Q3 2021 KKR Real Estate Finance Trust Inc Earnings Call
Good morning, and welcome to the KKR Real estate Finance Trust third quarter 2021 financial results Conference call.
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I would now like to turn the conference over to checks with tall up. Please go ahead.
Great. Thanks, operator, welcome to the KKR Real estate Finance Trust earnings call for the third quarter of 2021, we hope that all of you and your families are safe and healthy.
As the operator mentioned this is Jack Switala today I'm joined on the call by our CEO, Matt Salem, Our President and C O O Patrick Mattson and our CFO, Mr. Often they got T.
I would like to remind everyone that we will refer to certain non-GAAP financial measures on the call, which are reconciled to GAAP figures in our earnings release and in the supplementary presentation, both of which are available on the Investor relations portion of our website.
This call will also contain certain forward looking statements, which do not guarantee future events or performance. Please refer to our most recently filed 10-Q for cautionary factors.
Related to these statements.
Before I turn the call over to Matt I will provide a brief recap of our results.
For the third quarter 2021, we had GAAP net income of $32 million or <unk> 57 per share distributable earnings this quarter were $34 $5 million or <unk> 62 per share, which is a record quarter for us driven by net portfolio growth benefits from in place rate floors prepaying.
Income and continued strong asset performance.
Book value per share as of September 30th 2021 increased to $19 nine.
Which includes the cumulative seasonal impact of $1 <unk> per share as compared to $18 91 per share as of June 30th.
This will be the sixth consecutive quarter in which we have grown book value per share.
Finally in mid October we paid a cash dividend of 43 per common share with respect to the third quarter.
Based on yesterday's closing price the dividend reflects an annualized yield of seven 6%.
With that I would now like to turn the call over to Matt.
Thank you Jack good morning, everyone and thank you for joining the call today.
K RAF delivered exceptionally strong results in the third quarter with record distributable earnings of 62 cents per share.
We also had a strong investing quarter originating eight senior loans totaling $1 $5 billion, bringing our funded portfolio to a record $5 8 billion.
Up 16% on a year over year basis.
Our robust origination volumes are driven by a real estate credit team, which has doubled in size over the last two years.
And it is comprised of over 50 investment professionals today.
We've expanded kick out real estate credit capital sources as well.
Due in large part to <unk> acquisition of global Atlantic.
Our real estate credit franchise expects to originate over $13 $5 billion in loans in 2021.
With K rack.
Serving as the flagship senior transitional loan strategy.
In short.
We have become a one stop solution for our institutional clients.
<unk> benefits from this increased market activity.
In addition.
We continue to benefit from our real estate equity franchise as it expands.
With our latest U S opportunistic fund closing on a $4 $3 billion of committed capital.
The scaled platform across the real estate spectrum of debt and equity.
Provides differentiated access to information and market connectivity.
Yes.
In the third quarter.
The eight loans we originated.
Totaling over $1 $5 billion.
<unk> three multifamily loans to office loans and one loan in each of the life science industrial and hospitality sectors.
Seven of our eight loans were to repeat sponsors.
Which demonstrates the value of our franchise and the strength of our relationships.
Similar to the second quarter. These.
These loans were underwritten at an attractive low double digit weighted average IRR.
Which is comparable with target returns pre COVID-19.
We believe these returns off our strong relative value given the risk profile.
Junior loans.
Secured by institutional real estate owned by high quality sponsors.
One note I'd like to highlight this quarter.
Is a $520 million construction loan on a class a.
LEED Gold office property.
To an experienced Seattle based developer.
It's developed or acquired over 10 million square feet.
This large loan size credit a favorable competitive dynamic.
And we use multiple pockets of capital to secure the transaction.
Hey, Ralph.
Using its first in the waterfall position invested in 50% to approximately $260 million.
The property is 100% pre leased on a 16 year term.
So an investment grade tenant.
We were and we were able to underwrite this to a projected IRR.
The mid to high teens.
We continue to see robust activity.
And have approximately $1 1 billion of loans, either closed or under exclusivity subsequent to quarter end.
We expect to be active in our in our historical segments of multifamily and.
And select class a office.
Along with certain newer growth segments, such as life science and industrial.
Which now represents 7% and 5% of our funded portfolio.
As of the third quarter, respectively.
Our portfolio composition remained consistent with previous quarters and is comprised predominantly of lighter transitional floating rate senior loans.
71% of the portfolio is comprised of loans secured by multifamily and office properties.
And with respect to office.
I'd highlight 89% of our office portfolio is.
It's comprised of class a office properties.
The majority of which is.
Is LEED certified.
From a reporting perspective, we are now breaking out our exposure to life science.
Which was formally included within the office property type segment, and now represents 7% of the portfolio.
Overall performance remained strong with interest collected on over 97% of the portfolio as of the third quarter.
In summary.
We achieved another strong quarter across the portfolio performance earnings.
And portfolio growth, despite the active repayment environment.
With that I will turn the call over to Patrick.
Thank you, Matt and good morning, everyone.
As of quarter end, we increased our market, leading fully non mark to market financing to 81%.
With a 19% remaining balance only subject to credit marks.
<unk> has continued to maintain mid 70 to low 80% non mark to market financing levels similar to the way we were positioned at the start of the pandemic.
As of quarter end, our debt to equity ratio and total leverage ratio for one eight times and three four times respectively.
In terms of financing optimization in Q3, we continued to add incremental non mark to market financing capacity.
First we closed on a new $1 3 billion dollar CRE CLO.
Hello features a two year reinvestment period, with an 84 point to 5% investment grade advance rate.
An attractive weighted average running cost of capital of LIBOR, plus 130 before amortized cost.
In conjunction with this transaction, we refinanced our first CLO, which was passed its reinvestment period.
The larger size of the new deal increased the amount of match term non mark to market and nonrecourse financing.
Second we entered into a new 500 million dollar bespoke term lending agreement.
This provides us with asset based financing on.
On a non mark to market basis.
With a matched term for up to five years.
This differentiated financing is another example, the power of the broader KKR franchise and its impact on K RAF.
We have a robust quarterly asset review process and we evaluate every loan in the portfolio to assign a current risk rating.
The current portfolio has a risk rating of three point O on a five point scale down.
Down slightly from $3 one last quarter.
91% of our loans are now risk rated three or better in line with last quarter.
With respect to certain loans, we are seeing improving trends in select properties, which may lead to positive credit momentum in other assets.
As we've discussed on previous calls we are nearing the next phase on our Portland retail loan.
We intend to foreclose and to take ownership of the asset, enabling us to optimize value over the near and medium term.
With our scaled and integrated U S. Real estate platform, we have the capabilities relationships and partners to execute this business plan to stabilize the property and optimize value for disposition at a future date.
Upon taking title, which is targeted for the fourth quarter will begin to prepare for a comprehensive redevelopment of the site.
Which we expect will include multiple uses including residential and creative offices.
We expect a more fulsome update on our next earnings call.
We still feel our $40 million seasonal reserve is appropriate and therefore expect little impact to GAAP earnings and book value.
However, upon foreclosure, we will recognize a loss through our cash metric of distributable earnings.
Yes.
This quarter, we received approximately $935 million of repayments and.
And as previously indicated we would expect another $1 billion in repayments in Q4.
Before repayment levels begin to normalize in the first half of 2022.
Our net positive fundings in the third quarter combined with our current commitments and forward pipeline give us confidence in our ability to continue to grow the portfolio.
In the near term, we also expect to continue to benefit from remaining in place LIBOR floors and elevated effective net interest margins.
But this will decrease as the portfolio continues to transition to new loans originated at spot LIBOR.
Finally, <unk> finished the quarter with a strong liquidity position of over $510 million.
This total included over $307 million of cash and $185 million and Undrawn corporate revolver capacity available to us.
We also have $374 million of unencumbered and unpledged loans as of quarter end that can be leveraged to provide additional liquidity.
In summary, our record quarter with distributable earnings of 62 per share covering our 40 <unk> dividend by over 1.4 times.
Robust originations across eight loans totaling $1 5 billion and an additional pipeline of approximately $1 1 billion under exclusivity or closed subsequent to quarter end.
We grew the funded portfolio by over 200 million to a record $5 8 billion.
Which compares to 5 billion at the start of 2021.
Lastly, we incrementally added matched term financing, which contributed to a market leading 81% non mark to market asset financing as of September 30th.
Thank you for joining us today and now we're happy to take your questions.
Thank you.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
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At this time, we will pause momentarily to assemble our roster.
And the first question will be from Jade Rahmani with K BW. Please go ahead.
Thank you very much for taking the questions.
Should we anticipate.
Early prepayment income going forward and particularly in the fourth quarter. Since you noted a $1 billion of repayments.
Good morning, Jade, it's Patrick I'll I'll address that.
Yes, I think if you look at this quarter, where we had $6 4 million come through that was a combination of acceleration of OID and prepayment fees. The sort of breakdown of that was a 4.1 of that was prepayment income obviously, that's difficult to sort of model. However, we do expect the.
Oh idea acceleration just given generally where we're funding lighter transitional loans, so any pay off prior to the initial maturity date resulted in acceleration of OID.
OID just for context, you know in the first and second quarter, where we had really low levels of repayments that equated to about two cents in those quarters. This quarter. It was it was more elevated so we saw <unk>.
Come through from the OID acceleration. So that gives you some framework for what we might expect in the fourth quarter and beyond.
And you're still expecting to grow.
Portfolio net funded basis in the fourth quarter.
Yeah.
Yes, I believe so I mean, if you look at.
Where we are just even in in October here and we'd give you the.
You know activity subsequent to quarter end, we had.
A initial funding of $280 million, we had repayments of $100 million. So we're on track to continue to as we have in each of the last three quarters.
Increase the portfolio size on a net funded basis.
Thank you and just in terms of ROE.
<unk> also reported today and.
And that you know quite a sharp drop and.
Incremental yield are you seeing consistent Roe.
Could you give some context around loan yields and spreads.
Yes, just a comment on the ROE profile, thanks for taking the questions.
Sure Jade I'll jump in on that it's Matt.
Thanks for joining the call for questions.
Yeah, let's start it let's started asset yield I'd say first of all the market has been pretty consistent.
Over the last few quarters.
The tight end of the range. So think about a very straightforward multifamily lease up play institutional sponsorship new asset those are in the call it very high twos.
LIBOR plus you know very high twos.
And the widest end of what we're doing is around call. It all in 4% type of coupon.
So that 100 basis point range is similar to what we've discussed on the last couple of calls.
When you translate that into our OE, we're generating returns.
In the.
Call it 11% to 13% range on a gross basis are pretty similar to where we were pre COVID-19.
So I'd say the market is pretty attractive from a certainly from a relative value perspective, we're going to look around the world.
Think about where interest rates are and where other fixed income products. Our so we're pretty happy with with what we're seeing in the stability in the current market.
Thank you very much.
Sure.
The next question is from Tim Hayes from BT I G. Please go ahead.
Hey, good morning, guys congrats on the record results.
First question here just on the new bespoke when the agreement you entered into this quarter can you touch on a little bit more of the terms or just maybe even from a high level, just how the costs and advance rate.
Compare to other facilities you have in or if there are any other types of like unique covenants to be aware I'm just trying to understand you know how favorable ore or maybe even less favorable the terms of these agreements are in order to.
Get that kind of non mark to market aspect of it.
Short term, it's Patrick good morning, So this facility.
Similar to some of the bespoke facilities that we execute in the past it's a bilateral facility. It has an initial revolving period and for each loan that we put on the facility, we can get matched financing up to five years.
But we do have the revolving aspect so as loans pay off we can reset and put new loans with new five year match term financing.
As we mentioned, it's non mark to market. So that's consistent with what some of our other.
The spoke facilities.
It has.
Cost of financing and we quote in the Q a range of the existing assets that are on the facility of $1 65 to 175. So I think if you look across our facilities, it's right down the fairway I think in terms of of cost.
From a leverage standpoint.
Again, consistent with how we borrowed on a non mark to market basis, it's driven by the underlying collateral that's being put on to the facility.
But the the financing leverage ranges from anywhere from 75% to 85% depending on the.
Depending on the asset so right down the fairway, but but clearly a unique facility.
To our knowledge this counterparty does not have any.
<unk> have an existing facility with any other financial institution like ours and really was you know another example of the KKR platform coming and sort of really bearing fruit.
Meaningful way and allowing us to.
To continue to increase this capacity.
No that's helpful. Patrick Thanks for the color there and definitely seems like yeah that.
It doesn't hurt having a KKR as you sponsor there for that exact reason.
So.
Between the new lending facility cash on hand, you know it seems like liquidity position and repayments of course $1 billion or payments expected. This upcoming quarter. It seems like your liquidity position is pretty strong here just.
Don't want to put words in your mouth, there like how do you feel about your liquidity position here given that the pipeline is very strong and we did see leverage tick up a little bit last quarter and it seems like you continue to expect net portfolio growth and just wondering if it makes sense in your eyes to look at potentially doing another type of securitization or any other types of.
Financing to bolster the capital structure.
Yes, sure Tim I mean, I think certainly from a liquidity position, we feel really good if you look at the different forms of liquidity. We've got the revolver, obviously, a key to us sort of managing cash on the balance sheet as I mentioned, we've got this new facility that we put in place we closed on the CLO so as assets pay.
All of that will have capacity to to refinance there. So we feel really well positioned.
Currently we also quoted in the supplemental we have 374 million of unencumbered assets that are sitting on the balance sheet.
Our assets that we could pledge to facilities and borrow additional capital against that so we feel well positioned to.
Manage the pipeline, which as Matt indicated it's pretty robust at $1 1 billion and we think the opportunity set behind that.
<unk> is also pretty great. So you know I think we feel really good to be able to.
Fund.
The commitments that we've got and and also capitalize on opportunities that may come up.
Got it got it and then I guess part B to that question no Patrick is.
Given your current capital base, how big do you see the portfolio getting before you need to maybe start considering external capital.
I think what we indicated before with our existing equity around $6 billion is probably the.
Total funded size.
So we're in we're kind of in that area sort of plus or minus obviously, we've got as we've indicated a decent amount of repayments that we're expecting we think we're going to match up with those fairly well with our with our pipeline, but with existing equity we think about $6 billion.
Okay got it yeah, I think you've mentioned that before so thanks for confirming and then last question for me you know.
It's no surprise that competition has been pretty strong and we've seen a lot of capital raising across your peers and private debt funds and other non traditional sources.
I think we recently saw one of the largest CRE brokers take a large stake in a multifamily lender and I think maybe what they.
Doing is more on the agency side it might not be directly overlapping with you, but just curious when you see headlines like that.
If it gives you pause that you continue to see new players enter the market or that space might be getting too crowded or you know does the the KKR model just stand the test of time and even in these kind of <unk>.
Competitive.
Parts of the cycle.
Hey, Tim it's Matt.
I'll jump in there thanks for the question.
Certainly, it's a competitive market.
I mean do you think about the low interest rate environment.
Thirst for yield.
The attractive relative value.
That we're seeing in the market.
You would expect to see new entrants you do expect to see new capital accessing the.
The sector.
I would say locally we haven't seen any new competitors in our space certainly our competitors have capital.
Capital availability and that's been the case.
For most of our existence and certainly over the last few a few quarters.
But I think that where we sit.
In terms of our franchise.
Our client relationships the size of the loans that we participate in and then the efficiency of our cost of capital and you think about you know our liabilities that Patrick just mentioned.
We feel really good about our competitive positioning in the market and like I said, we haven't really seen new entrants in our particular segment of the market. So.
We're always cautious.
And disciplined as we approach the market, but right now.
We're pretty.
We're pretty excited about what we're seeing in terms of the investment opportunity set.
Okay got it well thanks for the comments, Matt and Patrick I appreciate it.
Thanks, Tim Thanks, Tim.
The next question will be from Stephen laws from Raymond James. Please go ahead.
Hi, good morning.
A couple of things I want to touch on and maybe a follow up or two to some previous questions. I guess first around distributable earnings clearly outpacing the dividend by a significant margin.
Any thoughts.
You know what adjustments we made in the bag to distributable earnings to get a good proxy for REIT taxable income.
And is there any financial impact around the foreclosure on the portfolio excuse me the Portland retail asset that that may reduce your distribution requirements for the year.
Thanks, David It's Matt I can take that one.
Yeah, I think specifically as it relates.
To the Portland retail asset because that will impact.
Our D E as as Patrick mentioned and so when you think about the impact you should think about that in the context of the seasonal reserve.
You know that we mentioned on the call.
In terms of how that relates to.
The dividend obviously, the board will discuss that.
At the.
I'm coming meeting, but we really view that as a as a one time event and not a not a reoccurring item.
Great and then around your pipeline and really geographic concentration you know it looks like your exposure in Illinois was down noticeably, Texas, and California up is that kind of coincidental or is that a conscious decision to move out of the Illinois market and focus more on some other areas can you talk about the pipeline.
And kind of how you expect geographic exposure to shift in the coming quarters.
Sure Yeah, I can I'm happy to take that some of it is a little bit idiosyncratic as you as you know we make larger loans and so any one loan repayment or origination can can cause a quarter of of SKU. If you will I think the Illinois came down because we had one large repayment.
On the multifamily side.
And obviously the other areas you mentioned were in some of our origination numbers.
So, but I think overall.
We haven't really changed our posture in terms of what we're targeting them.
Larger markets.
We still like larger markets, we still like them because they are more liquid more transparent.
At the same time.
We are seeing a tremendous amount of activity.
In the South Eastern States and some of the lower cost states. So.
We have been very active in you know in those in those areas as well, especially as it relates to office lending.
Yes, specifically was whats office lending.
So no real change in the posture, but you may see a little bit of noise here and there given the size of the loans.
Great and last question just wanted to touch on life Sciences. You know you guys I think broke that out but how has that changed maybe over say up year over year I know KKR has some some advantages there that you have resources that give you. Some expertise can you talk about that.
Additionally, close another life sciences loans subsequent to quarter end can you talk about the focus there and what the sponsor brings to the table and being able to underwrite those those loans, which can be a little unique versus other.
Types of office loans, and you know at 8% you know how big of a bucket is that something you could see that growing to over the next four to eight quarters.
Yeah, Let me Oh I'll take that one it's Matt again.
A couple of things I think first you asked what's changed I think that the biggest change has been a tremendous increase in tenant demand for space.
And so that's really what's driving all of this activity.
And.
Obviously, we're responding to that.
Both on the equity side of our business, where we own and operate life science properties and clearly as you mentioned on the lending side, where we went on a property this quarter and subsequent to quarter end as well.
And you know as we approach. This particular sector I think it's it's similar to how we approach other sectors with a slightly higher bar, we think that there is a real technical aspect too.
To owning and creating an operating these buildings. So when we think about sponsor.
And we think about location.
Well I think much more.
Much more disciplined in our life science place, but in life science space that have a much higher bar than we would in a more generic or traditional asset class.
So, but what we're seeing on the portfolio again across equity and debt is quite tremendous in terms of the activity in the leasing volume that we're seeing so it is a pretty it's.
We think a very good sector with a lot of tailwind.
You know in terms of where it can grow from a portfolio.
Portfolio size perspective.
You know I don't have a number.
Or kind of a red line that we Wouldnt cross but.
Certainly it's within this context could go up a little bit more from here, but.
If you think about its overall positioning in the market, it's not a tremendously large part of the overall real estate market. So.
We'll probably do a little bit more here and see what opportunities are available, but I don't I don't expect us to be extremely large portion of the portfolio.
Great Matt Patrick appreciate the comments this morning.
Thanks Steven.
And the next question is from Don <unk> from Wells Fargo. Please go ahead.
Two questions I guess first with the fed looking like they're going to taper do you expect any material changes in the commercial real estate markets.
You'd position for us.
And then secondly can you comment on your appetite to put capital to work in New York City as it recovers.
Hey, John It's Matt Yeah, I can I can take that thank you for the question.
I guess first of all the as the fed tapers.
I don't think we see them.
A very large impact to real estate.
Early.
That path has to be navigated appropriately and real estate like other sectors could get impacted by potential volatility in rates and broader markets in reaction to potential rate moves but.
I don't think that's our house view here. We you know we think that it's natural for rates to go up as the economy continues to rebound and.
And we still think real estate is a pretty attractive asset class.
You know when you think about.
Some of the inflationary pressures you may see on the market.
We do think that the combination of real estate equity the combination of kind of an inflation hedge as well as a yield play.
It'd be quite attractive investment in this type of market.
Environment.
So that's the first thing I'd say.
You know on the appetite to invest in New York City.
Hum.
I did state and so and still has a lot of liquidity in certain sectors.
And so certainly we're looking at opportunities in New York, We will continue to lend.
In New York.
Hum.
Much more cautious as we have been historically.
On some of the sectors that you would expect so when you think about class b or more generic office space that is going to be challenged we think.
At the same time I think there's a real demand for high quality class a office space.
On the multifamily side, we've seen that come back and rebound quite strongly so it's a sector. We will continue to continue to look at as we have.
So we do think new York's an investable market.
You've got a pik pick your spots as always but we'll continue to look at it.
Thanks.
Yeah.
Again, if you have a question. Please press Star then one.
The next question will be from Rick Shane with J P. Morgan. Please go ahead.
Good morning, everybody and thanks for taking my questions.
When we look at the interest rate sensitivity and compare it to the forward curve.
It suggests that there's probably somewhere between 50 and 75 basis points of ROE compression.
If we were just to follow the forward curve.
Realized that whats actually happening is that the portfolio is recasting at a slightly or not slightly but at a lower Roe.
As the floor is run off and spreads tightened.
I'm curious when you look ahead to 2022, where you think what is what is a reasonable ROE and maybe ROE in the context of LIBOR plus.
Ric Good morning, it's Patrick Thanks for that question. So when we think about return and we think about sort of LIBOR where.
We're obviously focused on.
There spreads are but what we ultimately care about is is all in coupon.
And if you look at our all in coupons today. They are almost entirely made up of a spread of LIBOR, obviously compressed to such a level that you know an eight basis points, it's not a contributor to ROE on new loans.
If you forecast out the forward curve or assume that at some point in time, we're in a higher rate environment, that's going to give us a positive return on those assets because our asset coupon will increase our liability coupon will increase.
But will be offset by the by the asset side and we would expect that there's an opportunity to generate higher returns on those existing loans.
You look at page 19 of the supplemental we included additional sort of.
Bar graph. This is our sensitivity to LIBOR and what we tried to show here was how the portfolio is transitioning as some of our higher LIBOR four loans are paying off and we're replacing those with loans that are at spot LIBOR and you can see quarter over quarter, we have less sensitive.
<unk> to higher rates as we get more repayments and as we recycle into more loans at these lower LIBOR rates, we expect at some point that change in LIBOR, the higher LIBOR rates to lead to positive earnings benefit you know down the road so.
The portfolio shifting we expect that over the course of the next couple of quarters. This graph will start to look different and will ultimately be positioned for higher rates and get a positive benefit as a result.
Yes look this is exactly what I was looking at sort of doing that math and I think you're.
You're right.
The portfolio was recasting and in the asset sensitivity that's intrinsic in these portfolios as sort of being reestablished those floors run off.
Should we think about the sort of potential worst case compression has been that LIBOR, 1% scenario because at that point you'll.
You'll basically have experienced all of the transition all the existing floors.
Yeah.
In the near term and the near term I don't think our forecast is for <unk>.
A 1% LIBOR and so while we show that as a sensitivity on this page. The reality is that we expect the portfolio to transition at a faster pace. So by the time, we get to a scenario where we're in that context.
We don't expect that this is the composition of the portfolio. So obviously if it set overnight to this level. This would be the impact right. If it was where sustained there for a quarter, but that's not our base case in terms of rate projections.
Understood I actually meant that's more theoretically when you look at the portfolio win.
50% now subject to floors above 75, bips, which means that less than 50, or 50% is less than 75 basis points and a weighted average floor of 1%.
What I'm, suggesting is that the sort of headwind from the floor recast.
It's pretty similar potentially to just 1% LIBOR scenario.
Yeah.
Right I think.
That's right I mean, I think over time and you've seen it as you sort of had followed you know quarter over quarter. This LIBOR floor continues to compress down the percentage rate of loans, we keep dropping this this sort of floor number we're showing half of it at 75 basis points.
I would anticipate right as we get through fourth quarter, if we show that as half the portfolio again, that's got a size down considerably. So I think it's trending all in that direction that you would anticipate it's not maybe not you know not surprising the loans that are sort of repaying are the loans that have re.
Realized on their business plans are the ones that are more seasoned and obviously have the higher LIBOR floors.
Great. Thank you for the transparency on the slide it's very helpful and thanks for taking my questions.
Thanks, Rick.
Ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to Jack Switala for any closing remarks.
Great. Thanks for joining everyone. Please reach out to me or the team. If you have any questions stay dry out there.
Yeah.
Thank you. The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
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