Q4 2021 Stratus Properties Inc Earnings Call
Good morning, and welcome to the Stratus properties year ended December 31, 2021 financial and operational conference call.
Earlier this morning, Stratus issued a press release announcing its year ended December 31, 2021 financial results.
Press release is available on Stratasys website at Stratus properties dotcom.
Following management's remarks, we will host a question and answer session. Please.
Please note. This call is being recorded and will be available for replay on Stratasys website through April 14th 2022.
Anyone listening to a taped replay should note that all information presented is current as of today March 31, 2022 and should be considered valid only as of this date.
As a reminder, today's press release and certain comments that will be made on this call include forward looking statements and actual results may differ materially from those anticipated expected projected or assumed in the forward looking statements.
Please review the cautionary language included in Stratasys press release issued today and the risk factors described in Stratasys 2021 Form 10-K that could cause actual results to differ materially from those projected by stratus.
In addition management will discuss earnings before interest taxes, depreciation and amortization also referred to as EBITDA and net asset value or N. A V and financial measures calculated by reference to a N. A V including after tax N. A V and after tax N. A V per share what's your financial measures.
<unk> not recognized under U S. Generally accepted accounting principles also referred to as GAAP.
As required by SEC rules. These non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in the supplemental schedules of Stratasys press release issued today.
On March 25, 2022, the company published on its website under the investors tab and update to its N a V.
I would now like to turn the conference call over to Mr. Beau Armstrong, Chairman, President and Chief Executive Officer of Stratus properties. Please go ahead.
Thank you all for joining our year ended December 31, 2021 financial and operational conference call today.
Our Chief Financial Officer, Erin Pickens is also here with me today.
I would like to start by spending some time acknowledging the tremendous year, we had which was only made possible by our incredibly talented and hard working team here at Stratus.
Then I will provide updates on the status of our current residential development project pipeline as well as touch on a few of our new retail and commercial development activities, which we are excited about.
Finally, I will pass the call to earn to review our 2021 financial results before wrapping up with remarks about the encouraging markets, we operate in and our successful full cycle development strategy.
To begin our momentum is driven by our significant achievements last year and I'm excited to share that 2021 produced record net earnings for Stratus.
Our total stockholders' equity increased 60% to $158 1 million at year end 2021.
Year end 2020.
Upon the completion of the pending sale of block 21, we expect to record a pretax gain of approximately $120 million or $95 million after tax.
Block 21 transaction is also expected to be accretive to stockholders equity.
We had the most productive year in the history of our company in 2021, which included.
Executing the sales of the Saint Mary and the Centaur for a combined sales price of $212 million and a combined pre tax gain of $106 million.
Sourcing significant institutional equity capital with an attractive promote structure for stratus to develop several new projects in our pipeline.
Including the St June B B.
And the St George multifamily projects in Austin and <unk>.
Continuing to lease up our retail projects, including our newest shadow anchored HEB in your Houston suburb of Magnolia, which is currently under construction.
Yeah.
Separately, we also successfully achieved our board refreshment objectives to enhance the skills experience and diversity of the board through the appointment of three new directors over the past 18 months.
Neville Rone Junior in December 2020.
Kate Henriksen in January 2021.
And Lori daughter in August 2021.
I am proud of our team's success in entitling designing constructing leasing and ultimately selling the Saint Mary and the Santo <unk>.
Our teams continue to work toward the block 21 sale.
The start of several new projects and continued progress on substantial new opportunities in our existing development pipeline.
In January 2021, we announced the sale of the Saint Mary a 240 unit luxury garden style rental project in the circle C community in Austin for $60 million or $250000 per unit.
After closing cost and repayment of the project loan the sale generated net proceeds of approximately 34 million of which stratus received $21 $9 million.
Stratus recognized a gain on the sale of $22 $9 million with $16 $2 million net of Noncontrolling interest in 2021.
In December 2021, we completed the sale of the St. Paul a 448 unit Garden style multifamily luxury rental project located in section N of Barton Creek for $152 million generating net proceeds of approximately $74 million and a pre tax gain on the sale of 83.
After closing costs and repayment of the project loan.
A portion of the proceeds from the sale of the Santal enabled us to pay down in full our revolver revolving credit facility with Comerica Bank.
We are also continuing to work toward closing the sale of our block 21 property to Ryman hospitality properties, Inc. For $260 million the transaction.
<unk> is expected to close prior to June one 2022 subject to the timely satisfaction or waiver of various closing conditions, including the consent of the loan Servicers to Ryman is assumption of the existing mortgage loan the consent of the hotel operator, an affiliate of Marriott to Ryman just.
<unk> of the hotel operating agreement the absence of a material adverse effect and other customary closing conditions.
Our outstanding achievements in 2021 reflect our team's continued success in developing properties from within our significant land portfolio as well as sourcing new development opportunities to generate value for our shareholders.
I am confident we have the development expertise market knowledge relationships and focus to continue to thrive in Austin and other select fast growing Texas markets, where we operate.
With that I'm going to turn to provide updates on our residential projects.
I want to start by first discussing our residential property portfolio.
Our residential projects continue to thrive in 2021 positively impacted by home centric trends, resulting from the pandemic and increased attractiveness of Austin, which continued to drive demand higher than available supply.
For the anti B the St. George in the St June we raised $46 $3 million of third party equity capital in 2021 contributing to the 90% increase in total equity to $208 $6 million at year end 2021 from year end 2020 and demonstrating.
Our ability to source outside equity capital with promoted economics for the company as we previously did with the Saint Mary Kingwood place projects in 2018.
I will now provide brief descriptions of each of these new projects.
The ATB is our proposed luxury high rise rental project in downtown Austin near the state capital expected to be a 400 foot tower with unobstructed 360 degree views of the capital.
Town Austin, the University of Texas campus in West Austin.
The project consists of approximately 420000 square feet with 300 luxury multifamily units for lease and ground level retail and other unique amenities.
In the historic a O Watson house, which was part of the antibody land assemblage and will be fully renovated as part of this project.
We closed the purchases in September 2021, and expect to finalize development plans and financing over the next 12 months.
The St. George is a proposed rap style multifamily rental project to be constructed on approximately four acres with about 317 units comprised of luxury studio one and two bedroom units and an attached parking garage along the Burnet Road corridor in North Central Austin.
Which is near the new Austin FC Soccer Stadium.
We closed the land purchased in December 2021.
While we continue to plan the project negotiate a construction loan and obtain entitlements and permit approvals. We expect to begin construction by mid 2022 and achieve substantial completion by mid 2024.
In the third quarter of 2021, we began construction on the St June of 182 unit luxury garden style multifamily rental project within the Tomorrow development in the Barton Creek community in Austin.
The first units at the St June are expected to be completed in the third quarter of this year with completion of the project expected in the first quarter of 2023.
In 2020 . One we also continued to make progress on several important long term development projects, including holding hills and section and at Barton Creek with a particular focus on health and wellness sustainability and energy conservation.
Sustainable development continues to be a guiding principle for the company.
Holton Hills as our final large residential development within the Barton Creek community, consisting of 495 acres and designed to feature 475 unique residences to be developed in multiple phases.
We anticipate securing the final permits to initiate construction in September of this year.
And to begin to close the sales of Homesites in mid 2024 subject to obtaining financing.
Using a conceptual approach similar to Holton Hills, we are evaluating a redesign of section N and approximately 570 acre track with a significant multifamily component in the southern portion of Barton Creek.
At Lantana place South of our Barton Creek development, we are planning to begin construction on the 306 unit multifamily component of this project in the third quarter of this year.
With an expected completion in mid 2024.
I'll provide more detail on lantana place in a moment.
Cost increases for our residential projects in 2021 reflect increased construction activity in line with increased demand as well as industry wide impacts of material and labor supply constraints.
We continue to monitor and strategically advance on certain projects in line with current trends and future expectations, such as the incorporation of more residential uses.
While also actively managing and monitoring design and construction costs.
Our retail commercial and mixed use projects are also continuing to perform well and benefited from increased activity in foot traffic throughout 2021.
We are continuing to lease up our retail projects Kingwood place Lantana place West Killeen market and Jones crossing.
All four projects are producing positive cash flow after debt service.
Our Kingwood place project in the greater Houston area includes approximately 152000 square feet of retail lease space anchored by a 103000 square foot HEB grocery store five pad sites of which four had been ground leased and one is available.
As of December 31, 2021 we have signed leases for approximately 85% of the completed retail space, including HEB.
Kingwood place also includes a 10 acre parcel currently planned for approximately 275 multifamily units in September 2021, we entered into a contract to sell this land for $5 $5 million and if consummated the sale is expected to close in mid 2022.
Lantana place is a partially developed mixed use real estate development project as of December 31, 'twenty 'twenty. One we have signed leases for approximately 85% of the 99379 square feet of retail space, including the anchor tenant movie House, an eatery and a ground lease for an AC by Marriott Ho.
As mentioned earlier, we expect to begin construction of the multifamily development in the third quarter.
This site within that Lantana place was recently Rezoned from office use to multifamily use.
As of December 31, 2021.
We had executed leases for approximately 70% of the retail space at West Killeen market, our HEB anchored retail shopping center in Killeen, Texas.
During 2021, we sold a pad site at West Killeen market for $750000 and only one unsold pad site remains.
We are also continuing to lease up our Jones crossing property.
Jones crossing is an HEB anchored mixed use project located in college station, Texas.
As of December 31, 2021, we had signed leases for approximately 95% of the completed retail space, including HEB.
Also as of December 31, 2021, we had approximately 23 undeveloped acres with estimated development potential of approximately 104750 square feet of commercial space and five vacant pad sites.
In 2020 , one we also announced new development plans obtain debt financing and commenced construction on the first phase of development for Magnolia place a mixed used development shadow anchored by HEB in the greater Houston area.
Yeah.
The development is planned to consist of four retail buildings five retail pad sites to be sold or leased 194 single family lots and approximately 500 multifamily units. We have signed three leases for 40% of the in line retail space and are in discussions with additional potential tenants.
The HEB is expected to open in the second quarter of 2022, and the first two retail buildings are expected to be available for occupancy in the third quarter of 2022.
Our design plans for new Kaney, an HEB anchored mixed use project, including restaurants and retail services remain underway. We currently plan to commence construction no earlier than 2024.
We expect the new Cannae project will total approximately 145000 square feet five pad sites and a 10 acre multifamily parcel plant for approximately 275.
Multifamily units.
Overall, we are pleased with the performance of our existing properties I'm encouraged by the activity in our pipeline and our team's proven ability to create value through the development process.
Thank you and I will now turn the call over to our CFO Erin Pickens for a review of the 2020 one financial results.
<unk>.
Thank you Bev.
Today, we reported our year ended December 31st 2021 financial results in our press release issued this morning.
<unk> consolidated revenues totaled $28 $2 million for 2021, compared with $44 $3 million for 2020, primarily reflecting the decrease in revenue from our real estate operations segment.
And there are available inventory of developed lots decreased.
Net income attributable to common stockholders totaled $57 $4 million or $6.90 per diluted share for 2021.
Compared to a net loss of $28 million or $2 78 per diluted share for 2020.
Net income for 2021 versus net loss for 2020, primarily the result of gains recognized on the sales of the santal and the Saint Mary totaling $106 million combined on a pretax basis.
EBITDA totaled $9 $7 million for 2021, which was a significant increase over $1 $1 million for 2020.
Also primarily attributable to the gains recognized on the sales and the phone calls on the Saint Mary.
Historically, we have reported for operating segment real estate operations leasing operations Hotel and entertainment.
Moving forward due to the pending sale of block 21, our continuing operations include our real estate operations and leasing operations segment.
Discontinued operations include hotel entertainment as well as in leasing operations associated with block 21.
Revenue from our real estate operations segment in 2021 totaled $8 $5 million compared with $22 $6 million in 2020.
The segment's operating loss totaled $3 $3 million in 2000.
In 'twenty one.
Compared with operating income of $3 $7 million in 2020.
This decrease in revenue and the operating loss primarily reflects the decrease in the number of lots sold during 2021.
Available inventory decreased.
Revenue from our real estate operations accounted for 30% of our total revenue in 2021 and 51% in 2020.
The operating loss also includes impairment charges of $700000 per kilo marvelous homes under construction and under contract.
$625000 for the multifamily tract of land at Kingwood place for which a sale is pending.
$500000 for an office building in Austin, Let's try this is renovating and may occupy as its headquarters from closing of the sale of block 21.
As of December 31, 2021 straight has had only two unsold developer tomorrow <unk> drive phase III lots.
Also in 2021 and try to sell this last condominium that the W. Austin residences that block 21.
Revenue from our leasing operations segment in 2021 and totaled $19 $8 million compared to $21 $8 million in 2020.
The decrease primarily reflects the sale of the Saint Mary.
Actually offset by increased or have any of that lantana place, notably revenue from our leasing operations segment accounted for 70% of our total revenue for 2021 versus 49% for 2020.
The segment's operating income was $111 $4 million in 2021 compared to operating income of $3 $1 million in 2020.
This significant increase reflects the gains recognized on the sales at the Santal, the Saint Mary, which as I mentioned earlier totaled $106 million combined pre tax.
Despite the COVID-19, pandemic stratasys retain substantially all pre pandemic retail tenants.
And added new tenants and all of our tenants are currently paying rent per their leases as well as monthly payments pursuant to a previously disclosed base rent deferral arrangements.
Moving now to results for discontinued operations.
Got it and hotel revenues increased to $18 $3 million in 2021.
$9 $9 million in 2020.
Which is primarily a result of higher RIN occupancy and food and beverage sales as the impacts of the COVID-19 pandemic continue to lessen throughout 2021.
Revenue per available rain, a revpar was $155 in 2021 compared with $61 in 2020.
Entertainment revenues increased to $12 $9 million in 2021 compared to $5 $2 million in 2020.
Primarily reflecting the increase in the number of events hosted at ACL live and <unk> ACL live.
Seating capacity remained limited at Stratasys entertainment venues until opening up to full capacity in August 2021.
After closing costs and Robin's assumption of the outstanding block 21 land. The sale of block 21 is expected to generate net pre tax proceeds of approximately $115 million in after tax proceeds of approximately $90 million.
<unk> preparations, including $6 $9 million to be S credit for 12 months after closing.
We expect to record a pretax gain of approximately $120 million upon the closing of the sale.
$95 million after tax.
Yes.
Our general and administrative expenses included in corporate eliminations, and other increased to $24 $5 million in 2021 compared to $13 $6 million in 2020.
Primarily reflecting a $7 $4 million increase employee incentive compensation costs associated with the profit participation incentive plan, primarily for the Santal Lantana place project.
And $2 7 million dollar increase in consulting lethal and public relation costs for Stratasys successful proxy contest.
Turning to capital management at December 31, 2021, consolidated debt totaled $106 $6 million and consolidated cash totaled $24 2 million.
This is compared with consolidated debt of $137 $7 million and consolidated cash of $9 $3 million at December 31st 2020.
Consolidated that announced they.
Excluding 21 line of approximately $138 million and at December 31st hasn't 'twenty also excluded the santal loan of approximately $75 million.
And the Saint Mary construction line of approximately $25 million.
As a result of these properties being classified as held for sale of those dates.
After using a portion of the proceeds from the sale of the santal to repay the balance under our $60 million American Bank credit facility as of December 31, 2021.
We had $59 $7 million available under the credit facility with letters of credit totaling $347000 committed against the credit facility.
Purchases and development of real estate properties included in operating cash flows and capital expenditures included in investing cash flows totaled $72 $3 million for 2021.
Merely related to the purchases of land for the St. George any <unk> the development of the St. Jude and other Barton Creek properties, including Tomorrow.
And the Magnolia place in Lantana place project.
This compares to the $20 million for 2020, primarily related to the development of Kingwood place Lantana place and Barton Creek properties and the purchase of an office building in Austin.
We project that Stratus will be able to meet its debt service and other cash obligations for at least the next 12 months or.
Our $60 million revolving credit facility with Comerica Bank matures on September 27th 2022.
We're in discussions with the lender to a live Holton hills from the collateral pool for the facility financed the Holton Hills project under a separate loan agreement and enter into a revised revolving credit facility with a lower borrowing limit secured by the remaining collateral under the facility.
If these discussions are not concluded timely we expect to be able to extend or refinance the facility prior to the maturity date.
Assurances can be given that the results anticipated by our protections will occur.
Finally, before I pass the call back to Bill I would like to discuss Stratasys updated in a V.
A presentation of our calculations can be found on Stratasys website.
<unk> total stockholders' equity was $158 $1 million at December 31st 2021, compared with $98 $9 million at December 31, 2020.
Genesis after tax NAV increased to $408 $9 million or $48 80 per share as of December 31 2021.
This compares with $337 $3 million or $40 65 per share as of December 31, 2020.
The increase in the after tax NPV was primarily driven by the increase in the gross value of block 21, which as of December 31st 2020 was determined using an appraisal obtained during the COVID-19 pandemic and is currently determined using the contract price with Brian .
Thank you I will now turn the call back to Bob for his closing remarks.
Thank you Erin I'm extremely proud of our team for all that we've accomplished this year.
2021 has been the most productive year in our history and Stratasys momentum is strong.
With our historic sales this past year and the pending sale of block 21, we are continuing to explore a range of capital allocation priorities for the uses of proceeds.
Which may include a combination of further deleveraging returning cash to shareholders and reinvesting in our project pipeline.
We expect to provide additional information after the block 21 transaction is concluded and the strategy Board and management have had the opportunity to assess market conditions.
And the capital desired for use in Stratasys development pipeline in the meantime, after careful consideration. The board has concluded that stratus converting to a REIT is not the best path forward for Stratus and its shareholders.
Among the factors the board considered in reaching that conclusion. Our stratus has continued success in generating attractive returns by developing and selling its properties.
Rashes large undeveloped land holdings, which provide ongoing and future opportunities for development and sale and the promising nature of other projects and Stratasys development pipeline.
Yeah.
Our successful performance and drive are informed by our ability to understand favorable market conditions and trends. We are committed and equipped to continue to source new opportunities for stratus moving forward.
Austin continues to be a thriving city and the metroplex has always been core to our pipeline.
The demand for housing remains strong here and other select markets we operate in.
We have many exciting opportunities in our development portfolio.
Our strategy is flexible and allows us to pursue opportunities that make sense, whether we decided to hold a property for lease or pursue a sale of refinance we have a talented team committed to continuously evaluating the best value creation opportunities for each of our properties.
Thank you all for joining at this time I would like to ask the operator to open the line for questions.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you were using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Fred Burtner with private Investor. Please go ahead.
Good morning Bowen Erin.
I had two questions first on block 21 is there a particular issue that's holding up the closing of the sale.
Good morning, Fred.
Not really it's more of a process. This is a the underlying financing is a C. M. B S alone, which I know you you know how those work those were all chopped up into little pieces and part of the in our loan agreement. We have the right to have this loan assumed under certain.
<unk>.
No.
It is clear to us at Ryman is a great borrower and owner operators. So theres been no question about Ryman, it's really a matter of just a process. There are a lot of hands on the wheel. So to speak. So we have made it through I think the critical process of the special servicer and they have signed off on it.
So now we're just kind of grinding through the balance of the process. So I would it's not anything that is theres nothing wrong with the property there is nothing wrong with the with the with Ryman.
It's really just a matter of a.
A terrible process it.
You know.
If I had to blame one thing.
Thank you and my other question is.
Why did the company waste. This is about the Centel why did the company waste time and money.
Trying to sell the <unk> in 2019, when you did so much better by waiting for 2021.
Well I think what we did.
Well, we did Fred was when we when we marketed the property in 2019.
We ran a.
Comprehensive process, we hired a.
Local broker in the.
The project had wide distribution and we had a number of really I thought very strong offers that would've been very profitable, but when we when we analyzed it we thought that.
Perhaps we would just be a better for us to refinance it so we refinanced it and pulled out.
Most of our investment.
And at that point, just continue to operate the property and then what happened.
Yes.
Covid happened, we had we were able to kind of push rents a little bit.
Austin.
Really.
Began to attract even more capital, which is hard to imagine just given the base. We were operating off of so we took it back out and obviously, we had a much better price. So I think the highest price. We had was about it was literally $101 million. So it went from 101 to $1 52.
In the span of whatever it was 18 months or so so I think we made the right decision by by refinancing and holding it.
The rent roll moved a little a little bit I don't know that it moved enough to where to justify that kind of price move I think we just got the benefit of.
You know Austin and.
The just the amount of capital that has come into this town. So I would just you know.
I guess, we got lucky on that one.
Okay.
I will say that the buyer is.
Very happy with the project. So I think you know our philosophy is around here, we we like to leave a little meat on the bone for the for the next buyer and so we know that they are happy with the asset and so I think it's been good for everybody.
Thank you I appreciate it.
The next question is from Chris Mooney with Wedbush Securities. Please go ahead.
Yeah.
Good morning, Bowen, Erin and really congratulations on a very busy and very successful 2021.
I have several questions.
The first is.
In the <unk> calculation Erin there is it $5 million potential set aside on the block 21 transaction can you speak to that a bit and then I was kind of surprised at the amount of 12 billion something that's being set.
Set aside for some period of time can you give us a little more color on both of those.
Related to block 21, I'll handle the five so the five is.
There are a couple of retail spaces within within the block that.
We have some tenants that are moving around and so we basically have set aside $5 million just depending on what happens with these tenants. So.
I can't tell you, whether I think that that will be able to you know, we'll keep that money or not.
Just kind of dealt with it in that fashion I think we're taking the conservative approach that we actually don't get that $5 million, but it's something that's going to take several months to work itself out as the 12 that number seems high to me I do know that we have 6 million $6 9 million $6 $9 million, Chris that it's customary we.
As a single.
It's there's really no recourse back to stratus and so I think it's customary that and transactions like this that we will set aside some cash for 12 months to basically backstopped some of our reps and warranties. So that's why that straight and I I I I think we feel comfortable that money will ultimately flow to strategy, but it is it's kind of a <unk>.
<unk>.
Set aside if you will for a transaction of this size.
Okay.
Couple of more quick ones is there any update on activity either in Liquate or circle C.
Well like way.
We retained approximately 25 acres of single family land.
The land use designation in our Pud agreement with the city of like what we have.
We have been in discussions with the city to in order to expedite the construction of a road through our property, which would be a bit of a kind of a relief valve Youll know Lake way. This goes from 620 to low mentioned and it would provide better access to the HEB, which is a huge traffic generator.
And then 620 is about to undergo a pretty significant construction projects. So the city is trying to figure out a way to incentivize incentivize us to build that road sooner than we would like so we had suggested to them that they could see their way to allowing us to build a multifamily project there we would.
Expedite the road construction. So we are we've been through a bit of a public process. We are I would say within a couple of weeks of making a formal application of the city, but I will tell you they are they.
They are not big fans of multifamily housing out there so.
I don't know it will be successful I mean, we think the single family works. It just doesn't work right now.
Given some of the cost of this road is very expensive there is a very expensive.
<unk> needs to be built.
So.
We think that it's good good real estate, it's just it just needs a little more time to season, but the multifamily.
It would allow us would give us some better economics than we could justify moving forward with the road with a rogue sooner so I guess.
Short answer is the long answer rather it's just to kind of stay tuned we're starting to kind of get into the process here over the next couple of weeks.
And then circle C.
You know several C. We really have we just have a couple of properties. There we've got a big office site along <unk>.
And in the last 24 months there have been some significant traffic improvements that have helped the site. So we have actively been marketing that as a as an office campus.
But we're also considering rezoning that are attempting to rezone that for more mixed use we'd like to add.
A housing component to that if possible again.
Multifamily you know I grew up in an apartment projects. So that it doesn't really bother me, but a lot of people just have an adverse reaction to apartments, even if it's kind of a class a nice stuff. So I again, it's hard to it's hard to know whether we'll be successful but I.
I think in Austin.
Housing is probably are the city's biggest priority right now we just have this.
Huge gap between the supply and demand of housing and I see that continuing for some time. So I think that there are.
Perhaps some sympathetic years at the Citi two to help accommodate additional housing stock. So we will know, which again, it's a process and it's purely discretionary by the by the city of Boston, but we feel that will put forth a thoughtful plan and we will take into account.
The needs desires wishes of the neighborhood, but that it's going to take us a little bit of time, but again, a long answer to your question great Real estate, we think that it would benefit from some.
And an additional land use other than just straight office. So we're going to we're going to take a shot at it.
Okay.
Okay great.
And then on the three retail centers that are up and running and I guess Jones crossing 95% leased.
As these me yeah.
I assume these are stabilized in the past you have had interest in monetizing.
Similar things is there any thought that you may look at that again.
Yes, we are you know our typical process for this is we will we.
We will ask a couple of the leading.
Investment sales brokers to to evaluate the projects and give us what we call a broker's opinion of value and then a marketing strategy. So we have done that we have not selected.
We have not made a selection yet of which which company we're going to use but we have we have pretty good data on the market whats available whats sold so I think we've got our.
A very clear picture of.
Where we want to go we do have some.
Ongoing construction and lease up and Thats that really doesn't affect value, but it is something we'd like to get to.
A good passing off point, if you will between us and the ultimate purchaser. So.
Yes, we are.
Our strategy continues to be to build stabilize and sell and I would think the board again I don't want to get ahead of the board they've not made a decision on this yet but my my feeling is that we will we will present this to the board.
And again, it's consistent with our strategy, we just want to make sure that we have.
Fully stabilized so we maximize the value, but I, but I would think that something that we will entertain.
Certainly this year.
And I think it's possible either to get it closed this year or early next year, depending on when we get into market. Because they are they are they are stabilized or stable or quickly stabilizing.
They're all HEB affiliated which HEB of course as you know.
It was very attractive from an institutional standpoint, so we think we're gonna be in pretty good shape there.
And again and lastly, they all really performed very well during COVID-19 and that's been something that we know institutional buyers are focused on is how how did things performed during COVID-19 and to the extent that they performed well I think that bodes well going forward.
Sounds like it's going to be a busy 'twenty two as well.
Surgeons, we're counting on it thank you.
This concludes our question and answer session and the conference is also now concluded. Thank you for attending today's presentation. You may now disconnect.
Yeah.
Okay.
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