurice Richard Roth insurance Stern, thereby increasing the board to 10 directors until our annual meeting of June.
At which time two of our income of directors, Roger Whitman and Pam Hooton will be retiring from the board.
This decision was made after significant reflection and was done in consultation with a number of our shareholders.
We are excited to add Darcy Richard insurance of the board and look for to their contributions.
However, like many life transitions. This board reconstitution came out of cost since we are losing two of our long story directors Roger at Pam who of each give it so much to our company.
Roger and Pam are both paragons of integrity industry, and collegiality and they will be terribly missed.
I know I know I speak for my fellow of directors as well as the entire team Cedar and offering my heartfelt. Thanks for the years of service and gratitude for all they have done for us.
With that I give you Robyn to expand on our accomplishments the date.
Robin.
Thanks for Bruce Good evening.
2021 has gotten off to a strong start at cedar given the recent leasing activity customer traffic patterns. It seems as though we are starting to move upward as the approach the other side of the pandemic of.
<unk> collections remain robust at 95.7 per cent as of quarter and and 96.7 per cent for the month of April.
Our last thing volume is gaining momentum of the 31 leases execute at this quarter totaling 268200 square feet.
For new comparable leases were executed with of positive spread of 5.7 per cent and 21, new renew old for done at of flat spread on average of 0.1 per cent.
An additional six non comparable deals were executed this quarter, including to complete the anchor deal that provide meaningful momentum for the portfolio.
Big Y at Norwood shopping center will undergo an expansion into their new 55000 square foot prototype paying $19 per square foot and base rent.
The former grocery store has been demolished and their new store is currently under construction, we will perform some minor shopping center improvements with the opening of the expand at the store.
At least with the game with executed this quarter at Yorktown Plaza, The sports Entertainment restaurant will serve as the catalyst for the merchandising transformation. We are undertaking for this renovation the <unk>.
Game will take 10454 square feet at Yorktown, paying $18 per square foot and base rent.
The your account plaza value out of redevelopment, let's previously put on hold due to the pandemic, but this fully entitled project is now in process.
The value out of redevelopment plan includes a new facade, new signage, new pad buildings and landscaping improvements additional executed leases for your child include IHOP Dunkin Donuts and Panda Express.
We have also seen good leasing momentum at Karremans Plaza are recently renovated center in Massapequa in New York.
As was reported previously 24 hour fitness filed bankruptcy and left the center of last year. This space totalling 54106 square feet will be back filled with at least three tenants.
5% decrease from prior quarter.
Same property leased occupancy is 91% as of March 31st which is a one 2% decrease from prior quarter.
This is primarily due to the vacancy caused by ollie's bargain outlet of Valley Plaza and Kroger at Coliseum marketplace offset by shoppers world joining the tenancy at Jordan Lane shopping center.
Our occupancy is also directly impacted by the redevelopment projects in our portfolio as we prepare properties for future redevelopment and re tenant Ting the vacancy in those centers temporarily increases.
Leased occupancy for our redevelopment portfolio is 73% while same store leased occupancy is 91%, resulting in an overall leased occupancy of 87, 8%.
In addition to the refinancing the closed yesterday, our other major milestone that occurred post quarter end as the commencement of construction on the first phase of northeast Heights, and the closing of the joint venture for this first phase.
On May 5th Theater finalized our partnership and formed a joint venture with Goldman Sachs Urban investment group as the limited partner and ASLAN capital partners as the co general partner, along with the Cedar Realty Trust for the construction of the Washington D. C Department of General service of headquarters.
Goldman will own 80 per cent of the venture with Cedar in asthma, each owning 10% respectively. The.
The venture has secure construction financing from J P. Morgan at an amount up to $105 million. The construction loan initially bears interest at LIBOR, plus 200 basis points and has an initial term of three years with two one year extension options.
I would echo Bruce's comments and sincerely, thank Dan Alger, Alan stage and the entire team at the Goldman Sachs Urban investment group for their partnership and share division for inclusive growth for ward seven.
Similarly, I would like to acknowledge Jim Simmons and Caleb of Radnet from Avalon for all day did to help navigate this venture from conception to conclusion, we look forward to continuing to benefit from your contribution from partnership.
Lastly, we would like to thank Roland merchant in the J L. L team for their professionalism and tireless efforts on our behalf I often say that it takes a village and this debenture was no exception, we were looking for to commencing the the first phase of northeast Heights with this partnership.
The first phase plan consists of a six storey 258000 square foot office building, which will house over 700 professionals and the 240000 square foot D. G. S headquarters and 18000 square feet of ground floor retail.
The merchandising mix for the retail is anticipated to be predominantly service and fast casual restaurants.
This phase of northeast Heights is projected to incur approximately 100 of $50 million of project cost.
Subsequent phases of North East Hi, It's our plan to include the redevelopment of two existing shopping centers East River Park in Senator Square shopping center into a mixed use residential office and retail neighborhood.
Significantly as the theater, we often talk about doing well for our shareholders while doing good for our community one of the gratifying facets of the commencement of construction of northeast Heights is that we are now going to put that into action.
Our investment into Washington D C. The ward seven brings economic empowerment opportunities in services. So this rich community, but is expected to provide benefits for generations to come.
We anticipate that as the phases of northeast Heights are developed and merged into our new vibrant neighborhood at the corner of Minnesota and bidding the area will witness greater access to fresh food quality retail health care services and quality housing, notably we are projecting to generate attractive returns for our shareholders.
While simultaneously, creating this vibrant neighborhood for the community that we serve.
This year is off to a fine start with that I will give you Phil.
Thanks Robyn.
On this call I will briefly highlight operating results and provide an update on our balance sheet.
With the operating results.
For the quarter operating <unk> was $8 $6 million for 62 cents per share and.
In property NOI was $20 $6 million.
This quarter property NOI did include almost $500000 of net snow removal expense.
It was impacted another $500000 from dispositions that took place late in 2020, along with the Kroger closing of calcium marketplace and big wide temporarily closing at the Norwood to construct the new larger store as Robin discussed.
Same property NOI decreased $5, one per cent compared to the comparable period in 2020.
This decrease is primarily related to the timing when the pandemic began as the comparable period last year was not significantly affected by the pandemic.
Further please keep in mind, the relatively small size of our same store property NOI are.
Our same store property NOI for the quarter was $16 $6 million for.
Accordingly, a five per cent change equates to just $800000.
Moving to the balance sheet.
Yesterday was a notable day for Cedar as we closed three transactions first the D. G S joint venture discussed by Bruce and Robin's.
Second the disposition of the Cummins in the boys, our last remaining property in Western Pennsylvania for $9 $8 million.
The third and finally, we closed $114 million nonrecourse mortgage loan.
We began working on this transaction while still in the depths of the pandemic and are pleased with the terms we were able to achieve.
In order to enhance the lender appetite for the Sloan, we decided to utilize the cross collateralized pool of five shopping centers located in three states with groceries operating under three different brands.
Additionally, our broker Enbridge, Inc.
Short of our loan was broadly marketed to life company debt funds and the MBS lenders.
The strategy of broadly marketing the diverse pool of grocery anchored shopping centers.
Permitted us to close the 10 year loan with Guardian life company out of 65 per cent loan to value price.
Years of interest only payments.
Fixed interest rate of 349%.
After closing these transactions yesterday, we have reduced the amount outstanding under our revolving credit facility to $59 million of $60 million available for additional borrowings and $15 million of cash.
One last reminder, before opening the call to questions our revolving credit facility maturing in September is the only debt maturity. We have in 2021 and as previously discussed this credit facility can be extended at our option for one additional year.
And with that I'll open the call to questions.
Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one from your telephone keypad kind of confirmation tone will indicate your line is in the question queue.
Do you mean for us start to feel like true move your question from the queue for parts.
The sprints using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment, please where we pull for questions.
Thank you.
Our first question of coming from the line of Todd Thomas with Keybanc Capital markets. Please proceed with your question.
Hi, Thanks, good afternoon.
A couple of questions on the joint venture.
The northeast Heights.
Congrats by the way I know you've been working on that for a little while but I'm curious is the cedars, 10% interest and capital commitment limited to the to the contribution of the asset and are there any proceeds to cedar or promotes at all to cedar available as a general partner.
Why don't I.
Take that although this was definitely a team effort with the specific and special kudos to Robyn for really just.
Quarterbacking the thing getting it over the finish line.
In terms of your particular question.
The D. G. S building sits on the Senator square side of the overall northeast type.
Parcel so that side is on the ground.
And because of that the nature of the contribution was different than if for example, we were going to contribute the land or the we own M. C on the East River side the.
The economics work is that we.
We're able to get all of the capital that we put in effectively back to us as.
As part of the formation of events. They are subject to some adjustments either you can imagine hacked in the context of finalizing the JV.
And in terms of the.
Water for going forward.
We're going to the co GPS with the ASLAN.
You mentioned in the gym Simmons.
And as the organization, we're really terrific in helping get this project done and theres going to be of promote painful the GP that we're gonna Sharon I know of.
A lot of that is disclosed in more detail in our filings.
Okay and are there any rights at all for for the partners to participate in future phases of the project or is this a single asset venture just specific to this asset.
And can you also update us on you know.
Of the future redevelopment phases and timing.
Sure why don't I handle the first part and then I'll hand, it over to Robyn to talk about the second part of the answer to your first question is really kind of yes in other words on the one hand, there is no real you know necessarily of explicit right that our partners have in the future phases, but sort of in these are outstanding.
Partners, and we would be happy to contemplate continuing with the I'm assuming that.
Things wind up well economically, but the nature of the JV agreement gives them some rates, but not an absolute right and certainly we're all capitalists them will endeavor to do what's best for our respective organizations of all at the same time, recognizing that there's something to be said for finding good partners and continue.
Moving to partner with them.
And so while we're not bound to do it we would certainly.
Be very open to exploring.
Dancing and capitalizing the subsequent phases of northeast Heights with the.
This.
<unk> group.
The.
Phasing of northeast Heights is a little bit of a moving target. Although it certainly is something that is coming together, well, but maybe I'll, let robin expand a little bit on the plans for the next few phases of the northeast Heights, and how we see it lining up for us.
From a timing perspective, while we recognize it obviously did a little bit of a of a moving target.
Yeah.
Sure so the.
The entirety of northeast Heights can be thought about in four phases with the the D. G. S headquarters being the first phase the subsequent phases are in process.
As Bruce alluded to and the timing is not 100% certain as to when we will break ground, but I would suffice it to say that it's in the next year or so.
Okay. That's helpful. Alright, and then Robin I guess sticking with you here in terms of.
Operations I mean, you discussed a lot of tenant activity of the Kroger and in all of these closures during the quarter do you have a sense for for when occupancy in the portfolio of my trough are you starting to see leasing pick up to the point, where you'd expect to see at least right.
Occupancy rate begin to climb higher.
Sure. So you know I always hesitate to pull out of my Crystal ball on things like this but you.
You know from a from a.
Just in general as we watch kind of the activity that's been happening we have seen a pick up in and transaction and the retail activity over the last couple of months as people kind of dust.
Desktop brush the desktop from the pandemic.
And the low hanging fruit that was kind of you know sitting on folks that day.
During that timeframe and so now people are looking at opening new stores talking about new deals and we are starting to see more more momentum that way of more transaction activity. So you know from a just seeing kind of reading the tea leaves of of what we're seeing both the you know within the theater and.
More of from a more macro perspective and the.
The economy, we are expecting to see you know a an uptick of occupancy as we go for it in the coming quarters as well as.
Our revenue as of as a result of that.
And Todd I would just interject here and to expand on it.
For the thing with Cedars Occupancies statistic. That's important to appreciate is that there is of significant negative just statistically just that percentage is a function of the intentional vacancy associated with the redevelopment projects and so that alone is at least I don't have the.
Statistics at my fingertips, the at least 100 basis points.
Of they can see probably closer to 150 basis points. So you can see.
So again, when we think about the opportunity to drive occupancy.
Recognizing that the whole part of that statistic is really baked into the redevelopment opportunities and the important thing to appreciate.
Yeah.
Okay, Yeah, and just to solidify the the numbers that that Bruce gave you know as I mentioned it in my prepared remarks, but the the redevelopment portfolio. For example has an occupancy of 73% while the same store leased portfolio was at 91%. So that's that spread that he was talking about.
Where as the development of the property from the development portfolio.
Get actualizing, the those projects are stabilized and that that will naturally bring up the the occupancy as well.
Okay and then the near term is the redevelopment of occupancy.
<unk> to two two to fall further while these projects are in motion.
There are a couple of projects, where we might see of.
A little bit more there's a couple of box of small shops that were moving around for nor would and valley Plaza is essentially made up of the Kmart and the ollie's. So you won't see much more of their there might be a little bit more movement for Yorktown before we get it.
Fully lease up and stabilize the by and large the majority of it has already been handled in the occupancy number youre looking at.
Okay alright, thank you.
Thanks Todd.
Thank you.
Our next question is coming from the line of RJ Milligan with Baird. Please proceed with your question.
Hey, its Raymond James but that's all right.
Bruce I appreciate your comments on N V and cap rates and I'm. Just curious if you could give some color on what youre seeing out there in terms of comparable transactions or cap rates that you guys are getting from the lenders.
Sure. So again as I mentioned in my prepared remarks, the blended cap rate.
The five axis may be contributed into our secured financing was six 7%.
We are seeing a fair amount of the transaction activity.
In our markets of sort of in that mid Atlantic and northeast footprint grocery anchored.
Assets are.
And the cap rates are really remarkable.
In terms of there being much much lower than.
One way to the expected and the quality of the correction and others of the recovery.
In the asset sale market for these types of assets has been pronounced.
We're getting feedback from some of the private equity firms for example that one.
These types of grocery anchored assets in our footprint that they're very happy to be.
Getting the kind of pricing that they're getting right now on the financing side.
Yeah, Phil It really advanced our financing through the pandemic period right now obviously, we're sort of in the post pandemic things and the financing markets of really heated up and are very supportive of the types of transactions.
That we're seeing and it's certainly of supporting the pricing that we're seeing.
On the single asset side.
So.
Again, you know cap rates in the sixes are something that we're seeing pretty regularly.
For the grocery anchored assets very similar to cedar in that mid Atlantic and northeast footprint.
Yeah.
That's helpful. That's it for me guys. Thanks.
Okay.
Thank you as a reminder, you mean for the star one to ask a question.
The next question is from the line of Floris Van <unk> with Compass point. Please proceed with your question.
Hi, Thanks for taking my question guys.
My question is sort of along the same lines as.
That's the one before but I'm.
I'm sure you've seen the of the joint venture that the RPT put together for net lease assets.
And have you thought about or are you looking at.
Our ways of of.
The parsing out your lower cap rate lower growth Highwood <unk>.
List anchor boxes, and you have a lot of anchor boxes in your portfolio and and.
And and you know arbitrage between that and redeploying that to either reduce leverage for too to make new investments.
Yeah.
Hmm.
First I would start off by just noting that you know I think Brian Harper at RPT is a terrific CEO and certainly when we saw that announcement considering you know how we're at high regard I personally hold the men. We obviously have hit pause then.
Digest that.
The endeavor and sort of see if it applied to theater and it could cause for.
Certainly it is something that is a potential way that we can.
Sure.
Asset manager of a portfolio manager in other words the carve out.
Assets or pieces of assets and monetize them in ways that offer us an arbitrage opportunity.
One of the things that I mentioned in our call. For example is that we're selling one of our assets were signed the the Camp Hill shopping center I can't tell them, all we call it and you.
It's an example of just the fact that we're fairly open minded whether it comes the buying assets or selling assets, where it simply capital allocators of they try to think about cost of capital and risk adjusted returns and.
You know in that vein, we would certainly look at anything that made sense then it could be that this does make sense I think one of the nice things about RPT having undertaken.
Undertaken this.
A move to try to exploit what might be an arbitrage between multi tenant open air shopping centers and single tenant net lease assets is that we will see if it works and if it does.
And if the arbitrage opportunity is still there it's something that we would.
Pursue alright, if it turns out that it's not there and it'll be something that we don't pursue so sort of I can't tell you that it's a good idea of a bad idea.
<unk> tell you that the folks at RPT of very smart and that certainly.
Will justify is monitoring it but for right now it's not something that we're actively pursuing.
Thanks, Bruce and then maybe in terms of the.
Other potential joint venture opportunities to pursue some of these growth.
The access that you have have you.
Or would you include someone like a <unk> of Goldman and does Oslo come with Golden Goldman to to do something like quartermaster or something in South Philly.
Yeah.
Yeah look I would tell you day.
I would make a couple of comments first of all I mean, obviously the relationship between asthma and the Goldman is between us and the Goldman I don't know.
What the nature of that relationship is what I would tell you is that we absolutely grew to admire Jim Simmons at Ashland, and Ah <unk> and that team and we also came to really admire the urban investment group folks and so again, whether they pass the come together, whether they happen to come together.
Is almost secondary to the fact that we would be open to potentially doing something with them.
You know to be clean about it yeah.
As I mentioned in my earlier comment right. We're ultimately.
The capital Allocators, we think about cost of capital and what are the return opportunities and that was how we go.
What about the joint venture and the contacts.
Doing the Bgs building and it's going to be how we think about joint ventures going forward.
And so I would tell you that.
We would certainly be open to doing it but it's not necessarily the only way we due to the just simply a function of what the opportunity is and what are the various capital alternatives at the time.
Thanks, Bruce that's it for me.
Thank you at this time I'll turn the call back over to Bruce <unk> for closing remarks.
Thank you operator.
Thank you all for joining us this evening.
Like I mentioned in my comments I really wanted to thank the team.
Team team Cedar.
Everybody at Cedar drill even pulling hard.
<unk>.
Reflected in our results as reflected in the events as recent as the closings that we were able to conclude yesterday and we look forward to continuing to.
Advance the cause.
Cause the theater and continuing to put up strong results in the months and quarters and years ahead. Thank you again and have a good evening.
Thank you. This will conclude today's conference may of this.
Connect your lines of at this time of and we thank you for your participation.