Q4 2023 Consolidated-Tomoka Land Co Earnings Call
Operator: www.realtystevenson.com Good day, and thank you for standing by. Welcome to the CTO Realty Growth fourth quarter 2023 earnings call. At this time, all participants are in a listen-only mode.
Okay.
Good day, and thank you for standing by welcome.
Welcome to the CTO Realty growth fourth quarter 2023 earnings call.
At this time all participants are in a listen only mode.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising that your hand is raised.
After the Speakers' presentation, there'll be a question and answer session.
To ask a question during the session you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to.
Operator: To withdraw your question, please press star 1 once again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host today, Matt Partridge, Chief Financial Officer. Please go ahead. Good morning, everyone.
To withdraw your question. Please press star one one again.
Please be advised that today's conference is being recorded.
I'd now like to hand, the conference over to your host today, Matt Partridge, Chief Financial Officer.
Please go ahead.
Matt Partridge: Thank you for joining us for the CTO Realty Growth fourth quarter and full year 2023 operation results conference call. With me today is our CEO and President, John Albright. Before we begin, I'd like to remind everyone that many of our comments today are considered forward-looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements.
Good morning, everyone. Thank you for joining us for the CTO Realty growth fourth quarter and full year 2023 operation results Conference call with me today is our CEO and President John Albright.
Before we begin I'd like to remind everyone that many of our comments today are considered forward looking statements under federal Securities law. The company's actual future results may differ significantly from the matters discussed in these forward looking statements and we undertake no duty to update these statements.
John Albright: Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's Form 10-K, Form 10-Q, and other SEC filings. You can find our SEC reports, earnings release, quarterly supplemental, and most recent investor presentation on our website at ctore.com. With that, I'll now turn the call over to Matt. And good morning, everyone.
Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's Form 10-K Form 10-Q, and other SEC filings you can find our SEC reports earnings release quarterly supplemental and most recent investor presentation on our website at <unk> Dot com.
I'll now turn the call over to John.
Thanks, Matt and good morning, everyone.
John Albright: We had a terrific fourth quarter of execution in nearly all aspects of our business. Resulting in core FFO and AFFO per share growth of 41%, which is meaningfully ahead of our expectations and consistent estimates. Our strong fourth quarter drove a significant beat above the top end of our previously provided full year guidance, fueled by fourth quarter same property NOI growth of 4.7%, better than expected tenant retention, and property level NOI at some of our more recently acquired properties that are not included in our same property statistics. Continued strength in leasing, where we generated comparable rent spreads of nearly 18% during the quarter and 7.5% for the year, and beneficial timing related to the flurry of dispositions we had to finish in 2023.
We had a terrific fourth quarter of execution nearly all aspects of our business.
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Per share growth of 41%, which was meaningfully ahead of our expectations and consensus estimates our strong fourth quarter drove a significant beat above the top end of our previously provided full year guidance fueled by fourth quarter same property NOI growth of four 7% better than expect.
The tenant retention and property level NOI at some of our more recently acquired properties that are not included in our same property statistics.
Continued strength in leasing.
We generated comparable rent spreads of nearly 18% during the quarter and seven 5% for the year and beneficial timing related to the flurry of dispositions, we had to finish 2023.
John Albright: Overall, I'm pleased with the way our team executed as we worked our way back from some unexpected tenant departures early last year. I'm happy to say we're continuing to see that positive momentum carry forward into the first quarter of 2024, where we had a very strong couple of months. The supply-demand imbalance that many people have highlighted as a multi-year tailwind for retail helped drive our strong leasing activity during the quarter.
Overall I am pleased that the way our team executed as we work our way back from some unexpected tenant departures early last year.
Happy to say, we're continuing to see that positive momentum carry forward into the first quarter of 2024, where we've had a very strong couple of bonds.
The supply demand balance that many people have highlighted as a multi year tailwind for retail helped drive our strong leasing activity during the quarter.
John Albright: This is evidenced by our signing of nearly 100,000 square feet of new leases, renewals, options and extensions, an average rent of $32.66 per square foot. To put that into perspective, this per-square-foot value for the fourth quarter was at least 23% higher than the average rent achieved in the first, second, or third quarters of 2023. In addition to our ability to push rates, quality of the leasing during the fourth quarter was relatively widespread, with the collection at Foresight and West Broad Village seeing the most activity and more than half of the rents coming from leading brands such as REI, Fidelity, UBS, Ford's Garage, and J.Crew, are 18% comparable growth and new cash base rents versus expiring rents is going to help push same store NOI in 2024 and even more so in 2025, when we'll get the full benefit of some of the larger leases signed on acquired vacancy when we lap over the natural timing disruption.
This is evidenced by our signing of nearly 100000 square feet of new leases renewals and options and extensions and average rent of $32 66 per square foot.
To put that into perspective this per square foot value for the fourth quarter was at least 23% higher than the average rents achieved in the first second or third quarters of 2023.
Addition to our ability to push rate quality of the leasing during the fourth quarter was relatively widespread with the collection of foresight and west broad Bill I have seen the most activity and more than half of the rents coming from leading brands such as Rei fidelity UBS forward to garage and J crew.
Our 18% comparable growth in new cash base rents versus expiring rents is going to help push same store NOI in 2024, and even more so in 2025.
When we'll get the full benefit of some of the larger leases signed on acquired vacancy when we lapped over the natural timing disruption.
John Albright: For the full year, the quality of our locations, strong demographics, and targeted lease-up strategies allowed us to sign nearly half a million square feet of leases, resulting in our signed-but-not-open pipeline totaling more than 6% of the portfolio cash-based rents. We ended the year with a modest increase in occupancy, finishing at 90.3 percent, and leased occupancy increased to 93.3 percent, both of which are a testament to our leasing activity given that we've largely been selling 100 percent occupied assets. During the fourth quarter, we sold six properties for $64 million at a weighted average exit cap rate of 7.8%. These dispositions include a community shopping center in Fort Worth, Texas, a small format retail property in Henderson, Nevada, three single-tenant retail out parcels at our Crossroads Town Center in Chandler, Arizona, and one of our two remaining single-tenant office properties. For the full year, we sold nine properties for $87 million at a weighted average exit cap rate of 7.5% and generated total gains of $6.6 million. On the investment front, it was a relatively quiet period.
Full year, the quality of our locations strong demographics and targeted lease up strategy has allowed us to sign nearly half a million square feet of leases, resulting in are signed but not opened pipeline totaling more than 6% of the portfolio cash base rent.
It's growing.
We ended the year with a modest increase to occupancy, finishing at 93% and leased occupancy increased to 93, 3% both of which are a testament to our leasing activity given that we've largely been selling 100% occupied assets.
During the fourth quarter, we sold six properties or $64 million at a weighted average exit cap rate at seven 8%.
These dispositions include a community shopping center in Fort Worth, Texas, a small format retail property in Henderson, Nevada, three single tenant retail out parcels at our Crossroads Towne Center in Chandler, Arizona.
And one of our two remaining single tenant office properties.
For the full year, we sold nine properties for $87 million at a weighted average exit cap rate of seven 5% and generated total gains of sales of $6 6 million.
On the investments front it was relatively quiet period.
John Albright: However, throughout 2023, we invested $80 million in four retail properties and one land parcel and originated two first mortgage investments totaling $30 million. In aggregate, we've invested at a blended going-in cash yield of 7.7%, which is notably above our 2023 disposition cap rate that was negatively impacted by the higher exit cap rates on two office property sales. As we close the book on 2023 and shift our focus to 2024, I'm very excited about some of the recent activity in our portfolio and the investment opportunities we're seeing in the market. From a transactional perspective, we are under contract with a non-refundable deposit to sell our mixed-use property in Santa Fe, New Mexico, for $20 million. We anticipate this sale will close before the end of the quarter, and the proceeds from this sale, combined with restricted cash and seller financing proceeds from the most recent office sale, give us dry powder to acquire larger format retail properties that are more core to our strategy. To put some context around the early 2024 positive momentum, Paulatin Row, an established food hall experience in Atlanta, and Culinary Dropout, a well-known Sam Fox restaurant concept, both opened at Ashford And Fogo de Chao just opened last week to a very strong reception at West Broad Village in Richmond.
However throughout 2003, we invested $80 million in Q4 retail properties and one land parcel and originated two first mortgage investments totaling $30 million.
And accurate we've invested at a blended going in cash yield of seven 7%, which is notably above our 2023 disposition cap rate that was negatively impacted by the higher exit cap rates on two office property sales.
As we close the book on 2023 and shift our focus on 2024 I'm very excited about some of the recent activity in our portfolio and the investment opportunities we're seeing in the market.
From a transaction perspective, we are under contract with a nonrefundable deposit to sell our mixed use property in Santa Fe, New Mexico for $20 million.
We anticipate the sale will close before the end of the quarter and the proceeds from this sale combined with our restricted cash and seller financing proceeds from the most recent office sale give us dry powder to acquire larger format retail properties that are more core to our strategy.
To put some context around the early 2024 positive momentum volatile ROE and established food Hall experience in Atlanta, and culinary dropout of well known Sam Fox restaurant concepts, both opened at Ashford Lane.
In beverage our just opened last week very strong reception at west broad village enrichment.
John Albright: Together, just these three tenants combined for approximately $1.4 million in annual base rent. In addition, just in the past week, we signed a ground lease on the undeveloped 10 acres we purchased less than six months ago that is adjacent to the collection at Foresight. In the same week, we sold our remaining non-income-producing subsurface interest for a gross proceeds of $5 million, which we intend to tax-efficiently redeploy into an investment acquisition. With that, I'll let Matt highlight our portfolio, go into details about 2023 financial results, and provide some more specifics regarding our 2024 guidance, and then we'll open it up for questions. Matt.
Together just these three tenants combined for approximately $1 $4 million in annual base rent.
In addition, just in the past week, we signed a ground lease on the undeveloped 10 acres, we purchased less than six months ago Thats adjacent to the collection of foresight.
In the same week, we sold our remaining non income producing subsurface interests for a gross proceeds of $5 million.
Which we intend to tax efficiently redeploy into an investment acquisition.
With that I'll, let Matt highlighted our portfolio go into details about 2023 financial results and provide some more specifics regarding our 2024 guidance and then we'll open it up for questions. Matt. Thanks, John We ended the year with 20 properties totaling $3 7 million square feet of leasable space.
Matt Partridge: Thanks, John. We ended the year with 20 properties totaling 3.7 million square feet of leasable space in eight states and 12 markets. Our portfolio continues to be concentrated in some of the fastest-growing areas of the Sun Belt, with Atlanta and Dallas now representing 50% of our annualized base rent, and the majority of our other markets are in higher-growth population states, such as Texas, Florida, Arizona, and North Carolina. Recent disposition activities have allowed us to decrease the standalone office exposure in our portfolio to less than 5% at year-end 2023, compared to 10% at year-end 2022, and our Whole Foods, Publix, Dick's Sporting Goods, Darden Restaurants, Best Buy, TJ Maxx Home Goods, AMC, Fidelity, and Ross Dress for Less all solidified as Top Ten Tenants. Our earnings for the fourth quarter of 2023 surpassed expectations. Core FFO per share demonstrated its fourth consecutive quarter of acceleration, coming in at $0.48 per share, representing a 41.2 percent increase compared to the fourth quarter of 2022.
In eight states in 12 markets.
Our portfolio continues to be concentrated in some of the fastest growing areas of the sunbelt with Atlanta, and Dallas now representing 50% of our annualized base rent and the majority of our other markets are in higher growth population states, such as Texas, Florida, Arizona and North Carolina.
Recent disposition activities have allowed us to decrease the Standalone office exposure in our portfolio to less than 5% at year end 2023, compared to 10% at year end 2022, and our top tenant list continues to increase and quality with holford public Dick's Sporting goods Darden restaurants, best buy T J Maxx Homegoods.
See fidelity and Ross dress for less all solidified its top 10 tenants.
Our earnings for the fourth quarter of 2023 surpassed expectations with core <unk> per share demonstrating its fourth consecutive quarter of acceleration coming in at 48 per share representing a 41, 2% increase compared to the fourth quarter of 2022 and fourth quarter 2023, <unk> was <unk> 52 per share representing a four.
Matt Partridge: And fourth-quarter 2023 AFFO was $0.52 per share, representing a 40.5 percent increase over the fourth quarter of 2022. Q4 Core FFO and AFFO year-over-year comparisons benefited from better tenant retention, higher rents, and better NOI flow-through at many of our recently acquired properties. A 4.7% increase in same-property NOI, most notably driven by strong percentage rents at our Daytona Beach restaurants and the full-year benefits from the repositioning and lease-up of Ashford Lane, lease termination payments related to tenants who previously vacated, and increased interest income from the makeup and size of our structured investments portfolio and growth in management fees and dividend income. The strength in our results was partially offset by higher interest expense and increased income taxes, as well as the full year effects of our December 2022 common equity rate. For the year, Core FFO was $1.77 per share, and AFFO was $1.91 per share, representing a year-over-year per share growth of 2% and 4%, respectively, when compared to 2022.
Eight 5% increase over the fourth quarter of 2022.
Q4 core <unk> and <unk> year over year comparisons benefited from better tenant retention higher rents and better NOI flow through at many of our recently acquired properties.
A four 7% increase in same property NOI, most notably driven by strong percentage rents at our Daytona Beach restaurants, and the full year benefits from the repositioning and lease up of Ashford Lane lease termination payments related to tenants, who previously vacated increased interest income from the makeup and size of our structured investments portfolio and growth.
And management fees and dividend income.
The strength in our results was partially offset by higher interest expense and increased income taxes as well as the full year effects of our December 2022 common equity raise.
For the year core <unk> was $1 77 per share and <unk> was $1 91 per share representing a year over year per share growth of 2% and 4%, respectively when compared to 2022.
Matt Partridge: After accounting for the impact of the three-for-one stock split in 2022, AFFO per share in 2023 represents an all-time record year for the company since it converted to a REIT in 2020. As we previously announced, the company paid a fourth quarter regular cash dividend of $0.38 per share in December, resulting in a Q4 2023 AFFO payout ratio of 73%. And earlier this week, the company declared its first quarter 2024 regular common stock cash dividend of $0.38 per share, which is payable on March 28th to shareholders of record on March 14th.
After accounting for the impact of the three for one stock split in 2022 <unk> per share in 2023 represents an all time record year for the company since its since it converted to a REIT in 2020.
As we previously announced the company paid a fourth quarter regular cash dividend of <unk> 38 per share in December resulting in a Q4 2023, <unk> payout ratio of 73% and earlier. This week. The company declared its first quarter 2020 for regular common stock cash dividend of <unk> 38 per share, which is payable on March 28 to shareholders of record on <unk>.
Matt Partridge: This is the company's 48th consecutive year of declaring a common dividend, and the 38 cents per share represents a very attractive current annualized yield of approximately 9.2%. During the fourth quarter, we maintained our opportunistic approach to capital allocations, repurchasing more than 14,000 shares of our Series A preferred stock at an average price of $18.40 per share. This represents a 26% discount to liquidation preference, and we also repurchased over 62,000 shares of our common stock at an average price of $15.72 per share, which has an effective annualized yield on cost of 9.7%. As part of our approach to balance sheet and interest rate management, we entered into a new $50 million forward starting interest rate swap agreement to fix SOFR at an average fixed swap rate of 3.85% for the period between February 2024 and January
March 14th.
This is the company's 48th consecutive year of declaring a common dividend and a 38 cents per share represents a very attractive current annualized yield of approximately nine 2%.
During the fourth quarter, we maintained our opportunistic approach to capital allocation repurchasing more than 14000 shares of our series a preferred stock at an average price of $18 40.
Per share this represents a 26% discount to liquidation preference and we also repurchased over 62000 shares of our common stock at an average price of $15 72 per share, which has an effective annualized yield on cost of nine 7%.
As part of our approach to balance sheet and interest rate management, we entered into a new $50 million forward starting interest rate swap agreement to fixed so far at an average fixed swap rate of 385% for the period between February 2024, and January 2028. This locked in nearly all of our remaining variable interest rate exposure on our balance sheet at our current all in.
Fixed rate of 545%, which is approximately 150 basis points below the currently floating interest rates.
Matt Partridge: This locks in nearly all of our remaining variable interest rate exposure on our balance sheet at a current all-in fixed rate of 5.45 percent, which is approximately 150 basis points below the current floating interest rate. We ended the year with net debt to total enterprise value of 51%, and our net debt to performing EBITDA improved quarter over quarter to 7.6 times.
We ended the year with net debt to total enterprise value of 51% and our net debt to pro forma EBITDA in per quarter over quarter to seven six times.
With the more than $150 million of total liquidity from available cash restricted cash and undrawn revolver commitments as well as the anticipated proceeds from our Santa Fe property sale, we're well positioned to be opportunistic in the transaction market. This year.
Turning to our 2024 guidance, we expect core <unk> to be between $1 56 to $1 64 per diluted share.
Matt Partridge: With more than $150 million of total liquidity from available cash, restricted cash, and undrawn revolver commitments, as well as the anticipated proceeds from our Santa Fe property sale, we're well positioned to be opportunistic in the transaction market this year. Turning to our 2024 guidance, we expect core FFO to be between $1.56 to $1.64 per diluted share. And AFFO is forecasted to be between $1.70 and $1.78 per diluted share. We're anticipating investment activity between $100 million and $150 million at a weighted average initial investment yield of 7.75% to 8.25%, and our disposition guidance assumes $75 million to $125 million of asset sales at a weighted average exit cap rate between 7.5% and 8.25%. Our assumptions for 2024, which conservatively contemplate cash flow disruption related to the timing of our dispositions and investments, also include very strong lease-up assumptions for the Current Portfolio.
<unk> is forecasted to be between $1 70, and $1 78 per diluted share.
We are anticipating investment activity between 100, and 150 million at a weighted at a weighted average initial investment yield of 775% to eight 5% and our disposition guidance assumes $75 million to $125 million of asset sales at a weighted average exit cap rate between seven 5% and eight 5%.
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Our assumptions for 2024, which conservatively contemplates cash flow disruption related to the timing of our dispositions and investments also includes very strong lease up assumptions assumptions for the current portfolio.
Before taking into account our transaction activities, we're projecting leased occupancy to be between 95%, 96% by year end, implying gains of approximately 200 to 300 basis points during the year, which would be a strong tailwind for 2025.
Same property NOI in 2024, it's forecasted to increase between 2% to 4%, which is most materially impacted by the loss rent from we work in 2024, and our expectation that there will be timing disruption between when some of our known lease expirations occur and when the replacement tenants rent commenced.
Both of these drags in 2024 are expected to reverse and provide incremental growth in 2025.
Part of our guidance assumptions, we've maintained credit loss reserves between 75, and 100 basis points of property level revenue, which is consistent with our historical run rate and we're not currently projecting any additional share issuances and repurchases.
Matt Partridge: Before taking into account our transaction activities, we're projecting lease occupancy to be between 95% and 96% by year-end, implying gains of approximately 200 to 300 basis points during the year, which would be a strong tailwind for 2025. Same property NOI in 2024 is forecasted to increase between 2% to 4%. She is most materially impacted by the lost rent from WeWork in 2024 and our expectation that there will be timing disruption between when some of our known lease expirations occur and when the replacement tenant's rent commences. Both of these drags in 2024 are expected to reverse and provide incremental growth in 2025. As part of our guidance assumptions, we've maintained credit loss reserves between 75 and 100 basis points of property level revenue.
And finally as John mentioned are signed but not opened our <unk> pipeline continues to grow representing $4 $5 million of incremental feature base rent or more than 6% of our current portfolio as cash base rents.
Combined with the positive leasing momentum potential upside of our guidance from the timing of transactions and the long term benefits of our asset management and technology initiatives. We are setting the stage for a strong 2024 and the potential for a milestone year in 2025.
With that I'll now turn it back over to the operator to open the line for questions.
As a reminder, if you'd like to ask a question at this time. Please press star one one on your telephone and wait for your name to be announced to.
To withdraw your question. Please press star one again.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of Floris Van <unk> with Compass point.
Operator: It's consistent with our historical run rate, and we're not currently projecting any additional share issuances or repurchases. And finally, as John mentioned, our Signed but Not Open, or S&O, pipeline continues to grow, representing $4.5 million of incremental future-based rent, or more than 6 percent of our current portfolio's cash-based rent. Combined with the positive leasing momentum, potential upside to our guidance from the timing of transactions, and the long-term benefits of our asset management and technology initiatives, we're setting the stage for a strong 2024 and the potential for a milestone year in 2025. With that, I'll now turn it back over to the operator to open the line. As a reminder, if you'd like to ask a question at this time, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.
Hey, good morning, guys.
For taking my question.
John.
Obviously, you guys got a lot of things moving and we're happy I think investors are probably happy to see you.
Get rid of some of that office exposure, which appears to be.
Unloved in the markets today.
Maybe if you could talk a little bit about your other initiatives.
That you've been doing including bringing the property management in house that I believe in Atlanta.
Are there steps underway do you do the same thing in Dallas, and what kind of uplift could investors expect.
Going forward from these kinds of initiatives.
Yes, thanks for us.
I'll, let Matt talk about the uplift, but as far as structure, but we do have an expanding team in Atlanta has been.
Very <unk>.
John Albright: Please stand by while we compile the Q&A. Our first question comes from a line by Flores Van Dykem with, Hey, morning guys. Thanks for taking my question. John, obviously, you guys got a lot of things going on and are, you know, happy. I think investors are probably happy to see you, you know, get rid of some of that office exposure, which appears to be unloved in the markets today. Maybe if you could talk a little bit about your other initiatives that you've been doing, including bringing property management in-house, which I believe is happening in Atlanta. Are there steps underway to do the same thing in Dallas, and what kind of uplift could investors expect going forward from these kinds of Yeah, thanks, Forrest.
Successful and beneficial to us having people on the ground and a lot of efficiencies, there and especially just people with an owner's eye on on our properties there.
And given that we've had all these restaurant openings.
With that policy.
Food Hall has just opened colony drop out just open.
<unk> really been critical to have people there on the ground and very helpful and with regards to Dallas, We're starting.
A little bit of that process.
Don't have quite as large of a presence there is.
<unk>.
As in Atlanta, but.
See that sort of opportunity as well down the road.
John Albright: I'll let Matt talk about the uplift. But as far as, you know, structure, we do have an expanding team in Atlanta, and it's been, you know, very successful and beneficial to us, having people on the ground and a lot of efficiencies there, especially just people with an owner's eye on our properties there. And given that we've had all these restaurant openings, Paulton Food Hall just opened, Colony Dropout just opened, you know, it's just, you know, really been critical to have people there on the ground and very helpful. And with regard to Dallas, we're starting, you know, a little bit of that process. You know, we don't have quite as large a presence there as in Atlanta.
Hey, Floris, it's Matt from an uplift perspective, I think Atlanta, probably provide at least one to two a share and thats without a <unk>.
Our focus team probably getting some economies of scale in terms of bidding.
Bidding out cohesive contracts for the entire portfolio in the market.
Probably upside to that one to two.
Thanks, and maybe if I could.
Follow through as well the <unk> pipeline.
I think you indicated it's $4 $5 million of ABR.
We're around 6% of your ABR.
When is the timing of that coming on line and does that include.
John Albright: But, you know, you could see that sort of opportunity as well down the road. A Flores, it's Matt. From an Uplist perspective, I think Atlanta probably provides at least one to two cents a share, and that's without a more focused team, probably getting some economies of scale in terms of bidding out cohesive contracts for the entire portfolio in the market. So there's probably an upside to that one. Thanks. And maybe if I could, you know, follow through as well, the S&O pipeline, it's, you know, I think you indicated four and a half million ABR, you know, around 6% of your ABR. When is the timing of that coming online?
Baxter, presumably that does not include the <unk>, where we work with the theater in North Carolina, but if you can give us a little bit more color on the timing and also those two particular spaces.
Is happening now on back filling those.
Yes ill give a little bit of color on the timing I'll, let John talk about.
The backfill on we work on Regal, so timing wise.
Paulison ROE culinary dropout and failure to file that John mentioned all open. This past couple of weeks, that's about 30% of the pipeline. The rest of it probably is late Q3 <unk> weighted.
John Albright: And does that include backfill? I presume that it does not include the backfills for WeWork or the theater in North Carolina. But if you can give us a little bit more color on the timing and also in those two particular spaces, what's happening with backfilling?
So it will have a disproportionate benefit to 2025 versus 2024.
As regards on where we are with that particular tenant so.
On Regal Theater, we've had.
And then going back and forth of two different tenants and we're basically there.
John Albright: Yeah, I'll give you a little bit of color on the timing. I'll let John talk about the backfill on WeWork and Regal. So timing-wise, Polliton Row, Culinary Dropout, and Fogo de Tao that John mentioned all opened in the past couple weeks. That's about 30% of the pipeline. The rest of it probably is late Q3, 4Q weighted, so it'll have a disproportionate benefit in 2025 versus 2024. As regards where we are with particular tenants, at the Regal Theatre, we've been going back and forth with two different tenants, and we're basically there with a tenant, so you should see that in motion very soon. So that's nice to get that back filled and get going, but remember the process on all these, especially larger tenants, to get open is really running a year. We try to do better and shorten that; obviously, it's really up to the tenant with getting permit drawings, but the approval process in certain jurisdictions just takes a while, as you probably have heard across the campus of other companies.
With a tenant so you should see that kind of emotion very soon.
And so that's nice to get that that backfill and get going but remember that process on all of these especially on larger tenants to get open.
Really running a year.
We try to try to do better and shortened add obviously, it's really up to the tenant with getting permit drawings, but as the approval process.
In certain jurisdictions, just take a while as you probably have heard.
Across the <unk>.
The campus of other companies with regards to we work we've had.
This year, we've had several tours with tenants.
So there is a couple of tenants out there for the full space. There is a couple of times there for half the space or a third of the space. So we're very anxious to get it leased and so.
Our brokers know that and so.
We won't let a deal.
I over small issues. So we're aggressively pursuing tenants in the market and Florida just to piggyback on that you are correct in either of those spaces are in our pipeline today.
John Albright: With regard to WeWork, this year we've had several tours with tenants, so there are a couple tenants out there for the full space; there are a couple tenants there for half the space or a third of the space, so we're very anxious to get it leased, and our brokers know that, and we won't let a deal die over small issues, so we're aggressively pursuing tenants in the market. And Floris, just to piggyback on that, you are correct; neither of those spaces are in our S&O pipeline today. I got it.
Got it so maybe just just a follow up on the re tendering because again that theoretically should have fairly high re leasing costs, particularly if you're splitting a box as you might in with bauxite I should say the space with we works.
John Albright: So maybe just a follow-up on the re-tenanting because, again, that theoretically should have fairly high releasing costs, particularly if you're splitting a box, as you might do with, or a box, I should say, the space with WeWork's space there. Is it safe to assume that's going to cost potentially, you know, up to $100 a square foot to re-tenant that space? Uh, you know, definitely that could be in the realm. I think we talked about this on conference call earnings calls, you know, six months ago, maybe nine months ago when we were negotiating with a fitness tenant that wanted the whole space. And That would have been north of 100.
Yes.
Space there.
Is it safe to assume that's going to cost potentially.
Up to 100 Bucks a square foot to re tenant that space.
Definitely thats could be in the realm I think we've talked about this non conference call earnings calls six months ago, maybe nine months ago, when we were negotiating with.
Fitness tenant that wired the whole space.
That would have been north of 100, but I would say 100 is very safe on traditional office space.
Or do something more special will be higher than that but.
That's a safe assumption.
John Albright: But I would say 100 is very safe for traditional office space, and if you do something more special, it should be higher than that. But that's a safe assumption. And would it be safe to make that assumption for the regal space as well? You know, it's not quite as high as we work, but it's a little bit shy of that. Okay, thanks, that's it for me for now. Sure. Our next question will come from the line of Rob Stevenson with Jannie Montgomery. Thank you. Thank you. Good morning guys,
And would that be safe to make that assumption for the regal space as well.
Uh huh.
It's not quite as high as we work.
But.
A little bit shy of that.
Okay. Thanks, that's it for me for now.
Sure.
Our next question will come from the line of Rob Stevenson with Janney Montgomery Scott.
Yes.
Hey, good morning, guys.
John Albright: Is the Regal Retaining a theater, or is that a different concept? So it's a different concept. There has been theater interest, but it's a different concept. Okay. Is that going to take longer than a year if you're converting a theater to some other use, given the sloped floors and all of that sort of stuff? It shouldn't take a year.
Is the Regal re tending a theater or is that a different concept.
So it's a different concept there has been theater interest, but it's a different concept.
Okay is that going to take longer than a year, if you're converting a theater or some other use given the slope floors and all of that sort of stuff.
It shouldn't take a.
Matt Partridge: It would take a year because of permits. But if you didn't have permits, it would not take a year. Okay, that's helpful. And then Matt, the four and a half million that you talked about, you know, coming online in 24, is that all on stuff that was not open in the fourth quarter? Or does that include stuff that may have opened in December but didn't pay a full quarter's worth of rent? Yeah, that's going to be a combination of both.
A year.
It would take a year because of permitting.
But if you didn't have permitting it would not take a year.
Okay. That's helpful and then Matt the $4 5 million.
<unk> talked about.
<unk> online in 'twenty four is that all on stuff that was not open in the fourth quarter or does that include stuff that may have opened in December.
But didn't pay a full quarter's worth of rent.
Matt Partridge: But primarily, it's going to be stuff that has not come online yet. Okay, but that includes whatever adjustment we need to get to a pro forma for any leases that started paying rent in December and things like that. That's included in that four and a half.
That's going to be a combination of both but primarily it's going to be.
Stuff that is not not come online yet.
Okay, but that includes whatever adjustment, we need to get to a pro forma for any leases that.
Started paying rent in December and things like that that's included in that four five.
Matt Partridge: That's right. Okay, perfect. And then, any material known move-outs in 24 or early 25 at this point? Just Regal is the only known to move out, and that'll be late March or early April. Okay.
Yep.
Okay, perfect and then any material known move outs in 24 early 'twenty five at this point.
Just regal is the only known move out and that that'll be late March early April.
Okay, and then how are you guys thinking about fidelity.
John Albright: And then, how are you guys thinking about the Fidelity asset in New Mexico, I mean, given where that's yielding and 100% occupied versus the market for office assets and, you know, being able to replace that NOI at some point? Yeah, so I would think about it. But, Rob, what would be more your concern?
Asset New Mexico, I mean, given where that's yielding a 100% occupied versus the market for office assets.
<unk>.
Being able to replace that NOI.
At some point.
Yes, so I would think about it.
Well, Rob what what would be more your concern. So I can kind of address it appropriately from well first of all it's not a great market for office assets, but that's a single tenant asset which has been a little bit better in the marketplace with.
John Albright: So I can kind of address it appropriately. From Well, first of all, it's not a great market for office assets, but that's a single tenant asset, which has been a little bit better in the marketplace with, you know, a quality credit tenant. But also, is it, you know, what are you looking at?
And a quality credit tenants.
But also is it what are you looking at if you're having to if you decide to sell that at some point here in 'twenty four what are you looking at that as a likely sort of cap rate spread are you going to is that going to wind up being 150 200 basis points wide of where you can redeploy the proceeds.
John Albright: If you're having to say if you decide to sell it at some point here in 24 hours, what are you looking at as a likely sort of cap rate spread? Are you going to wind up being 150 200 basis points wide of where you can redeploy the proceeds, etc. So both, what do you see as the market for that, as well as how are you thinking about, you know, replacing that NOI going forward? Yeah, okay. So, I was actually out there last this last week, and the market in, you know, just getting real granular here for you. So since this is our last office, I said, I hope you, you hope you don't mind. But you know, as you know, it's in the Mesa del Sol, a master-planned community right by, you know, the Sandia National Labs. It's by Kirkland Air Force Base.
Et cetera, so both what do you see as the market for that as well as how are you thinking about.
Placing that NOI going forward.
Okay.
So I was actually out there.
Last week and the market in just getting real granular here for you.
Since our last office asset a hope.
If you don't mind, but so as you know it's in Mesa del Sol.
Mr planned community right by the Sandia National Labs by the Kirkland Air Force base. So as the government is spending a lot of money on both of those big infrastructure, if youre getting a lot of contract or interest in the Albuquerque area and they want to be as close as possible on Mesa del.
John Albright: So as the government's spending a lot of money on both of those big infrastructures, you're getting a lot of contractor interest in the Albuquerque area, and they want to be as close to the Fidelity campus as possible. And Mesa del Sol is the place to be. Netflix is still spending a billion dollars. They're under construction for additional movie studios. It's basically a seven iron from the Fide
So is the place to be.
Netflix is still spending $1 billion or under construction for additional movie Studios is basically a seven iron from the fidelity campus.
And as we talked about and Fidelity building is two story building with two separate buildings that could be separated and so it's the only office building in that whole complex theres a thousand lots under construction for homes. There is multifamily under construction for homes. There is a planned hotel.
John Albright: And as we talked about, the Fidelity building is, you know, a two-story building with two separate buildings that could be separated. And so it's the only office building in that whole complex. There are 1000 lots under construction for homes. There are multi-family under construction for homes. There's a planned hotel in the Mesa del Sol that's going to be maybe two homes or two hotels for the Netflix business. You have a solar manufacturer that's going to build a complex, a facility right across the street from Fidelity. And you have an Australian helium energy company that is basically coming to Mesa del Sol.
In the Mesa del Sol, that's going on maybe two homes at our two hotels for especially for the Netflix business.
Have a solar manufacturer that's going to be.
Build a complex a.
Facility right across the street from Fidelity and you have in Australia, and helium energy company that is basically coming into Mesa del Sol.
John Albright: So with that aspect, you know, the market's getting better and better for the Fidelity building. Having said that, we're in discussions with Fidelity about, you know, doing, you know, maybe an extension with the lease where it can be a lot more marketable and a lot more valuable to us on a sale basis. And then based on that sort of monetization, we feel like it will be easy to replace, call it, you know, income neutral to where we could sell that building. If we had to sell it now, and just like, you know, come hell or water, to sell it, it would be a little bit, you know, not as accretive or, you know, basically a loss of income as you replace the capital. But it wouldn't be anything crazy because the building is a class A building built by Forest City.
So with that aspect, the market's getting better and better for the fidelity building, having said that we're in discussions with fidelity about doing.
Maybe an extension with the lease where it can be a lot more marketable and a lot more valuable to us on a sale basis, and then based on that sort of monetization.
We feel like it will be easy to replace.
Call it.
Income neutral to where we could sell that building if we had to sell it now and just like come hell or high water to sell it it would be a little bit.
Not as accretive or basically.
Loss of income as you replace the capital, but it wouldn't be anything crazy because.
Building is a class a building built by forest city and its in a growing area and no. One is going to build an office building as you know and there is a lot of people coming into Albuquerque.
John Albright: And it's in a growing area, and no one's going to build an office building, as you know. And there are a lot of people coming into Albuquerque for the, you know, big government kind of contractors and new energy, you know, kind of the clean energy sort of tenants. So sorry if that was a little bit too long for you. No, no, that was helpful.
For the big government contractors and new energy.
Kind of the clean energy sort of.
Tenants, so sorry, if that was a little bit too long for you no. No that was helpful. And then I guess my last question regarding tenants if.
John Albright: And then I guess my last question, you know, regarding tenants, you know, if you were to, you know, dispose of Fidelity, AMC becomes your top tenant. How does that asset look today? Is it with whatever data you're getting and seeing foot traffic on, you know, Friday, Saturday nights, etc.? Are those theaters back to doing pretty well? Are they still, you know, weak?
If you were to dispose of fidelity AMC becomes your top tenant.
How does that those assets look today as it with whatever data you are getting and seeing foot traffic on Friday Saturday nights et cetera are those theaters back to doing pretty well or are they still.
John Albright: You know, is it more or less dependent on how quickly more blockbusters get released? How are you guys thinking about those theater assets? Yeah, so I guess I was taking a little bit of a tour around our portfolio last week. I was also in Atlanta and went to talk with the manager of AMC in Madison Yards.
<unk>.
Is it is it more or less dependent on the.
How quickly more blockbusters get released how are you guys thinking.
About those theater assets.
Yes so.
I guess I was taking a little bit of a tour around our portfolio last week also.
In Atlanta, and with talked with.
The manager of the AMC in mass and yards.
John Albright: And Madison Yards is basically fourth or fifth in the whole Atlanta region for AMC. It's doing very well, and that's out of 15 to 17 theaters. And so they've had some really strong performances as far as films go out there.
And massing yards is basically fourth or fifth in the whole Atlanta region for AMC, it's doing very well and that's out of 15 to 17 theaters.
And so they've had some really strong performances as far as.
John Albright: And so they're feeling really good about that theater. And if you look at that theater, it's probably one of the last ones that was built in the AMC system. So it's very new and appropriately sized. The AMC that we have at Collection is probably the second prime location within the Collection property right along the highway, so it has visibility. And that market is basically on fire. And so it would be very easy and economically advantageous to us if they wanted to leave, because there'd be a lot of backfill interest with much better credit and possibly higher rent. So we feel very good about our exposure in the theater space right now. Anyway, that's kind of a little bit of that backdrop.
Films out there and so so they are feeling really good about that that theater and if you look at that theater Thats, probably one of the last ones that was built in AMC system. So, it's very new and appropriately sized the AMC that we have at collection is probably second prime location within the <unk>.
<unk> proper.
Property.
Right along the highway so has visibility.
And that market is basically on fire and so it would be very easy and very economically.
The advantage to us if they wanted to leave because there'll be a lot of backfill interests with.
Much better credit and possibly higher rent. So we're we feel very good about our exposure on the theater space right now.
Anyway.
A little bit of that backdrop, alright. That's helpful. Thanks, guys I appreciate the time and have a great weekend.
John Albright: All right. That's helpful. Thanks, guys. Appreciate the time, and have a great weekend.
Operator: All right. Our next question will come from the line of Matthew Erdner with Jones Trading. Hey, good morning, guys.
Alright, Thank you Rob.
Our next question will come from the line of Matthew <unk> with Jones trading.
Matt Partridge: Thanks for taking the question. So given the short-term loan, that looks like it's going to be up kind of in the second half of the year. You know, are you expecting acquisitions to be in the second half of the year with dispositions kind of front loaded? And then also, what's going to drive you to the higher range of that guidance towards the 150 million mark rather than the 100 million mark?
Yes.
Hey, good morning, guys. Thanks for taking the question. So given the short term loan and that looks like it's going to be up kind of second half of the year.
Are you expecting acquisitions to be in the second half of the year with dispositions kind of Frontloaded and then also whats going to drive you to the higher range of that guidance towards the $150 million mark rather than 100.
Matt Partridge: Yeah, so, you know, we basically have some acquisition activity going on right now. We hope to be kind of front-ended, as you mentioned there, and so the timing could be on top of when the seller financing that we did for Sable gets monetized, and so that timing should match up fairly well, and so, you know, we have that going on, but I'll let Matt, you know, talk about your other questions. Yeah, Matt, in terms of timing for transaction activity and to hit the top end of the range, like John said, we're working on some stuff right now that would match fund some of the activity that has happened on the disposition side or would happen. But the rest of our guidance assumes that it's pretty back-end weighted from an acquisition perspective. And so there is some timing drag between dispositions and acquisitions that comes through the guidance.
Yes, so we basically have some some acquisition activity going on right now we hope to be kind of front ended as you mentioned there and so the timing could be on top of win.
The seller financing that we did for Sable.
Gets monetized.
So that timing should match up fairly fairly well.
And so so we have that going on.
But I'll, let Matt talk about your other question yes.
Yes, Matt in terms of timing for transaction activity and to hit the top end of the range like John said, we're working on some stuff right now that would that would match fund some of the activity that has happened on the disposition side or what happened but.
The rest of our guidance assumes that it's pretty backend weighted from an acquisition perspective, and so there is some timing track between dispositions and acquisitions that comes through the guidance.
Matt Partridge: And then as it relates to hitting the top of that range, I think it's going to be a function of finding good opportunities on the acquisition side. I think we feel pretty good about the liquidity of the assets that we would want to sell to match fund. So it's really going to be an opportune time.
And then as it relates to hitting the top end of that range I think it's going to be a function of finding good opportunities.
On the acquisition side I think we feel pretty good about the liquidity of the assets that we would want to sell to match fund so it's really going to be opportunistic.
John Albright: Yeah, gotcha. And then can you talk about the opportunities that you're currently seeing, whether it's in markets where you're already at, or if you're looking to expand into some new markets? A little bit of both.
Yes got you and then can you talk about the opportunities that you are currently seeing whether it's in markets, where you are already at or if youre looking to expand into some new markets.
John Albright: So, you know, finding opportunities within our markets and new markets. Gotcha. And then there's one last quick one for me.
A little bit of both so finding opportunities within our markets and new markets.
Matt Partridge: Do you know the cap rate on the acquisitions or the dispositions, sorry, if you were to exclude the office transactions? I don't have it off the top of my head, Matt, but it's certainly inside of the blended cap rate given the more elevated cap rates on the two offices. Got you. Thank you guys, www.realtystevenson.com. Our next question will come from the line of John Misoka and B. Reilly Securities. Good morning. Good morning, can you hear me?
Got you and then one last quick one for me do you know the cap rate on the acquisition or the disposition sorry, if you were to exclude the office transactions.
I don't have it off the top of my head Matt.
It's certainly inside of the blended cap rate given the more elevated cap rates on the two office disposition.
Got it thank you guys.
Yes.
Okay.
Our next question will come from the line of John Michel <unk> with B Riley Securities.
Good morning.
Good morning can you hear me.
John Misoka: Yeah, so maybe sticking with the theme of guidance and kind of the ranges in the investment activity, what can kind of cause you to be closer to the high end on the cap rate or the investment yield scene? And I guess, as you kind of contemplate that investment volume guidance, are there kind of some more of the structured investments you've been doing recently factored into that? Or is it, you know, kind of more typical equity investments and shopping center assets that would, you know, that would be kind of making up the bulk of that guidance? Yeah, we're definitely looking at just right down the fairway as far as core sort of acquisitions of where the strategy is as far as buying larger format retail where there are different levers of increasing value with bringing in new tenancy and changing out tenancy, that sort of thing. And so we feel pretty good that we have our eyes on the higher end of that guidance as far as cap rates go without any structured finance investments. We don't have any structured finance investments that we're looking at right now.
Yes, so maybe sticking with the theme of guidance and kind of the ranges and the investment activity what can kind of cause you to be closer to the high end on on the cap rate or the investment yields and then I guess as you.
Kind of contemplate that investment volume guidance.
Are there kind of some more of the structured investments you've been doing recently factored into that or is it kind of more typical okay.
Equity investments in shopping center assets.
That would be kind of making up the bulk of that guidance.
Yes, we're definitely looking at just right down the fairway as far as core sort of acquisitions of where the strategy as far as buying larger format retail where theres different lever levers of.
Increasing value with bringing in new Tennessee, changing our tenancy that sort of thing.
So we feel we feel pretty good that we have our eyes on higher on the higher end of that guidance as far as cap rate without any structure finance investments. We don't have any structure finance investments that we're looking at right now.
John Albright: Okay, and then with the in place portfolio, you kind of mentioned that the cash. The increasing kind of cash rents is pretty broad based. I mean, I guess is that 17.9% level or somewhere around there sustainable?
Okay.
And then with the in place portfolio, you kind of mentioned that the cash.
The increase in cash rents is pretty broad based I mean, I guess is that 17, 9% level or somewhere around there sustainable.
Matt Partridge: going forward as we look out into 2024? Or was that maybe an anomaly for specific leases that were renewed or, you know, put in place. A good question. You know, I think on the 2024 leases expiring, there is a pretty good opportunity to drive more rates. The average cash rent per square foot for the leases expiring in 2024 is $17.83.
Going forward as we look out into <unk>.
124 was that maybe an anomaly for specific leases that were.
Renewed or.
Put in place.
Yes, good question.
I think on the 2024 leases expiring.
Pretty good opportunity to opportunity to drive more rate.
The average cash rent per square foot for the leases expiring in $2024 $17 83.
Matt Partridge: So that's meaningfully below our average rent for the portfolio and obviously pretty significantly below our last 12 months of leasing activity average rent. So I think it'll continue to be a pretty substantial lift on a real leasing effort. Something that's probably a little bit more specific to us in the space is the fact that we have been acquiring vacancy over the past few years, and so there's a lot of runway to drive increased cash flow independent of the comparable lease spread. And then lastly, on the ground lease.
Yes.
That's meaningfully below our average rent for the portfolio and obviously pretty significantly below.
Our last 12 months of leasing activity average rent. So I think there'll be there'll continue to be pretty substantial lift on our releasing effort and then.
Something thats, probably a little bit more specific to us in this space is the fact that we have been acquiring vacancy over the past few years and so there's a lot of runway to drive increased cash flow independent of the comparable lease spreads.
Yes.
Okay.
And then lastly on the ground lease can.
John Albright: Um, can you just provide a little more color on, you know, the counterparty there, what's the likelihood that they, you know, in your mind, would enact, you know, terminate the agreement during the feasibility period and, you know, utilize the purchase option? Just, just kind of any additional color there would be helpful. Sure. So the group that basically we signed the ground lease with, with the option to buy, they really wanted to buy the parcel. But from a timing perspective, that didn't work for us.
Can you maybe just provide a little more color on the counterparty there.
Whats the likely date.
In your mind that they would enact terminate the agreement during the feasibility period.
Utilize the purchase option just kind of any additional color there would be helpful.
Sure.
So the group that basically we signed the ground lease with with the option to buy they really wanted to buy the parcel.
But referred timing perspective that didn't work for us So we gave them the option.
John Albright: So we gave them the option after a year where they could purchase the site. So that was definitely their preference to buy the site. It's, you know, the group is well capitalized. It will be a very good draw and very complementary to the collection.
And after a year.
Where they could.
They could purchase the site so that was definitely there.
Their preference is to buy the site.
The group is well capitalized it will be a very good draw and very complementary to collection will bring.
John Albright: Will bring, you know, good customers with a big spending sort of outlook. And so, we're very excited about it. If they drop out, we, it was a tough choice to go with this group. We had two other groups that were vying for it.
Good customers with big spending sort of.
Outlook.
So we're very excited about it if they drop out.
<unk> choice to go with this group we have we had two other groups that were buying for it and.
John Albright: And, you know, and to be honest with you, the other groups would pay more. But we felt more comfortable with this use and the timing; it would go faster than the other groups, but the other groups would pay more. So I have no problem. If these guys don't make it work, I feel like it will be fairly easy to backfill that for sure. And you might not be able to provide this, but just any kind of color of the brackets in the purchase option and what that would apply in terms of a return on your investment. Yeah, the return will be, you know, very, very, you know, good for the shareholders. So it would be, you know, basically almost double.
To be honest with you the other groups would pay more.
But we felt more comfortable with this use and the timing it would.
Go faster than the other groups, but the other groups would pay more so I have no problem. If these guys don't make it or feel.
Feel like it will be fairly easy to.
To backfill that for sure.
And you might not be able to provide this but just any kind of.
Bracketing that purchase option.
And what that would kind of imply in terms of a return on your investment.
Yes, the return will be very very.
<unk>.
Good for the shareholders. So it would be basically almost a double.
John Albright: Okay, that's very helpful, and that's it for me. Thank you very much. Great. Our next question will come from the line of R.J. Milligan with Raymond, Georgia.
Okay.
That's very helpful and that's it for me. Thank you very much.
Great. Thanks, Joe.
Our next.
Question will come from the line of RJ Milligan with Raymond James.
John Albright: Good morning, guys. Just one question for me on the investment guidance for the year: the cap rates are 775 to 825. I'm just curious, you know, obviously, you've shown an appetite to buy back either common or preferred shares, and curious, with your stock trading in the 8% cap rate range or north of that, how do you feel about additional buybacks versus making more investments? Yeah, thanks, RJ. So remember, a lot of this acquisition is being driven by the recycling from, you know, for instance, the Santa Fe that's under contract for 20 million; the Ford credit building that we sold, that's, you know, part of that money's in 1031. And then the seller financing of that will come through. So a lot of it's being driven by 1031 tax needs.
Hey, good morning, guys.
Just one question for me for the <unk>.
Investment guidance for the year, the cap rates, 775% to 25 I'm just curious obviously, you've shown an appetite to buyback either common or preferred shares.
Curious with your stock trading in the 8% cap rate range or north of that how do you feel about additional buybacks versus making more investments.
Yes, thanks, RJ so remember.
A lot of this acquisition is being driven by the recycling from for instance, Santa Fe, that's under contract for $20 million. The Ford credit building that we sold as part of that money. Then 10 31, and then the seller financing of that will come through so a lot of it is being driven by a 10 31 needs.
John Albright: And then the other part of it, as you've seen, we were very active in buying back shares at very interesting levels for shareholders. So, you know, it wouldn't be, we would not be using proceeds from asset sales to buy back stock. But certainly, we would look at, you know, other levers to buy back stock if it got, you know, down to low levels again, for instance, we could sell some of our structure finance investments and use that. So, we're certainly not shy about buying back stock when it becomes ridiculous, in our opinion, and interesting. But, you know, a lot of the acquisitions are going to happen because of the 1031 nature. That was it for me.
And then the other part of it as you've seen we were very active in buying back shares at.
Very interesting levels.
For shareholders. So.
So it wouldn't be we would not be using proceeds from asset sales to buy back stock, but certainly we would look at other certain levers to buy back stock if it got down to low levels again for instance, we could sell some of our structure finance.
<unk> and use that so so we're certainly not shy about buying back stock when it becomes ridiculous in our opinion.
And interesting but.
Lot of the acquisitions are going to happen because of the 10 31 nature.
John Albright: Thanks, guys. Thank you. As a reminder, to ask a question, that is star 1. Our next question will come from the line of Michael Gorman with BTIG. Yeah, thanks. Good morning.
That was it from me thanks, guys.
Yes.
As a reminder to ask a question that is star one one.
Our next question will come from the line of Michael Gorman with BTG.
Okay.
Michael Gorman: Just a quick question, Matt, on the disposition guidance range. Does that include the payoff of the seller financing on Sable Pavilion, or is that above and beyond the disposition guidance? No, that would be above and beyond the disposition guidance. Okay, great. And the remaining two structured investments after that, do they, I know John just mentioned potentially selling, but do they also have any accelerated prepayment options associated with those? If they do, we have a make whole provision.
Yeah. Thanks. Good morning, just a quick question, Matt on the disposition guidance range does that include the <unk>.
Pay off.
Seller financing on Sable pavilion or is that above and beyond the dispositions guidance.
That would be above and beyond the disposition guidance.
Okay great.
Meaning to structured investments after that do they I know, John just mentioned potentially selling but do they also have any accelerated prepayment options associated with those.
If they if they do.
Matt Partridge: Okay, great. Thanks so much. Thank you. And that concludes today's question and answer session. This concludes today's conference call. Thank you for participating. You may now disconnect. Thanks for watching.
We have a make whole provision.
Okay, great. Thanks, so much thank.
Thank you.
Okay.
And that concludes today's question and answer session.
This concludes today's conference call.
Thank you for participating you may now disconnect.
Okay.
[music].
Sure.