Q3 2023 Global Net Lease Inc Earnings Call
Good afternoon, and welcome to the global net lease third quarter plenty twenty-three, earning conference call.
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I would now like to turn the conference over to John Jordan Show Unfelt also shifts at global net lease please.
Please go ahead.
Thank you good afternoon, everyone and thank you for joining us for Gnl's third quarter 2023 earnings call. Joining me today on the call are Mike Weil and Jim Nelson.
<unk> co Chief Executive Officer, and Chris Masterson, Gnl's, Chief Financial Officer.
Following information contains forward looking statements, which are subject to risks and uncertainties Shaw.
One or more of these risks or uncertainties materialize actual results may differ materially from those expressed or implied by these forward looking statements. We refer all of you to our SEC filings, including.
The Form 10-K for the year ended December 31, 2022 filed on February 23, 2023, and all other filings with the SEC. After that date for a more detailed discussion of the risk factors that could cause these differences.
Any forward looking statements provided during this conference call are only made as of the date of this call.
As stated in our SEC filings GNL disclaims any intent or obligation to update or revise these forward looking statements except as required by law.
Statements, referring to the future value of an investment in GNL, including any adjustment, giving effect to the recently completed merger with the necessity retail REIT incorporated defined as RTL and the subsequent internalization of both P&L and Archie held advisory and property management function as well as any projections about any potential.
Success, following the merger and internalization.
Are also forward looking statements there are a number of risks associated with the merger and internalization, including but not limited to our ability to integrate the operations of RTL and the other entities acquired in the merger and internalization.
May not realize the anticipated synergies other benefits of the merger or the internalization or do so within our anticipated timeframe.
Also during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance.
Measure should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP a.
A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release and supplement which are posted to our website.
You can also refer to our earnings release for more information about what we consider to be implied investment grade tenants. A term we will use throughout today's call I'll now turn the call over to our co CEO, Mike while Mike.
Thanks, Jordan and good afternoon, everyone welcome to our first earnings call. Following the merger with the necessity retail REIT and corresponding internalization transaction.
We recognize how vital our shareholders are to our continued success and we appreciate the great conviction, our investors demonstrated and supported the merger and internalization.
The success of the merger and internalization has created the third largest publicly traded net lease REIT with a global presence based on gross asset value as well as corporate governance in line with our internal lives peers.
The foundation of our global presence is a diversified portfolio of high quality tenants, which gives us the flexibility to focus on attractive opportunities in multiple markets that will contribute to long term shareholder value.
Our recently completed merger and internalization creates the path for GNL to trade up to our net lease peer multiples.
We believe we are clearly undervalued on an a F F O multiple basis compared to the other internalized streets, even though the quality of our rental income and investment grade worthy tenants are substantially higher than the average in our industry.
We closed the merger and the internalization transaction on September 12th Accordingly, the third quarter financial results reflect 73 days of Standalone pre merger GNL and only 19 days of post merger internalized GNL in RTL results.
The company is currently on track to achieve the $75 million of annualized cost savings, we anticipated in conjunction with the merger and internalization.
To this point based on 19 days of lower than expected G&A expenses GNL has exceeded the projected synergies by $2 million, capturing $56 million of annualized synergies and we remain on track to capture the $75 million worth of total synergies with a projected six per.
Sent G&A operating expense by Q3, 'twenty 'twenty four.
In addition, GNL reduced its quarterly dividend per share from 40 cents pre merger to 35.4 cents as part of the merger, reducing the amount of cash needed to fund the dividends by approximately $42 million on an annualized per share basis as of September 32023.
Together without the assumption of any incremental acquisitions or external growth GNL expects to reduce its payout ratio and continue to execute on its current business plan.
Leasing renewals and strategic disposition initiatives.
Our leading portfolio of over 1300 properties spans nearly 67 million square feet, and we had a gross asset value up $9.2 billion at quarter end the.
The diverse makeup of our net lease portfolio is unmatched whether measured by geography asset type tenant or industry, which positions GNL well to navigate external macro challenges as we move ahead.
The portfolio is over 96% leased with a weighted average remaining lease term of six nine years.
Geographically, 81% of our straight line rent is earned in North America, while 19% comes from Europe. Additionally, the portfolio includes contractual rent increases with an average annual rental increase of one 3%.
The portfolio also features a stable tenant base with an industry, leading 58% receiving an investment grade or implied investment grade credit rating.
I also want to highlight the strong asset management capabilities, we demonstrated while continuing to succeed with leasing and renewal activity.
In particular, our third quarter leasing and renewal activity included 1.8 million square feet across the entire portfolio.
Leasing spreads on renewals were 5% higher than the expiring rent.
Our largest segment is industrial and distribution with 218 properties that span over 33.6 million square feet and contributed $229 million annualized straight line rent.
93% of the leases in this portfolio include favorable rent escalations with an average annual rental increase of one 6%.
Turning the portfolio to benefit from annual rental income, while having eight year weighted average lease term.
Our single tenant retail segment is the largest by property count with 886 properties that span over seven 9 million square feet and contributed $153 million to annualized straight line rent.
The single tenant retail segment comprised of 69% investment grade or implied investment grade rated tenants and features an 8.4 year weighted average lease term.
The multi tenant suburban retail segment includes 109 properties that span over $16 4 million square feet and contributed $199 million in annualized straight line rent.
The portfolio has a weighted average remaining lease term of five one years and includes 21% of grocery anchored centers, which are 91.3% leased.
This segment is predominantly comprised of triple net leases with incremental lease up potential and attractive leasing spreads with 61% of the straight line rent in this portfolio coming from the Sun belt markets, which continue to grow and have favorable demographic tailwind.
Our smallest segment single tenant office includes 91 properties that span $8 9 million square feet contributed $146 million to annualized straight line rent and has a 5.1 year weighted average lease term.
One of the metrics that differentiates the single tenant office portfolio is that it consists of 71% mission critical facilities, which we define as headquarters lab or R&D facilities and feature 70% investment grade or implied investment grade tenants, which we believe provides rents stability.
And low level of default risk.
Even GNL successful track record of lease renewals. The single tenant office segment also includes limited near term lease maturities minimizing the risk of vacancy and additional hallmark of our total portfolio strategy is the mitigation of concentration risk our top 10 tenants collect it collectively account for only 21.
1% of annual straight line rent with our largest tenant accounting for only three 1% of our total portfolio.
This high quality tenant roster provides a highly predictable base of rental income on which to build our future as our tenants provide stability and durability to our business.
Our leasing results continue to illustrate the quality of our assets driving leasing rates higher even in the current environment.
The single tenant segment completed eight new leases and renewals and showcased a positive 7% renewal leasing spread demonstrating the strong renewal demand for our mission critical assets, while adding $5 million to net straight line rent.
The multi tenant segment completed 92, new leases and renewals, resulting in a positive four 1% renewal spread consistent with the high demand we're experiencing at our suburban shopping centers, which increased net straight line rent by $11 $8 million.
Our executed leases at the end of the third quarter 2023, combined with our leasing pipeline as of November one 2023, well raise occupancy in our multi tenant portfolio to 92, 9% up from 89, 5% of actual occupancy at the end of June 30, 'twenty twenty-three at Archie.
Yeah.
Yeah.
Turning to the balance sheet, although only 18% of our debt is variable the volatile interest rate environment. We're currently experiencing does temporarily impact the portion of our debt that is not fixed or swapped prior to the 100 basis point increase in the 10 year Treasury rates in September we secured a $500 million increase to our credit.
Facility through our accordion, bringing the facility to $1.95 billion.
Additionally, prior to the completion of the merger RTL completed a $260 million commercial mortgage backed security loan encumbered by 29, multi tenant properties that we assumed as part of the merger.
The loan has a 10 year term and is interest only at an attractive rate of 6.45%.
We're pleased to be able to achieve this by utilizing our so first swap lock a 3.54% that Artie I'll put in place prior to closing alone before the merger.
This C M. B S alone contributes to our increased weighted average debt maturity, while lowering our cost of capital and further increasing the percentage of fixed rate to over 82% leased.
These transactions have further enhanced our balance sheet flexibility.
We will continue to focus on opportunities that will help us achieve our financial goals, which include reducing net debt to adjusted EBITDA and organically, increasing NOI through lease up and contractual embedded rent growth.
This will also be accomplished in the near term through strategic dispositions and the continued success of our asset management platforms leasing and renewal activity.
The strategic dispositions will be intended to delever, our balance sheet as we intend to use the proceeds to pay down additional variable rate debt debt. Currently has a blended average rate of seven 2%.
GNL will continue to evaluate the market for accretive acquisitions, but we believe current risk adjusted returns need to improve for the company to be more active.
We will continue reviewing and monitoring our portfolio for strategic dispositions that can create incremental proceeds to help us accomplish our near term financial goals.
Our global portfolio will continue to deliver value, allowing us to take advantage of opportunities in the U S or Europe and transact on assets that are mispriced or that require expertise and more than one asset class.
We believe our global and increased diversification will prove to be a competitive advantage as we move ahead and our successful lease renewals speak to the mission critical nature of the properties that we own where the weighted average remaining lease term is seven years.
Now that GNL as an internally managed REIT, we expect to trade more in line with our internalized net lease peers on an <unk> multiple basis.
Given the diversification quality of income and superior investment grade worthy tenants in our portfolio.
I'll turn the call over to Chris to walk through the financial results in more detail Chris.
Thanks, Mike.
Before getting into the detail a reminder, that the third quarter results reflect only 19 days of the combined GNL in RTL portfolios are.
Our cost savings internalized management structure, and many nonrecurring expenses related to the merger.
Outside of the last couple of weeks prior to the completion of the merger and internalization transaction results for the three and nine month period ended September 32023 reflect the legacy GNL resolved and the external management structure.
That said for the third quarter 2023, we recorded revenue of $118 2 million and a net loss attributable to common stockholders of $142 5 million.
Core <unk> was $31 5 million or 24 cents per share and <unk> was $46 9 million or <unk> 36 per share.
Typically we provide a year over year comparison.
However that would not be meaningful this quarter given all the 19 days of the quarter reflect combined result of GNL in RTL as an internal life company.
We intend to provide formal 2024 guidance around the time of our upcoming 10-K, which will provide investors with increased transparency regarding our financial goals and protection.
As expected at that fall in the third quarter was impacted by many one time items related to the merger and internalization transaction, including $14 6 million of settlement costs $10 4 million of equity based compensation and $43 8 million of transaction costs that are added back.
As always a reconciliation of GAAP net income to the non-GAAP measures can be found in our earnings release, which is posted on our website.
Given the timing of the transaction some balance sheet metrics also do not fully reflect the benefit of the merger.
Specifically, our net debt to adjusted EBITDA ratio. This quarter does not reflect a full quarter benefit of adjusted EBITDA from RTL and the internalization, but our total that reflects the full impact of the transaction, making this ratio not meaningful for the quarter.
Moving forward this net debt to adjusted EBITDA ratio will be part of the fourth quarter disclosure and we anticipate to be approximately seven six times.
We ended the quarter with net debt of $5 2 billion at a weighted average interest rate of 4.7% and had liquidity of $319 4 million, including $133 4 million of cash and cash equivalents and 186 million of availability under the company's revolving credit facility.
The weighted average debt maturity at the end of the third quarter 2023 was three four years with minimal debt maturity due in 2024.
Our debt comprised of $1 billion in senior notes $1 6 billion on the multi currency revolving credit facility and $2 7 billion of outstanding gross mortgage debt.
Our debt was 82% fixed rate, which includes floating rate debt with in place interest rate swaps and our interest coverage ratio was two five times.
As of September 30th 2023, we had approximately $230 8 million common.
Common shares outstanding.
On a weighted average basis or approximately $130 8 million shares outstanding which is calculated based on the 73 days as a standalone pre merger GNL and 19 days of post merger genome.
As always I'm available to answer any questions. You may have on this quarter. After the call I'll now turn the call back to Mike for some closing remarks.
Thanks, Chris.
We remain excited about the future of the internalized global net lease.
We're on a strong growth trajectory with nearly 100% retention rate of gnl's newly hired employees combined with our competitive advantage of owning one of the largest most diversified global net lease portfolios in the country and the fact that almost one third of the portfolio's NOI is derived from industrial and distribution properties.
Leased to credit worthy tenants with long term leases.
Now the GNL is an internally managed REIT, we believe we will close the trading gap relative to our peers given the quality of our portfolio and the attractiveness of our credit worthy tenants.
This will allow us to unlock significant value in the coming quarters for all shareholders. As we continue our work to become the preeminent net lease company in the future Lastly, I want to mention that there's a lot of valuable data in the publicly filed investor deck and we wanted to ensure that the Dec is being utilized to gain a better understanding of gnl's exciting.
Growth prospects and of course management is available for any follow ups. Operator. Please open the line for questions.
Thank you.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys.
He said anytime Youre question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Yeah.
Okay.
And our first question comes from Bryan Mayer from B Riley Brian. Please go ahead.
Thank you and good afternoon, everyone.
Hi, Brian.
Quick questions for me.
Not so quick.
The historical data you guys provided annualized stuff on slide 14 broken out by segment.
That's pretty helpful from a modeling standpoint, but maybe for Chris do you suspect we will be able to get.
And that breakout as we see it there on a historical basis to kind of fine tune our models a little bit.
We'll have to get back you on that one.
We don't have anything in that regard other than the pro forma that we've put out but what we'll have to get back to you.
Hey, Brian it's Mike what what.
What would be easy.
Easiest for you.
It would be interesting to see and I know this is annualized data, but if we were to take the U S. L are for each of these segments.
Divided by the square feet outstanding to kind of see what it is per.
It'd be interesting to see unless you guys tell us it is useless what the trends have been kind of up to this point in time, you know when we build our models. When you look back at history, and say you know the ups and downs and what impacted those okay.
Okay.
It's helpful to see that if it's not too much trouble well Christian already and I will get together and see what we can come up with.
Okay, and then when we think about the four different sectors.
Is there meaningful differences in the rent escalators for each.
Okay.
Yeah.
When you think of it in terms of the 1.3% annualized that the portfolio averages no theres not there there are slightly different but all in that vicinity.
And then when we think about asset sales going forward are there particular sectors or geographies.
That you're leaning into more than others.
It won't be geography, driven it will be.
A number of other and.
The analysis that we will be looking at including where we see the deepest buyer pools.
And.
Where we see the biggest benefit to the overall impact to the go forward portfolio. So it could be if there is an upcoming debt maturity and its an asset that we think is valuable for redevelopment.
Element or repositioning that you know there are a lot of factors that will go into it to maximize the result.
Okay, and then when I look at Slide 18, how you break out the multi tenant.
Retail between power anchored and grocery.
Can you maybe rank, Michael where you're seeing the most and least strength in each of those segments.
So all three of those segments, Brian have equal strength in the new leasing and renewal are.
They all are critical to the suburban communities, where they're based.
And we just wanted to really highlight the fact that our multi tenant retail fits clearly in these three very similar.
Okay.
So it's really what we don't have we want to make sure that everybody was clear there are no strip centers, you know along the side of the highway there.
These power centers anchor centers and grocery centers the anchors tend to be investment grade they tend to be national tenants.
And many of them have the investment grade or implied investment grade rating.
And most importantly, they tend to have net leased leases on these large anchor so.
This is where we have found the greatest value. This is where the communities shop on a regular basis and we just wanted to clear up any questions that that people might have.
How this portfolio looks on a deeper dive.
Thanks, and just one last quick one for me I think Chris you said that the net debt to EBITDA.
You know, we know what you booked for the third quarter, but for the fourth quarter I want make sure I got this right did you say seven six times.
Yeah, seven six times is it's what we've been disclosing as the projected amount.
And how does that compare to the pre merger estimate and Michael where would you like to see that go over the next 12 months to 18 months.
Well just in terms of the pre merger that is an improvement so it it would lower that the net debt to adjusted EBITDA.
So the as Chris says the merger was deleveraging.
In target at seven six times net debt to EBITDA. So we think that's a that's a good start you know, it's a little bit hard right now Brian without being in a position to give the guidance that we intend to give them.
When we file the K, but I have continued to say that we are focused in.
Kind of a mid term goal I don't know that it can happen in just a couple of quarters, but we will continue to drive net debt to EBITDA down we think that we need to be.
Under six five times to really have a conversation about what an investment grade balance sheet would look like.
And that is where we continue to focus.
Okay. Thank you that's all from me alright, Thanks, Brian.
And our next question comes from Mitch Germain from JMP Securities Mitch you.
You May proceed.
Thank you and I really appreciated the enhanced disclosures it was really helpful.
The two acquisitions.
Physicians.
Or deals that were highlighted.
In our power filing I think it was dated September right around the closing of the transaction.
It seems like both are falling out as well.
Staples, Samsun, wealthier and no longer under contract or although to just gain some insight I think one was titled car wash alone was a bigger retail portfolio yeah.
Mitch. Thank you for the question, yes, we.
Made the decision as we were in due diligence that we didn't want to move forward with those acquisitions.
As we said in the.
Commentary before the Q&A.
We don't we don't think that the markets are quite matched up yet with the risk adjusted returns the cost of debt et cetera and.
We didn't see.
Meaningful benefit in moving forward. So we notified the sellers that we would be terminating.
Right, Okay, that's super helpful.
Yeah.
On the asset sale side.
Obviously 185 million was done year to date I know there was a 50 million dollar deal done in the quarter.
Can you guys just remind me how much of that activity.
<unk> to the third quarter.
<unk>.
I'll give you yes.
Eight nine.
Uh huh.
But.
Roughly.
$15 million in the third quarter.
Okay. So the third quarter dispositions were just about one.
I sat in on the West Coast is that the way to think about it.
Mitch I think youre, referring to the the vacant property for the 50 million that one we expect to close in 2024.
Okay.
The press release, the press release just cells.
Okay.
That is that is correct that one is contracted and we expect to close in 2024.
So then I just I.
Michael answered, but I.
There's a little bit.
If broken up how much of the three how much of the 185 stems to the third quarter. Please.
It's about 50.
A little less than $15 million.
15, okay, especially in <unk>.
Yeah.
Yeah.
And then Eric if fourth quarter that we don't want to get into right now.
And as far as the details of it but we're very confident in the $383 million for 2023.
So that includes the other.
198, or so left under contract because that's the way to think about it that is correct.
One follow up on that though Michael does that include younger contracts include the $50 million.
Office building, that's going to be sold in 2024, Yeah, I'm, sorry, 198, Yeah, I think I'm confusing thing. So let me just break it down.
Yes.
Let me just like it sounds like around 200 million total 150, hopefully by year end and then other assay build and that all of their asset on the west coast probably in sometime in 'twenty four is that.
Yeah, the way to think about it yes.
Alright.
Chris would you say it any differently than the 50 million will close is scheduled to close in.
2024, and the majority of everything else will be closed.
In year end.
Yeah that is correct.
Okay, that's super helpful and last one for me.
I wanted to just get a clarification about the additional.
<unk>.
The synergies that you talked about.
So you originally said $54 million with another $21 million to be realized over a 12 or 18 month period.
I apologize if I'm a little off on that type of thing no that's exactly right.
Okay, great. So now you're talking about 56 months.
We achieved same thing yes.
Yes, okay.
But and you're still seeing 21 over time, so is it 75 million or $77 million I'm just trying to understand.
Kind of how much is left to be realized.
With 2 million just accelerated from the backend or and there's really only $19 million left or is it really.
On the 1 million left which would mean that your synergies are in excess of $75 million that you guys. Originally stated.
Yeah.
So so.
Yeah go ahead, Chris.
Sure. So I was going to say Mitch the way that you should look at it is the $56 million that we referenced that is comparable to the 54 million.
So that that is effectively from day, one we took our actual result for those 19 days and we were able to annualize them.
And our expenses ended up coming in a little bit lower than we had estimated so that that's why you're seeing the 54 protect to the 56 now it's separate 21.
That is something that we won't be oh over as we mentioned in the next 12 months realizing that that relates to some other.
Elected of costs, whether its legal audit and things like that and that is not impacted.
At this point.
Look at the 56 into 'twenty one.
So that was <unk> 77.
Correct.
Get crushed lots 75, okay great.
Thank you Mitch.
And now we are going to take a question from Todd Thomas from Keybanc capital markets.
Please go ahead.
Hi, Thanks.
Just following up on the synergies from the merger the $21 million off of of synergies.
On that side is that to be achieved on sort of a ratable basis over the next 12 months or will that be a little bit more lumpy. Maybe you can just talk about the expected timeline to to actually realize those cost savings.
Sure. So I would say that would be something we would realize over time and as we get towards the third quarter of 24, effectively we should have all of those synergies in place, where if you were able to annualize the numbers it.
It will be reflected in there.
And Todd, it's not going to be ratable over the next few quarters. Some of it will be and some of it's lumpy by event.
So.
That's.
Right.
Okay.
And then.
Appreciate the color on the synergies and some of the the updates here when you initially announced the merger you talked about.
9% accretion on an <unk> basis.
And I was just wondering if you could comment on you know.
Whether you're on track to achieve that in the fourth quarter on an annualized basis I think it was relative to the first quarter and you know if there are any additional considerations for us as we look ahead.
Yeah that is that will.
That is what the.
The <unk>.
Merger anticipated results are 9%.
Accretion and you know.
That is going to be further addressed.
In our guidance that we're going to be giving.
You know we've been executing the synergies have gone very well.
So.
The the thing that is slightly different from.
From the time of the merger is the <unk>.
Increase.
In interest cost.
With the <unk>.
<unk> markets, we're starting to see that come back down so I'm not sure that that changed impact will be.
Significant but that is what we're looking at right now and with the end of the third quarter and the 19 days of the of the merger as you can imagine there was a lot of.
Very important work that needed to be done right up until the close of the quarter and.
Through this period.
So that Chris and the accounting team.
Could get everything together for the 10-Q.
And one of the things that we were also very pleased with was is as you saw.
All of the debt from RTL was able to transfer it.
It came over at par no penalties no. It didn't have to be paid off and reissued so that that was a very important part of what was accomplished in this period.
Okay and then.
Lastly, you mentioned that the long term target for leverage still in sort of a six and a half.
You know, maybe sub six and a half times range on a debt to EBITDA basis.
It's a little ways to go from the 7.6 you've outlined.
That you expect to be out in the fourth quarter, what what's the timeline to ratchet down leverage further and you know what sort of the roadmap look like to get there how should we think about that.
I am going to ask that you, let us address that next quarter with guidance Todd.
It has not yet been disclosed.
On a timeline basis and as you know.
It is an important step for the company and one that we continue to be focused on taking steps to achieve and we will lay that out.
Okay Alright.
Alright, thank you.
Yes.
And I just would like to remind you if you would like to enter the question queue Just press star one.
Hi, Barry break out great guys. Thanks, so much when I'm looking at the dispositions and I'm, assuming that that's going to go towards debt and you mentioned that your variable rate debt was around seven point to when you look at the cap rates that you might achieve is that gonna be a little bit dilutive or.
Or do you think you can come in below the seven point to with your dispositions and have it be a little bit accretive.
We expect it to be accretive.
Okay, Okay, perfect and then Mike on the 92.9 on the on the multi tenant when you look out into 'twenty four how much do you think you could push out do you think you can push out another you know percentage of another 100 basis points.
<unk> or <unk> or do you feel like maybe where maybe we're at the top end of the range that you feel you can get out of that that that portfolio.
So I've always thought that we should be optimized optimizing this portfolio to between 94% to 96% occupancy on the multi tenant which will drive the overall GNL higher than the 96 that it is today already.
I know there are always moving pieces in our in our real estate portfolio like this so.
It's obviously challenging to get much above 90, 697% on a on a max basis for this wave of multi tenant.
Portfolio.
Yeah. The the markets had been very strong the interest in the centers, we have a number of national brands that continue to expand their presence in our overall portfolio enjoying the results.
Of being in our centers.
So I'm very optimistic I'm really pleased with the work the asset management team continues to do.
As you know they they have driven this portfolio.
You know, we're getting close to 10.
10% increase.
In October.
You can see in the multi tenant in a very short time.
Since we acquired that portfolio.
Right No no you guys have done a done a great job I was just trying to kind of figure out how much more juice. There was left and you're saying, there's probably you're saying look there's probably a little bit more to go here.
Yes, I am I am.
And then lastly for me what what did you guys like about the C. M. B S market. When you were looking at doing a debt debt deal.
Well, it's a very thoughtful question so thanks.
We first of all.
10 year money is a very nice profile I O C M b asset on this portfolio.
And frankly, when we look at where the market has gone since.
It's pretty attractive on the debt side I think this is.
Close to the then.
Where we're going to see some debt for awhile. So we were very.
I'm pleased to come in there we thought the timing worked out very much in our in our favor.
But it was also very strategic for us at the time, Barry because we wanted to make sure that we had capacity on the line after the closing of the merger.
Okay.
Accomplish a couple of things it was another piece of fixed rate debt at extended our weighted R. R.
Our.
Remaining term on the debt.
And it gave us flexibility for the upcoming year as we take different steps.
Got it that makes sense. Thanks, so much guys alright, thanks Barry.
Okay.
And this concludes our question and answer session I would like to turn the conference back over to management for any closing remarks. Please okay.
Well as always we thank you for spending the time and listening to the to the.
Earnings call I have an echo on my line I am sorry.
Jim wanted me to pass along he's under the weather. So that's why you didn't hear from him today.
But of course, he will be available to join us.
On future calls and if you have any questions.
We look forward to any follow ups that there are and of course. Most importantly, we look forward to continuing to execute and seeing the benefits of what we're very excited about this internalized structure, we're already starting to see the benefits from a savings on the operational side.
The team came over with 100% retention and we're looking forward to talking to you again with end of year results and some guidance and in the meantime, we'll take any follow ups that you have and thank you again for your time.
And this concludes the conference. Thank you very much for attending today's presentation and you may now disconnect.