Q3 2021 Mack-Cali Realty Corp Earnings Call
Good day, everyone and welcome to the Mark Kelly were anti Corporation Dark corner of 2021 earnings conference call today.
Today's conference is being recorded.
I'd like to remind everyone that certain information discussed on this call they.
Constitute forward looking statements within the meaning of the federal Securities law.
Although we believe the estimates reflected in these statements are based on reasonable assumptions, we cannot give assurance that the anticipated results will be achieved.
We refer you to the company's press relief annual Unfortunately reports filed with the S. E C for risk factors that impact the company.
With that I will hunt over to my bought me, a mark Kelly's Chief Executive Officer.
Good morning, and welcome.
2021.
I'm joined by David.
Yeah.
I'm pleased to say that we had another active quilted your English we tried to simplify the pain and confusion.
While capitalizing on the positive trends in the multifamily sector.
We are encouraged by the progress we make a call today in a handful of all the way from transitioning into a cheerfully multifamily company.
Ah results to the tools that are a testament to the quality of the appeals are multifamily equal.
Despite the continued economic uncertainty, we maintain strong leasing and let them throughout the quarter, increasing occupancy Bob Prepandemic levels.
Specifically I was October 24, 5825 years.
It might be a big fight with them.
Okay like if you've got three percentage of June 30th and 2.7% above prepandemic levels.
As I mentioned last quarter.
Definitely the cosmos.
Increasing better positively impacting that's operating income which is about 4%.
Patrick.
Posted performance across a multifamily pool player restarted fuelled by strong leasing as a whole three.
See the Decaf coffees, which are collectively now more than 95%.
And performing well ahead of our expectations with respect to both these thing velocity and rest level of cheese yeah.
Financial Hills in the capital important.
Bush forgot securities is during the first quarter when 99.5% of $96.
Respectively as of October 2004.
Riverhouse mine at Port Imperial is already about 95%, despite having a indulged in bed.
We anticipate initial occupancy 525 750 in that department.
Building a 25.
In Jersey City.
The commander of the first quarter of 2022 look for to updating all the leasing momentum there in the coming quarters.
Since announcing our strategic five to simplify the business and strengthen the balance sheet.
$138 is the dog.
Part of Oxford.
Disposal programs, including the sales of 700 or other forms of four gate drive for $29 and $25 million, respectively. The proceeds of which we used to reduce corporate that.
Consistent with our ongoing efforts to try listening to a cure for a multifamily. We've also entered into separate definitive agreements to offer supposed to be located in Jersey City.
Okay surfing, approximately 1.8 million square feet for combining sale price of $590 million.
Upon completion of the sale multi.
Multifamily assets will account for approximately 70% of our messed up right.
Free stabilization of health 25, and assuming all else is held clusters.
Clinical office, hopefully at the waterfront assets about $73, 3%.
As COVID-19 cases in the northeast decline in many employees. Besides the office, we believe I'll live what play office proposition on the waterfront possessed an attractive option. So very cross section of tenants across industries, including a wide range of spaces, including alcohol space.
West based solution.
And a comprehensive immediately offering.
Overall, we're pleased to report stroma facing results from quarter and excited about the strategic direction of the company.
With that I'm going to head over to David who will update you on our financial performance during the quarter.
Thanks, Bob.
We reported core episodes per share for the quarter of 17 steps the year over year reduction and caught up if Oprah sure was primarily due to the impact of our suburban office asset sales program, which is now complete.
This quarter, we continue to see positive trends throughout our multifamily operations.
That's my Bad mentioned, our occupancy now stands at 270 basis points above prepandemic levels, which has allowed us to begin to grow net effective rents through the reduction of concessions and increases in market Reds.
On a sequential same store basis reported a revenue increase of 4.3% and then NOI increase of 4% we.
We see these trends underpinned by a tight labor market and strong wage growth continuing into the fourth quarter.
Or three newly stabilized developments in short hills, and Port Imperial New Jersey continue to outperform our expectations generating $2.7 million of Noise's sure in Q3, a $3 million increase over there NOI contribution in the second quarter.
Office leasing was modest in the quarter with only three small noncomparable Lisa signed for 8600 square feet.
As anticipated television Ameritrade has moved out of its remaining 44000 square feet at Harborside six in October.
We placed two of our six remaining waterfront office assets under contract in the quarter at a combined sales price of $590 million or $325 per square foot.
In the suburbs, we've completed the previously announced $29 million sale seven drawn up arms and post quarter and our last suburban office asset held and discontinued operations for gay Hall for $25 million in proceeds.
Excluding the contributions from the health for sale waterfront assets and suburban our assets and discontinued operations multifamily operations accounted for approximately 70% of the companies NOI in the third quarter.
All else remaining constant we anticipate that the multifamily NOI contribution while increased to approximately 75% upon stabilization of our newly developed properties and house 25.
Upon closing of the waterfront asset sales under contract our operations will be driven by our 21 class a multifamily operating assets with sector, leading average monthly rents of $2930 per unit and sector, leading average portfolio age of only seven years.
Additionally, we have one multifamily project in construction House 25, with budgeted total cost of 469 5 million and with no remaining equity requirements.
This asset is expected to reach received tenants in the first quarter of 2022.
Ah remaining portfolio includes for office assets totaling 3.1 million square feet, all located within our Harborside complex in Jersey City.
Two hotels and a prime land bank, comprising 14 development sites. The majority of which are located one transit stop from Manhattan.
We are excited about our competitive position.
Or streamline portfolio focused on class a multifamily assets improves our NOI growth outlook and our cash flow growth profile as we move forward, especially when accounting for capital expenditures.
We see continued tailwinds from concession burn us.
Anticipated growth and market rents and the upcoming delivery of our house twenty-five development all contributing to cash flow growth in the quarters ahead.
This concludes our prepared remarks, operator can we open the call for Q&A.
Okay. Thank you, ladies and gentlemen to ask a question today piece techno bypassing star one on your telephone keypad.
Please ensure that the meu.
Function on your telephone is switched off to allow your signal to reach our equipment.
Then to ask a question. Please take note bypassing star one on your telephone keypad, we would pause for just a moment to allow everyone an opportunity to just take note of my questions.
First question comes from many Kotchman from city. Please go ahead.
Hey, good morning, everyone.
In terms of the asset sales in Jersey City, and Hoboken, All those give hard money deposits on those and when do you anticipate that those would close.
Morning Manny.
Thanks for the question, Yes, we do have taught my deposit phone dies and they expected timing for clothes is Q1 next year.
And then my budget's thinking further out.
Is the plan to sell down the rest of the Harborside Office holdings.
And if so does that require leaves type of those holdings are you running sort of.
A soft or hard inquiries out there to see if there is interest in the masses are what's the plan for the rest of the harborside.
Yeah, I think what we've.
Made clear the strategic direction for the company.
Is to further.
Simplify.
Focus.
And enhance operations around the multifamily side of the business and you'll be seeing that now come to fruition.
You made a comment the prepared remarks about how was the expected say that these two assets everything else have constant approximately 70% of our NOI with calm for multifamily and then with the stabilization of the day.
Math that somehow 25, then and moves up from that so I think we've been pretty opportunistic.
And and considered I think about asset sales and will continue to.
Approach it in the same way going forward as we make this transition, but no specific timeframe on on that it will be in a very measured it in a balanced way.
With the aim of maximizing value for shareholders.
Okay. Thanks.
Thanks Honey.
Our next question today comes from Jamie salesman from Bank of America. Please go ahead.
Thank you and good morning, I guess can you just I know your leverage kicked up to about 15 times in the quarter can you just walk us through the the glide path here for bringing leverage down based on the answers sales and.
In the pipeline, how we should think about timing.
Thank you Jamie it's David so on the net debt to EBITDA basis, as we've talked about before I think that the glidepath really is to remain about constant in the teams now as we wait for our largest development to come online house.
Twenty-five where we continue to fund all the debt Uhm, we're almost done there that should begin receiving tenants in the first quarter and then from there as you know the combination of that.
Debt repayment from asset sales.
The lease up of office at Harborside.
And hopefully, possibly some recycling of land into yielding assets, we see a glide path that brings us down not all the way to where the market is in multifamily but into the into the lower teams and approaching single digits, but you'll need all of that to happen and I will take some time for us to.
Approach those levels I would note.
As I have on past cause that when we seek to finance or multifamily. These are 55% loan to value loans on multifamily assets, we consider our debt extremely safe on the on the assets and we don't have any major maturities over the next three years.
Okay, and I guess, if you're going to be kind of a going concern even if it's just an apartment company I mean, how do you get to that final level.
Is it is it hopefully the fact is it a place where you can create more raise equity or.
Or asset sales.
What gets you filled.
Over the goal line.
So yeah.
I think that.
I think it's one step at a time.
There's no silver bullet traveling but I think we're making good progress moving in the right direction.
I've mentioned actually there are a few different.
Tools potentially available to us.
To be able to bring the the leverage down to what may optically be more <unk>.
Consistent with the multifamily market.
But certainly look away, where a year ago with two looming corporate debt maturities.
Of a significant quantity.
I think we've got a long way during the past 12 months too.
Cancel strengthening the balance sheet and the debt that we have right now, albeit on.
Net debt to EBITDA basis is elevated and that is a function of the disproportionate amount of equity that we have and fully equity funded non-bank and constructions and progress that are not yielding any EBITDA yet.
Vacancy on the waterfront is sort of a capital allocation point that but.
Ultimately the leverage is.
They are noted looming left maturities of concern an overall average on a known to value basis, particularly given the quality of the assets and the cash flows.
Doesn't present, any kind of real financial risk to us I think it's more about the optics of coming into line over time, and we do have a few tools about disposal to allow us to do that.
Okay, that's very helpful.
And then a lot of a lot of news in the press about potential large nieces and harborside. One can you just talk about the leasing pipeline and if you were to get that building least up does that movie closer to selling that one as well.
So uhm as I'm sure he'd appreciate.
It's not our policy to comments on on on rumor and speculation.
But what I will say about leasing generally is that.
While during the quarter.
The thing was quite muted.
And our feeling is that that was somewhat really related to the delta very and if you think back a few months and the fear that that caused an assortment of leasing decisions during the quarter.
It's not a complete surprise and in fact office leasing over the last 18 to 24 months across the board.
Has been muted and the waterfront is not an exception.
To put it into perspective year to date.
Has been something around 375000 square foot of leasing on the waterfront.
About two thirds of that is renewals.
The second lowest volume in 10 years, it's 80% below the 2016 peak.
And it's about 30% below the five year caught me average so.
And what has been relatively tough diesing period with the investment that we've made in the harvest slide complex with the investment that we've made in our leasing efforts, we still managed to at least 176000 square feet yet to date, which is about 60% of the total leasing activity yet.
The date, despite earning about a quarter of the total stock in that market. So I think the market is isn't strong on the leasing front, but we are making the most of it and I continue to believe that we are.
The best position, we've been for a very long time of the company to capture more leasing demand as we now start to see particularly with the boost the job.
A greater return to the office until along that.
<unk> market.
On the East coast.
[noise], Okay can you quantify the size of the leasing pipeline. Thank you've done that in the past.
Nah not during my tenure I think my sponsors very much that we will announce leases Adam when they become nieces and we signed them. So.
We're not gonna provide guidance.
On leasing pipeline going forward.
I haven't done that yet.
Okay.
And finally for me.
The buyers of the.
The waterfront ask that you have on your contract was as their interest in harborside as well as some of the same bye.
Well I mean.
Contractually restricted from disclosing the identity Ah Ah cause biased.
Or assets.
Which is why you so seldom lumped together.
Those those buyers had an interest in specifically in those assets not be on them and we didn't fix Lola.
Okay, Alright, thank you very much.
Question question.
Question comes from Steve soft cloth from Africa ISI. Please go ahead.
Thanks, My Bud and I was just wondering if you could talk a little bit about the the apartment business and.
Clearly the rebound has been sharp we've seen that with with many of your peers.
Appears in the area up here.
I'm just curious what are you sort of know sending out in terms of renewal increases given that you're roughly 96% occupied and clearly pricing powers moved back in your favor.
Yeah. So.
Steve. Thanks. Thanks, So question Uhm, Yeah, it's been a pretty.
Shop or aggressive rebounds.
Now.
2.7% above prescriber levels and occupancy concessions.
Being tape it right back there are some concessions still on the salt properties.
But for the most of the outside of that it's pretty much been scaled bite back. So we're at that point now where one would expect to start to see Samantha great. We're starting to see that rents are required.
And we.
Hum as I mentioned that actually once before we still have constituents of the mountains out there that are not even back yet.
Most notable one being.
The student community, but.
The overseas too crazy, but with borders now opening up potentially that just at the field to demand going forward and we're pretty optimistic about.
But it seems to be able to capture rental Gladys when we have really high quality assets.
That attracts.
Premium brands and are renting extremely well.
It's a false off the demand sorry, it's a soap opera at that.
But we have across the portfolio will they also it's also asking what's 430, and we expect to see that translated into some mental growth over the coming quarters.
Okay, but you can I guess you are not willing to quantify maybe where you're sending out renewal notices kind of looking out 60 days like I, just curious how much had changed or moved in your favor.
And the last.
Two months.
I think it's.
First step has been really the tapering of concessions and we are starting to see.
The impact on the rent faithful matter of fact the Rams.
But I think it's a little bit.
Two.
The data points are not sufficient yet for us to give you that level of caught it quite this quarter hopefully next quarter will be able to give you more color on that but like it's great.
Great position to be in the market fundamentals are strong the assets perform really well.
Relative to competitors in umbrella domestic about what that means in terms of.
Rental growth and comprising how can I afford.
Okay. Thanks, and then maybe a second question look I realize the balance sheet sort of constraining your ability to to start new development on multifamily you have a lot of land sites maybe just.
Talk us through you know your desire to find JV partners that you can contribute land they can come in and and be a capital source.
Do you sort of put that land to work and are there things that you have gotten a mix today that could allow you to start some new projects over the next 12 to 18 months.
Yeah well.
Great question I think it's really a capsule allocation then capital redeployment question. So.
I don't see it as somewhat constrained, but as we.
Look to sell off that flight with two office buildings, if we announce that does release equity in and we will as we near closing on those transactions evaluate all options for the redeployment of that equity will use of that equity really and ultimately put it to its highest and best.
You slept that quiet is I couldn't tell you today because no decision has been made.
But certainly when it comes to the land bank I've been pretty open about this before I think we have a disproportionately large and pretty and efficiently funded landbank. It's a great landbank don't get me wrong.
Great sites, but it's a lot of equity to have piled up.
That that has so the backhanded baton and no current income and is it <unk>.
Part of what we're trying to do is simplify and go back to the basics of what meets were intended to do so potentially some of that land could get recycled as well with the equity being reallocated to a higher and better use within.
Within the business, but.
All things that were looking out at the moment and I think it's a it's a great question, but it is one of the areas where I think there is some inefficiencies hitting on Lance you ultimately.
Not developing and it's just finding a hall of the balance sheet is and it's not a great sport to be it.
Okay and my last question just can you just remind us about the Rockpoint J D and are there any put right or you know capital calls or just financial obligations around that just to make sure we're thinking about.
How that might unwind or any any key dates coming up maybe in 22 or 23 that we should be mindful of.
Yep. Thank you Steve is David So all the equity has been funded by Rockpoint on their end our current business plan.
Doesn't call for any for us to call any additional equity from them Norwood.
Nor are we required to so over the next couple of quarters in years. The next main data in the agreement would be March 2nd 2023, where there is a put call between both partners.
At that point, either partner can exercise a one year extension, so you're really one year off that on kind of rationalizing the JV.
Finding net asset value market value for both.
And exchanging so you know the the JV will continue all over the next quarter's as I described and I don't think you'll see anything really different on that and.
Okay, great. Thanks.
Thank you welcome to our next question now from Tom Cochrane went from B T. I T piece kind of had.
Thank you so much <unk> talked about in the past the restructuring that you guys have done obviously, we've seen the positive impact on earnings how does that restructuring impacting the operating side of the business and did that contribute at least in part to some of that residential occupancy pick.
Up or was that more driven by stronger market fundamentals.
Good morning, Thanks for the question Tom.
So I think it's probably a combination.
I believe the restructuring going back to what we really did was we had to.
Almost independent.
Almost better than the autonomous.
Organizational structures underneath one which created financial.
Financial inefficiency, but also operational efficiency in the way I felt the business is being run so what we've done it collapsed all of that and so one streamlined.
Org structure.
And then reconfigure that tweak that that.
The bridge areas, where we felt like we could be stronger.
And so it's impartially.
Cost driven than policy, just more real kind of true operational level changes that we've made we brought in a couple of very seasoned.
Multifamily experts as well that we've hide and I do believe that that made a difference but the market has also been extremely strong and you've seen that in all competitors results as well so.
Uhm it's.
The deficiency on the cost side, but the revenue side has also been driven by the changes that we've made by the markets or anything it's a combination of all those things and you're starting to see some of the.
Rewards are making those changes I think.
Got it I appreciate that color and kind of following up on on the impact on the revenue side that you mentioned.
It was good to see the sequential pick up in both parking in hotels revenue this quarter, especially given.
Concerns around the Delta variant and delayed returned to office.
This was the first time the Hyatt Regency is inflicted into positive NOI territory since 2019.
Can you speak a bit about the trajectory in those line items, what you're kind of expecting from parking and hotels going forward and kind of the drivers of that sequential improvement.
Uh-huh.
Yeah, Hey, Tom it's David So I'll start on that <unk> can add so yeah I'm parking we did see some sequential improvement and it was really towards the end of the quarter. As you know returned to office at Labor day got pushed back anecdotally I I don't have the exact utilization right now but are lobbies are more for.
We're sharing elevators a lot of our food vendors have opened in and around Jersey city, so parking still probably needs.
I would say three to four quarters, maybe by the end of next year to get back to the levels that we were pre COVID-19.
And I think that'll coincide with returned to office being back 100% and then on the hotels, we've seen a lot of group pick up a lot of weddings, a lot of events, but again I would caution, let's let's see what happens this winter with return the office Delta very it in any other variance in flu but.
We're expecting I think from here just modest growth, we've had a stair step up and the hotels to a level and I think from her kind of more modest growth low single digits type of growth and EBITDA revpar.
Got it. Thank you David kind of lost one for me.
<unk> I appreciate your comments on the waterfront leasing demand in response to Jamie's previous question.
Taking it from a different angle the emerged New Jersey incentive program was obviously put in place earlier. This year, we understand the program made its first allocation or award or a month or so ago.
Are you seeing any positive change or thawing intendant requirements now that that incentive plan is in place.
It's a great question I do think that.
That.
Having the incentive program.
Have made a huge difference to the inquiries.
And the.
The number of thumbs that.
We will now consider relocating.
To New Jersey.
Two instances recent.
Oh.
The award actually being utilized almost party city the retailer if you've got a 10 million dollar incentive package and and as a result, you'll see 350 new jobs.
Created in Woodcliff Lake and then the.
The other one was financial perk phone called <unk>.
He was investing 150.
$105 million.
And Berkeley Heights, and creating 3000 jobs in this evening I pretty substantial tax credit Lord as a result, so it's starting to make its way through actually into.
Will translate into leases.
And our expectation is that will.
We'll continue to see more of that going forward.
Sounds are attracted to the area official.
Got it that's it for me thanks, everyone.
Thank you for the questions.
<unk>, we have a follow up question now from money Kotchman from city. Please go ahead.
Hey, it's Michael blend in here with many good morning, Marlborough Diet, you know I know the the pandemic is limited your ability to actually come to the U S. I'm just curious now as things with reopened a little bit more sort of what you're planning.
In terms of geography.
And I know you.
Hired a C L O in London.
To work with so just you just update us sort of on your own plan.
[noise] invitation.
Yeah sure Hi, Michael Thanks for the question, Yeah like I mean, we've obviously during the last.
We've made 14 months, we've made progress all of us actually not just me.
Spending a lot of time watching remotely and so we'll be done so far I think has been positive and and we will continue to do that having said that I'm excited because I have my one visa which has come through now have my appointment.
With the embassy had next week and I'm have a slight book to to get over there in the next couple of weeks so.
Similarly, with I'll see.
No going through a process with with her and the expectation is if everything goes as planned.
That she will relocate so.
Excited to see the borders reopened and I'm looking forward to coming over.
So are you going to relocate run the company or does he make this transition to multifamily you want it still C O in London or do you expect to hire.
A permanent.
And the email.
I think that's really a question.
For the both the latter won the the third part of the question is really uhm undecided. So as it stands and if I'm spending half of my time over there and all of my time of day I'm not sure if I'm living in the U S and.
Creating back to see my family or vice versa. So I will be doing what it takes to make the trip continues to make the company and the story of success.
For as long as I'm gonna seats.
Pre times on that you guys had indicated you had an offer that you mentioned company a double <unk>.
Terrible sort of corporate transaction initiatives scanned and.
Sort of take us to reassure lunch.
On that side, how much time, you were trying to spend on.
A corporate level transactions isn't there have been interested before when you've now gone down to the suburbs.
Only have four office assets left I would imagine that the interest level would be higher now that you're more cool.
[noise] well semi call as you know we have a relatively new highly competent and highly focused bored and strategic review Committee who.
It's focused on.
Creating and unlocking value for shareholders here.
In any way, but they cat our job as a management team is to focus on the operations to create value of the asset level and at the entity level.
Any future strategic decision that may or may not involve crystallizing not value outside of the current structure is really a question for the Src on the board, but as I said, there's something of a highly focused on.
But that's not really a question for us.
Okay.
Two off it fails can you talk a little bit about the process that you had gone through for those were those actively marketed or.
Or were they <unk> off market buyers came to you and then.
How did you think about pricing, especially given the fact that it.
Great prices 590 looks like you have almost $20 million a cough and then another 20 $25 million a prepayment penalty.
Really only letting down to like 550, 545 on with $400 million of that that's only relinquishing about $145 million.
Cash can you just sort of talk about.
Cap rate, how you thought about the pricing net of 40 $45 million has cost and just sort of reconciling that correct.
Hey, Michael It's it's David I'm Gonna start on this one I could jump in and add color. So these assets were marketed they have been marketed even pre COVID-19. So we kind of knew where the interest lied in these assets. So we're pretty happy with the pricing given where it came in from <unk>.
Covid that said, we're not gonna give you the exact quotes on both and we do have confidentiality and we're not closed yet so we're happy with where the bids came in on the Defeasance. You are correct. We do have defeasanced, but we weren't going to let that dictate our strategy and.
And we came up with some creative workarounds and approaches to this defeasanced, but net net of the Defeasanced. We still think we came out with pricing that we're very happy with.
And and that the market did see these assets and they fit in with our strategic direction I think many and others pointed out and others that know our portfolio. What's also important as these two assets one in Hoboken, and one in Jersey City really get US now defined down in and around our harborside assets, which are.
Four assets. If you you look at them from the street, but really could be considered one complex. So we weren't going to let the feed this really drive the day here, we're happy with the price we got and strategically this is where we wanted to go and pivoting towards multifamily I don't know if Bob I'd had anything additional.
Oh look I think it's it's a strong price across the two on a five square foot basis.
And.
That's certainly been the reception as well that that we received we think it's the right decision to move forward in this direction as I said, we're focused not just on at any cost at any point.
Moving in this direction and destroying by your very focused on moving in this direction towards the transition.
By multifamily right in a thoughtful way.
And then an opportunistic way and to US that's exactly what we've done with these sales.
Can can you just walk through the sources of nieces and the math.
Surprise that transaction costs are so high.
And then obviously the prepayment penalties, which.
The choice that you had to make to deliver on the assets unencumbered obviously is.
Dash out the door. So can you just walk us through sort of the financial impact of these transactions, obviously, the extra hundred and 50 will go towards debt repayment.
We're relinquish the 400, but I'm just trying to get a sense of how much NOI goes away.
When these deals close.
Oh, My God, you're asking a lot of questions. There I think you're essentially asking for the cap right to figure those out we do provide the amount of debt and the interest rate. There. So what I'd say if you go through our supplement you can see what our rent sorry, you can see the occupancy in these assets. So it's.
It's still too early these assets haven't close we're not gonna come in on the cap right. You are right that when cash comes in we do have a balance on our line. We would look just to manage our flowed and pay down the line and then his mother had mentioned will look at our capital allocation and which we have a number of different avenues we.
Can go down.
Including recycling returning capital and further repayment of debt. So we'll look at all of those but at this point, we're not going to relinquish cap rates on these assets.
Okay last question, just as you transition to multifamily how much of locked point is tied into the asset value and the sort of G. E D of of the multifamily platform.
So Michael we we always disclose the rockpoint minority interests, so they've invested $400 million and they also have an accrual in the waterfall, which we book it's on our page on page seven of our supplement so it's currently at 466.
3 million, we've never really commented on or do we disclose the JV split percentage, but that rockpoint interest that would be their their equity interest in perhaps with leverage you could kind of back into what their percentage of of G. A V. As there and also on that basis, you could back into the their equity into.
But we continue the the same disclosure and I think Steve asked before about some of the other partnership features and the buy sell but nothing new to report their rockpoint.
Can you distribute assets and relinquish or if the buy sell on the complaint platform.
There are a number of things we can do unless and we have a very good relationship with Rockpoint. This is not gonna be one of us rushing to a buy or sell a date and surprising the other there's lots of different things. We can do and we have a broad relationship with them and so when the time comes will have those discussions.
We don't see anything in the near future changing on that relationship.
Okay. Thanks for the Congress.
<unk>, we have no further questions at this time I'd now like to turn the personal patient back over to your speakers today find any additional comes to remarks.
Thank you very much everyone for joining us today, and we look forward to updating you on all continued progress next quarter.
Thank you. This will conclude today's conference call. Thank you for your participation ladies and gentlemen, he may 19th connect.
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