Q1 2023 Kimco Realty Corporation Earnings Call
Speaker 2: 2023 earnings conference call. At this time all participants are in listen-only mode.
Speaker 2: A brief question and answer session will follow the follow-up presentation.
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Speaker 2: As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Mr. Dave Bujnicki, Senior Vice President of investor relations and strategy. Thank you, Mr. Bujnicki. You may begin.
Speaker 3: Good morning, and thank you for joining Kimco's quarterly earnings call. The Kimco Management Team participating on the call today include Conor Flynn, Kimco CEO , Ross Cooper, President and Chief Investment Officer, Glenn Cohen, our CFO .
Speaker 3: Dave Jamieson, Kimco's Chief Operating Officer, as well as other members of our executive team that are also available to answer questions during the call.
Speaker 3: As a reminder, statements made during the course of this call may be deemed forward-looking, and it is important to note that the company's actual results could differ materially from those projected in such forward-looking statements due to a variety of risks, uncertainties, and other factors.
Speaker 3: Please refer the company's SEC filings that address such factors.
Speaker 3: During this presentation, management may make reference to certain non-GAAP financial measures that we believe help investors better understand Kimco's operating results.
Speaker 3: Reconciliation of these non-GAF financial measures can be found in our quarterly supplemental financial information on the Kimco Investor Relations website.
Speaker 3: resolve as quickly as possible and if the need arises we'll post additional information to our IR website. With that I'll turn the call over to Connor.
Speaker 3: Good morning and thank you for joining us today. I will begin with an overview of the leasing environment and share how we are strategically well positioned for long-term growth. Ross will then cover the transaction market and Glenn will close with our key performance metrics and updated guidance.
Speaker 3: first quarter results including over 4.5 million square feet of leasing as we benefited from our combination of high quality grocery anchored assets emphasizing off-price retail and everyday essentials in first-ring suburbs. That makes us uniquely positioned to benefit from what we believe to be longer-term trends.
Speaker 3: relating to consumers and retail strategies. We accomplished this leasing in the face of high interest rates, bank failures, signs of a weakening economy, and troubled retailers. Our dedicated team and resilient portfolio not only withstood these pressures, but outperformed. First, the consumer.
Speaker 3: retailers, the demand for essential goods, services, and groceries continues to be strong. In addition, the flexible hybrid work environment is creating more opportunity for shoppers to pre-plend our centers. Finally, OmniChannel Shopping continues to outperform pure online shopping.
Speaker 3: as optionality is a winning formula, but providing consumers the convenience of shopping online and picking up a returning at the local store. Requests to expand our nationally recognized Curbside Pickup program continue to grow from our entire stable of national, regional, and small shop tenants.
Speaker 3: In addition to the resilient consumer, leasing demand and the ability to push rents continues at a robust pace due to the lack of new supply and high barriers to entry at a highly desirable locations.
Speaker 3: The demand for new space is well-diversified, with a mix of new deals this quarter, spread among off-price, grocery, sporting goods, fitness, health and wellness, medical, and fast casual dining.
Speaker 3: As part of our focus on attaining the highest and best use of our properties, we also secured two new entrants to the Kimco portfolio this quarter, a Tesla dealership in Austin, Texas, and a market by Macy's in San Diego.
Speaker 3: Strong leasing supported by this robust well-rounded demand is reflected in our new leasing spreads of 44% a five-year high.
Speaker 3: Occupancy buffs the seasonality trend of dipping after the holidays and gain 10 basis points thanks to our team's stellar efforts and our small shop leasing initiatives. During the first quarter we anticipated some space coming back from underperforming retailers, including Bed Bath and Beyond, who just filed for bankruptcy this past week.
Speaker 3: This has been widely expected and we've been well prepared for this outcome as we have actively marketed all of our bedbass bases for some time.
Speaker 3: To highlight our successful efforts, we started the year with 30 bed bath leases. During the first quarter, we sold one location and released three boxes, including two we recaptured with a mark-to-market spread of 24%. Regarding the remaining 26 bed bath leases, we are either in lease or LOI negotiations on 22 locations.
Speaker 3: With a marked to market spread, similar to what we have executed today, which exemplifies the strong activity from a diverse pool of retailers looking to expand. The remaining four locations are either being marketed for lease or of a potential redevelopment candidate.
Speaker 3: The lack of supply and inability to meet new store targets is a constant refrain from our retailers during our portfolio reviews and remains key catalyst for the lease up of these locations.
Speaker 3: It is also why our retention rates for the portfolio continue to remain well above historical levels at 90% this quarter. With this pace of retention and the strong leasing demand, we believe that over the long term we should see an improved underlying growth rate for our business.
Speaker 3: Further enhancing the value of our first string suburb locations is the increased demand for industrial and residential assets.
Speaker 3: This competition for land or conversions makes the cost of new retail development even more prohibitive, which will further reduce supply for potential new retail. And when you combine the rising rents in the residential sectors with the competitive redevelopment advantages at our existing locations in the first ring suburbs, the opportunity to add more mixed-use density provides us the long-term opportunity to increase the demand for new retail.
Speaker 3: for growth and will look to be opportunistic when others cannot in our quest to outperform on a sustained basis.
Speaker 3: and will look to be opportunistic when others cannot in our quest to outperform on a sustained basis.romanaging your post, and you can choose asstyle Rent Azirrr Bal as interim
Speaker 3: Thank you, Connor, and good morning. I'll begin with the market for transactions, which remains restrained given the volatility in the capital markets and elevated borrowing costs.
Speaker 4: Transaction volume was down across the board in the first quarter. However, what has remained constant is the significant demand from both institutional and private investors for high quality open-air retail.
Speaker 4: A healthy level of equity capital remains patiently waiting on the sidelines for opportunities to acquire our product type as the property fundamentals continue to improve within this retail sector.
Speaker 4: Notwithstanding the improving operating fundamentals, investors are seeking higher cap rates to offset higher costs of capital.
Speaker 4: At the same time, however, supply remains limited, with sellers holding out for higher pricing unless they face refinancing or other pressure to sell.
Speaker 4: How long does stalemate last is the ultimate question? Despite these broader market conditions, we have found ways to selectively and accretively put capital to work. On the last earnings call, we mentioned the two Southern California grocery assets we acquired from one of our JV partners.
Speaker 4: subsequent to the call we were successful in buying out a third grocery angered site in Southern California from the same partner.
Speaker 4: This property is a dual grocery anchored site with a smart and final traditional grocer in addition to a Trader Joe's.
Speaker 4: We are excited to add these three strong performing grocery assets to our wholly owned portfolio, despite the market conditions I described.
Speaker 4: We also added a new structured investment into our program in the first quarter, an $11.2 million subordinated loan on a Sprouts-anchored shopping center outside of Orlando, Florida.
Speaker 4: As with all of our structured investments, we retain the right to acquire the asset in the future in the event the sponsor looks to sell.
Speaker 4: This property is another great addition to the structured portfolio with a very attractive return at a very appealing basis on our investment.
Speaker 4: As it relates to dispositions, we previously mentioned the two Savannah, Georgia power centers we sold back in January .
Speaker 4: Prior to quarter end, we sold a third power center in Gresham, Oregon.
Speaker 4: To my point earlier that it had taken longer to transact, we have been working on this since the fourth quarter of last year and successfully closed at the end of March.
We should expect kind of 60 basis points of rent coming off in 100 basic place of occupancy coming off and then over time, we get that that kind of next year.
Eight and a half a million of rent kind of comes back in like a 10 and a half a million dollar state like does that and then what what would be the timing of Oakland that would kinda come back online.
Yeah. Good question. So I would say what you just articulated would be sort of the the worst case scenario in the sense that everything went out nothing was purchased at auction.
Or a side, which is a bad that has yet to occur and we anticipate happening in June energy and of July . So there can be some impact to that to to the positive Ah considering the competitive landscape that is a very real possibility in terms of the activity is Carter Carter articulated <unk>.
<unk>, we've already leased twenty-six that remain seven of those were rejected and the the day one motion.
Or at least with over half and half otherwise on the balance all of which are single tenant uhm, backfills, which helps reduce the conversion in the downtime to get it get it reopened so that's positive.
Balance in the box is that the majority of those are all also single turn it back till opportunities and we are either at least tried loi's age the handful that the counter mentioned in a script, we are assessing real redevelopment opportunities for those as potential or we'd like to do it <unk>. So we are in a great position.
<unk> from where we see obviously the lack of needed supply knows no retail development on the horizon for the years to come retailers are really seen this is the opportunity grab that market share and expand our portfolios it needs to keep markets.
<unk>, we're a bit ahead of where we thought we'd be as you saw we raised the lower end of our guidance, even with you know without the the termination income that we anticipated and a lot of that is attributed to the environment that we're in today for high quality locations like bed Bath and beyond have so you see the the diversity of demand is quite is quite strong.
We're in a good spot to it's really you know by June will really have a better understanding of of which ones are coming back to us, but we're not waiting for that we're being proactive and lining up replacement so very strongly seem spreads.
Thank you and then ask question comes on Craig's Mailman was city.
Alright, good morning, everyone <unk>.
<unk>, maybe I want to follow up on that last point you guys. You know effectively raised guidance half penny the mid point, despite having a draft certain fee. So it looks like effectively at two cent raise.
Could you just walk through exactly what's what's driving that cause the operating assumptions didn't look like they changed all that much.
Yeah sure again, it's really driven by the rent to management. So we are a little bit ahead of plan, which is what what's driving it also the timing of investment activity and then the impact of the of what we looked at in terms of bankruptcy situations. So we are a little bit ahead of schedule.
What we had budgeted so what I'm comfortable with raising that that lower end of the range.
I think one of the big drivers to for us to get comfortable with raising the bottom and is the retention rate as I mentioned earlier that that's really driving you know a significant amount of cash flow growth for us. When you look at you know where are we thought we'd be versus where we are today. We are ahead of schedule that.
Thank you and the next question cuts off correspond I come with Compass point.
Great Guy So I've got a question I guess in two parts number one I I'd like maybe if you can you'll walk us through the lower and a wide margin and expense recovery for the quarter and what was behind that and and how does that.
Impact your.
Your your views towards you know, maybe <unk> or or having you know a pure just on a on a inflation adjusted basis. Your recovery struck and then the second part is in terms of Philadelphia I noticed there was your Philadelphia portfolio is lagging.
<unk>, you know quite a bit I think something like 480 basis points in terms of occupancy relative to the rest of the portfolio. Just if you can give us maybe some some more details behind that and if that's specific to maybe potential redevelopment or or some other opportunities or is that just market is has been you know less good than some of the other ones.
Alright, I'll I'll take the second one first and then I'll take it over to the rest of the team to to address the margin as it relates to Philadelphia, Yeah. It's it's just related to Kohl's transaction, where we took back two of the polls leases as part of that transaction you want which we knew were already bacon. So that was that was out there.
The rest of the Philadelphia portfolio is quite strong and actually you know trending.
At or above when you look at it from the whole portfolio.
<unk> question on here.
Question, if you look at the N O I imagine what will actually take a look at the credit for a second there and you can pull that ask in Bulgaria.
And to have more in line. So that's really a good driver.
<unk> and then when it comes to the recovery and first time expenses that my front loaded.
<unk>, but when you look at <unk> comfortable with that.
<unk>, so it will level Alec unlimited coverage.
Uhm.
Yeah.
Thank you and the next question comes from <unk> BMO capital markets.
Oh good.
Good morning, just hoping you could talk a little bit about the investment market, what asset values or or <unk> or what's being transacted that a couple of details both on the buy and that's all set in the first quarter.
How that compares to.
Have a nice landing opportunity that it seems to be an opportunity that for ya.
Sure as I mentioned in the remarks, you mean, it is a little bit of Estelle name right. Now. So the transaction volumes are way down you are seeing certain deals get done in the first quarter. We did see some transactions occurring in the fives similar to the pricing from last year, but they are fewer and farther between when you look at that sort of a bit.
<unk> spread is very deal specific so as I mentioned there there are buyers that are still looking for higher cap rates and sellers that are holding firm because there's really not any sort of forced situation with lenders or cash flow situation or challenges. So from that perspective, we were successful in acquiring.
Free shopping centers problem joint venture partner that was looking for some liquidity I'm. So it's really just about staying opportunistic and ready with a capital, which we have as it relates to amaze financing and are structured investment program that is also something that we're obviously very focused on one transaction in the first quarter.
But again, because there really hasn't been any forced sales or or.
Distress situation as it relates to the lending community.
Are a little bit more challenging in terms of sourcing right now, but having lots of conversation hanging around the globe and we're ready to move as soon as those opportunities present themselves.
The only thing I would add is that we are seeing pretty significant capital formation for our product I think for a period of time certain folks are on the sidelines looking at open air specifically grocery anchored shopping centers and we're having a lot of inbound.
Request for dialogue to potentially have new capital R. At our call for investment purposes, Obviously, we're sitting with you know.
Tremendous amount of cash today. So we're looking at the opportunities that internally, but it is nice to see a significant amount of capital formation for our product.
Thank you and the next question customer Alexander Goldfarb Piper Sandler.
Pay good morning, so question on the depth of demand across.
Your portfolio would you say, it's pretty evenly spread you know uhm anchor junior rank or you know small shop, etc. In outparcel or is one area much deeper and actually I'm <unk> more focused on which areas are sorted the lightest and backfilled demand and you know how how.
How you sort of Genoptix those are spot you would expand or subdivide I'm just trying to think about where the areas of the least amount of demand are in in space across the portfolio.
Sure question, Alex So I'd say, we were seen pretty consistent demand across the square footage at this time historically sort of that at Tweeners six to 869000 square feet has historically been a little bit lighter than the smaller shops or could you know anywhere from 1000 and 5090 acre box.
10000 over but even in that category, we've seen great demand a lot of people coming out of the malls you know whether it be for.
And others that are looking to backfill that that particular box category has really been a benefit so will continue to push that <unk> yeah. The anchor activity, yeah, let's add the nicole's impact Frank or boxes of support or we would've been up another 20 basis points from from last four days. So we would've been at night.
Instead, it 98 would've been 98, two I shall we continue to see that and it goes back to my earlier point that there's just no new developments by that's coming online here in the coming years and so these rare opportunities where you got availability in good locations you are gonna jump on those and stretched a little bit to make sure they should.
Because they don't see anything else on the horizon and they have to have that that gross profiling and their button.
The only thing I would add is that the the retailers are getting less rigid on their square footage requirements. So when you look at you know the typical protostar, whether it's a small shop, a mid size box or an anchor box you know typically it's now opportunistic where they're looking at the space available versus their prototype and making it work, which obviously <unk>.
Itself to our business because if you could backfill the entire space with one tenant capex logos down dramatically and that's what we're experiencing all the bed bath boxes.
Thank you and the next question comes off some air come out with Evercore.
Hey, good morning, everyone. Connor can you talk about the the shop leasing environment and how you think that'll scare this sort of this cycle. You know we've seen said the bank sailors here and you know that impacts the smaller tenants.
Are you thinking about credits environment for the shops, if we go into a potential slowed down here. Thanks.
Yeah, the shop space as you've seen with our occupancy growth continue to be the bright spot I mean, it's really interesting. If you think about the diversity of demand of what's driving that it's pretty remarkable I think we're at a point in the retail evolution, where the last mile or the the closest retail destinations, where you live and where you work is really a <unk>.
<unk> I would say a hybrid retail environment, where it's medical services is essential goods and services, it's grocery it's health and wellness, it's physical it. It it really is interesting to see the the diversity of demand driving that that small shop growth opportunity for us I think when you when you look at the.
The the ingredients of where we see the demand drivers.
I think it gives us a lot of confidence to say that with this portfolio. We can drive a higher small shop occupancy rate than we've ever experienced before.
It's because of that diversity at the man now it's it's gonna be interesting if the if the economy really does get worse and there's a pullback.
Some of the small shops that didn't make it through Covid I would say, we're still in a position where we're back feeling those locations with higher credit.
Better operators and so we we I think we're starting from a higher quality higher credit portfolio of a small shops today.
Thank you and the next one.
[laughter] Ottosen just with Missoula.
Hey, good morning.
So kind of I guess cause we understand the timing of Baghdad is one of the factors of that.
Can play a key role of swing factor in the house core growth plays out here. The next year or two but I was hoping you guys could talk a little bit about the cadence first name. So whenever I growth. This year and then as we look ahead, given the snow related occupancy visibility in with the band that you're saying what type of ballpark. The same sort of my growth does that Quebec gift you too <unk>.
Next year, I think most of us need to set the longterm two 2.5% safer in one business curious if you think you can pop the longterm average next year. Thanks.
Sure. Thanks for the questions and I I think when you look at again the fundamentals of our business now there's gonna be some lumpiness, obviously quarter to quarter with the bed Bath and maybe some of the other retailers that we're watching and and how the auction process plays out because that will really determine the lumpiness of how much how much N Y it comes off.
<unk>, but I do believe as I said earlier that the fundamentals of our business are quite strong and with virtually no new supply and very high retention rates, we should see a I think a longer term growth rate that's above the historical average and we're also pushing for higher annual increases when you look at the bumps were getting on our small shops or higher too.
They then there were the trailing bark orders the same goes with our anchors are higher today than they were trailing four quarters and if you look back multiple years, they've been trending higher so that bodes well for obviously, a fundamental rereading of our growth rate going forward, but there's a lot of things that may or may not occur to us for that to happen. So it's hard to.
Wait what the future is gonna hole, but where are we stand today you know, we're very confident about the strategy, we put in place and executing on that strategy is showing up in the internal growth rate the pricing power that we have to that in terms of the cadence of the same site I'll turn it off any blood yeah. I mean, I think if you if you look at their desk component to it.
Again with config against Dead dead income from last year.
So when you look forward really have a morning normalize what we expect to be on one normalized bed that level, but I think that that that part at least.
Should keep us in.
In good shape to be able to grow the same site and a Y grow really well <unk> from from the Red bumps that Congress.
Thank you and the next question comes from Anthony Powell with Barclays.
Hi, Good morning, I guess question about percentage rent I saw that takes up to close to $6 million in the quarter.
I'm Gonna run rate and what's really driving and grew up in that segment.
That's a great question some of it is timing.
We have been very proactive on getting sales or puts out to tenants in the collections in the first quarter or higher than what we had originally budgeted some of those collections that came in where we're from 10 is that we had budgeted to be in the second quarter. So you'll you'll see you'll see it start to get down as we go through the year. So the first.
Quite or is it a little bit ahead of with a bunch of <unk>.
Thank you and then ask questions <unk>, Caitlin Burrows was Coleman sacks.
Hi, Good morning, everyone, maybe just to follow up on the small side I know, there's a concern that small shop tenants, maybe more negatively impacted by <unk> standards. So what are you hearing from them has there been any change in their ability to run their business and then at the same time do you have a breakdown of what portion of the small shop tenants are actually.
Small businesses birthdays furniture national businesses that happened to upgrade <unk>.
Yeah, It's it's a great question, and it's something that where where.
Very closely monitoring because we went anticipate that they would be the ones that would be most impacted by the the the pulled back up a local or regional banks and their ability to lend right now we haven't seen a material impact on obviously <unk>. That's R Q1 numbers and those businesses ability to offer.
<unk>.
But if somebody that were closer to watch her and watching and monitoring through the course of this year.
Do you anticipate see if there's any any cracks in the system, but right now things are things are holding up pretty well.
And we do have a breakout at our investor presentation of the small shops that are really more local versus really the the national and regional players and we are heavily weighted towards the national and regional Blair's. The only thing I would add is we have a better communication than we've ever had with all of our retailers primarily because of what the pandemic <unk>.
Forced a lot of us to do which was again have constant dialogue with art with a retailer partners and you're handling the P. P. P program as we did.
Gaining access to our small shops and the way we have given them the opportunity to access capital in times of need I think we have very close ties now with our with our partners in a retailer's that we believe will will hopefully be able to weather. This next door.
Thank you and once again as a reminder, please press Star then one if you would like to ask a question or ask a follow up question.
And our next question comes from keeping Kim with truest.
Thanks. Good morning. Two question is first I noticed that you guys started the development encore to replace it looks like it's the preferred equity investment with the <unk> Group I was just curious if you can provide some more color on the structure pricing and if the income from the preferred equity investment is based on the dollar say put to work or is it okay.
All upfront and the second question going back to bed Bath and beyond I guess, what is part of your.
Thinking in your budget are you assuming that they all eventually shut down you'll get it back or I was just curious about how that configure it to your budget.
Sure I'll I'll I'll take the first one on Unculture. So yes. The the culture project is our first multifamily activation in our preferred equity structure add furthest up you know you'll see that the gross cause yield for that that investment will be approximately five to six per sandwiches concern.
And with what you'd see historically as multifamily projects <unk> towards as a result of our preferred equity structure that we're able to contribute the land as well as a <unk> and a preferred yield and then blended together with some additional contribution to common equity, we're able to achieve a yield that that exceeds our current cost of capital which.
It makes it it created to Austin and hit that low double digit return that we're looking for so right now we're excited <unk> wonderful partner very very qualified and established player on the business.
And it's a great property. So it's a it's a good first first effort on this structure on.
On the bed Bath question, we are anticipating getting them all back I think that's a better way to to budget is to just you know not not anticipate anything being sold in the auction process and having the associated downtime and leasing costs with each box. So I think that that again is incorporated in our budget and our guidance.
Thank you and the next question construct Breakmate tennis was scotiabank.
Okay, two part of here as well first Ross apologies if I missed this but could you discuss the cap rates achieved on the acquisitions and dispositions this quarter and then for the follow up on cost of capital are you willing to use the low cost albertson cash to offer lower cap rates to sellers.
Potentially get them off the sidelines or how are you thinking about your cost of capital and target an investment yields.
Sure I didn't mention that but I'm happy to address that'd be the acquisition cap right on the grocery anchored centers that we acquired in southern California, where I didn't write to around six and when you look at the spread on the dispositions was about 150 basis point spread.
That's really an ear one cap rain, while we're at most focused on is what the gross profile those assets are buying.
Line them up compared to each other so we see outside of the crowd.
The grocery anchored center that we acquired whereas the power centers that we saw it would either be flat or even potentially the moving negative. So that's really the focus I'm thinking about recycling integrate high quality grocery anchored centers versus the power centers that we sold in terms of the the low cost of capital from the Albertson's I mean, it's a great position to be in obviously the hurdles.
Are a little bit lower the hours is capital that was achieving around two per cent dividend yield now that being said it really is a balance for us between trying to move aggressively and put the capital to work and being patient for opportunities that we expect will present themselves here in the back half of the year. So we're not looking to necessarily overpay or set the.
<unk> just to get people off the sidelines, but we can move very aggressively and quickly if opportunities present themselves that we really like stomach gives us a lot of flexibility with liquidity position that'd be out.
Thank you.
And the next question comes from Manuel Camden with Morgan Stanley .
Hey, just one.
One quick question a follow up so the first is just just don't capital allocation.
Uhm priorities could you just remind me how you guys are thinking about stack ranking it is it.
Sort of acquisitions in the six range is that some of the structured investment given tightening lending conditions, what what sort of makes the most sense right. Now if you. If you could sort of flip you want what would you wrap up on and then the follow up question is is sort of a related bed bath and beyond question.
You know it seems like you guys are sort of a head of that you know 15 20 per cent mark to market really interesting.
But as we think about sort of what's coming down the line. What's coming next you know party city and <unk> and things like that you. Just compare contrast, how you guys are thinking about that box size mark to market demand anything would be sort of helpful. So we can get a sense of what that potentially could look like.
Sure so on capital allocation priorities, one two and three we always say or at least English English thing Oh, you start there and obviously the fundamentals of our business continue to shine followed by that the highest trying for us by these smaller redevelopment, where we can activate the parking lots and create a pad parcel or expand an existing shopping center. It was typically you.
The double digit range. So we we like to activate those as many as possible. We typically run the range of 80 to 90 million a year. So those projects and we're we're looking through the portfolio so to try and generate more of those unique opportunities.
After that typically is a blend of you know the structure investment program as well as his core opportunities as well as the preferred equity and the and the and the mixed use redevelopment essentially you look at the the the sweet of opportunities there and you try and make sure you you you blend to a you know.
Cost of capital that obviously reflects where we are today, we are in a unique position, where we have a lot of albertson's capital to deploy but as Ross mentioned, we're continuing to be patient there and look for those of fat Fitch that unique opportunity to really take advantage of dislocation and we've done it before and will do it again and we continue to think we're well positioned to be opportunistic.
That.
Thank you.
Sorry repeat the question of <unk> It was related to the other tenants coming down party city and their boxes sure. Yeah part part sorry part of the city is in terms of box size 12, 14000 square feet right now, we don't just fade and none of them had been rejected.
So we we're in pretty good shape, there and then what the Tuesday morning, and David's bridal Tuesday morning.
Similar in size David's bridal is is smaller and age or more than that under 10000 square feet.
Thank you and that's what I should cancel one side with Jefferies.
Yes, hi, sorry, if I missed earlier, how much of your full year credit lost expectation of 75 to 125 basis points was realized in <unk>.
So the the credit credit list for the first quarter was around 95 basis points.
Oh, <unk> again and in line with where guidance is and it counts for.
The impact of the.
A bed desk that we had in cities.
Cities and some of David's bridal.
Thank you and the next question I <unk> met with Bank of America.
Well. Thank you you know looking at the operating goes for <unk> I guess I was surprised that it wasn't going to grow a little bit more from the 13% to 15%.
Given the added a multifamily <unk>, you're projecting and then you know as you get past. The 2025 Bill May you accelerate the the mixed use redevelopment I mean, you have a pretty extensive list of things you have those.
That you're pursuing entitlements and the future projects.
Yeah, It's a good crossing Craig obviously, we've ramped up program from for virtually zero to where it is today in the last three or four years. So we have seen you know continued growth of the mixed use platform and we'd like to fundamentals are really how they drive value to each other retail really drives value to the <unk> to the residential in the apartments.
Because of the amenity based that it provides in the apartments drive a lot of value to the retail cause you have a built in chopper based on the traffic patterns continue so it's an uptick there. So it is one that will continue to monitor we did activate a project. This quarter as you saw yeah, we like the opportunity to activate excuse me Capex light structure. So again it does.
Way down our our our growth opportunities you know, we we have a a select few that are still active right now on the ground lease that are gonna be stabilizing later this year. The same goes for the Milton at the Pentagon as it is about to open here and we're excited about suburban square, having a mixed use component with with residential there. We think we can really hopefully drive a lot of <unk>.
Are you there going forward you know will continue to obviously hopefully crest that goal of 15% from mixed use and then reevaluate. The next you know really the master plan for each asset and how much we can ramp that again using a capex light structure, where we can showcase the growth of the underlying portfolio and and still create value for our shareholders.
<unk>.
Thank you and the next question comes from Alex Pagan with bird.
Hello, Thank you for taking my question.
So quick question on the plan to use the pretty big cash position. That's been built up should we expect that that large cash position balance will be there for about a year or at least until the potential special dividend.
The plan there.
Yeah. So the plan is really to be optimistic and again, we're gonna be patient if the opportunity doesn't present itself and we're very comfortable maintaining the cash position until it does but in the interim we're having lots of conversations with all of our JV partners talking to a lot of brokers, an owner that may need capital at the the year progresses, so to the extent that we can utilize.
That capital Accretively, we're we're very comfortable doing so otherwise, we'll just wait for the right opportunity.
Thank you and then ask questions on my computer with J P. Morgan.
Yeah, Hi, two quick ones here first how diversified as the pull of tenants that you're talking to you for the bed Bath releases and then is it safe to say that you're largely finished with the albertson's monetizations this year.
Yeah.
I'll do the album since first.
With with both transactions that we did one in March 20th April we are done for the year, Oh, those proceeds and the gains from them.
Are about as much as we can do including the special dividend that we received relative to our gross income. So we will we will hold onto the shares for the remainder of the year and then look for a further monetization in 2024.
Yeah in terms of the diversity. It is a healthy and diverse cool you have your usual suspects obviously any off price category brochure interested furniture fitness entertainment uses.
And then what you need you those categories, you're getting a variety of names as well. So it's it's nice to see that that type of diversity for these boxes.
Like one thing to keep in mind too is.
There are some you know with the off price wars that are going on right now and they are a lot of demand for new space you could see some of them being very aggressive in the auction process because of the unique attribute it to the bed bath leases, which would allow them to get into center that they may previously not be allowed to because of used for <unk>.
Use provision so it'll be interesting to watch what happens there.
Thank you and the next question is a fall from undecided with shepherds.
I just to follow up on the off price fourth are you seeing.
Rental rate increases result from the officers competing with each other.
Yeah, I mean, when you have more than one better at the table that creates a competitive environment. So obviously you know.
As a result of that you can see some price increases on rent for boxes.
Okay. Thank you that was all the time, we have just for today's question and answer session I would like to turn off our back over to match up for closing comments.
Thank you very much for joining the call today enjoy the rest of your day.
Thank you and thank you for attending today's presentation, I mean, I'll just catch your lines.