Q3 2022 Blackstone Mortgage Trust Inc Earnings Call
Good day, everyone and welcome to the Blackstone mortgage trusts third quarter 2022, Investor calls I state by best in Tucker head of Investor Relations. My name is Ben and I'm Your event manager during the.
Dentation your lines will remain on listen only if you require assistance at any time. Please press star zero on your device and a coordinator will be happy to assist you I'd like to advice all parties that this conference is being recorded for replay purposes, and now I would like to hand, it over to your host Mr. Doug what is yours.
Great. Thanks, Ben and good morning, and welcome to Blackstone mortgage trusts third quarter Conference call I'm joined today by Mike Nash Executive Chairman, Katie Keenan, Chief Executive Officer, Austin, Pena Executive Vice President investments, Tony Marone, Chief Financial Officer, and Tim Hayes shareholder relations.
This morning, we filed our 10-Q and issued a press release with a presentation of our results which are available on our website and have been filed with the SEC.
I'd like to remind everyone that today's call may include forward looking statements, which are uncertain and outside of the company's control actual results may differ materially for a discussion of some of the risks that could affect results. Please see the risk factors section of our most recent 10-K, we do not undertake any duty to update forward looking statements. We will also refer to certain non-GAAP measures on this call and <unk>.
A reconciliations you should refer to the press release and our 10-Q. This audiocast is copyrighted material of Blackstone mortgage trust and may not be duplicated without our consent.
So for the third quarter, we reported GAAP net income per share of <unk> 60.
While distributable earnings were <unk> 71 per share a few weeks ago, we paid a dividend of <unk> 62 per share with respect to the third quarter. If you have any questions. Following today's call. Please let Tim or me now and with that I'll now turn things over to Keith.
Question <unk>.
Capital markets today reflects significantly heightened uncertainty around global economic conditions.
But on the ground <unk> fundamental performance this quarter once again underscore the stability resilience and earnings power of our business.
We have always run this company according to our core principles low leverage strong borrowers and high quality real estate backed by a conservatively structured match funded balance sheet.
These principles is most apparent in environments like the one we face today.
So most institutional real estate owners expected higher rates to the speed and slope of the rate hikes have been more aggressive than anticipated.
But given the key tenants with which we originated a loan they are well positioned to withstand the impact of higher rates at the same time, the growing earnings power across our entire portfolio provides a powerful ballast amid an evolving credit backdrop.
This quarter, we generated 71 of distributable earnings up an impressive 13% year over year.
Our retained earnings grew book value, even as we increased our reserves and we drove these robust results, while maintaining $1 7 billion of liquidity more than double our March 2020 level.
We enter the fourth quarter strategically positioned to play offense and are highly opportunistic investment environment, while continuing to generate attractive durable income for our shareholders.
The current market reflects a lack of visibility on the pace of interest rate hikes, and where they will set a long term.
As a result.
Asset prices are volatile impacting liquidity and restraining investment activity.
And while the public markets are more reactive to this day to day uncertainty what matters for our real estate over time is fundamental performance.
High quality real estate that can capture rent growth is resilient in an inflationary environment as replacement cost rises and cash flows outpaced higher opex in rates.
Theres nearly $400 billion of institutional real estate capital sitting on the sidelines and while it will take time as the rate picture crystallizes liquidity will flow back to hard assets that generate attractive yields.
If long term rates settle out in the range of their current levels, some asset values will need to reset.
Unlike the GSC there is neither overleverage, nor overbuilding Wang on the system and most reasonably levered capital structure is we'll be able to absorb a reset in rates with impact of the equity returns, but still a positive outcome for the Doc.
This quarter, we saw once again that the FMC portfolio is weathering the capital market Storm, a result of the low basis at which we start our senior loans, our credit selection process, our rigorous loan structuring and our sponsorship.
We continue to see that the value add business plans, we lend against can capture increasing rents in an inflationary environment, which should support asset values and credit performance over time.
Moreover, 96% of the loans in our portfolio have rate caps, which insulate borrowers from further rate increases or other structural enhancements, including carrier guarantees are substantial interest reserves there.
The result is our continued 100% interest collection. Despite a 300 basis point increase in so far since the beginning of the year.
While a positive experience to date is an important indicator as a lender we naturally consider many scenarios, including the potential for conditions to further deteriorate.
In this respect we look to the position and incentives of our borrowers.
With an average loan LTV of 64% at origination our sponsors have 36 points of equity to protect as a starting point.
Even in a materially higher rate scenario, the incremental carry costs borne by borrowers represent a small fraction of the overall deal capitalization just one to two points of additional equity a year well within our sponsors capabilities and justified for assets with value to protect over the long term.
This commitment is reflected in the behavior, we saw in the pandemic when our sponsors injected over half a billion dollars of additional cash to carry their assets.
And we see analogous behavior today with our sponsors having invested $275 million of incremental cash equity so far this year.
Turning to the office sector, while the office segment faces secular headwinds. It is further impacted today by regulatory pressure it based on a broad brush approach typical in periods of economic pullback.
There are many older vintage commodity office buildings that will suffer.
But there is also a significant segment of the institutional market, where high quality office is seeing continued tenant demand and rent growth for.
For example, this quarter saw in New York City is strongest leasing activity since COVID-19 up 28% year over year, and roughly 10% above third COVID-19 in the five year pre COVID-19 average and that leasing activity is concentrated in class a building, which despite being only one third of New York City stock captured 74% of <unk>.
Leasing in the third quarter.
And most of our office portfolio, we see stable occupancy ongoing sponsor commitment and particularly notable in today's environment continued repayments with $349 million in office loans repaying over the last three months, including our vacant New York City office slated for renovation, which just occurred post quarter end.
Our office portfolio is 92% class, a 100% performing and generally characterized by high quality well monetize buildings that are outperforming in today's leasing environment.
A third of our collateral is brand new construction, including the Newbuild headquarters of Pfizer and Warner brothers and across our portfolio. We have assets recently leased to major law firms and creative users private equity finance and tech.
We lend to highly experienced well capitalized sponsors like Tishman, Speyer oaktree related and J P. Morgan and this year, our borrowers have contributed over $150 million of new incremental equity to our office deals alone indicative of the value they have to protect and their continued commitment to the assets.
While we believe the vast majority of our office portfolio is well positioned for the post COVID-19 environment, we downgraded for office loans to force this quarter.
These loans, which represent just 3% of our portfolio continued to perform pay interest and in most cases showed positive leasing and material recent sponsor cash commitment.
But having evaluated each asset in our portfolio in detail. We felt downgrades were warranted in these specific cases denoting a heightened risk of underperformance we remain.
<unk> focused on actively managing these loans as well as our broader office portfolio in this moral liquid environment.
Importantly, the overall performance of our collateral assets across the portfolio continues to show strength. We also had talent upgrades this quarter as assets ramped up and stabilized with higher rates and less overall transaction activity in the market assets that have completed their business plans are staying in our portfolio longer as.
Patient sponsors after holds rather than sell into the current conditions.
We are also keeping a close eye on Europe , and the U K in light of rising inflation elevated energy costs and increasing economic uncertainty.
Our underwriting process is consistent across borders.
Just as in the U S. We have been highly selective about sponsorship real estate quality and credit in our European lending practices.
Our collateral is concentrated in high conviction sectors and in many cases the ltvs on these loans are lower relative to similar U S transactions and adjusted in the U S. We have seen strong consistent credit performance in our Europe up.
Notwithstanding the macro challenges the dislocation in Europe today is presenting appealing investment opportunity is.
This quarter, our primary origination activity as we are in cross diversified pools of European industrial where vacancy is one 5% and the rent growth is nearly 20% are.
Our overall originations this quarter averaged 58% LTV and an all in yield of $5 41 over base rates are high single digits all in Unlevered return.
With the securitization market frozen and banks seeking to reduce their balance sheet exposure, we expect a target rich environment in the U S as well.
While regular way transaction flow is more limited given a disconnect between buyers and sellers on valuation we are starting to see both recapitalization at reset bases and secondary loan purchase opportunities, where we can partner with motivated counterparties to provide liquidity at compelling risk adjusted returns.
Going forward, we expect an increasingly attractive investment environment, and we are fortunate to have ample dry powder to address that.
Turning to the balance sheet, our liquidity risk management approach and diversification put us on solid footing to address this more volatile but opportunistic environment.
Our robust liquidity position today is by design. The result of our actions early in 2022, when seeing hints of dislocation and other corners of the market, we opted to fortify our capital base and slow regular way originations to best position ourselves for what we saw ahead.
And from the outset of our business, we have run a matched balance sheet insulating our performance from term currency and interest rate risk.
We have diversified sources of corporate and asset level capital a material advantage in an environment, where much of the market as sidelines.
As a premier investor and one of the largest owners of real estate in the world Blackstone as a trusted partner at the banks our track record as a borrower affords us best in class terms throughout our business and helps us to secure lending capital as banks consolidate business to their top clients, including a new 1 billion pound credit facility just this.
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Looking ahead much depends on the SaaS management of the delicate balance between inflation and recession.
But our navigation of this turbulent market is deeply informed by the unparalleled investment experience and knowledge base of the Blackstone platform, which has a long history of performing for investors through cycles.
<unk> track record, including the last period of severe dislocation in 2020 through today.
Evidence is the result of our positioning stable asset and liability performance and highly attractive earnings growth that is rare in today's market.
With a floating rate portfolio. Our income is still growing third quarter average so far it was $2 45, and it is already a 120 basis points higher at 365 today.
Our asset sensitive portfolio, each incremental 100 basis point increase in rates results in six of increased earnings quarterly all else equal.
This powerful earnings dynamic creates meaningful resilience for our business in two ways.
First building book value, which helps insulate against increasing reserves or potential credit issues and second ensuring our dividend remains well covered in a wide range of scenarios.
Together these elements strongly support our ability to deliver a reliable overall return to our shareholders, even if credit conditions weakened.
Today <unk> is trading at roughly 88% of book value eight five times, P/e and a 10, 3% dividend yield.
Tricks that we do not believe reflects the resilience of our business model and earnings stream, our long term credit credit track record or the clear differentiation of the Blackstone real estate platform.
Our current dividend yield is 620 basis points above the tenure.
Worldwide, our pre Covid average despite our company now having growing earnings significantly stronger dividend coverage, a high integrity balance sheet with more than double the liquidity in our performing portfolio that has been reoriented to standup to today's inflationary pressures.
Less than 10% of U S stocks today offer yield above the 10 year treasury rate and we are paying a dividend yield that is more than two five times that level, we pay that dividend for 29 consecutive quarters and were covering at over 115% today.
In a volatile market current income is key and <unk> is delivering with that I'll turn it over to Tony.
Thanks, Good morning, everyone.
This quarter's results showcased positive impact of rising rates on <unk> to use floating rate loan portfolio with another consecutive quarter of meaningful earnings growth supported by the stability in our book value portfolio metrics and capitalization.
We reported GAAP net income was <unk> 60 per share and distributable earnings of <unk> 71.
Which is up <unk>, <unk> from <unk>, and <unk> or 15% from <unk> levels.
This reflects the positive impact of rising base rates are 99% performing loan portfolio continuing to flow through to our bottom line net income.
Our central banks continue to battle inflation the market continues to further.
To forecast further increases in base rates, which will similarly provide a tailwind to be executed on.
Comparing to <unk> levels, and incremental 100 basis point increase in base rates, we generated <unk> of quarterly earnings per share net of incentive fees, assuming all else equal.
Similar to Q2, our earnings this quarter had no meaningful prepayment income because overall market transaction volume has been muted and we collected $443 million of repayments across our portfolio.
This compares to $697 million of loan funding, leading to a consistent overall portfolio size of $26 billion.
And therefore stability in our capital deployed in net interest income generation.
As Keith noted our portfolio credit remains strong with no new impairments or non accrual loans and a net $937 million of loans upgraded with 10 risk rating upgrades this quarter outpatient five downgrades.
Overall, our total portfolio is currently 89% risk rated one two or three which reflects the overall strength and stability of our borrowers and collateral levels.
We increased our seasonal loan loss reserve by <unk> <unk> per share this quarter and 13 year to date, which amount does not include any specific loan reserves, but rather is reflective of uncertainty in the broader economy and the related potential impact on our loan portfolio over time as required by the seasonal accounting rules.
While our seasonal reserve does not impact distributable earnings it does reduce our GAAP net income and book value per share.
Notwithstanding this impact our book value was still up slightly this quarter to $27 20.
Our earnings more than covered our dividend at <unk> 10 cents to book value.
Importantly, excess earnings will grow book value benefiting our stockholders and offsetting the impact of higher reserves.
In addition in a period when the pound declined by 17% and the Euro declined by 14% we saw virtually no impact on our book value on a local currency financing and programmatic foreign currency hedging offset the asset level currency volatility.
Although transaction volume was muted this quarter as new lending activity declined generally across the market. We did closed $438 million of new loans at lower than average ltvs and above average spreads.
Consistent with our focus on balance sheet and liquidity management, we obtained committed financing for substantially all of the $697 million, we funded under new and existing loans this quarter.
This is evidenced that although we have seen banks pullback amid the choppy market conditions, we remain a favored client with our track record of strong consistent performance in our portfolio of high quality low leverage assets.
Importantly, we have maintained and in many cases strengthened the resiliency of our credit facilities to market downturns.
Looking at our total financings outstanding 64% is either structurally immune from any market call provision mark to market provisions or limited to margin calls on defaulted assets only with no capital markets margin call provisions on any of our finance.
With the strong credit performance of our loan portfolio and the stability of our capital structure, we will receive a zero margin calls in the history of the SMT, including during the challenging market conditions experienced at the peak of the pandemic in 2020.
We maintain a term matched asset level financing structure and have no material corporate debt maturities until 2026, giving us a very stable platform from which to manage our business through more volatile market conditions.
Further we increased liquidity to a record $1 7 billion.
Nearly 60% increase from this time last year, giving us capital to deploy opportunistically or reserve to defend our assets should market conditions worsen.
In closing we are pleased to report another quarter of earnings growth driven by rising rates with the prospects for further growth as this trend continues.
Also consider the potential downside scenarios should further rate increases or other market factors read to any nonperformance in our portfolio.
Although there is a broad range of potential outcomes given the current market conditions, we believe our superior credit selection and fortified balance sheet will endure and our strong earnings will continue to provide clear support for our book value and quarterly dividend.
Periods of high inflation, we believe that the value generated for investors by dividend income becomes increasingly important and we look forward to continuing our track record of a reliable and attractive dividend through varying market conditions.
With that I will ask the operator to open the call to questions.
Okay.
Allow me to inform our audience. If you wish to ask a question. Please press star one on your device.
Kindly keep it to one question and a follow up at the time in order to let everyone dissipate.
Should you have any additional follow up questions. Please press star one on your device again afterwards to get back into queue. Thank you.
Our first question comes from Don <unk> from Wells Fargo. Please proceed.
Hi, good morning.
The four office.
Loans.
Move to four rating I believe.
Little bit of a balance.
Quality of the sponsor and good they have is.
Their view that there is enough equity in the properties because I think that's one of the risks and.
In this environment is that values have gone down so.
Thank you.
You could see property owners more likely to walk away from an asset.
Sure. Thanks, John So we downgraded for loans to for US this quarter, just 3% of the portfolio and determined the downgrades are warranted I think given the unique headwinds each of the assets faces and some cases locations and more challenged markets or submarkets like D C or Chicago.
As well as looking at the specific circumstances I think it is important to note as I mentioned on the call all of the assets that had recent sponsor cash commitments, some very material and so it's really our assets that to note underperformance spot where sponsors are still investing capital and where we don't expect we're.
We're not looking at impairments that would be a five rating.
It's also worth noting we have eight four rated loans since COVID-19 and all of them performing consistently for a two year period, one actually repaid this quarter.
When we look at our four rated loans, we're looking at an increased risk of underperformance, we're looking at our underwriting what we're seeing in the markets, but we do still have committed sponsors in most cases and we're working towards.
Either repayments or sales to.
To get these assets moving on.
Okay and my follow up is just.
Net portfolio growth.
Of an environment, where a call without.
I'm not going to be much growth or do you still.
We plan on growing the portfolio.
Okay.
I think if we look at the investment environment today, there's a lot of really interesting opportunities, but really we're in the very fortunate position of having a well invested portfolio, that's creating tremendous earnings power and delivering very strong current income. So we're going to have a very high bar for new investments. We obviously are looking at them but.
I think that we should expect a strong well adopted portfolio going forward, but more consistency and consistency between originations and repayments to keep that earnings power very stable.
Thank you.
Our second question comes from Doug Harter from Credit Suisse.
Please go ahead.
Thanks.
I'm talking about office can you talk about your willingness or your appetite to look at new office loan.
Hum.
And whether you would find.
Any new opportunities attractive.
Sure I think it's going to start from our overall perspective on the market today, which as I mentioned is definitely a high bar and thinking a lot about underwriting that service coverage near medium long term end uses for our capital in more interesting ways I E legacy loan acquisitions.
Helping the banks reduced some of their exposure in those types of unique opportunities that we think can generate really outsized risk return profiles in the office market generally I think we've been very consistent in that we really see a very strong bifurcation in the market, so newbuild well positioned in markets with dynamic.
Tenant demand pre leasing things like that we would certainly look at opportunities like that and we really see that as a different part of the market that the segment that sees the most challenges.
And then just a follow up on your comment about legacy alone acquisitions.
No I guess.
How do you kind of get comfortable with someone else's underwriting and just kind of the quality of loans versus something that you.
Yes.
Britain from historic.
Sure I mean, I think this is where the Blackstone platform really shines anyway are incredibly detailed and up to the minute real time information on what's going on in markets. We have a great origination team. This business was really born in a period, where there were a lot of loan portfolio acquisitions. The GE portfolio acquisition was.
Really formative for the <unk> business generally and we have I think a great capacity to put a swat team of really talented people so sort of crawl all over our loan portfolios.
Get a sense of how we view the underwriting in today's environment and really look at the structure of the documentation and all of that I think it's something we've done successfully over time, and we're really well positioned today, both from a team and platform information perspective, as well as our relationships with potential counterparties that might be looking for liquidity.
Alright, thank you.
Our next question comes from Steve Delaney from JMP Securities. Please good morning, everyone.
Good morning, Thanks for the question and congrats on a nice quarter.
A volatile market.
I'd like to ask about repayments.
Obviously things have slowed down but it.
Works out the 400.
A million worked out to about 7% annualized on the portfolio. How should we think about that going forward normally we would think bridge loan portfolio would be what 2020, 30% a year in terms of runoff.
Youre repay outlook. Thanks.
Yeah, absolutely I mean, I think that.
With the way the transaction market is today and looking at all of the factors, we definitely expect overall transaction volumes to come down and knock on the origination side and the repayment side.
The transaction market cooling some of the deals that would ordinarily have repaid are sticking around longer and a lot of cases thats. The kind of patient sponsors are doing their startup hold versus sell analysis and they just like the whole side better I think you can see that in our risk ratings, we have more ones and twos today as a percentage than is typical.
Other cases, we're going to have situations, where people need a little bit more time to execute their business plans and because of the way we structure our loan that's really a great opportunity for us to get more equity in the door.
<unk> the business plans reduce our loan et cetera, and so I think over time, we'll see a little more states portfolio, but most importantly, as we talked about earlier the earnings power is really dictated by the investment level the deployment of the portfolio and so a more stable portfolio is positive from an earnings perspective.
For sure and those extensions that you have in addition to getting more cash in from the borrower do you have a repricing opportunity at that time as well in some cases.
Yeah, we do potentially and I think that we really look at all of those conversations as new investment decisions, where we think very carefully about the balance of pricing terms and structure, new equity coming in and really bring to bear, but I think it's a very sophisticated asset management approach and new information.
Two underwriting to make sure that we're creating the most value that we can for our shareholders.
Thank you for the comments.
Okay.
The following question comes from Eric Hagen from <unk>. Please go ahead.
Eric Good morning.
Hey, good morning, I am sorry about that.
Can you guys talk about the sensitivity.
Cap rates in the portfolio to rising interest rates.
And how you see that developing especially at the short end of the curve and the sensitivity that you see there. Thank you.
Sure. So I think when we think about the rate sensitivity at the short end of the curve, we really look at that.
Service coverage and the performance of our portfolio as I mentioned in the remarks, 96% of our loans have either interest rate caps or other very meaningful structural enhancements like Kerry guarantee it. So I think as far as the short and not going to have a material impact on.
Our borrower's ability to pay because there really is a lot of structural enhancement already built into the loan.
As we think about cap rates over time, I think it really depends on a number of factors. Obviously cap rates are related to interest rates were also related to growth in the portfolio growth in NOI and we're seeing continued NOI growth in the asset sectors that we've been focused on.
Inflation protected sectors like multifamily hospitality industrial things with short duration leases, even very high quality office is being very strong rent growth and so looking at cap rates in the context of growing NOI, obviously values will be impacted more so by cap rates going up than if we just had NOI growth, but there is a balance between.
Growth in cap rates and Thats, what we really use when you look at the long term values of our assets.
Think about the risk in the portfolio and think about new origination.
Very helpful. Thank you very much.
Our next question comes from Jade Rahmani from K B W.
Please proceed.
Thank you very much for taking the questions.
Yes.
The upcoming portfolio loan maturities can you speak to that.
What do you have expected for the fourth quarter in 2023, and how much of that is office does it resemble the overall portfolio mix or is there any weighting toward office.
Sure. So I think worth noting when you look at the upcoming loan maturities, they're really pretty minimal it's about 7% of the portfolio over through the end of 2023, so as we've talked about in past years most of our loans.
We kind of address them well ahead, whether it's because borrowers are executing their business plans and moving on or we think about other ways to have borrowers recommit to their assets. So we don't see upcoming maturities as sort of a very heavy schedule I would say as far as the specifics there's a lot of loans that already have plans in place for a refi or sale.
And on the others I would refer back to the remarks I made a bit earlier as far as the approach we take with borrowers in general we really are willing to reward patient borrowers who are interested in putting more capital in the deals and thats, what we've seen by and large.
Thank you very much there was a trade peace, noting PX empty made a construction loan $670 million.
It looks like a class a potential development downtown Austin can you confirm that that's the case and would that be a fourth quarter originations given its construction I wouldn't assume there is a large amount of upfront funding there.
Yes that was actually a second quarter origination I think that traded picked it up a little later on versus the origination, but we love that project that is really going to be a best in class asset and I think it really speaks to our broader focus on flight to quality, we think that the best assets well located.
<unk> are going to outperform whether it's in office or multifamily or hotels that project is a mixed use project. It's also a low leverage construction loan with one of the best sponsors in our portfolio. So overall looking at those types of opportunities, where we have the opportunity to lend on a low leverage level on the newest best quality in the market.
We'd like to see those but again that was a second quarter. John I think we talked about it a bit on the second quarter call for more detail.
Okay.
Thank you.
Our final question comes from Stephen laws from Raymond James Please.
Please go ahead.
Hi, good morning.
I would like to start first with maybe how your conversations with Counterparties, particularly around.
The fibroid loan didn't change so maybe the four rated bucket.
When do we see for loans with rating changes.
Tunnel metric.
Or your current conversations going with your Counterparties.
Around credit marks you know how are they looking at.
Yes.
Watch list type assets, specifically around the office kind of any discussions with what youre seeing with.
And those questions.
Yeah, I think we maintain a really open and active dialogue with all of our lenders and they're very involved in and up to speed on everything thats going on in the portfolio in real time I think in general when you look at our lenders we have great long term relationships with them They trust us.
Manage the portfolios in the best possible way, they've really well performing portfolios and of course, they look at our overall business and we have more income and more liquidity than we've really ever had and that gives us a strong degree of confidence in us as a borrower and our counterparties. So really have not seen any material change in terms of our of our dialogue with our.
Lenders.
Thanks, David.
As a follow up I appreciate the disclosure and commentary around rate caps and structural protection on effectively.
All of the portfolio, but can.
Can you talk a little bit more details there.
Whereas the weighted average on those.
Youre recaps, how much are in the money on new originations where are you putting those in and is at a different level than than where those were going into loans.
Spread basis.
A year or two ago any additional color you can provide on the book.
Details.
Yes.
Sure so starting with new originations, we have always adhere to a policy rate caps on our loans.
We're very focused on making sure that involve sort of up to the minute structure on the loans that we originate and thats really been a consistent touched on of our origination approach over the years and obviously the same today.
The rate caps, we have in the portfolio, we are seeing more and more of them in the money obviously.
They come in at different levels, but I think the credit performance on the interest collection, we have seen in our portfolio.
Is indication of the fact that our structures are working.
And we continue to have the rate caps role when loans come upon maturity or the interim maturity borrowers need to buy new rate tax and we're seeing that and we're seeing other equity come in more interest reserves more structural protection.
So I think that part of the structure is sort of a key difference in terms of how lenders, Kevin whether an environment like this and something that we've been very focused on in our portfolio.
Great. Thanks for the comments this morning.
Okay.
And I'll hand, it back to invest in Tucker for closing remarks.
Thanks, everyone for joining us today and look forward to following up after the call. Thank you.
Thank you for joining everyone that concludes your conference you may now disconnect. Please enjoy the rest of your day Goodbye.
Goodbye.
Yes.
Yes.