Q4 2022 Global Medical REIT Inc Earnings Call
Speaker 1: I.
Speaker 1: And.
Speaker 1: F.
Speaker 1: Three.
Speaker 2: of the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Sweat, investor relations. Thank you, sir. You may begin. Thank you. Good morning, everyone, and welcome to Global Medical Reads.
Speaker 3: fourth quarter and full year of 2022 earnings conference call. On the call today are Jeff Bush, Chief Executive Officer, Alfonso Leon, Chief Investment Officer and Bob Kiernan, Chief Financial Officer.
Speaker 3: Please note the use of forward-looking statements by the company on this conference call. Statements made on this call may include statements which are not historical facts and are considered forward-looking. The company intends these forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in the Private Security's litigation reform act of 1995 and is making this statement for purpose of complying with those Safe Harbor provisions.
Speaker 3: Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond the company's control including, without limitation, those contained in the company's 10K for the year-ended December 31st, 2022 and its other SEC filings. The company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, on this call, the company may refer to certain non- GAAP financial measures, such as funds from operations,
Speaker 3: adjusted funds from operations, DBDRE, and adjusted DBDRE. You can find a tabular reconciliation of these non-GAAP financial measures to the most currently comparable GAAP numbers in the company's earnings release and filings with the SEC. Additional information may be found on the investor relations page.
Speaker 3: of the company's website at www.globalmedicalrete.com. I would now like to turn the call over to Jeff Bush, Chief Executive Officer of Global Medical REIT. Jeff? Thank you, Steve. Good morning, and thank you for joining our fourth quarter and full year 2022 earnings call.
Speaker 4: Our high quality portfolio of needs-based healthcare facilities continues to produce excellent results. At the end of the fourth quarter, portfolio occupancy was 96.5% with a weighted average lease term of 6.2 years and a portfolio average rent coverage of 4.4. Year over year, we achieved a 19.6% increase in total revenue driven primarily by our...
Speaker 4: our acquisition activity early in 2022. The fourth quarter reflecting the impact of rising interest rates, our net income attributable to common shareholders was $369,000 or one cent per share compared to $3.8 million or six cents per share in the fourth quarter of 2021. Recall also that the fourth quarter of 2021 number included a gain on sale of $1.1 million. FFO in the fourth quarter was 22 cents per share and unit, down one penny from the prior year quarter.
Speaker 4: And our AFFO was $0.24 per share and unit in line with the fourth quarter of 2021. Looking forward, we have ample liquidity, which allows us to be patient as we look for markets to improve. As we mentioned last quarter, we have been spending time identifying properties that we could sell as a means to reduce our outstanding debt and preparation from when the markets conditions improve. We currently are optimistic that we can generate proceeds.
Speaker 4: from the sales of approximately 90 million at a weighted average cap rate of between 6 and 6.5 percent and are already placed under contract for sale to assets for gross proceeds of 11.6 million. If we are able to close on 90 million of dispositions, we would reduce our variable debt to approximately 10 percent of our total debt while also reducing our leverage to a target range of 40 to 45 percent.
Speaker 4: We continue to look for quality properties that meet our investment criteria, although our ability to acquire our target property became more difficult. As the effects of higher interest rates, increased our cost of capital, we remain nimble in our approach to acquisitions. For example, pursuing deals that utilize OP units. And based on our pipeline expect to acquire approximately 100Million of assets this year.
Speaker 4: Overall, I am pleased with the fourth quarter result, and want to thank the entire team for their hard work and contributions to our results. With that, I turn the call over to Alfonso to discuss our investment activity in more detail. Thank you, Jeff.
Speaker 4: As Jeff mentioned, the transaction market for target medical facilities that meet our investment criteria has slowed significantly as buyers and sellers adapt to changing interest rates with that urgent views on cap rates. We continue to see a large number of opportunities in the fourth quarter, typical of year-end seasonality, but opted to pass as we saw nothing compelling giving our cost to capital. We continue to review potential deals, and as of February 28th, had one acquisition on the contract.
Speaker 5: for a purchase price of 6.7 million that we will fund primarily with OP units. With respect to the acquisition market, we believe that the position of goods and some corporate sellers remain on the sidelines on the market conditions to prove. Some owners could be forced to sell, they are unable to refinance their mortgages. We hope that by the second half of 2023, it will be more predictability with respect to the market interest rates and the acquisition market more broadly. Regarding efforts to reduce our leverage, we have been able to successfully place two properties under contract for sale.
Speaker 5: for proceeds of $11.6 million and are optimistic that we can complete other dispositions that would generate a total of approximately $90 million of proceeds at a cap rate between $6 and $6.5 million during the first half of 2023. We have been pleased with the level of investor interest in our assets as we go through this process. With respect to other investment opportunities, we are seeing an increase in inbound calls on development capital funding due to a combination of cost increases and higher cap rates pushing rents significantly higher for new construction and developers having a harder time finding financing for projects. We are also having discussions on and evaluating other investment options such as joint ventures that could expand our investment opportunities and diversify our revenue stream. We believe the stability of our diversified portfolio of quality medical office in 35 states, the leading healthcare providers in each submarket.
Speaker 5: combined with our available liquidity allows us to be patient as the acquisition market for our asset class finds equilibrium. Smaller owners of medical office are likely going to struggle with refinancing their assets, funding tenant improvement allowances, and enduring releasing risk. The macro trends for medical office are excellent, but you need a large diversified portfolio to reduce idiosyncratic risk and access to capital to out-compete other buildings in each submarket.
Speaker 5: It is also likely that the tourist capital that came into medical office in 2021 and 2022 will exit leaving the market to dedicate funds. Their exit would create opportunities. We have been through cycles such as this before and know that the transaction market takes time to adapt. We will continue to source opportunities that make sense and potentially use some competitive advantages such as scale, access to capital and OP unit deal structures where we can. Given our view of the market, we expect our acquisition activity to pick up in the second half of 2023.
Speaker 5: And as Jeff mentioned, we are targeting to complete 100 million of a creative acquisition during 2023. However, market conditions can be unpredictable, and there's no assurance that we will be able to meet our acquisition targets. I'd like now to turn the call over to Bob to discuss our financial results.
Speaker 4: Thank you, Alfonso. GMRE's portfolio continues to produce solid results. At the end of the fourth quarter, 2022, our portfolio consists of gross investments in real estate of 1.5 billion, and it includes 4.9 million of total leaseable square feet, 96.5% occupancy, 6.2 years of weighted average lease term, 4.4 times rent coverage, with 2.1% weighted average contractual rent escalation. In the fourth quarter, we achieved a 19.6% Eurofear increase in total revenues, the 36.3 million
Speaker 4: of its step balances, along with higher operating, depreciation and amortization expenses due to our larger portfolio. Our interest expense in the fourth quarter was $8.1 million compared to $4.8 million in the comparable quarter of last year, reflecting both higher average step balances and increased interest rates.
Speaker 4: To illustrate the effect the rapid increase in interest rates has had on our interest expense, our weighted average interest rate during the fourth quarter of 2022 was 4.07% and compares to 3.65% during the previous quarter and 2.88% during the fourth quarter of 2021, representing an increase of about 120 basis points in just one year.
Speaker 4: The increase in interest expenses occurred despite our having fixed the interest rate on approximately 80% of our indebtedness and weighted average interest rate of 3.75% as of December 31, 2022.
Speaker 4: Given the effect interest rate increases have on the cost of our variable debt, as Jeff noted, we plan to use the proceeds from our current expected dispositions to repay amounts on our revolver and reduce our overall leverage to our target range of between 40% to 45%.
Speaker 4: GNA expenses for the fourth quarter of 2022 were $4.1 million compared to $3.9 million in the fourth quarter of 2021. Within our current quarter, GNA expenses, notes in our stock compensation cost in the quarter were $1.1 million in our cash GNA cost of $3 million. Looking ahead, we expect our GNA expenses in 2023 to increase and range between $4.2 million and $4.6 million on a quarterly basis. Our operating expenses for the fourth quarter were $7.1 million compared to $4.5 million.
Speaker 4: a prior year quarter with the increase in these expenses primarily driven by the growth of our portfolio. Regarding these fourth quarter, 2022 expenses, $5.3 million related to leases where the company recognized the comparable amount of expense recovery revenue in $1.5 million related to gross leases. That income attributable to common stockholders to the fourth quarter of 2022 with $306,000 or $1 per share compared to $3.8 million for 6 cents per share in the fourth quarter of 2021. FFO in the fourth quarter was $15.5 million or $22 cents per share.
Speaker 4: many shares of common stock under our ATM in the fourth quarter or to date in the first quarter of this year.
Speaker 4: As of December 31st, 2022, we had $704 million of gross debt. Our leverage ratio was 47.6%, and our weighted average interest rate was 4.2%.
Speaker 4: As of quarter end, the weighted average remaining term of our debt was 3.9 years. The current unutilized borrowing capacity under the credit facility is $245 million. With respect to our investment portfolio in our 2023 lease aspirations, we are pleased with our progress on renewal and based on that capacity to date, currently our project is to retain between 85 and 90% of the 363,000 square feet that it's expiring this year. Additionally, we are in discussions to lease up approximately $20,000 square feet that is currently vacant and have executed leases of 15,000 square feet of current vacancy. The tenant schedule to take occupancy in 2023.
Speaker 4: Currently, we are expecting that our occupancy during 2023 will be above 96% throughout the year. Regarding capital expenditures on the portfolio, currently we are projecting approximately 6 million capital expenditures and $4 million intended improvements, primarily associated with lease renewals and lease-up to be completed during 2023.
Speaker 4: While market conditions are challenging, we are optimistic that we will be able to reduce our leverage and ramp up our acquisition activities during 2023 and look forward to sharing our progress with you throughout the year.
Speaker 2: This concludes our prepared remarks. Operator, please open the call for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key use.
Speaker 6: One moment please, will we pull for questions? Our first question comes from Austin Worseman with Keybank Capital Markets. Please proceed with your question. Thanks, and good morning, everybody. With respect to the $90 million of targeted sales that you highlighted, can you give us some additional detail about how far along you are in the negotiations for that beyond, you know, the roughly 12 million you highlighted, and how should we think about the timing of those deals closing? Would you consider these assets reflective of the overall portfolio? Just some additional detail would be helpful.
Speaker 5: Sure, I'll take that. So we have two properties under contract. Those are the ones that add up to 11 million. One of those actually, the diligence period has expired so that one, we're looking to close within the next week, one, two, three weeks here from today. The other one is still in diligence. And then we have two other assets, one that's approximately 9 million.
Speaker 5: that is still in the first round of bidding, but we're getting very strong interest in that property. This is one that's a cancer center that we bought when it was owned by a group of physicians, but Bonsa Cores came in, bought that group, and extended at least. So we're getting a lot of interest on that one, and we're expecting price and the B under a six cap. And that one, we've had about 120 interested investors on that one. And we're expecting a lot of interest on that one.
Speaker 5: And there's another property that's approximately $58 million and we finished first round of bids and are in the second round of bidding. But that one is going to take some time to get under contract and then the diligence period. So we're looking at you know two to three months before we can get that one closed. That's helpful and then just speaking maybe to the investment pipeline. I mean how big is the investment pipeline today? Are you seeing bid asks breads narrow and?
Speaker 5: What type of cap rate are you targeting on 100 million of potential acquisitions you discussed this year? Sure. We're targeting mid to high sevens and potentially even eight caps. Even though we've not been active putting deals under LLI or under contract, we have been very active trying to track the market understand where cap rates are and understanding where financing is for assets. What kind of pricing people are getting when they're trying to buy with mortgages?
Speaker 5: I would say that most of the movement in cap rates happened last year. So far, the first two months of this year, it's been a story of just affirming kind of where the year ended. So basically, all the cap rate compression that the market witnessed in 2021 and 2022 is gone. We're back to call it 2019 pricing. So things that used to trade at a seven or trading at a seven again and things that used to trade at a low six or trading at a low six again. So in the next that we we've targeted historically, you know, we're not competing with the bulk of the money.
Speaker 5: We're not chasing the core assets and the credit deals. We've historically always chased position credit and deals that traded 100, 200 basis points above or core is pricing. And right now those assets are back to seven caps. In terms of the bid-ass spread that I think we've all been hearing in the market, that is a thing. There is seasonality to transactions. So even though December was, I would call it fairly busy in terms of new investment opportunities that were available, January was probably slower than it has been in the past. And February there was a pickup.
Speaker 5: It's hard to gauge exactly how the year is going to shake out. There's still a good amount of money that wants to invest. I mean, as we witnessed, even in the properties that we put for sale, I mean, there's a lot of buyers that are hungry for deals that really fit a core plus profile. So there is ample demand. And I think in terms of supply to the market, it's... I think a lot of people recognize that 2021 and 2022 were outliers. And I think there is acknowledgement that the pricing was...
Speaker 5: very rich. And so there are a lot of sellers today that acknowledge that, you know, that pricing is probably not coming back again. And, you know, if they decide to sell, it's going to be for typical reasons. It's going to be just the right timing, the right hold period, or there's a transition in the physician group. If it's a developer that is, you know, two years after certificate of occupancy, this is the right time, it's going to be a lot of natural sellers that are going to start emerging. And I think.
Speaker 5: Everyone decided to wait for a couple of months to kind of let the let the let that thing settle and just get a better sense for where interest rates are going and what's happening in the market, but there is a growing consensus that the second half of the year is going to be fairly busy. I think it's going to be a lot of people that are going to be playing catch up and I think by then, you know, the bid aspect is going to narrow and I think it's going to start moving the market.
Speaker 6: It's helpful. And on the inbound increase for development capital funding, investment opportunities. You know, how does the pipeline break down between those types of opportunities versus a more traditional acquisitions? And I guess given your guys size, how significant of an opportunity to do this could be what kind of terms are you looking for? And would there be an ultimate goal of owning these assets? That's it.
Speaker 5: a met financing during construction or doing a forward takeout or doing a combination of those things or even potentially doing a joint venture. So we started having these conversations in December and there's a few groups that we've been talking to that were interested in continuing those dialogues.
Speaker 5: But you know, it's something that we're in the early stages of discussion, evaluation, and just understanding how we can position ourselves to act to our pipeline. You know, in terms of acquisition, we're looking at what we've typically looked at in the past. And there are opportunities that are in front of us right now, but we're...
Speaker 5: You know, we're still several months away before we can really start putting things under LLI and under contract.
Speaker 6: But that 100 million you highlighted is that that includes just all opportunities. This wouldn't be in addition to the 100 million Correct. Yes, okay. Great. Thanks guys
Speaker 2: Our next question comes from Juan Sandria with BMO Capital Markets. Please proceed with your question. Hi, good morning. Just hoping to follow up on a comment you made at the end of your prepare remarks around looking at potential joint venture opportunities. Just hoping to.
I'll ask that a little bit more and how that maybe structured would it be a one-time or a setup or a vehicle where you look to grow with some sort of a third-party partner or partners.
and how that maybe structured would it be a one time or a setup or a vehicle where you look to grow with some sort of a third party partner or partners. I'll start with this one.
We are just looking at the opportunities out there, not necessarily ready to do one. It depends on how much we can add to ASS-O and what we do is the partner somebody we can grow with and get capital. We wouldn't be to be doing assets that are not in what we normally buy right now, possibly buy the lower price core for them. I mean lower cap rate core, not to compete with what we do, which is we add value.
We buy a couple of points above what the core is and our properties often turn out the way we buy them. As you can see with our sales, often creditors come in, they add higher credits to them when we extend the lease. Suddenly, there's a lot more value and it becomes sort of core. So we wouldn't do exactly the same.
but we're just looking out in the market to see what the opportunities are and what it would add to our AFF at both. So Fondo Q1A? Yeah and you know we've had a good number of conversations with different parties and I would characterize it as exploratory thus far but you know there are some opportunities that that...
It could make sense for us just depending on how the year shapes up. And I would say even on the private equity side, it's pretty clear that at the beginning of the year everyone adopted a more cautious standby mode. And a lot of the conversations I've had with those groups, it sounds like they're also targeting kind of second half of the year for them to really start getting active. Okay, then thank you for that. I was hoping there for a second question to get a little bit more color on the slight downtake in occupancy.
kind of what drove that and I think you highlighted you want to be above 96 for 23 and so if you could maybe just help us bridge to how you get back there on the visibility. In that improvement from the year end levels that be fantastic.
Yeah, before I turn that over to Bob, I just wanted to say that we do buy vacancy a little unusual for a read, but we do go out and buy core really strong properties that we find sometimes 80% occupied and we now have the history of renting them up over time. So the occupancy...
We're trying to stay within that level, but we do see some really great opportunities that have vacancy that we believe we could Rent up over time and we have a history of doing that like with our Fairfax property. I'll turn this over to Bob Yeah, yeah relative to the Q4 vacancy change this really reflected the fact that one of our cash basis kind of our tenant in Westland Michigan that's been on cash basis since
I think 2021, we were able to evict them in the period. So the change that you're seeing in Q4, that was the vast majority of the change. So really from a financial impact on a perspective basis, because it's already been with us for some time. At this point, this was just the actual vision in moving them out of the facility. And then you could kind of think. Yeah. Sorry. Oh, sorry. So prospectively, yeah, as we look at our lease up activity for 2023, I mean, things are progressing.
really well relative to our lease up activity. Again, we're forecasting that between 85 and 90% of the expiring square feet that are out there for 2023. And then we're making progress on vacant space. So the combination of those things is what we're forecasting, how things look as we head through 2023 that we'll try to really be in that 96. And above from an occupancy perspective. Thank you. And then just the last question on pipeline health. The tenant that came back from bankruptcy and reemerged in January .
Can you just give us an update on comfort level that, you know, once you use up some undetermined amount of security deposit to help them pay their cash rents in 23 on the sustainability of that rental stream to to shareholders?
I can start with the comment. I think a lot of it, a lot of the pressure in 2022 came from the wage inflation around nursing staff. I mean, the year has started with relief on that side. And I think some of the things we were hearing.
at the beginning of the year, at the end of last year from pipeline about that line item, in particular, seems to be trending as they were predicting. So, along with that continues finding relief and those rates start coming down and I think the comfort level increases. Thank you.
beginning of the year at end of last year from pipeline about that line item in particular seems to be trending as they were predicting. So, along with that continues finding relief and those rates start coming down and I think the comfort level increases. Thank you.
Our next question comes from Rob Stevenson with Jamie Montgomery Scott. Please proceed with your question. Good morning guys. How fun is all. You broke up a little bit when you were talking, I think one of the earlier questions about cap rates on the acquisition. We're considering what your hurdle rate there. What is the cap rates on the stuff that you're looking at at this point given you're across the capital? No.
7.5 or higher. I mean, we're looking at stuff into high sevens and there's a few in the low eights, but we really haven't, you know, haven't found anything yet. That is a good fit for us. There's the year did start off low in January and February that was a pickup, but we're targeting more of a 7.5.
Okay, and then Bob, in terms of financing that the line of credit, your lowest cost incremental debt at this point? It still is. Yes. I mean, it's from a borrowing capacity. It's still, I mean, from a financing rate perspective, it's still the lowest cost. I mean, we've explored and looked at other potential sources, but I think it's.
At this point from a temporary base, this is you, if you think about the revolver, we would talk about the dispositions that would bring our variable rate down to 10% of our total debt with the dispositions. And then, prospectively, we would look to really over-equitize. We'd look to maintain that leverage and that lower and that target range as we went ahead. Okay. And then, I think that in the prepared comment, you guys said that the $6.7 million acquisition will be funded primarily with OP units. How are you guys thinking about that? Are those just struck at market levels? Was that a negotiation and struck at higher than 10 bucks? Except for how should we be thinking about that and sort of the sort of...
fully loaded yield on any type of acquisition funded today with equity. of them. So we do it higher than the stock price.
on those OP units. We have some interest in them. I think when we start doing deals, since we're trying to reduce our leverage, we'll try to push more OP units out there. At one point, we weren't doing that. And we've been offered that, but we weren't doing that because it wasn't worth it to us at the time. But now, OP units are an important part of growing, being more equity.
We're real conscious of our bringing down our debt levels and staying in the 40 to 45%. And then as we grow in the future, even going below that. So it's a goal of bringing down our debt. At the same time, we're finding product out there and we could sell assets in the low sixes and it seems to be a lot of demand for what we have.
and that low sixes and we are capable of then buying in mid-7 to 8. So either way whether our stock is there at the price issue stock.
would be my preference, or we could sell and buy and replace assets with higher. So I think we can move on to the acquisition mode right now, given that it's tremendous demand for what we have and we could sell them in the Texas. Okay, and then last one for me, Bob, how should we be thinking about the sort of unreinversed operating expenses that's accruing to you guys?
get the rental revenue and then you get, and then on a triple net lease, you get rid of some of the operating expenses. The revenue is sort of easier to figure out, but how much operating expenses are you incurring on an annual basis for the vacant assets or assets where you're on, you know, like the guy that you bumped out from a, from an eviction standpoint.
Right, no, you're exactly right. It is that double change where you're able to flip something from a negative to a positive. And just looking at the run rate on some of the properties, it really gets to be upwards of a million to a million and a half that you're carrying.
in those costs from the vacancies on the annual basis. So it's a high motivation to lease up the vacant space and turn the situation around. That's definitely an opportunity for us as we look at 2023. Okay, perfect. Thank you. Thanks guys. Appreciate the time.
10 or is there something different we should be thinking about?
That's probably about right in our target. I mean, we're targeting 100 million. You know, it's an uncertain market right now. But we do believe that there's assets that we're starting to see in the price ranges where we could do and it would be profitable. So that would be about this. In the next year.
we hope to be back to our $200 million a year without selling assets. Okay, that's helpful. And then just if we were in a world where you sold the 90 million and Alfonso just couldn't get there with the 100, is there a level at which your stock trades that you might contemplate going into the market and buying some shares?
Yeah, when we're a creative um and the way I would define that is that we could buy properties essentially for equity, I don't want to add debt and that you know the when the debt
And we see it accretive there, but we could still buy it for equity. That's about the, you know, when that stock price matches where we could buy assets, that's where we could go in the bucket.
Okay, thank you. That's all for me. As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question comes from Aaron Hecht with JMP Security.
Please proceed with your question. Hey guys, good morning. Another point of clarification on the balance sheet with regards to the $100 million being deployed versus the $90 million being sold. Does that imply that we should be thinking that a majority of the capital being deployed is going to be funded?
with equity because I know you discuss bringing leverage down a number of times and reducing the variable rate or is there something else that we should be thinking about here or is that just held in isolation in terms of disposition and pro forma leverage.
We prefer to do it with equity. We don't know with this environment whether that exists or not or we do expect later in the year, given that each turn of the Fed where there seems to be a vision that the Fed is going to stop raising our stocks, so it's rising. So pretty nicely. So we do prefer doing it with equity.
But in case we can't do it in equity, we can sell more. I don't want to add to the debt. We really want to be stringent upon our debt to stay below 45, I mean in the 40 to 45 range. Understood. And then, Bob, I think you made the comment about 10 to 15% of your expiring leases potentially going vacant. That's good to be able to think through those few.
Is that a normal percentage per year for you guys? Is there anything unique about those properties that you think are going to go vacant that investors should understand in terms of time frame and duration may take to return it?
I don't think there is anything unique about it. I think it is more just a natural flow that can occur with any expiration and releasing activity. So, achieving a retention at the 85 to 90% level, we think, is good as we then lease up back.
about the properties. I think it just...
You just an overall flow from the business. Okay, and I think it was, I think you discussed two tenants moving in to previously vacant space this quarter. What's the incremental NOI going to look like on a quarterly or annual basis? How should we think about that? Well, I mean, I think from a from a releasing perspective, it's...
adding additional square feet from a Lisa perspective will, you know, will increase our, you know, will increase our, and the way, but I think overall we're probably going to be, you know, flat from an occupancy perspective in the first quarter as, as we, as we look ahead. So I don't, I wouldn't.
factoring a large in-a-life increase from the lease up in Q1. Understood. Thanks guys. We have reached the end of our question and answer session. I would now like to turn the floor back over to management for closing comments.
Well, thank you everybody. Look forward to next quarter call. Take care. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
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