Q1 2022 Getty Realty Corp Earnings Call
Good morning, and welcome to Getty Realty's, earning conference call for the first quarter 2022.
This call is being recorded.
After the presentation, there will be an opportunity to ask questions.
Prior to starting the call Josh.
Josh <unk> Executive Vice President General Counsel and Secretary of the company.
Read our safe Harbor statement and provide information about non-GAAP financial measures.
Please go ahead Mr <unk>.
Thank you operator, I would like to thank you all for joining us for Getty Realty's first quarter earnings Conference call yesterday afternoon. The company released its financial results for the quarter ended March 31, 2020 to the form 8-K and earnings release are available in the Investor Relations section of our website at Getty Realty.
Dot com.
Certain statements made in the course of this call are not based on historical information and May constitute forward looking statements. These statements are based on management's current expectations and beliefs and are subject to trends events and uncertainties that could cause actual results to differ materially from those described in the forward looking.
Statements. Examples of forward looking statements include our 2020 guidance and May also include statements made by management in their remarks and in response to questions, including regarding the Companys future operations future financial performance and the company's acquisition or redevelopment plans and opportunities we caution.
Such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially I refer you to the company's annual report on Form 10-K for the year ended December 31, 2021, and our other filings made with the SEC for a more detailed discussion of the risk.
And other factors that could cause actual results to differ materially from those expressed or implied in any forward looking statements made today you should not place undue reliance on forward looking statements, which reflect our view only as of the date hereof and the company undertakes no duty to update any forward looking statements made that maybe.
We made in the course of this call also please refer to our earnings release for a discussion of our use of non-GAAP financial measures included in our updated definition of adjusted funds from operations or <unk> and our reconciliation of those measures to net earnings with that let me turn the call over to Christopher constant our.
Our Chief Executive Officer.
Thank you Josh good morning, everyone and welcome to our earnings call for the first quarter of 2022.
Joining us on the call today are Mark Olear, our Chief operating officer, and Brian Dickman, Our Chief Financial Officer.
I will lead off today's call by providing commentary on the quarter highlight the company's investments and capital markets activities and discuss our outlook for the remainder of the year as usual Mark and Brian will take you through the portfolio and financial results detail.
Our solid first quarter results again demonstrated the successful execution of our strategy.
Which delivers durable cash flows.
Our operating portfolio combined with attractive growth.
Sure.
Our strong 2021 acquisition activity.
Contractual rent escalations.
Our redevelopment projects.
The base rental income.
Okay.
Yes.
Our adjusted funds from operations or <unk> increased 12, 5% and our <unk> per share of <unk> 52.
It represented a six 1% decrease over the prior year's quarter.
Year to date, the company has invested approximately $53 million, including the acquisition of two convenience stores for $7 million. During the first quarter. The acquisition of 10 car washes and wanted to be a source of $43 million subsequent to quarter end and approximately $3 million of total development funding year to date across four project.
It was both due to industry sources.
Yeah.
We ended the year with a robust investment pipeline across a number of our target asset classes. We are remaining disciplined in our approach as we work through these and other opportunities.
Our strategy is to acquire high quality real estate across the convenience in automotive retail and service sectors and to partner with strong and growing regional and national operators.
Considering these factors we are optimistic about our ability to continue executing on our investment strategy.
Breasts.
I'm also pleased with our recent capital markets execution, including our credit facility refinancing and ATM equity issuance in the fourth quarter of 2021, and the two tranche 225 debt private placement, we completed in the first quarter, which position us well to fund our growth pipeline.
Yeah.
Turning to the convenience store sector, which continues to represent approximately three quarters of our ABR. The National Association of convenience stores or at Max recently published its annual state of the industry.
For me, the resilience and consumer demand for the overall convenience store sector.
<unk> annual survey data for convenience stores across every region of the United States 2021 was another strong year for inside store sales, which grew more than 8% and reached a record $280 billion.
Similar to last year. The next survey highlighted a 6% increase in the average basket size per dollar spent per transaction in the store, which is impressive prior year's increase was up 15% due to pandemic related shopping.
Customer visits also rebounded during the year as consumers return to normal in store shopping patterns.
Most important for the overall convenience store sector was the return of strong foodservice sales, which were up 24% year over year after declining during 2020.
For 2021, the next data indicated that food service represents a 22, 5% of total inside sales and 35, 5% of overall store gross profits both record levels for the overall industry.
On the fuel side of the business. The good news is that consumers and commuters drove a recovery of fuel volumes 2021, which saw total fuel gallons sold increased four 4%.
It was the gap to pre pandemic levels as 2021.
Nationally, we're only seven 2% below the 2019 levels.
For this year. Despite the recent volatility in the oil market and rising retail prices industry reports suggest that fuel volumes are continuing to recover and that the average gross profit continues to be healthy and generally in line.
Sure.
In general despite the inflationary pressures impacting the broader U S economy, including our tenants' businesses.
Pleased that journey and our tenants continue to operate successfully without material adverse effects to date.
We will continue to monitor our business and proactively communicate with our tenants in our portfolio to better understand any changes to industry fundamentals as the year progresses.
Our team remains as focused as ever on the growth of this company. We are working diligently to source and underwrite new opportunities in strong metropolitan markets.
As well as to unlock embedded value through selective.
We believe our success year to date and our current pipeline demonstrates our ability to source opportunities that align with our investment strategies.
And that we are in position to continue driving additional shareholder value as we move through 2022 and beyond.
That I will turn the call over to Mark to discuss our portfolio and investment activities.
Thank you Chris.
As of the end of the first quarter. Our portfolio includes 1003 net lease properties five active redevelopment sites and six vacant properties.
Our weighted average lease term was eight seven years and our overall occupancy excluding active redevelopments was 99, 4%.
Our portfolio spans 38 states across the country, plus Washington D C and our annualized base rents, 64% of which come from the top 50 msas in the U S are well covered by our trailing 12 month tenant rent coverage ratio of two six times.
In terms of our investment activities, we have completed $52 8 million of investments year to date.
This reflects $8 $8 million of acquisitions or development funding for three properties in the first quarter, including sale leaseback to convenience stores in Connecticut.
Properties, which required for $7 million are subject to a 15 year unitary lease with global partners.
We also advanced $1 7 million of development funding for one new to industry property during the quarter.
The project is with Splash Carwash for the construction of an express tunnel wash location in the New Haven, Connecticut MSA.
As part of this transaction, we will accrue interest on our investments during the construction phase of the project and we expect to acquire the property would be a sale leaseback transaction completions final funding.
Aggregate cash yields on our first quarter investments was six 6%.
Subsequent to quarter end, we invested $44 million in 12 additional properties.
And our recent investments investments include.
<unk> on the acquisition and these factors eight express tunnels car wash properties in the Austin, Texas MSA with go car wash with $36 million.
Two additional properties Laskhar loss.
Your $6 million.
Acquiring one convenient store location in New York City, MSA for $1 1 million and.
In providing approximately $1 million of development funding slashed carwash or another industry Carwash. This one in Houston, and New York, MSA, which we expect to acquire upon completion.
The weighted average lease terms of the properties acquired to date 14 eight years in the aggregate initial cash yield on our year to date investment.
North of six 5%.
We began 2022 with a robust investment pipeline comprised of a diverse set of asset classes prospective tenants.
During the quarter, we saw the amount underwritten by our investment team continued to increase year over year you.
Convenience stores represented approximately 33% of our underwriting with the remaining 66 being focused on other automotive and retail categories.
While it can be difficult to control the timing of direct sale leaseback transactions based on our current visibility we remain confident that the pace of investment activity will accelerate as the year progresses.
We continue to pursue a direct sale leasebacks acquisition of net lease properties and funding for new industry. Construction, we remain committed to our core underwriting principles of acquiring high quality real estate major metropolitan markets and partnering with strong tenants our target asset classes.
Moving to our redevelopment platform during the quarter, we invested approximately 400000 and projects which are in various stages in our pipeline we.
We have seven signed leases or letters of intent, which includes five active projects. One project at a property, which is currently subject to triple net lease and has not yet been recaptured from the current tenant and one signed letter of intent on a vacant property.
The company spent expect rent to commence at these and other projects over the next several years, including later in 2022.
Turning to asset management activities for the first quarter, we sold 15 properties, realizing $10 2 million in gross proceeds and exited one lease property.
14 of the property sold in the first quarter represented the closing of the second tranche of the planned divestiture of a portfolio.
To the existing tenant in upstate New York.
We will continue to slightly dispose the properties that we have determined are no longer competitive in their current format and do not have a compelling redevelopment potential.
With that I'll turn the call over to Brian to discuss our financial results.
Good morning, everyone. Just a reminder, that we are reporting <unk> under the revised definition, we implemented at the end of last year, which adds back stock based compensation and the amortization of debt issuance costs.
We reported <unk> per share of <unk> 52 for the first quarter of 2022, representing a year over year increase six 1% versus the <unk> 49 per share we reported in the first quarter of 2021.
<unk> for the quarter was <unk> 49 per share as compared to <unk> 44 per share in the first quarter of 'twenty one.
Our total revenues were $39 3 million for the first quarter, representing a year over year increase of five 5%.
Base rental income, which excludes tenant reimbursements GAAP revenue adjustments and any additional red grew eight 8% to $35 $8 million in the first quarter.
Strong acquisition activity over the last 12 months and recurring rent escalators in our leases were the primary drivers of the increase with additional contribution from redevelopment projects that were completed last year.
On the expense side G&A costs were $5 1 million for the first quarter, a decrease of $400000 compared to the first quarter of 2021, which included approximately $500000 of retirement and severance expenses, excluding those costs G&A increased marginally year over year as a result of increased personnel costs.
Property cost decline in the first quarter of 2022 due to lower property operating expenses, which included both a permanent decrease in non reimbursable expenses and the timing impact of certain reimbursable expenses.
These decreases were partially offset by increased leasing and development costs, primarily $230000 of demolition cost per active redevelopment projects.
Environmental expenses, which are highly variable due to a number of estimates and noncash adjustments declined to a credit of $100000 for the quarter versus a 500 dollar expense.
Due to lower legal and professional fees and changes in tech remediation costs.
Turning to the balance sheet and our capital markets activities. We ended the quarter with $625 million of total debt outstanding which consisted entirely of fixed rate senior unsecured notes with a weighted average interest rate of four 1% at a weighted average maturity of six nine years.
No amounts drawn on our $300 million revolving credit facility at the end of the quarter.
As of March 31, net debt to EBITDA was four six times and total debt to total capitalization was 32% while total indebtedness to total asset value as defined in our credit agreement was 35%.
As previously announced we closed on a private placement of $225 million of senior unsecured notes during the quarter the.
First trash, which funded on February 23rd included $100 million of notes bearing interest at fixed rate of 345% and maturing in February 2032.
The second tranche, which will fund in January of 2023 includes $125 million of notes that will bear interest at a fixed rate of 365% and mature in January 2033.
Proceeds from the notes funded at closing were used to repay all amounts outstanding on our revolving credit facility to partially fund our year to date investment activity.
It's from the delayed funding notes will be used to prepay in full our $75 million of 535% unsecured notes due in June 2020, with the balance used to fund investment activity.
We did not issue any shares under our ATM program in the first quarter.
With low leverage cash on the balance sheet, and Undrawn revolver and committed 2023 debt financing at attractive rates, we believe that our balance sheet and overall credit profile are in great shape and position to fund the company's growth as we move through 2022.
With respect to our environmental liability, we ended the quarter at $47 million, which was a decrease of more than $600000 from the end of 2021 for the quarter, our net environmental remediation spending was approximately $1 million.
Finally, as a result of our year to date investment activity, we are raising our 2022 <unk> per share guidance to $2 10 to $2 12 per share from our original guidance of 2008 to 2010 cents per share.
As a reminder, our guidance includes transaction activity to date, but does not otherwise assume any potential acquisitions dispositions or capital markets activities for the remainder of the year Spa.
Specific factors, which continued impact our <unk> guidance include variability with respect to certain operating and deal pursuit cost at approximately $400000 of demolition costs related to redevelopment projects, which runs through property cost on our P&L.
With that I'll ask the operator to open the call for questions.
Thank you.
And I will be conducting a question and answer session.
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One moment, please slightly 44 questions.
Our first question is from Todd Thomas with Keybanc capital markets. Please go ahead.
Okay.
Hi, good morning.
Just first question a couple of questions around investments here it sounds like a pretty healthy pipeline.
That you're looking at can you talk a little bit more about the flow of deals that you are underwriting.
And also whether or not you might expect to see a little bit of an.
Air Pocket.
Sure.
And offerings I guess later in the year, just given the increase in borrowing costs.
This is mark so first part with regard to the pipeline as we stated we're ahead of where this time last year.
The team continues to grow the pipeline of opportunities, which hopefully allows us to.
Outperform on more of those opportunities and remain committed to our underwriting standards.
Explain.
We're ahead of last year like I said the.
The widening of the buy box conclude.
All automotive talent service categories. In addition to C stores has given us a lot of additional.
Visibility.
You can grow that pipeline.
With regard to.
At the pace, we're not we're not seeing any.
Any indication that the pace will materially increase or decrease as we get through the year.
Our goal to keep that steady.
Less lumpy pace throughout the year and to continue to source.
We'll deals.
Okay.
I guess last last year was a pretty big year of investment is about $200 million.
I realize that.
Investment activity can be a little bit lumpy and unpredictable, but the balance sheet is in good shape and I guess I'm wondering if you would anticipate a similar year to.
<unk> to 'twenty, one and if you can maybe provide a little bit of a sense or book and what we might expect.
And also curious if you've changed your return hurdles at all as you're underwriting new deals.
So.
To give you some perspective 2020, we invested $150 million 2021 was $200 million.
Yes.
As Mark was saying we've expanded some of our.
Underwriting to include other automotive retail asset classes. So we continue to underwrite more we expect our ability to grow.
To continue that same momentum that we have we don't give formal acquisition guidance I don't want to go too much further than that.
From a return perspective.
Again, we're fortunate that we raised.
Considerable amount of equity.
In the fourth quarter of last year.
With that Brian talked about in the first quarter.
Funded transactions.
Off the balance sheet at this point.
We expect our ability to lock in attractive spread to continue as the year progresses.
Okay.
And then on.
The cap rate for investments completed.
During the quarter I guess really in April so I think I heard I heard six something the audio in and out a little bit.
What was the cap rate on investments completed year to date share.
First quarter was $6 six.
It includes all the year to date activity.
Commentary.
Greater than six 5%.
Okay, Great and last one Brian you mentioned, a permanent decrease in some non reimbursable expenses and.
In the quarter, what was that and what impact did that have on.
Full year guidance.
Yes.
It's primarily rent expense as hard as.
As you've seen over the last several years as we have leased properties that come up right, where we are in a sandwich position, where typically exiting those leases.
Theres marginal profitability to them, but generally that's in line with sort of our asset management strategy. Among other things. So the bulk of it is reimbursable expenses and then.
And that was about just looking at our disclosure in the.
And our tech that was a couple of hundred thousand dollars year over year.
And then there was just a little bit of a decrease in some other non reimbursable expenses, which is typically taxes or maintenance at the mic at the few vacant properties we have.
Okay got it alright, thank you.
Thank you. Our next question is from Ben.
Hudson with RBC capital markets. Please go ahead.
Yes. Thanks, good morning, everyone. It sounds like the site level financials will stay strong, but I am curious if there are any potential corporate level tenant credit issues that you are watching I would assume that some of them like land exposure to variable rate debt.
Yes, we really haven't.
Seen any any.
Corporate tenant issues come across.
Our asset management group to date.
One of the big takeaways from us coming to too far back, but going for Covid right was really the ability.
Two.
Proactively work with tenants, if we see something going on either on a corporate level or a site level and their financials.
All I can say to date, we haven't we haven't seen anything that concerns us.
Okay.
And then.
Terms of new deals has there been any sort of change in competition. It seems like if anything the cap rates might have compressed a little bit more but do you think.
Youll see bidders falling out because of the higher rate.
I think you see both first off Theres still a tremendous amount of capital flowing into retail net lease, including our asset classes.
From both public and private competitors I think what youre seeing perhaps is more pricing discipline.
More of the startup more pricing discipline.
And some of the transactions that we're bidding on.
And I think we'd expect that to continue right.
Everyone's borrowing costs increase overtime.
Okay. Thank you.
Thank you. Our next question is from Spiro <unk> with <unk>. Please go ahead.
Hi, everyone misses on Cerro Park them on behalf of Mike Gorman.
Off the previous question could you dive a little deeper on the competition, you're seeing in the convenience and gas market versus the other auto market and anything that's influencing that 33% and 67% pipeline.
Okay.
Well I think the the reason for the pipeline disclosure in our in our commentary was really around the strategy, which we.
It started to talk more about last year, which is really focusing on broadening only focusing on not only acquiring C store assets broadening to automotive retail assets are just retail at least.
And I'm actually very pleased with the activity coming across remarks group, where we're seeing not only.
A similar amount of opportunities in the C store sector, but this quarter, we saw two thirds of our opportunities come from non C store related assets.
Speaks to the team's work in terms of building out.
Business development or sourcing.
Opportunities that are newer to getty.
Okay great.
And then could you give a quick update on expectations for G&A. This year I know on the previous call you.
You mentioned that you were expecting about 4% to 5% growth over last year and does that remain the same.
Yes. This is Brian no change to our view on G&A for the year were right in line for the first quarter and we would expect a similar run rate.
Okay, great. Thanks, that's it from me.
Thank you.
Next question is from Joshua Donlin.
With Bank of America. Please go ahead.
Hey, good morning, everyone.
Can you remind us the mix between fixed rent bumps and inflation linked bonds within your portfolio and then on a related note.
As you are kind of looking at new acquisitions is the underwriting changed at all in response to rising inflation.
This is Brian I'll hit the first part and I'll use the opportunity to plug some of our supplemental information that we started to include it.
In the back of our corporate profile there.
There are some details on the P&L Todd I was referencing that to your question on page 30, and then we do have distribution of our of our rent Escalations on page 28, but to answer the question were about 99% of our leases overall, so substantially all of our leases are subject to some rent escalation of that amount.
<unk>.
More than 88% are fixed at the bulk of those are annual about two thirds.
And then the balance about 11% and 5% of our rent is subject to CPI, which is really one or two leases.
They do have.
Caps on them.
That's our distribution in the composition of our rent escalators.
Yes, it's mark as far as as far as underwriting.
Our core underwriting hasnt changed in quite some time and we're going to remain committed to it as far as what we like how we underwrite how we view properties on the underlying real estate quality markets tenant.
Tenant operational quality balance sheet.
Specifically.
We're trying.
To leverage the market on any deal point and every deal point and.
Certainly to our favor so.
When and if we can push harder on whether its cap rate.
Rent bumps other deal terms for that kind of blend to a total value of return we.
We're taking every advantage that we can on those terms.
Yes.
Appreciate that is the market changing at all for maybe what.
What people are willing to put into.
The sale leaseback.
As far as like Bob.
I think what Youre seeing.
I think what Todd asked the question I think youre seeing more discipline and the buyer world.
Morris.
<unk>.
Great to know.
She had a certain transaction types.
I think at this point, it's hard for us.
Sellers and buyers to ignore what's happening in the broader economy.
And that certainly translated into as Mark said.
Discussions around.
Certainties.
Got it thank you guys.
Thank you. Our next question is from with.
Quality with Baird. Please go ahead.
Hey, Good morning, guys is it fair to assume the bank Governor on deal volume at this point is just the cost of equity and how high would you take leverage at this point.
Yeah.
Well this is Brian Wes.
The Governor I don't I don't think Thats necessarily right point in time today.
Given what we've emphasized here and the balance sheet revolver capacity cash on hand leverage levels et cetera.
Typically and respond to that question, we talk about our mandate the quality of the space.
And really just the rigor of our of our underwriting in terms of getting things through the bottom end of the funnel.
As it were.
More so than cost of capital point and time today.
So I guess, that's how I think of that in terms of leverage.
Some runway here right.
We've always stated or for as long as I've been around stated four five to five five times, we're at the bottom end of that range I.
I think we have an asset class that could bear the burden of slightly higher leverage I think theres, a little bit of room, just broadly and you think about market expectations.
Five and a half.
But I think the shorter answer is no change to our philosophy or really how we want to execute we certainly have some runway here again as we've articulated and look if we continue to execute as we continue to execute.
Hopefully, we will see a little bit of a rebound in the stock price and that won't be an issue when we get to raising incremental capital, but in the near term. We're we're sticking to what we've been doing focused on executing and feel like we've created a runway from a capital perspective to do that.
Okay. Thanks for that and then when we look at the volatility of the oil prices of late do you expect any impact on the margins of your tenants and I guess overall can that coverage as we start to cycle through the next few quarters.
Yes.
Long term west the answer is no right I think week to week right. There is certainly variability in margins for given the movement in the price of oil or the wholesale cost.
Our product.
But when you smooth that out to a couple of week average or a month average it's still right in line with where it's been the last couple of years.
Layer on top of that great volumes are trending back up right as people are driving more going on vacations commuting to work.
So we don't see that as an issue today.
Sorry, what was the second part of your question effort.
It was going to have any impact on the I guess, when we look at the margins and the tenant.
Tenant coverage going forward and when you look at the trailing 12 month tenant coverage would that start to have a little bit of leakage is what I was looking for.
We don't see it today.
Okay, and then when we look at the rising interest rate environment more specifically for the sale leaseback transactions do you see any I guess pocket of weakness in the M&A transactions that could lead to sell leaseback deal.
Yes.
The interesting question I think.
M&A for our target asset classes has been a very frothy, both in the C store and carwash sector to the extent that.
Borrowing costs or overall leverage rent rates come down and valuations get less attractive I think that could benefit.
Sale leaseback providers like Eddie.
Not to say, we've really seen a lot of that.
Private builders.
Definitely been helpful.
Got it thanks, everyone.
Yes.
Thank you. Our next question is from Mitch Germain with JMP Securities. Please go ahead.
Hi, good morning.
Curious about the competitive landscape in the development funding business.
Our relationship based business or is there.
Kind of a bidding war going on with some of these.
<unk>.
Yeah total hard to hear but I think.
We view it as a relationship business.
We can.
I will provide.
Different type of financing right, which ultimately gets to the same place where we own the property at the end of the day to our existing relationships.
And it's very helpful from a repeat business standpoint.
And our tenants they like the product that it's a way for us to continue to expand our relationships with those operators that were.
And our various sectors.
Great.
The.
The guidance increase that just really the deals coming in sooner than anticipated is that the way to think about it.
Hi, Mitch it's really just the deals closing right. So we do point in time.
Look forward guidance with anything Thats close point in time, So obviously as we were sitting in February .
We didn't have to say volume that we had closed as of last week are really I guess as of today as we put the guidance out us as.
We're closing deals.
<unk> capital as the case may be we will continue to adjust our guidance throughout the year as we go.
Great. Thank you.
Thank you.
Our next question is from John Marshall.
With Ladenburg Thalmann. Please go ahead.
Good morning.
Okay.
Alright.
Most of my questions have already been answered I also just maybe one kind of clarifying point I think you made earlier in the call as we think about some of the acquisition volume that was done subsequent to quarter end.
Should we feel that's going to get match funded with kind of equity on the ATM or do you feel you are in a position from a leverage perspective too.
Basically just deploy kind of available liquidity.
Hey, John its Brian specific to that.
That set of activity that was just cash on the balance sheet right. So as Chris mentioned, we raised for us a meaningful amount of equity in the fourth quarter and really last year about $95 million in 'twenty one.
We.
Did the private placement in February so.
As we're sitting here today as we were sitting here coming into this set of activity.
We have that cash on the balance sheet and we did sell some assets both in the fourth quarter at here in the first quarter and the fourth first quarter behind us.
Now, we're 10 31 activity.
From a liquidity standpoint from our available capital standpoint, we are funding activity.
Very not really just write off the balance sheet.
And as we move forward throughout the year as we typically would youll see us use the revolver to fund that activity.
And.
Appropriately opportunistically as needed.
Fuels warranted.
We'll look to utilize the ATM.
Again, as we always have but point in time, what you're sitting at just north of four five times with an undrawn revolver.
Cash and some temporary one proceeds on the balance sheet.
We're just funding from those sources.
Okay that makes sense and then.
You kind of talk about a little bit there in your answer to the first question, but.
Is there an opportunity for maybe some more programmatic granular disposition just feels like given some of the dynamics in the marketplace right with.
A still strong 10, 31 market, but maybe some of the levered buyers, who tend to buy bigger portfolio as being kind of squeezed by interest rate.
Maybe there is an opportunity to do kind of bigger deals and fund some of that way.
With one off sale.
I think thoughts around that.
Yes.
We've been selling obviously this portfolio, which was the two tranche deal was.
A unique set of circumstances, but we've been selling.
10 to 20 properties a year Gemini, they're there on the lower tier reconsidered the quality.
Great.
<unk> proceeds I don't I don't think Youll see us really ramp up dispositions in the near term but.
Certainly a possibility.
Okay. That's it for me thank you very much.
Thank you Darren.
No further questions at this time.
I would like to turn the floor back over to Christopher constant for closing comments.
Alright, well. Thank you all for joining us on our first quarter conference call. We look forward to getting back on with everybody. When we report our second quarter in late July .
Thank you.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.