Q3 2021 Choice Properties Real Estate Investment Trust Earnings Call
2021 earnings conference call.
Please be advised that today's conference is being recorded.
I will now hand, the conference Oh, what's your first speaker today, Doris Bond Senior Vice President General Counsel and Secretary.
Go ahead.
Thank you good morning, and welcome to join properties Q3, 2021 conference call.
I'm joined here. This morning by real time, President and Chief Executive Officer, Harry <unk>, Chief Financial Officer, and an executive Vice President.
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Before we begin today's call as I'd like to remind you that by discussing our financial and operating performance and in responding to your questions.
Forward looking.
<unk>.
Statements regarding choice parties objectives strategies to achieve those objectives as well those statements with respect to management.
Plans estimate intention.
Similar statements concerning anticipated future.
Brazil circumstances performance or exceptions that are not historical facts.
These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause actual facts to different material from the conclusion and these forward looking statements.
Additional information on the material risks that can impact or financial statements and.
And the assumptions that were made by applying in making these statements.
Can be found in the recently filed Q3 2021 financial statements and management discussion an analogy.
Which are available on our website and on SITA.
I will now turn the call over to route.
Thank you Doris and good morning, everyone.
Thank you for taking the time to join up to three conference call.
Pleased with a strong financial and operating results.
A business model and a necessity based portfolio as proven resilience over the course of the pandemic.
In addition to a strong results, while advancing a development program and executing one strategic transactions, both with a focus on improving the overall quality of our portfolio and driving meaningful net asset value appreciation.
All of this is independent an industry, leading balance sheet that affords us the financial flexibility to execute on these initiatives.
Joining me or today's call is Ataractic will first provide an update on operational results and then marry a better Florida. So we will provide an update on our financial results I will that provide an update on our transaction activity and a development program at all.
Over to you.
Thank you round and good morning, everyone as round mention we are pleased with our operational results for the corner, we continue to see positive side afternoon activity across the portfolio.
<unk> related restrictions are being lifted and our tenants get back to business.
Our period and occupancy remains strong.
<unk> slightly to 97% compared to 96.9 last quarter.
We had approximately 1 million square feet of places expiring in the corner.
Renewed 813000 square feet, resulting in a retention ratio of 81% and leasing spreads on renewables Ah six per cent.
We completed 204000 square feet of new leasing, resulting in overall positive absorption of 17000 square feet for the corner.
Or 45 million square foot retail portfolio, consisting of open air centers, which necessity base tenants continues to deliver stable and reliable results.
[noise] tail occupancy was consistent with the prior quarter with tenant retention of 89% and leasing spreads on renewables, a 4.5% for the quarter, excluding two anchors with fixed rate options.
Retailers have looked at foot traffic to dry leasing decisions in our portfolio of neighborhood centers anchored by essential shops, a few steps from shoppers homes are seeing the strongest level of interest.
New leasing activity has been strong across the portfolio. We are seeing interests from Mister Alex value and necessity based retailers looking to increase their store network as well as relocate from enclosed shopping centers.
Also driving demand is the entry of new <unk>, our concepts and existing food operators expanding their footprints.
The desire for tenants to locate at our grocery anchored site is evidenced by our high by our high retention rates and consistently high occupancy.
We expect that is restrictions east further we will continue to benefit from the positive momentum we are seeing.
Our industrial segment has been our strongest performing asset class over the past two years with fundamentals continuing to strengthen.
The national industrial availability rate dropped below 2% the.
The demand for distribution and logistics warehouses remains at an all time high.
And a supply demand imbalance in most markets is driving rental rates to record highs.
Leasing activity was strong across our entire national industrial portfolio, resulting in an occupancy increase of 40 basis points to 97.6% in Q3 with occupancy in our 6.6 million square foot, Ontario portfolio sitting at 100%.
We also retain 80% of expiring tenants and grew rinse by 16.6% over expiring rent in the quarter.
Offices face the most headwinds over the past few quarters with many tenants putting large space decisions on hold until they sort through their return to work place strategy.
They can see rates have ticked upward this quarter in most markets by the downtown Toronto, where our largest assets are located they can see actually dropped 10 basis points to 9.9% and sublease availability dropped even further.
We are encouraged by this.
And by an increase in touring activity, especially on smaller units.
New leasing activity for the quarter was slow and occupancy in our 3.6 million square foot office portfolio declined from 90% to 88 seven.
I've noticed the fact that some of the space vacated consisted of retail tendencies as downtown urban core retail continues to struggle compared to suburban grocery anchored retail.
That said, we did see a list and renewal spread of approximately 3% on the deals that were completed.
We have used this time with fewer people in our buildings to its full advantage. We have completed improvements that reduce the energy and water consumed in our buildings to make them more efficient and cost effective we've upgraded common areas and created new tenant amenities as well as an built improved move.
And ready office suites, so we are able to lease space more quickly.
Overall, we are pleased with the operational performance of our portfolio and we expect to continue to deliver strong results looking ahead.
I'll now pass the call over to Mario to discuss our financial performance.
Thank you and good morning, everyone.
This was a strong corner operationally with solid third quarter financial performance.
Strength and stability about necessity based portfolio as proven Brazilian over the last 18 months and that is reflected in our in our collection rates, which increase in 99 per cent and a quarter.
We also reported that expensive $1 million are most provision during colby and it's COVID-19 restrictions continue to lift across the country and the Canadian economy looks to fully reopen we're well positioned to benefit from momentum.
Ah reported comes from operations for the third quarter was $172.7 million.
This was a relatively clean quarter apart from the $1 million does that expense I referred to earlier.
When compared to the third quarter of 2020.
Increased by $3.5 million due primarily to a decline in Baghdad expense of $3.8 million in contributions from development transfers and acquisitions of 1.7 million.
This was partially offset by a decline in straight line right.
On a per unit diluted basis on Q3 of them phone was $23.09 per unit consistent to the 23.8% reported the third quarter 2020th.
Total seat acid cashing in wide increased by 2% compared to the third quarter of 2020.
My asset class retail see massive cash in Hawaii increased by 2.5% on industrial increased by 3.5%.
This reflects a combination of declining Baghdad expense contractual rent steps and higher renewal rates and occupancy games and industrial.
Off the same acid cash and a white decreased 6.4%, primarily due to the reduction of occupancy and lower parking revenues.
Wood, excluding baghdad's total same acid cash NOI was relatively flat increasing by 3%.
So overall, we're pleased we've been able to maintain stable occupancy and consistency method performance over the last four quarters.
Turning to the balance sheet for the fifth consecutive quarter, we've reported an increase tornado asset value.
This quarter reflects the total increased enough of $89 million or 1%, including an increase of the fair value of our investment properties of $51 million.
The increases were primarily related to the advancement of a residential development projects and games from top of recycling, a retail assets and secondary and tertiary markets.
Market demand for grocery anchored retail in these markets is robust with significant liquidity in demand from all types of investors.
We had very little new financing activity in the quarter. However, we continue to maintain a strong balance sheet in terms of leverage and liquidity.
Our leverage ratio was consistent with prior quarter with our debt to EBITDA remaining low at seven four times.
From liquidity perspective of approximately $50 million in cash and cash equivalents $1.3 billion available credit on our line and 12.8 billion full of unencumbered properties.
So overall, we're pleased with the third quarter performance delivering strong operating results and driving net asset value through development and capital recycling, while maintaining a conservative and sexual balance sheet.
I'll know I'll now turn the call over to rail to address our development and investment activities.
Thank you barrier.
And another extra quarter, making progress both a development program and a transaction activities.
In terms of transactions for the quarter required a retail property at three to five <unk> Avenue in Toronto.
$31.6 million the property includes a rexall drugstore and the T D bank and it directly adjacent to one of our existing global and could thoughts.
The acquisition is pretty Jake because the existing tenants on the first debate and this allows us to control entire thoughts providing flexibility in terms of any releasing efforts or longer term redevelopment opportunities taken together the sauce forms of two and a half acre parcel that is exceptionally well located.
During the quarter. We also advanced 41.6 million dollar mezzanine loan to our development partner right commercial group.
<unk> well secured by 154 acres of future industrial development land in East Credibly, Ontario, just north of new market and that is kind of deserved agriculture.
However, it has been designated as employment juice in the secondary pad and is undergoing a rezoning process and advancing the mezzanine loan web pages equity conversion right into 75% of the met this option provides the flexibility to acquire an industrial sided the GTA at a.
Very attractive cost basis of 370000 an acre.
We're excited about this mezzanine loan and the possibility of adding significant pop line of industrial development opportunities.
On the development fronts, we continue to deliver exceptional S as tough portfolio and I'm, making steady progress on the rezoning of a longer term hotline for.
For the quarter, we completed and transferred to development projects for total development cost of 52 million asset transferred this quarter include.
A new shoppers drug moped for 17000 square feet of retail sod wealth, Ontario.
And the second of three buildings at a rental residential development that Brixton located in the Queen with neighborhood of Toronto.
The second building includes 93 units at all ownership <expletive>.
The leasing program at the Brixton as.
Is well underway and activity has picked up considerably in the last few months is COVID-19 restrictions have continued to left.
Of the 665 units that have been transferred to date, 55% of at least we expect to transfer the last building made of this year.
Construction is also wrapping up at Liberty House, and Liberty village with an expense of completion in the fourth quarter. We had originally anticipated first occupancy early next year, but based on the activity and the status of construction. The first tenants begin began taking occupancy earlier. This week. So we will try.
For this asset to income producing in queue fault.
In addition to our active residential projects, we continue to find opportunities to intensify existing retail properties.
We commence development on eight you retail intensification projects across the country on completion. These projects will add an additional 55000 square feet of necessity based jelly, including three new shoppers drug Mart vacations, and two a new bed pads.
Looking forward, we're making considerable progress on advancing a longer term planning projects for a mixed use development.
In the quarter, we submitted applications with two residential and mixtures projects here in Toronto.
The first application is for mixed use development on a three acre parcel of land located at the southwest corner of that fourth Avenue in <unk> Avenue in Toronto and the second application is for the residential development at our existing.
Residential property Pier 123, located at Dawn, most road and ship It Avenue Toronto.
Both sides are exceptionally well located within close proximity to a TTC subway station.
Taken collectively with our ongoing planning projects, we have over 10 million square feet of Chile, either zoning approved zoning applications underway with more projects ongoing and more submissions expected. We believed we have one of the best development path lines in the right space and.
That will drive significant long term net asset value appreciation.
With that I would like to now turn the call back to the operator for questions.
As a reminder to ask a question you would need to press star one on your telephone.
Withdraw your question press the pound key please.
Please stand by while we compiled the Q&A roster.
Your first question comes from Sam the money with T D Securities.
Thanks, and good morning, everyone real maybe it's the first question is on on the East <unk> Ah land I Wonder if there's a little bit more color you can provide on I guess the visibility on the rezoning of that parcel and is the is the primary plan to to do you know codevelop. It was race or or what is what is the sort of plant I guess over the medium term.
Please.
Uhm, yes, thanks for the question.
Ah development partner had a preconstruction meeting with this town.
September of this year.
Dave assembled a consulting team to prepare all the materials to submit a zoning bylaw amendment.
And they are targeting the first submission in January of 22, it would be our intention to convert we just wanted to see some progress on the zoning sideburn, but I'd say overall, we're very bullish on the side and you know just to put it in perspective, you know, it's not a traditional industrial zone.
There has been tenants moving to the area and you know the drive is about 25 minutes to the four O. One. So if you just compare that to other sauce east to west is exceptionally well located.
Yeah, No that's seems like an opportunity in terms of location for for expansion for the market for sure maybe just flipping over to Saint property and a Y growth and it certainly is evident that the office sector is is holding the rest of the portfolio back any sense.
On I guess, the turning points with occupancy in the near term I'm also just wondering if there was much N Y contribution in this quarter from the space that was most recently vacated the fraud argument you down to 80 per cent and change.
Hi, Sam.
I guess I'll answer your first question you might have to explain the second question, assuming I'm sorry.
As to a turnaround.
We're starting to see a little bit more.
Activity, particularly and this this deal activity, particularly with smaller tenants. So subsequent to the quarter and we completed 14, new deals. They told him about 40000 square feet in the office portfolio and that was like across the country from Calgary Montreal Vancouver, So though.
Tenants are.
Okay, so that will help.
And then the larger ones.
That I think it's going to take a little bit longer.
And what was your second question, if you don't mind repeating it.
Sure I mean, I mean, the N Y the same carpet in Hawaii year over year was was down 6% and change in the office sector, but sequentially it was pretty pretty stable.
And so I'm just wondering you know with the <unk> with the occupancy down at quarter end should we expect another sort of stepped down in N Y in Q4 versus Q3.
Uhm, it's so it would be it would be the very modest there is.
A few smaller tenants, we know are not renewing but we have minimal lease rollover exposure and so yeah. The variance that you saw.
Drop relative to Q2 was primarily a result of the larger vacancies that we spoke about.
Earlier at 170 pipe lower the largest the largest one.
And Sam I think the one thing with office right now is.
There's not a lot of visibility people still there's no real estate trend back yet we're seeing people Tripoli so.
So there's been some good news, but I think right now there's not alone.
Along with the longer term disability.
Okay. The last one for me on the retail side occupancy is steady.
The modem is there the activities picking up we're still not back to it in 98 per cent occupancy prepandemic, what's your expectation I guess for for 2022.
To get there and I guess, what what categories might still caused some headaches in terms of the headwinds for occupancy go you're going for.
Maybe Sam I'll, just talk about maybe to forecast and it can get into the detail.
I think by the end of next year will be stronger, but I think in the in from like on an average basis, there's gonna be some turnover of Tennessee's and with that will come some downtime. So I don't see you will see.
What kind of still protecting that one or two per cent and a lot of growth and depending on the timing.
It could be closer to the 1%. So we still have some things to work on but but as far as retail. So I. So I don't think like I think a year and we might be closer to that 98%, but during the year will be will be will be later than that and as far as retail goes I think and I talked about it there is some.
The open their centers there is some some traction to the retail I think is the economy opens.
We'll see that activity. So so we're very bullish but just on timing.
B C. It towards the end of the year not guilty part.
That's great I'll turn it back thank you.
Your next question comes from the line of Mark <unk> was Kenacort Caroline is open.
Thanks, Thanks, and good morning, everyone.
<unk> you you gave an update on the development pipeline and it's it's quite extensive mouth is there any.
I first met her we'd enter that that you're being a little more aggressive in picking up the pace or try to pick on them more project now or is this all just generally what's been into plants.
He about faced with.
I would say, we was largely behind others on advancing zoning and we've made significant strides.
And advancing.
The zoning uhm, we want to be in a position, where we can get you know Mossad zoned and then in a position to commence construction and they will obviously commence construction when the market dynamics arrived. So you know if we just look forward over the next 12 months as an example.
Of two buildings trash.
Transferring to income producing property that soon we would expect to commence construction on two more projects in 2022.
And then maybe again in 2023 again will commence construction. So it's really trying to position ourselves that we have this pop line of wonderful opportunities on the residential side.
I think the other thing to note on the industrial side like it will come quick just give in as just given the lead time for for development is Quaker and I think if you look overall and I'll pop blood you know with the Latin required earlier this year and with the auction with these guerilla Marie.
We probably have.
450 acres of potential development, then which could could add about 67 million square feet of best in class industrial which it's all in the G J, which will probably grow industrial portfolio by about 40%. So it's very very meaningful.
And once that that gets owned will will come on quicker.
Would that be for the industrial will do that all your overall.
Sorry, I didn't mean to interrupt you while I think I'll go with the way we view it as you have a great mix of residential opportunities industrial opportunities and then we spoke about the pickup in retail activity. So overall, we very very bullish without development activities.
I know some of them mixed Houston's the presidential particular, you're you're looking to do with partners for the industrial would you do would you like to do that I'll yourself.
Well the two big industrial opportunities, we have a partner Ross commercial group very good partner and why don't we would 85% one of them. We would 175%. They are primarily responsible for the development. Our team works closely with them, but then we would take over leasing and property management on competition.
Okay. Thank them, maybe just one more maybe for Mario Uhm over the past year, you have issued stock to the vendors, which I've fees uhm.
Mm related party for for buying properties, it's somewhat is somewhat dilute it for it takes away some of the accretion because he Q how 'bout using more equity are you comfortable with a balance sheet is now and is that something that you will look to do more of in the future.
Hi, Mark things.
So the first question I mean, we're very comfortable with the balance sheet. There's two elements that we've been focusing on ways.
Getting a leveraged down and pushing out of debt maturities and and maintain liquidity and then he can come out of Covid.
Very strong and then we've improving our asset quality, which again devers the portfolio, which means less pressure on the balance sheet.
I think as far as equity goes I think we would use it if it's very strategic and in some cases you know there are some tax benefits to the to the vendor which gives us.
An advantage there so if we can get access to good properties.
Or use it strategically we would do that again.
Okay, great. Thanks.
And your next question comes from the line of Himanshu Gupta was supposed to bank. Your line is open.
Thank you and good morning, So just 120 twenty-two visa expired. Please a physical for industrial minutes call me do I think around one point system is gonna cheat, so what kind of <unk> expected and give a little house phone don't want to do is it on cable or is it in but the like what's the mixed fluffy.
So I'm just going to.
Hi.
Sorry.
Yeah, just to answer your question Uhm on the expiry date.
We have a few large expiry that are coming are coming due.
In Q3, <unk>, sorry, three and 2022.
And it's kind of spread out across across the country. So it's not heavily weighted in.
In Alberta.
So we have a large spotlight distribution facility in Montreal on Frank.
Rolling as well as a large facility in Ontario, and then another one in Alberta.
And then another half million square feet spread out as well across that all those markets in Halifax as well.
What we're protecting for industrial I mean, we expect to see on a long term basis real growth rental rank probably thank god.
Net asset value appreciation of asset.
But in the short term, we do have some temporary vacancies that will be evident in our results next next year.
And it's the three that I spoke having my challenge Terry on Alberta, but we we have released the largest one in Montreal, which is half a million square feet that has.
Has been.
Released to Amazon it'll be a large distribution facility actually their largest in the province. So we're really excited about that and we'll see a huge lift in rentz relative to the current in plain track.
But there will be my period of downtime, while they invest in the facility and get it up and back so.
That will be it have an impact in 2022, and similarly in Ontario, and Alberta, we have tenants that are also relocating to larger facility, but we have.
Significant interest in both of those sites. So we anticipate releasing them there Carrie quickly and again at France.
Sets up expired.
Yes.
Cause I don't know that's just stay at home, so long and maybe it on the same lines on D V D inside and I know you already mentioned about the occupancy abusing environment and cooling.
Bye bye questions How's the market once saving for <unk> go to open the everything's all the fees.
Kobe keeps getting about the captain's compressing Oh boy, let's say best buds.
Is there anything happening with a bucket one SEC.
Yeah, we are seeing led skin rash like in our in our grocery anchored centers. This quarter, we saw a list of.
About 6% as I mentioned in my call.
And you know.
We expect that to continue as we have ample demand.
Alright, well, thank you and I.
I think I mentioned, the it's not just the rental I think you talked about the cap recompression.
Where there's lease term.
Especially with the lava, Tennessee is a really valuable commodity.
That's okay, well, thank you for taking <unk>.
And maybe my next question is are the mixed use development and I know you know more zoning application was fine this quota.
And then you mentioned like bold somebody should have expected so how long the missiles.
Just wanted to work with this is fine.
Uhm.
Yeah, I don't know exactly what's in the the popcorn handy, but but if you actually looking to invest the material. We have maps of the major cities and we pretty much have more dots on the map the than most so we just bullish on the long term hotline uhm and we're working collaboratively.
Of the with a major tenants and same with which makes sense to follow those applications.
But it and and maybe an O B U look you know in the near future too. So I'll be 45, you know what the medium to long term Douglas into my account could look like I know, it's it's pretty massive looking at I've been struggling along with the chocolate milk.
Yeah, we've quantified the did 10 million in in planning applications.
And as we get more clarity on time, and we'll look to quantify.
And especially with time, even if we try to be very transparent in our disclosures and and I think a lot of investors have told us. The longterm really is not as valuable. So we're trying to show the potential put the quantification right now is not as more of a as not as relevant as maybe.
The near to mid term. So we're trying to be very transparent on what is what is active and what is in the pipeline.
And so so you'll get you'll get those disclosures from us on a regular basis now.
So thanks for <unk> me with your comments on the road. So thank you at.
<unk>.
Thank you.
Your next question comes from the line of semi aside with C. I B C. Your line is open.
Thanks, Good morning, just wanted to confirm that on the Brixton and transferring it to incomplete, you're saying did show up in the fair value games this quarter.
A little bit it's been showing up in the last few quarters. So yes, and then also as these liberty.
Dances and.
We're getting closer to cost completely getting certainty.
On the remaining costs.
And we're having a better view of rent that all impacts the fair value as well so they're they're both there, but it's not one big it's been coming in.
As the project advances overtime.
Okay, and then I guess on on if somebody just curious what rinse. Your scene then when do you expect it to be stabilized.
You know, we seen rent around 390 of <unk> and we expect it to be stabilized in about 12 months from now.
Okay.
And then it's really kept your thoughts on that what you're seeing in the market in terms of Ah Bart.
<unk> demand for more secondary tertiary might get retailing can comment on any uhm spreads you're seeing in Catholic confession versus more I guess core located product.
Look we forget about the last few quarters, we continue to see lots of liquidity for the rock top of retail in the wrong type of retail is a necessity based retail and and they lots of different investor tops looking for that product. So uhm.
We haven't rather than say we've seen a.
Meaningful compression and cap right because it's deal specific bad, but you know obviously, we'd be very active on the capital softening program.
Selling assets that we feel are non strategic in may of low growth.
Okay. Thank you I'll turn it back.
And again that is star one to ask a question.
Your next question comes from the line of <unk> with National Bank Finance Your line is open.
Hi, good morning, everybody.
It's all.
Just to start with let me you know you've made earlier comments that you spend a lot of time and capital. This are super building up its future industrial with some bank of industrial land.
Uhm, when we're thinking it's a thinking about it from our side.
Should we be thinking is this all third party or does loblaw figure into occupying some of this as well.
Okay, Yeah, we purchased the land.
Four four third parties, but obviously given the relationship with level, we will always show it to them first.
And we would be thrilled if they would consider.
Leasing mad bad, but it's generally going to be.
The bodies and current focus is really on the rezoning right now.
So it'd be pushed to acquire these lamp is it's not.
Like a sort of loblaw.
Imperative for their strategy, because it's not them driving these decisions. Those are you you guys are making the choice to try to make these acquisitions.
Yeah, It changed drug development partner Ross commercial we have a strong relationship with them and they showed it to us.
First and I'm very fortunate with foster these long term relationships.
Okay, I guess like maybe just a bit bigger picture, you know like where fears of <unk> and you guys picking over at the Ministry team done a lot to work cleaning up the portfolio.
From my years, it certainly sounds like you're talking a little bit more about playing a bit more offense now.
Talking up in your trunk development things like that.
You know.
Are you trying to like well.
How do you want a position choice like.
For the future in terms of where.
Where you want to split between the asset classes going forward.
Yeah.
You hit on that you know I'd say over the last three years and a focus ready was first on integration and gains of our people in place.
And was <unk>.
<unk> the balance sheets I'm, putting the balance sheet in a better place never gets in the way of of.
Running the business or in the way of taking advantage of acquisition opportunities and the way we think about the entity today as we have the one for this wonderful portfolio.
Of stable growing cash flow from necessity based retail industrial office and now residential we have truly we believe the best development pipeline.
In the <unk> space, we have a balance sheet that allows us to take advantage of those off what's your name of phenomenal people. So so we actually think we are exceptionally well position as far as specific mixes on acid, we more focused on asset quality, but if you even think about capital recycling initiatives, we focused on selling assets that we.
Inc have preservation risk homemade low growth, we're not selling up as as as in February rather buy more about that asset. So so we let focused on we less focused on specific mix as we more focused on quantity.
Okay. That's helpful. And then just <unk> you know like again now that you know you're sort of at this new kind of pays for the company.
Uhm you know prior to the Creek deal you'd started soon and you'll distribution hikes. Every your was there any thought to sort of maybe restarting that going forward.
Paypal you know.
We haven't talked about her recently, but I think just the way to look at it as we've had growth and had to make some some trade offs and and so Israel said, we took some of our growth and.
The towards the deleveraging and that that kind of took a few cents and then the asset quality you get a bit heavier dilution when you trade kind of higher concrete houses for low comprehensive, but again, we're generating value and then investing some of the proceeds into this development pipeline. So.
So I think there will be times.
We haven't talked to the board you devote a at some point some of our growth will be diverted back to you in folders, but I think it has to be a time when we're ready now we can discuss considering long term.
Okay, that's great. Thanks, gentlemen.
Hi, I'm showing no further questions at this time I will now turn the call Oh, two real diamond.
Thank you Judy and Wanna, Thank everyone for joining us on today's call. Please continue to do all you can to stay healthy and face. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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