Q3 2021 STAG Industrial Inc Earnings Call
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Greetings and welcome to the Stag industrial third quarter 2021 earnings Conference call.
At this time all participants are in a listen only mode.
A brief question and answer session will follow the formal presentation.
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As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host that's been our senior Vice President of Investor Relations. Thank you Sir you may begin.
Thank you welcome to Stag Industrials conference call covering the third quarter 'twenty 'twenty. One results. In addition to the press release distributed yesterday, we've posted an unaudited quarterly supplemental information presentation on the company's website at stag industrial Dot com under the Investor Relations section.
On today's call the company's prepared remarks and answers to your questions will contain forward looking statements as defined in the private Securities Litigation Reform Act of 1995 forward looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today exam.
Examples of forward looking statements include forecasts of course also same store NOI G&A acquisition and disposition volumes retention rates, another guidance leasing prospects rent collections industry and economic trends and other matters. We encourage our listeners to review the more detailed discussion related to these forward looking statements contained in the company's filings with the SEC.
And the definitions and reconciliations of non-GAAP measures contained in the supplemental informational package available on the company's website.
As a reminder, forward looking statements represent managements estimates as of today.
Industrial assumes no obligation to update any forward looking statements on today's call you'll hear from Ben Butcher, Our Chief Executive Officer, and Bill Crooker, Our President and Chief Financial Officer also here with US today is Steve Mackey, our Chief operating officer, who is available to answer questions specific to operations I will now turn the call over to Ben.
Thank you, Matt Good morning, everybody and welcome to the third quarter earnings call for Stag Industrial we're pleased to have you join us and look forward to telling you about our third quarter results.
We're having daily conversations across our tendency to help address their real estate needs.
Physician topics ranged from building expansions the sourcing additional space across 60, plus markets in which we operate the sustainability related upgrades such as efficient letting convert.
These scenes beans were highlighted in our recently completed fifth annual tenant survey. This survey provides us an opportunity to obtain real time insights into how our tenants are thinking about their businesses and how their real estate needs are evolving in these unprecedented times not surprisingly there was a dominant theme in their responses the need for additional space.
Tenants are looking to enhance the resilience and strength of their supply chains as well as to support new growth initiatives labor availability remains a widely held concern and limiting factor in these growth initiatives by our tenants.
The majority of respondents indicated e-commerce activity has increased over the last 12 months consistent with the belief that there has been a structural change in consumer behavior.
Continuing the trend approximately 40% of the buildings in our portfolio support some level of e-commerce activity.
Our tenants like our society in General are also more focused on ESG matters in particular, the survey revealed a noticeable increase in the importance of sustainable building operations as a measure of building fit.
That continues to be a leader in ESG. We recently received our 2021 Graysby public disclosure letter grade rating of B R score remains above the REIT average and ranked second out of the 10 industrial REIT real estate companies scored by grasp. It we look forward to releasing our inaugural corporate sustainability report in the coming.
Weeks, which will provide a comprehensive view into how we are addressing in accomplishing our ESG initiatives.
The demand for industrial real estate as seen through our portfolio operating metrics and heard through our tenant survey is also reflected in the asset transaction market.
Yesterday, we closed on the sale of a building located in part in Massachusetts, which is approximately 40 miles south of Boston.
Acquired vacant in 2019 investment strategy included repositioning 350000 square foot building to optimize its appeal as a warehouse facility.
A short term lease was signed with a large cloud company as we initiated the permanent process show.
Thereafter, we entered negotiations with a large e-commerce tenants are fully leased the facility on a long term basis.
E Commerce tenants identified the facility as our primary locations to service same day delivery the greater Boston also known as last mile delivery and examples of common misperception of the widely used term last mile.
After executing a long term lease to this tenant we were approached by multiple interested buyers. We ultimately sold the building for gross proceeds of $78 million, representing a 48% Unlevered IRR for a three year hold period.
Proceeds of this sale will be redeployed accretively into our opportunity set.
150% nominal gain over our all in cost basis was a great result for stag.
This sale was consistent with our practice of selling assets that are worth more to others than they are to us.
With that I'll turn it over to bill to discuss our third quarter operational results. Thank.
Thank you Ben and good morning, everyone.
Demand for industrial real estate continues to increase driven by the acceleration of supply chain issues initiated by the Covid pandemic.
Backlogs of ships at ports and other transportation bottlenecks shipping cost increases inventory mismatches and labor constraints are driving demand for warehouse space as companies attempt to adjust their supply chain networks.
Consumer adoption of E Commerce is permanent and reflected in our healthy portfolio operating results.
<unk> was 53 cents for the quarter, an increase of 15, 2% as compared to the third quarter of 2020.
Included in core for flow this quarter was the impact of a settlement agreement related to a former tenant.
The settlement included a $1 $7 million cash payment to stag, which accounted for one penny of core for <unk> per share this quarter.
Cash available for distribution totaled $219 $6 million year to date through the third quarter, an increase of 22, 1% as compared to the first nine months of 2020.
Net debt to run rate adjusted EBITDA was four eight times at quarter end.
We acquired 24 buildings for $427 $2 million during the third quarter with stabilized cash and straight line cap rates of five 3% and five 7% respectively.
Our acquisition activity this quarter included.
Further additions to our portfolios growth in the Central Valley of California, and our entry into the Salt Lake City Submarket.
Year to date as of today, we have acquired $757 $5 million of acquisitions with a healthy closing schedule of transactions under contract and subject to a letter of intent as we head towards year end.
There continues to be increasing competition for larger single asset transactions and portfolios.
Large capital sources simply don't have the ability to efficiently acquire at a granular individual asset level or.
Our platform was built to identify and underwrite individual assets, allowing us to deploy our relative value investment strategy nationwide, while avoiding the auction like pricing of larger transactions.
This is reflected in our pipeline of $3 $7 billion today.
Dispositions for the quarter totaled $39 $4 million as highlighted by been subsequent to quarter end, we sold our Taunton, Massachusetts facility for $78 million, realizing a 3.1% cash cap rate on the sale.
During the quarter, we commenced 22 leases totaling $3 7 million square feet, which generated cash and straight line leasing spreads of 8% and 14, 7% respectively.
Retention was 55, 7% for the quarter and 76, 2% year to date.
The broad based demand for our assets is robust and has resulted in numerous instances of available space being backfill immediately with minimal to no downtime.
When adjusted for media backfill retention was 77, 7% for the for the third quarter and 89, 8% for the year.
Cash same store NOI grew two 9% for the quarter and three 4% year to date.
This metric continues to be a high watermark for stag driven by strong rental escalators cash leasing spreads and lowered average downtime for vacancy.
Moving to capital market activity, we raised gross proceeds of $127 $5 million through our ATM program at a weighted average share price of $39 59 in the third quarter.
In addition to the equity raise through the ATM program on September 29th we fully settled all outstanding forward equity contracts and received $182 $2 million in proceeds.
On September 28th we funded our previously announced private placement notes, the 10, and 12 year notes totaled $325 million and bear a weighted average interest rate of 282%.
On October 26, we refinanced our $750 million unsecured revolving credit facility.
The revolver matures in October 2025, with two six month extension options.
The facility bears an interest rate of LIBOR, plus a spread of 77 five basis points based on the company's current leverage level and debt rating a reduction in pricing of 12 five basis points.
In addition, the company refinanced $150 million unsecured term loan, which was previously set to mature in March 2022. The term loan now matures March 2027, and is fully swapped with an all in interest rate of 2.15%.
Finally, the company improved pricing on $675 million of term loan debt, specifically term loans E F and G <unk>.
The term loans now bear current interest rate of LIBOR, plus a spread of 85 basis points a reduction in pricing of 50 basis points with no change to maturities.
Our guidance is included on page 21 of our supplemental reporting package.
As to our guidance are as follows with approximately $758 million acquired plus assets on a closing schedule our acquisition volume expectation for the year has been increased to a range of $1 1 billion to $1 2 billion, an increase to the low end of the range of $100 million.
In conjunction with the <unk> acquisition volume, we revised our stabilized cash cap rate guidance to a range of 5.25% to five 5% a decrease of the high end of the range by 25 basis points.
As a result of the top to Massachusetts disposition, our disposition disposition volume expectations for the year has been increased to a range of $150 million to $200 million, an increase to the low end of the range of $50 million.
The expected level of G&A for the year has been adjusted to a range of $45 million to $46 million a decrease of the high end by $1 million.
Note that this range excludes nonrecurring cash expenses related to the adoption of the retirement plan during 2021 and severance charges incurred in Q3 of 'twenty, one 2021.
Finally, we have updated our guidance related to core <unk> per diluted share.
To a range of $2 <unk> to $2.06.
This is an increase equal to <unk> at the midpoint, representing eight 5% accretion over the prior year.
I will now turn it back over to Ben.
Thanks Bill.
Another great quarter, driven by the strong industrial fundamentals and the excellent execution by the stag team.
In our view these strong fundamentals are likely to persist for some time I have no doubt that the matching execution excellence by the stag team will persist for the long term.
Thank you for your time this morning, I will now turn it back to the operator for questions.
Thank you we will now be conducting a question and answer session.
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One moment, please while we poll for questions.
Thank you. Our first question comes from the line of Sheila Mcgrath with Evercore. Please proceed with your question.
I guess good morning, Dan I was just wondering if you could give us your big picture thoughts on rent growth profile, our outlook on secondary markets versus primary markets, and where you think stags in place rents.
Compare right now versus market compared to like a couple of years ago.
Well first of all good morning, she'll always good to talk to you.
Secondary markets are have always been in our view and I think the data supports this less volatile than primary markets and obviously during a period of vastly quickly rising rents the primary markets that volatility versus the benefit of landlords.
We are seeing strong rent growth against the secondary across all the markets and secondary and primary markets that we operate in.
And we expect that that to continue I think the the mark to market.
Without getting into great detail, but the fact that you have stronger rising rents must mean that the portfolio was slightly more under market than it would have been a few years ago, but that's more of a academic answer than a.
Asset by asset evaluation.
I think that shows up in the.
Rent spreads, which are you know we expect to run in the high single digits. So.
Nothing specific in terms of an answer but again, where we feel our portfolio is in a good place.
Okay. Thanks, and then Bill G&A guidance went nowhere at the top end.
There were some adjustments for severance or something.
That you mentioned can you comment on what might be a good run rate for us to think about in fourth quarter or more importantly for 2022.
Yeah, Hey, Sheila I mean without getting into guy.
Our guidance for next year, which would include new hires cost of living adjustments, but our run rate in Q3 for Q1.
I would add probably another $750000 and thats more related to the retirement plan. We've put in place the beginning of the year those costs will be frontloaded frontloaded for some employees that are eligible so.
So it's an additional 750 from Q3 into Q1.
And Sheila I might add I might add that as always.
We note that we have a very scalable business. So the growth in our portfolio, which was sizeable does not translate directly to G&A. It's a the margin allowed the G&A is de minimis compared to the size of the portfolio again.
And just to reiterate that's not guidance for next year will come out with our official G&A guidance in January and February excuse me.
Okay and last question two acquisitions in the quarter were vacant.
Just wondering if you have tenants in hand for those or do you have to do a lot of our capex spend to reposition those assets.
These assets are are effectively ready to lease the underwriting for our acquiring assets whether they are a tenant at our untested. Its the same where we're looking at the projected downtime capital costs etcetera, and the least achievement once once lease the rental achieving once leased.
In evaluating our returns going forward and again these assets, though vacancy.
By our projections still meet our return thresholds.
We're very comfortable with the lease ability of the assets. The three buildings that we acquired vacated one of which we've already have a lease in hand, and the others, we expect leases.
Not too distant future.
Okay, great. Thank you.
Thank you.
Our next question comes from the line of Manny Korchman with Citi. Please proceed with your question.
Hey, it's Chris Mcquarrie on with Manny I was just wondering if you could comment around the acquisition strategy specifically, how steep competition is in some of these target markets you lowered your acquisition cap rate guidance. So I'm. Just wondering is that just a factor of more competition in these markets.
Certainly competition is a factor, but the main reason that that cap rates are lower than they were in prior periods is that the rent growth profiles and the cash flow profile of the assets. We're buying is better so that the future cash flows to justify given our return requirements of the lower cap rates.
We said before cap rates are a point in time measure.
They can be in the view can be altered theres, a bunch of different cap rates that people quote, but we're interested in long term cash flows.
And making sure that we deliver the returns to our shareholders that we think they deserve.
Yeah, and as we mentioned in the prepared remarks, we're seeing a lot greater competition in bigger asset sizes and portfolios are sweet spot in that $5 million to $30 million range, we're still able to achieve our historical hit rates for the smaller asset sizes, but where we're seeing the impact of greater competition is that art.
Hit rates are much lower than they were a couple of years ago, we have expanded our capacity to identify and underwrite.
But to buy the 1 billion, one 2 billion to that we're projecting to buy this year, we're having to look at more assets or underwrite more assets to to get to that number but that's what our that's our peculiar advantage in the market our ability to do that allows us to still get the returns that we're achieving for our shareholders.
Got it yeah more at that makes sense switching over to dispositions what exactly are you looking to sell today and what is the appetite to use some of those proceeds for land are covered land plays.
So our and our what we're looking to sell today is what we've always been looking to sell which is our assets that are others think are worth more than we think they're worth in our portfolio. So a ton Nash. It obviously was a prime example of that.
Not an asset that we disliked donated someone else was willing to pay not only more significantly more than we thought it was worth to us in our portfolio and as we evaluate our portfolio. There are other assets that will pop up.
Or be evaluated by our staff as potential candidates to sell.
So the way we continue to review our portfolio and undoubtedly we will find some of those.
This year and that's in our projected disposition total of $100 million to $200 million.
For this year and we expect.
We have not issued guidance for next year, but that's not unreasonable number to expect.
Covered land place we look at it the same way we look at a tentative building what are the prospects for that building, whether it's a tear down and rebuild and.
An expansion and improvement to the existing structure, perhaps improvement in Tennessee.
And you know of an existing structure all those things can be evaluated on the basis of their cash flow going forward and again, given our return requirements not only on a per share basis, but on an absolute basis, a what if.
They meet those return requirements were happy to buy those.
Got it thanks.
Our next question comes from the line of Blaine Heck with Wells Fargo. Please proceed with your question.
Great Good morning.
If you think about your cost of capital, it's been solid preferably not exactly where you want it to be but it enabled you guys to buy some lower cap rate assets like longer duration, maybe in better market do you think your acquisition pipeline changes at all if your cost of capital were to increase for whatever reason.
If our cost of capital increases, obviously, we wouldn't be able to buy the same cash flows that we can buy today the returns on a a higher cost of capital.
We'd have to find more attractive more attractive financial deals.
So the answer to that is of course, the change in cost of capital will change, especially our per share metrics core <unk> per share CAD per share etc.
We're hopeful that the market appreciates our ability to identify and acquire assets that are accretive and therefore, our cost of capital are certainly on the equity side, we hope to improve going forward I think there you know the other side of the equation or the 30% of our capital structure that is dead.
There are learning people, who are projecting increases the cost of that and there were limited people who are projecting decreases the cost of debt.
We are cognizant of and pay attention to is that our forward projections of the cost of debt during our hold period. So we believe we are irrational assessor of cost of capital not only today, but going forward.
Makes sense, Okay and then.
Just a question on same store expenses this quarter, if I'm looking at it right. The expenses increased a little over 18% year over year. This quarter. I know you guys are reimbursed through a lot of the expenses given your lease structure, but just wanted to ask what the driver of that increase.
Yeah, I mean, the primary driver is just the occupancy some of these expenses are.
Paid for directly by the tenant and when paid directly by the tenant they don't show up on our P&L and so when you have it.
The occupancy decline those expenses now show up on the P&L.
Got it and then lastly, just wanted to touch on retention. This quarter you guys were a little lower than the normal at 56% I think you guys typically point to tenant expansion as the reason for most of your move outs does that apply to this quarter and then looking forward is there any reason you think the lower retention.
Around or should we expect it to normalize closer to I guess, the 70% Mark.
So nothing when are we talking about expansion. So it's tenants that feel they need more space as you know not not really looking to expand the building.
But that can be through consolidation whatever I.
I think that's still remains one of the principal reasons why tenants vacate buildings.
I don't have any color on this.
Situation.
Wayne mentioned it on the prepared remarks retention was 56%, but when adjusting for me to backfill. It was 78% and that was just situations, where we're able to push rents a little bit more of those immediate backfill tenants, we were able to roll up low double digits, Brian casual of rats.
But again the reason for the original tenant the party may be as Bill said.
Red sticker shock or again, a normal course of business. Its most typically they're looking for more space and indeed in our tenant survey, we had a significant number of our tenants.
Who are you know looking.
Looking for more space, and where we're able to accommodate them in many instances.
Got it thanks guys.
Thanks.
Our next question comes from the line of Michael Carroll with RBC Capital markets. Please proceed with your question.
Yeah, Thanks, Ben with regard to Stags hit rate on new acquisitions can you quantify where that number is today and how has it trended.
I believe it's down roughly 50% versus pre COVID-19 level. I mean first is that correct and is this just the new I guess should we expect it kind of stay at this level given all the competition that we're seeing in the industrial space.
I think you know there's a few things going on so the this past quarter were little better than 12%, which is say two thirds of our pre COVID-19 hit rate earlier in the year had been running sub 10%. There is a variety of factors, obviously theres a lot of competition in the market. There's also a lot of assets being brought to market.
And R R.
Our activity in an unsolicited bids has also been increased whichever which is fine by nature have a lower hit rate. So the seller hasnt decided to sell at the time, we approach them hasn't made that over decision to sell the <unk>.
Number of factors that go into it I think you're right, though the competition is a certainly a big piece of that we continue to underwrite deals and in primary markets where.
The hit rate is going to be lower because of the amount of competition and as I said. The unsolicited offers are always going to have a lower hit rate because we don't know for certain that the seller is Asia is indeed a seller.
Okay, and then you know one of them.
I'm sorry, just one of the advantages of our the improvements we've made to the the people systems and processes on our acquisition team is we have an even greater and in growing ability to identify and underwrite assets. So we can maintain volume, even though we have that lower hit rate.
Okay, Yeah understood and then I guess bill earlier, and I know that you kind of mentioned this already in the Q&A regarding the competition for those larger assets does the size of asset matter. They garner that increased competition, depending on the market or region or is it fairly uniform that these.
New investors coming into the space just are trying to buy larger portfolios or larger single assets just deploy capital.
Well I mean, it's not 100% in uniform, Mike I mean, there are some markets that.
Some of the larger investors do not feel comfortable investing in which is perfectly fine with us.
But I would say absent that it's pretty uniform in that.
The larger deal sizes 40 million plus.
Just garner a much lower cap rate in this environment.
And then I'm sorry, if I missed this can you quantify the difference between the cap rate for those larger versus the smaller transactions. I mean is there an easy way to do that.
It's a continuum. So you know the $40 million deal attracts a certain amount of capital that 400 million dollar deal attracts a certain amount of capital in the $4 billion deal attracts a certain amount of capital. So it's really where you know some of our especially the non traded Reits you know to the extent that they feel they can get involved they typically drive low.
Cap rates I wouldn't say, there's a good algorithm to assess the the differential is when they you know when some of these these pass those sources of capital or income oriented sources of capital show up it's going to drive cap rates down.
Okay, and then last one for me is what percentage of the assets that you typically acquire or below 40 million I believe it is a large part right.
Yeah, I don't have the exact percentage I mean, you can look at our earnings release and supplemental to figure that out, but it's a very high percentage.
Okay, great. Thanks.
We'll try and give you some numbers on that.
Our next question comes from the line of Vince <unk> with Green Street Advisors. Please proceed with your question.
Hi, Good morning, I would like to dive into act acquisition cap rates a little deeper.
You discussed the difference in cash cap rate between stabilized, 100% leased assets and vacant properties, where you're taking some leasing risk does how much higher our the estimated stabilized cap rate for for vacant building compared to something similar that's fully leased.
Yeah. Vince this is Ben I thought you were going to give me an easy one the vacant ones have zero cap rate that.
But you had you did stabilize so I have to.
Deferred from that.
It's probably 25 or maybe a little bit more basis points. It obviously depends on the velocity of the market how fast it's going to be leased right now projected to be leased et cetera, but the 25 25, plus is probably not a bad assessment.
Okay. That's helpful. And then can you just share your kind of typical leasing outcomes in some of these vacant acquisitions or what what you underwrite in terms of the amount of downtime and whatnot.
Yeah, again market specific submarkets where underwriting.
X months I'm right nine some 12, our experience has been.
In current market conditions has been we generally have outperformed our underwriting, but we remain conservative in how we view how we view the world. We're looking for the midpoint not the optimistic point yeah. A couple of examples Vince I mean, one of the deals we acquired this quarter, we were underwriting nine months and we have already have a lease in hand for one of the buildings.
And then also we mentioned that Taunton facility that we just sold I mean that was an acquisition that we acquired vacate we put a short term leasing there almost immediately.
And then subsequently put a large e-commerce tenant there for a long term lease effectively that one had negative downtime because of the the short term lease paid to get out of the lease, but where we're seeing.
The again down times are running.
Shorter than our underwritten downtime on a general basis, we have a number of times, where we have an asset that's brought to us as an investment and then there's a reset to the investment analysis, because Elisa has been executed prior to our acquisition.
So the seller may be looking for additional proceeds based on Theyre, having leased the building before we even bought it.
That makes sense very helpful. Thank you.
Yeah.
Our next question comes from the line of Chris Lucas with capital. One. Please proceed with your question.
Hey, good morning, guys.
Just maybe a follow up question to that pension maybe thinking about your acquisition mix may be shifting to a little bit more value add given the <unk>.
<unk> that exist in the industrial market fundamentals.
I think the answer to that is you know what we buy are when we find returns and if the world has shifted the focusing just on cash flow, which you could argue that the.
The introduction of all of this non traded money, which is income oriented.
Might result in it might mean that you can find better returns and value add.
But that's a that's a pendulum swings back and forth.
Probably not a big not a big arc pendulum. So it's not like value add gets really attractive in income gets really unattractive as theirs.
Small gradations and we react.
Going where are what its gretzky Wayne Gretzky said, we go where the puck is going to be we're going to find the places where we underwrite the best returns for our shareholders and it may be in <unk> or maybe an income, but we got we are continuing to look for those returns as opposed to any particular category.
But you're not putting any guide rails in terms of Maximums in terms of what to do on the back.
No and again I don't think that depends on the swings that far so and again, we're looking across a whole bunch of different markets, which have different sort of.
To some extent anyway have different reality is going on between cash cash flowing assets and value add assets.
So across all those markets, we don't expect to move very far from the median how.
How much of a port of our acquisitions are value add versus encumbered immediately income producing.
Okay, and then let me segue into markets are you seeing any.
Markets, where there are significant rent spikes and or tenants.
Being more aggressive about their space needs and trying to get out in front of it and therefore, taking space in advance of when they need it.
More so than they might have in the past.
Yeah, I think the answer to that is yes, I mean, you have in some markets you have persisting very low vacancy where you know that.
The.
Driver for tenants trying to get out in front I don't think you're going to see or we certainly haven't seen the kind of activities you saw in <unk> and lab urban office in some prior cycles where people.
Went out and I think of downtown San Francisco are but you know the people. We're just we're going out and trying to secure they had space way way in advance of need.
I haven't seen that Steve have you seen that not not to this too.
So a specific market, but broadly based I think what Ben just said is correct.
Okay, Great. That's all I had this morning. Thank you.
Thanks, Chris.
As a reminder, if you would like to ask a question press star one on your telephone keypad.
Next question comes from the line of Mike Mueller with Jpmorgan. Please proceed with your question.
Yeah, Hi, and I got on the call a little late so I apologize if you touched on this at the beginning but two questions. One if youre looking at just what you think the portfolio Mark to market is today, what would you say that is and then second thinking about bumps and escalators what is the average in place for the overall portfolio.
And then if we're looking at the leases that were signed in 2021 are they at a similar level or a different level.
I'll, let bill answer the second part of the question for it first Yeah, Hey, Mike the average escalator in the portfolio today is still around two and a quarter.
New and renewal leases were signing new leases around that 3%, Mark and renewals anywhere from 2.5% to 3% so consistent with what we've seen this whole year.
Great and.
And the first part of the question remind me what that what mark to market on a mark to market yet.
We're still obviously given the backdrop of of across the whole country, obviously vary by market.
Very fast rent growth relative to long term norms, it's highly likely that our and we believe our portfolio is under market.
We don't have a specific number of how far in their market, but reflecting the rent spreads that are we're achieving we certainly know that our portfolio in total is under market.
Got it okay that was it thank you.
Thanks, Mike.
Thank you we have no further questions at this time, Mr. Butcher I would like to turn the floor back over to you for closing comments.
Thank you very much for AR to the participants into the operator.
Another good quarter.
The team here is executing extremely well.
Changes to execute in a primarily virtual environment, we have a huge opportunity set in front of us.
And we look forward to continuing to deliver good returns for our shareholders. Thank you for your time this morning.
Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.