Q2 2023 STAG Industrial Inc Earnings Call
Yes, Sir you may begin.
Thank you welcome to stack Industrials conference call covering the second quarter 20 twenty-three results. In addition to the press release distributed yesterday, we have posted an unaltered quarterly supplemental information presentation on the company's website at.
At Www Dot stack industrial dot com or the Investor Relations section.
And today's call the company's prepared remarks and answers to your questions will contain forward looking statements as defined in the private Securities Litigation Reform Act of 1995.
Forward looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today.
Examples of forward looking statements include forecasts of <unk> Same-store in Hawaii, G&A acquisition, and disposition volumes retention rates and other guidance.
Leasing prospects rent collections industry, and economic trends and other matters.
Encourage all listeners to review the more detailed discussion related to these forward looking statements contained in the company's filings with the S. E C and the definitions and reconciliation non-GAAP measures contained in the supplemental information package available on the company's website.
As a reminder, forward looking statements represent management's estimates as of today.
<unk> industrial assumes no obligation to update any forward looking statements.
Today's call you'll hear from Bill Kroeker, our Chief Executive Officer, and Maths, Bernard Chief Financial Officer.
Also with US here today is Mike Chase, a chief investment officer, and Steve Kimball EVP of real estate operations or available to answer questions specific area of focus I will now turn the call over to Bill.
Thank you Steve.
Good morning, everybody and welcome to the second quarter earnings call for Stag industrial.
You are happy to have you with us today as we discuss the results for the quarter.
A portfolio continues to produce exceptional results are seen by a rapidly spreads this quarter.
Industrial sector is benefiting from the secular tailwinds unique dwy industry, including the near and Onshoring and the continued penetration of e-commerce as a method of consumption.
He can see rates have crept up to approximately 3.7% nationally.
A demand for industrial real estate remains historically strong it has come off pandemic KYES as we enter the new normal.
And then start taking more time to evaluate their space needs.
There are more examples of tenants weighing their supply chain footprint against the associated corporate finance cost of outfitting space.
These are large cash outlays, which include items, such as material handling equipment and automation systems.
Nine to 12 months ago, there was strong demand for recently constructed buildings with large footprints.
Unruly buildings north of 500000 square feet.
In today's environment 50 to 100 million dollar investments by tenants 12th at large new spaces as being avoided by contracting with third party logistics firms to manage supply chains.
On the supply side deliveries are expected to be approximately 3% of the overall industrial stock this year with nearly half of those deliveries classified as big box buildings, the sizes at or above 500000 square feet.
He's deliveries are expected to result in the national vacancy rate of 4.2% a year and.
This level of they can see is still indicative of strong conditions.
We continue to expect market rent growth in our portfolio to be in the mid to high single digits. This year.
Element starts however are down approximately 30% since the end of 2022.
This lower level of development starts coupled with continued strong demand should put push vacancy rates lower in the back half of 2024.
Two week to our portfolio, we are proud to report cash in gap leasing spreads at.
Hi, Watermarks was tag.
As of July 25th.
We have achieved 94.2% of the leasing we expect to accomplish in 2023, a cash breads of 30.6 per cent.
After the slow start to the year, we recently I've seen an uptick in development and acquisition opportunities as the capital markets slowly normalize.
One area, where this has been evident is on the <unk> side.
There's been a growing number of opportunities as developers looked at the rest of their positions.
Financing supply and leasing risks are pushing some developers to lock in profits today.
Thereby forgoing a portion of potential upside.
In exchange for certainty.
We see opportunities ranging from the purchase of folan titled Land sites with.
With the approval and negotiated construction contracts to.
Completed a vacancy big spec buildings.
These projects present, very limited construction risks with favorable upside in exchange for capital funding and leasing exposure.
Also so that it can be selective focusing on developments that the mice to smaller spaces that are lying with leasing demand.
On the acquisition side, you'll activity is restarted.
The bid ask spread between sellers and buyers has begun to narrow was levels were transactions can begin to clear.
Pirates of greater clarity into the cost of capital.
That was now understand that prices previously achievable in 2021 and not available to them in the current interest rate in macro environment.
The ongoing attractiveness of industrial real estate, given the strength and underground and the underlying fundamentals further supports the case for capital to be placed in our sector.
This is a resulted in an uptick in deal flow during Q2, and an expectation of increased transaction activity in the back half of 2023.
Although unlikely to reach levels seen prepaying demick this calendar year.
Starring in the acquisition market can be seen a recent marketing and closing of several large portfolios of industrial real estate.
Something that was absent during the recent period of volatile capital markets.
Our acquisition volume for the second quarter totaled $40.7 million. This consisted of two buildings was stabilized cash and straight-line cap rates of $6 two per cent and $6 three per cent respectively.
In April Stag acquired a 100000 square foot warehouse dis distribution facility.
Located in the I 287 exit 10 sub market of Central New Jersey for $26.7 million.
This acquisition represented an opportunity to acquire low coverage functional asset and one of the nation's top markets.
And may stag quite a fully occupied 134000 square foot facility in the airports Submarket of Greensborough, North Carolina $14 million.
As of closing this building is at least for 1.8 years to a tenant who is moving to a <unk> at the end of their term.
I will have the opportunity to realize a 50% or greater roll up upon the release of the building.
With the recent openings in the market or a Toyota EV battery plant and aerospace manufacturing plant the buildings modern specs and airport adjacent location leave it well suited to capture the growing kind of base supporting these plans.
Subsequent to quarter, and we acquired six buildings was $70.7 million.
On the disposition side <unk>.
So five buildings quarter for aggregate proceeds of $33.8 million.
Three of these buildings were non-core assets.
The other two buildings were located in Louisville, Kentucky.
Portfolio.
Resulting in proceeds with $26.8 million.
And reflecting a 6.2% cash cap right.
Your date, the aggregate cash cap right on the company's opportunistic dispositions was 5.5%.
Finally, I'm excited to announce a stag industrial was added to the S&P Midcap 400 in may of this year.
Testament to how the markets have begun to recognize the growth of the company and the evolution of the platform.
That I will turn it over to Max who will cover our meaning results and updates the guidance.
Thank you Bill and good morning, everyone corporate <unk> per share was 56 cents for the quarter equal to the second quarter of last year.
Cash available for distribution for the second quarter totaled $87.2 million, we've retained $42.5 million a cash flow after dividends paid this year at the June 30th <unk>.
<unk> near the low end of our guidance range with <unk> at the annualized run rate adjusted EBITDA you go to a 4.9 times liquidity stands at $794 million during the quarter, which meant 29 leases totaling 3.6 million square feet, which generated record cash in straight-line leasing spread to 28%.
42.6% respectively.
Tash leasing spreads of approximately 30% for the year.
Retention with 79.6% for the quarter and 97.4% when adjusted for immediate Backfills, We achieve fame store cash and why I'd go with a 4.5% for the quarter and 5.3% year to date.
To date, we have experienced two basis points of credit loss, but not incur during the second quarter moving the capital market activity, we issued approximately 2 million shares under our a T. M program at a gross average share price of $35.86, resulting in gross proceeds is $75 million as of today, we have $61.1 million a forward eck.
He proceeds available to fund at our discretion equity will be used to match fund our acquisitions and development pipeline in terms of guidance. We made the following updates we increased our cash seen for guidance to arrange a five per cent and 5.25% for the year or 12.5 basis points at the mid point.
Change is driven by improve retention in a modest reduction expected credit loss from 40 basis points to 20 basis points.
We increased our disposition guidance to arrange a 100 and $200 million driven by your progress through today, an increase of the midpoint of $25 million.
We updated our retention the range of 70% to 75% based on Lisa assigned to date, so expect that the annualized run rate adjusted EBITDA between five and 5.5 times I will now turn it back over to Bill.
Thank you, Matt I'm excited about where the company sits today and the road ahead.
I must express my gratitude to our team for their effort and dedication and are cheating our goals this quarter.
We continue to have extremely strong operational results and forecasts for 2023.
You'll also benefiting from a conservative balance sheet with ample liquidity.
These factors will allow us to take advantage of the opportunities present themselves with the remainder of 2023 and beyond.
Now I'll turn it back over the operator for questions.
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One moment, please all we pull for a question.
Our first question comes from Craig, Maryland. Please proceed with your question.
Good morning, guys, just kind of curious you guys have a kind.
Kind of a broader portfolio that maybe some of your peers and you know more recently rent grows in sequential rent growth has been sort of top of mind for investors, especially in L. A and somebody other coastal markets, but I'm just kind of curious you guys look at your portfolio your footprint.
What are you seeing on on that front from a sequential market <unk> fundamental kind of stable as stable kind of conditions.
That kind of maybe differentiate your portfolio your growth rate from people that are a little bit more exposed to some of the market set you know maybe really benefit drink COVID-19 and are now kind of coming back a little bit to reality.
Yeah, Hey, Craig Thanks for the question our market rent growth forecasts at the beginning of this year were mid to high single digits for the portfolio, we affirm that last quarter and affirmed it again this quarter. So market rent growth has been pretty stable in our portfolio last quarter, we mentioned benefiting from some of them.
Nearshoring.
I know El Paso markets, we're seeing those Mega site investments start to go up.
And pockets in the U S. The southeast.
Texas, some weight Midwest market. So we think.
That will be a demand driver for some of our markets as well, we're seeing all system demand coming from logistics tenants continuing to build up a supply chain in our market. So for all those reasons, we've seen pretty stable and strong market rank growth in our markets.
Do you feel like you're kind of mentioned the hesitancy attendants to make the cap outlays and so maybe they're using three P. L. As in the near term I mean do you feel like there's a substantial amount of of pent up demand in your markets that if you.
Maybe the said to the or something else cause people more assurances on the economy that you could see almost a reacceleration that absorption and potentially kind of an upper pressure on on rent in your market or is it just.
You know just would be incremental on the margin.
Yeah, I mean, certainly that's the scenario that could play out I mean, there's a lot of.
Factors that would contribute to that and we need to figure that out but that certainly could.
Could be an outcome right now is as I mentioned in the prepared remarks big box demand is still very slow we're seeing a lot of demand from three P. LS as that which is consistent with last quarter.
So overall I mean, we're really happy where the supply demand dynamic is for our portfolio and our markets and our box sizes. As a reminder, or average lease size is 140000 square feet and the demand the supply that's coming online today.
Half of that supply is as big box supply 500000 square feet or above.
And then if I could slip one more in you guys talked about your the acquisitions that you made the quarter kind of the $70 million as opposed to <unk> to dispose and kind of your your equity availability I mean, if you guys.
Your guidance what does the accretion on a net basis look like from all the the capital recycling activity within earnings maybe for twenty-three and what that kind of translates to on an annualized basis for a run rate.
Yeah, I mean for for earnings this year.
Our acquisition guidance is back and waited so we're not.
Not factoring in a large contribution two cor <unk> from acquisitions.
Uhm dispositions are happening a little quicker and the year, we increased our disposition guidance, but for this year not a major contributor to <unk> the acquisitions this year it should.
If it significantly 2024 <unk>.
And we'll we'll always to speak about that on our later Paul.
Our next question comes from Eric <unk> with BMO capital markets. Please proceed with your question.
Hey, guys. Good morning, appreciate the color on the potential development acquisition opportunities and just hoping that you could kind of expand on that maybe quantify what you're seeing today in the pipeline and now what you expect to close in the back half of the year and <unk> and then just a clarifier is <unk>.
Those opportunities included an acquisition guidance or are they separate too.
Yeah. Good question, Eric Thank you the development opportunities <unk>, we're seeing.
We're really excited about.
We've had really great success on our past developments.
The development are not in our acquisition guidance any incremental balance would would be incremental to that.
But they do take time anywhere from 12 to 15, sometimes 18 months to develop so the deployment of capital for those will be over a period of time.
We're seeing opportunities I said from newly constructed buildings that are that are making too entitled land sites that will run the development to partnering with.
Developer and <unk> and providing capital to that developer in return for taking the risk for upside and downside in the transaction. So we're seeing a lot of opportunities now as as we close on those opportunities will be sure to let everyone know.
At this point, there's not enough certainty in the pipeline for us to give guidance on that but as that.
That happens, we will be sure to give guidance and lay out a schedule note in the deployment of capital.
When those developments will be completed yields profit margins et cetera.
Okay. That's helpful. And then maybe on the funding side just how are you thinking about the funding for the remainder of the year, just giving your share price today.
60 million a forward left versus cost at that and mix of dispositions you know, what's the most attractive source of capital today, and how should we think about the mix and it through the remainder of the year.
Yeah. Good morning, Eric This is Matt you're right. So we have unfunded proceeds on the forward roughly $61 million, we're gonna use those to fund acquisitions in the future ongoing development. So that the bill just mentioned.
The capital market has materially improve since April and you know as we've talked about our initial guidance ranges were set at the beginning of the year to allow us operate or target leverage again.
And if you know if we hit the mid point of our net acquisition volume issue of no equity would likely be high end of that leverage range with this modest amount of equity funding, it's more likely going to operate closer to the middle part of a range, but the the concept of being able to operate without any additional equity is still in place as Bill mentioned, we slightly increased the the bottom end.
<unk> of our disposition guidance. So we expect from a funding source you can see it I'd say incrementally more disposition proceeds.
Our next question comes from Evinced about with Green Street. Please proceed with your question.
Hi, Good morning, I, just wanted to clarify the cash tap rates on the acquisitions in the corner just giving these are shorter Walt deals does that $6 cheaper tap right reflect run rate current N O y or just incorporate that's kind of a big mark to market you highlighted especially in the.
And the Carolina property.
Yeah. It depends on if it's a known vacate Vince one of the deals is a known vacate so that would be S. S stabilized and the other one is is not a known vacate so that would be the in place.
Got it so basically the the year one yield on me, there's gonna be a little lower than six two just to clarify yes.
Yeah, a slightly lower yep.
And then does that kind of question on the development opportunities and kind of just really how Lisa rescues being price today. So now if you were gonna buy the completed development that they can't you know how much additional yield do you think you could see <unk>, leaving that building versus just buying a stabilized score.
Property today.
It depends on the market depends on sweet size demand.
The supply, but anywhere yeah call at Circus 75 basis points dependent again, depending on the sweet sizes, what were the opportunities. We're looking at under development side is call. It smaller boxes generally medium sized boxes, and a lotta times, where a building.
Knows we're planning to build those two demise them into.
Two to three suites, so really meets the <unk> of the demand.
Our next question comes from from you cannot now with Evercore ISI. Please proceed with your question.
Hey, good morning, everyone Ah Max I mean, there's a lot of positivity around the comments here, but you know you you can <unk>.
Kept the guidance and changed so.
So I'm just trying to figure out as you kind of you know still pretty wide gap considering you're you're in August here, just wondering what sort of holding you back here and maybe talk about the factors.
Maybe to get through to the low end of guidance here.
Yeah. So just to talk about the no change in corporate phone to your point, we did have a modest increase in their same store guidance.
Hello.
Still macro uncertainty as we sit here in July it definitely influences our view on guidance you know, we did increase our disposition volume expectation for the year.
It can be a timing mismatch between selling an asset in redeploying those proceeds as bill mentioned.
Mentioned your external growth is really not a material drive it to earnings. This year. The acquisitions are expected to be back and waited in terms of the low end of guidance you know to the extent something on the macro front really kind of kept the capital market picture and that flowed into the share price, but now we're very confident with the midpoint and to the extent.
Credit lost comes in lower et cetera, we would drift towards the higher end.
Yeah, I just add onto that I may I think you'd have to have some you know a real material macro event to push us to the low end of guidance some significant credit issues in the portfolio.
Which we were not yeah, we're not anticipating what we certainly don't want to.
Put a guidance ranch out there that doesn't factor some of that uncertainty into it.
Our next question comes from Blaine Heck with Wells Fargo. Please proceed with your question.
Great. Thanks, just following up on some of the earlier questions can you just talk about how you were thinking about your overall cost of capital today and the spread between your cost of debt and equity and the required return on investment I guess, you know what's that spread on the deals you've executed year to date and is there a spread that you guys target that we should be.
Thinking about over the longer term.
Hey, blame the Samantha can start with a cost of our capital. So let's start with that so if we were to go out and originate longterm cat.
And the private placement market, we've been very successful there.
We'd likely issue something between seven and 10 years 10, or probably mixed both of those if we go to market today, when the 5.75 per cent area, notably below the cap rates that we just discussed in a couple of questions about.
In terms of the equity you know, we're comfortable with where we should actually because we to creative uses for this proceeds you know as we sit here today, we would need you know appropriate uses for additional equity right. There has been modest increases in the acquisition activity, but.
I really want to emphasize modest, particularly compared to what what we look like in 2019.
So you know we we sit here today.
We like for the balance sheet is we're looking at the opportunities, we're hoping to opportunities increase but you know we're we're very cognizant of of the <unk> of the cost of that and I think that's flowing through yeah, and then just the opportunity side.
Blaine I mean this color we're really excited about the two acquisitions, we executed on the below six cash cap range. We can add some a lot of value to those assets as well when you look at what we closed subsequent those six buildings three ish call at Walt for your wall.
On those opportunities, we can add value to as well and then when you think about some of these development opportunities that we're very close to close to closing on a few of these those or go to generate even higher returns and we feel like in a <unk> in markets that Ah some of our store.
<unk> market, so great opportunities and certainly a creative uses for where we can reach incremental capital today.
Alright, that's really helpful. Second question just are there any common themes or trade center property that you guys are sold or those that you guys are are targeting for sale and the rest of the year or any specific markets you might be looking to exit or tenant industries that you're trying to avoid or is it just more opportunistic.
Yeah on the industry's not really right. We we really focus on the real estate. So if it's a good piece of real estate.
We'll deal with the tenants.
With respect to the dispositions there was a couple of opportunistic dispositions I think that a year to date, we're in the mid fives for a disposition cap right, which in this environment was pretty good and a lot of those properties Blaine are either on the on the cusp of art.
CBRE tier one markets or just locations that made me feel like longterm or not maybe the best for us <unk> <unk>.
Some exam. One example of a sale was to the tenant itself, who just wanted to own the building. So it was a great opportunity for us to realize that pretty good yields while improving the overall quality of the portfolio.
Okay.
Thanks.
Our next question comes from Camille Bye now with Bank of America. Please proceed with your question.
Hello [noise] can.
Can you talk to the downtime chan's in your portfolio clearly you've made significant progress on leasing this year and even factoring in November attention.
Occupancy looks chances so just trying to get a sense of anything can detract from this trajectory in the second half of the year.
Yeah from a downtime perspective.
You're not seeing material changes I mean, it's it's basically flat or are up just a little bit, but not we're not seeing any material changes their <unk>.
What we're seeing changes in as as tenants, taking a little bit longer to make decisions. So leasing space well in advance a year in advance like they were last year versus now, they're they're taking a little bit more time.
Making those decisions.
Part of that's just to to their outlook on the economy part of that's due to putting capital in the building and making a long term commitment to the space and.
Weighing the decision to either go into space themselves are utilized for three P. L network. So from a downtime perspective from a concessions perspective nothing material from a T. I's those are those are pretty flat on a free rent and we're hearing rumblings in the market at free ranch up a little.
We're not seeing that not portfolio, we're not seeing that in our lease proposals. So overall.
It's pretty consistent with what it has been.
That's very helpful.
And just the bigger picture question on that transaction market given it looks like you're starting to get more active.
What's your view on what's driving deals across the line now despite no real changes around interest rate and questions around the economy.
And have you seen any changes in appetite some sellers and buyers in the recent weeks.
You know what I think time has has been helpful. In that respect I think the volatility of interest rates coming down as help.
So the stable say it another way the stabilization of interest rates and now sellers really understand where the cost of capital is and when they know that they're that generates where they're willing to trade their assets. So you're seeing that bedash spread between sellers and buyers come down and that's really what's.
But starting to feel the transaction market.
A couple of big portfolio deals that done you know, there's there's one or two on the market today as well and those just give a little more confidence to both sides of the equation of you know what's the right.
Market when you have a rapid rise in interest rates like we had over the past couple of years.
Sellers don't know what their properties are valued at and now that we've had stabilization I think people are more comfortable with the value of the properties and that's why you're seeing bills get done.
Our next question comes from Nick Yeah men with that please proceed with your question.
Hey, good morning, guys, maybe touching a little unleashing now with 94% of twenty-three kind of in the books here I mean, it's we're looking out into 24 do you have any like early indication of kind of where those spreads are coming in and just trying to get a sense of we have a sustainable like same-store performance you're going forward.
Nick you know I'm not going to answer the 24 leasing spreads.
[laughter], but.
I I will say.
The supply demand dynamic in our markets continues to be pretty balanced, we really like how our portfolio sits and how it fits our submarkets.
We said this on the last call we had some el Paso assets role. This year, we had a couple of buildings role in southern New Jersey.
We don't have those same markets rolling next year, but with that being said you.
Supply starts development supply starts are down.
I'm pretty significantly year over year, that's gonna impact like the the back half of 24, how much of an impact that's gonna have it's hard to measure that today, but overall, we're we're really comfortable with a portfolio said so I think if you look at the same store <unk>.
Last year, we had some occupancy gains and same sore and you had half the leasing spreads we have no credit lost this year, we're still budgeting, some credit loss and or a five per cent same-store last year. This year was still budgeting credit loss, we had double the leasing spreads we had 50 basis points of average occupancy loss and we're.
Still you know in that five.
Five per cent plus range in same store. So I think you know your back of the envelope. This it's hard to think we're not kind of in a sustainable same-store arrange for for a period of time.
That's helpful. And then may be looking at the third corner acquisition, so far it seems as though a little bit more smaller builds maybe around like 80000 square feet. So is this more of a shift into just kind of meet that demand or is this is kind of what you're seeing transact on the market today.
A part of what we're seeing transact in the market and we're certainly willing to buy bigger buildings, but if it has a shorter walton that bigger book building it's.
It's got a result in us paying less for it because of the way the market is today. So I think you're seeing sellers not put those large buildings with short of what's on the market because they know they won't transact that at.
The appropriate Yale they're looking for so.
I think part of it's a mixed change in terms of what's on the market and part of it is just pricing give it market dynamics.
Our next question comes from Michael Carole with RBC capital markets. Please proceed with your question.
Yeah. Thanks, I wanted to follow up on the 2024 at least explorations I know bill in your earlier comments are talking about I don't know some slow down in the larger blocks of space I mean, if you're looking out of 2024, I mean is there a number of large blocks expiring next year or how's that makes compared to to this year or the past few years.
<unk>.
Yeah the.
What we're seeing is slow down demand and.
You can put a pan and you know what number you want to use as large 500000 square feet and above is what we use.
In terms of next year, we have nothing 500000 square feet or above this rolling we don't have anything even 400000 square feet or above this rolling next year. So for US what's rolling you meets the demand at our Submarkets. So there's there's nothing abnormal that's happening next year and just.
To remind you are average the size of 140000 square feet Uhm. So meets a lot of the demand that's in the market.
Okay, great. So I got thanks.
Alright, Thanks Bye.
Our next question comes from my <unk> with J P. Morgan. Please proceed with your question.
Yeah, Hi, I'm curious on the development pipeline.
Can you give us a sense as to how large you want that program to be either a relative to annual dollars deployed versus acquisitions relative to your total market cap just just some guidelines there.
Yeah, It's still early days, Mike Yeah, as we get more.
More of these under contract or restart the clothes I'm more of these.
I will lay out a schedule and give and give some threshold there, but we've got a ways to go before we're putting out thresholds yeah I know some of some of the others in the sector have a.
10% of enterprise value cap or a little bit north of that you know.
For us it'll be lower than that just given it's a it's a newer endeavor for us but.
But <unk> as we as we close more of these will certainly provide some of that guidance.
Okay. Thank you.
Thank you.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Our next question comes from Bill crowd with Raymond James. Please proceed with your question.
Good morning desk a.
The Bill you quoted development starts down 30% I think others have talked about down 40%.
Just curious whether you're seeing the evidence that the development reduction might be longer duration in nature or is this just really a pause.
<unk> merchant builders cutting headcount are shown entitled land and faster pace.
It's so unique and that.
Fundamentals are really really strong and mercy and development slowly dramatically. So everybody just on the sidelines and they're gonna jump in as soon as the financial markets of any markets recover or what's your take on that.
Yeah.
It's a really good question, we're seeing a lot of a lot of different things in the market today I mean, we're certainly partnering with some developers as I mentioned, we are seeing some entitled land sites come on the market <unk>.
The merchant developers that can sit on land are sitting on land.
What starts the wave of supply again.
I think you're gonna need a pretty significant decrease in interest rates for that to happen.
Think that's that's really been a big issue for the merchant developers.
The markets are great the fundamentals are great.
But it's really it's really the interest rates and that that capital markets. That's that's putting them on the sidelines. So I.
I haven't seen yeah, I guess I'm not close to see how much he if they're cutting headcount or whatnot. There I think what they're trying to do is is the risk their portfolio as much as they can and that's where we're looking to partner with some of these some of these folks.
Yeah, Okay I think it's.
Really interesting time from a development perspective.
Alright that was it.
Yeah. Thanks.
Thanks, though.
Yeah, Thanks, Bill though.
There are no further questions at this time I would now like to turn the floor back over to Bill.
Those in common.
Okay. Thank you all for attending the call this morning.
I appreciate the questions and appreciate your support.
Forward to talking to you all soon thank you.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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