Q1 2024 Alexander & Baldwin Inc Earnings Call
Good day and welcome to the first quarter 2020 for Alexander <unk> Baldwin Earnings Conference call. At this time all lines are in a listen only mode. Following the presentation. We will conduct a question and answer session. If at any time during this.
Goldie: Goldie with quite immediate assistance.
Goldie: Press Star Zero for the all P. J. This call is being recorded on Thursday April 25, 2024, I would now like to turn the conference over to MS. Jessica <unk> senior manager of financial reporting and technical accounting. Thank you Pease go ahead.
Jessica: Thank you Hello, and welcome to Alexander <unk> Baldwin's first quarter 2024 earnings Conference call. My name is Jessica and I am a senior manager on a financial reporting and technical accounting team.
Jessica: With me today are A&D, Chief Executive Officer, Lance Parker, and Chief Financial Officer Clinton Shang.
Jessica: We are also joined by Kevin Willis Senior Vice President of asset management, who is available to participate in the Q&A portion of the call.
Jessica: During our call. Please refer to our first quarter 2020 for supplemental information available on our website at investors that Alexander Baldwin Satcom Flash supplements.
Jessica: Before we commence please note that statements in this presentation that are not historical facts are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relative.
Jessica: Forward looking statements. These forward looking statements include but are not limited to statements regarding possible or assumed future results of operations business strategies growth opportunities and competitive positions.
Jessica: Such forward looking statements speak only as of the date. The statements were made and are not guarantees of future performance.
Jessica: Forward looking statements are subject to a number of risks uncertainties assumptions and other factors that could cause actual results and the timing of certain events to differ materially from those expressed in or implied by the forward looking statements.
Jessica: These factors include but are not limited to prevailing market conditions and other factors related to the company's REIT status and the company's business. The evaluation of alternatives by the company related to its noncore assets and the des and the risk factors discussed in the company's most recent form.
Jessica: 10-K Form 10-Q, and other filings with the Securities and Exchange Commission.
Jessica: Information in this presentation should be evaluated in light of these important risk factors.
Jessica: We do not undertake any obligation to update the company's forward looking statements.
Jessica: And it's that we'll be referring to non-GAAP financial measures during our call today. Please refer to our statement regarding the use of these non-GAAP measures and reconciliations included in our 2024 first quarter supplemental information materials.
Jessica: Lance will kick off today's presentation with an overview of the quarter, then hand, it off to Clayton for a discussion of financial matters.
Clayton: Clothes Lance will return for some final remarks, and then we will open it up for your questions with that let me turn the call over to Lance.
Lance: Thank you Jess and Hello, everyone.
Lance K. Parker: Pleased to say that we started the year strong.
Clayton: Total NOI growth was four 4% and we achieved same store NOI growth of four 1%.
Clayton: Same store NOI growth excluding collections of previously reserved amounts was three 9%.
Clayton: Same store leased occupancy was 95%.
Clayton: Many basis points higher than the same period last year, but down 70 basis points from last quarter due primarily to a move out at <unk> mall.
Clayton: Same store economic occupancy at quarter end was 93, 3% down 10 basis points from last year, and 70 basis points from last quarter.
Clayton: We executed 44 leases in our improved property portfolio for approximately 212000 square feet.
Clayton: Comparable lease basis achieved blended spreads of seven 8% with spreads for new leases at 11, 8% and spreads for renewal leases at seven 2%.
Clayton: And our land operations segment, we sold more than 300 acres of land holdings, which exceeded our initial target for 2024.
Clayton: We recognized nearly $7 $9 million of operating profit in the first quarter of 2024 compared to selling one acre and recognizing an operating loss of $92000 in the same period last year.
Clayton: The disposition of our remaining non core assets remains a priority, but the sale of land holdings will vary period to period and will be opportunistic in nature and this quarter was an example of just that.
Clayton: The majority of the land that was sold at the end of March was not factored into our initial outlook provided in February and we will therefore be raising our guidance to reflect the impact of this land sale occurring.
Clayton: Finally on our last call I mentioned the sale.
Clayton: <unk> would enable us to simplify our reporting metrics.
Clayton: Youll notice changes in our supplemental information package that improved period over period comparability and is presented in a way that will enable you our analysts and investors to more easily evaluate our performance.
Clayton: I'd like to thank Jeff and our financial reporting team for leading the initiatives to make those enhancements.
Clayton: Turning to the economic environment in Hawaii.
Clayton: Unemployment was three 1% at the end of February versus the National average of three 9%.
Clayton: But what you saw $1 5 million visitor arrivals in the first two months of 2024 flat compared to 2023.
Clayton: Visitors from the mainland U S continued to exceed pre pandemic levels in the first two months of 2024.
Clayton: Visitor arrivals from Japan, where more than 80% higher compared to the same period in 2023 and about half of their pre pandemic levels.
Clayton: We believe our portfolio of primarily grocery anchored neighborhood centers.
Clayton: Has and will continue to benefit from the strength of our underlying economy.
Clayton: And now I'll turn the call over to Cleveland for financial details Cleveland. Thanks.
Cleveland: Thanks, Brent and Aloha, everyone, starting with our consolidated metrics for the first quarter of 2024.
Cleveland: Net income available to shareholders was $20 million or 28 cents per diluted share.
Cleveland: Income from continuing operations available to shareholders was $20 2 million.
Speaker Change: Or <unk> 28 per diluted share.
Cleveland: Paul was $29 2 million or <unk> 40 per diluted share, which compares to $18 6 million or 26 per diluted share in the same quarter last year.
Cleveland: Land operations related ethical was <unk> 11 per diluted share during the first quarter of 2024.
Cleveland: Primarily reflecting the land sales that Lance previously mentioned.
Cleveland: This compares to the first quarter of 2023.
Cleveland: Land operations contributed <unk> <unk>.
Cleveland: <unk> related to commercial real estate operations and corporate was <unk> 29 per diluted share compared to <unk> 26 cents per diluted share in the same quarter of 2023.
Cleveland: <unk> improvement was due primarily to high higher rental revenue lower bad debt expense and lower G&A compared to last year.
Cleveland: As we mentioned on our <unk>.
Cleveland: Last call with great now, so and our business activity made up primarily of commercial real estate and land operations land sales we.
Cleveland: We are no longer reporting core <unk>.
Cleveland: Instead, we are now reporting <unk>.
Cleveland: Therefore was $25 5 million or <unk> 35 per diluted share for the first quarter of 2024.
Cleveland: This compares to $16 million or <unk> 22 per diluted share in the same period last year.
Cleveland: The increase in <unk> was due primarily to the land sales previously mentioned.
Cleveland: Here net operating income in our commercial real estate portfolio and lower G&A compared to last year.
Cleveland: Each of these metrics for the first quarter of 2024.
Cleveland: <unk> from collections of amount reserved in previous years of approximately $800000 or a penny per diluted share.
Cleveland: For comparative purposes in the first quarter of 2023 collections of amounts reserved in previous years with $700000 or a penny per diluted share.
Cleveland: G&A expenses decreased by $1 5 billion or 17, 1% to $7 2 million.
Cleveland: Which compares to $8 7 million in the first quarter of 2023, largely reflecting cost reductions due to our simplification and streamlining efforts as well as favorable timing differences.
Cleveland: We'll continue to manage our G&A overhead costs and are targeting a run rate for 2024 that approximates $7 $8 million that we reported for the fourth quarter of 2023.
Cleveland: For additional details on our results and comparisons to prior periods in 2023. Please.
Cleveland: Please see our earnings release and supplemental information package.
Cleveland: Turning to our balance sheet and liquidity metrics at.
Cleveland: At quarter end total debt outstanding was $458 million.
Cleveland: And we had total liquidity of $470 million.
Cleveland: Made up of approximately $16 million in cash and $454 million available on our revolving credit facility.
Cleveland: Approximately 90% of our debt is fixed rate.
Cleveland: Net debt to trailing 12 months consolidated adjusted EBITDA was three eight times, which compares to four two times at 2023 year end.
Cleveland: With respect to our dividend, we paid our first quarter dividend of 22, and a quarter cents per share on April 5th and.
Cleveland: Our board declared a second quarter dividend of <unk> 22, and a quarter cents per share that is payable on July eight.
Cleveland: We have $58 million of debt secured by our <unk> village asset, which matures on may one.
Cleveland: We intend to pay off the mortgage with proceeds from the previously announced eight year private placement notes that we issued on April 15th.
Cleveland: In addition, we intend to use one of our two forward starting interest rate swaps to hedge the floating interest rate on our revolver debt.
Cleveland: Once it becomes effective on May one.
Cleveland: We expect the combined impact of the refinance together with the interest.
Cleveland: To be approximately.
Cleveland: 10 to 15 basis points on our overall cost of debt on a pro forma basis.
Cleveland: As Lance mentioned, given our overall performance in the first quarter, we are raising our guidance.
Cleveland: We now expect same store NOI growth in the range of one 1% to two 1%.
Cleveland: And same store NOI growth, excluding collections of amounts reserved in prior years of two 1% to three 1%.
Cleveland: We are guiding to <unk> in the range of $1 five per share to $1 16 per share and <unk> in the range of 89 per share to $1 per share.
Cleveland: Our revised outlook, primarily reflects the strong results we achieved in the first quarter.
Cleveland: As we look ahead to the remainder of the year. There are a few timing related items to point out.
Cleveland: First.
Cleveland: While there may be quarterly fluctuations, we expect our retail and industrial assets to continue performing at levels consistent with what we had anticipated in our initial guidance.
Cleveland: Second you may recall that we had significant ground lease renewals during the second quarter last year that provided an ADR increase of $1 1 million.
Cleveland: As part of that renewal. We also received one quarter's worth of retroactive rent in the second quarter of 2023.
Cleveland: We are not expecting any significant fair market value resets.
Cleveland: This year in.
Cleveland: And as a result, we are expecting ground lease NOI growth to be slightly negative in the second quarter of 2024 and flat for the remainder of the year.
Cleveland: Third.
Cleveland: We also expect certain office properties to be impacted by tenant move out later in the year as we look to reposition them.
Cleveland: Glass as.
Cleveland: As we have mentioned throughout the call we sold more than 300 acres of land in the first quarter of 2024.
Cleveland: We plan to sell the majority of that land in 2025, so the benefit of selling these lance was not factored in our initial 2020 for guidance.
Cleveland: As a result of the land sales in the first quarter, we are increasing our 2004 land operations <unk> <unk> per share range.
Cleveland: By <unk> <unk> per diluted share on the low end and <unk> 10 per diluted share at the high end.
Cleveland: We are also raising ethical per share attributable to CRE and corporate by another penny on the low and high ends reflecting our stronger than expected CRM performance in the first quarter.
Cleveland: With that I will turn the call over to Lance for his closing remarks.
Lance K. Parker: Thanks Clayton.
Lance K. Parker: First quarter demonstrated the strength of our outstanding team and quality of our assets our portfolio is performing well our balance sheet is strong and we have taken steps to limit our exposure to rising interest rates.
Lance K. Parker: With these accomplishments, we are well positioned to grow our business.
Lance K. Parker: We continue to make progress on internal growth initiatives and I am encouraged by the pace and types of external investment opportunities. We have been underwriting in the first three months of this year.
Speaker Change: On that note I will now open the call up to questions.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one on your telephone keypad.
Speaker Change: Hey, Tom that you had that's been raised and should you wish to cancel your request. Please press star followed by the two if you are using a speaker phone. Please lift the handset before pressing any Keith one moment. Please for your first question.
Robert Chapman Stevenson: Your first question comes from the line of prop Stevenson from Janney. Please go ahead.
Speaker Change: Yes.
Stephen C. Swett: Hi, good afternoon.
Stephen C. Swett: Guys Clayton in terms of the <unk> land sales how much was that in the first quarter and how much does that represent of the 5% to 11 guidance.
Stephen C. Swett: For the year.
Stephen C. Swett: So for.
Clayton: So the 11, what we did for purposes of our revised guidance. It was updated to reflect the actual impact of our first quarter performance and so the 11 sensors built into the overall.
Clayton: Revision.
Speaker Change: I'm not sure okay.
Speaker Change: Good question. So the rest of the year is flat to negative six.
Speaker Change: So we.
Speaker Change: I guess I should just start off by saying that we have mentioned in the past that noncore land sales remain a priority for the company.
Speaker Change: And so we're going to continue to pursue every opportunity to.
Speaker Change: To monetize and simplify what's left in this non core portion of our business.
Speaker Change: With respect to what what's incorporated into our forecast for the balance of the year.
Speaker Change: We are having are we've been in some discussions with with potential buyers of additional.
Speaker Change: Parcels, but at this point, it's too early for us to indicate.
Speaker Change: Whether or not those will occur.
Speaker Change: Occur or not and so.
Speaker Change: From that perspective.
Speaker Change: Sure.
Speaker Change: We've simply updated our overall guidance for the year to reflect the actual results related to land up.
Speaker Change: Okay and then the.
Speaker Change: And I'm going to butcher, it but why in a mall.
Speaker Change: You had I guess 17, roughly a 17000 foot user move out of there.
Speaker Change: What is the plans for the for that space and the timing is it going to need for you to any sort of redevelopment.
Speaker Change: Is it just going to be released more or less as is.
Speaker Change: How are you guys thinking about that space.
Speaker Change: Hi, This is Curt how're you doing alright.
Curt: Good so yes. It was a it's actually it's about 20000 square feet. Overall, if you talk about the adjacent spaces and we're really happy that we are in discussions for a backfill with a high credit tenant.
Curt: And we're optimistic about being able to get that deal done.
Speaker Change: Okay, and how material was the rent that you did get from the tenant in the first quarter or was that all out of the first quarter.
Speaker Change: In other words, what do we need to strip out of any sort of a stub.
Speaker Change: Revenue in order to get to a current run rate.
Speaker Change: So they moved out in late January.
Speaker Change: So one third of the quarter was in there what I will say, though is that our.
Speaker Change: Original guidance.
Speaker Change: Still stands relative to the retail portfolio okay.
Speaker Change: Yes.
Speaker Change: Alright, and then I guess the last one winds up being is that.
Speaker Change: You guys announced in the release about the industrial.
Speaker Change: The new industrial development that you guys are in the planning stages for.
Speaker Change: How much is behind that and is anything else at this point likely to be started in 2024 or anything else that you guys are planning is likely to be at 25 or later start.
Speaker Change: Hey, Rob this is lance.
Lance K. Parker: We continue to be.
Lance K. Parker: Opportunistic in terms of potential transactions and build to suits at Maui business Park.
Lance K. Parker: And so while there has been some interest in terms of firm deals. It's really just the one that we announced earlier in the year.
Lance K. Parker: It's important maybe a couple of things one.
Lance K. Parker: In our ethanol.
Lance K. Parker: We have about $1 million in ethanol attributable to that deal that we expect to come economic late next year that is not currently in our number.
Lance K. Parker: I just want to make sure that people are aware of that and then maybe just speaking a little bit more broadly because of course, we think about growth opportunities both internally as well as externally so whether it's development at Maui business Park repositioning of some of our retail assets.
Lance K. Parker: Falls into the same bucket is acquisitions.
Lance K. Parker: What I would say on the acquisition front is that although the market remains tight from a marketed deal standpoint.
Lance K. Parker: Our investment team, which is led by Jeff Pauker. They are actively out there working all of our existing Hawaii relationships looking for off market transactions for us and while it would be probably premature to give insight into the specific deals or even a dollar amount for 2024.
Lance K. Parker: Just based on what we're seeing at the top of the funnel as I mentioned in my prepared remarks, I am encouraged that we'll be able to place of investment capital in 2024.
Speaker Change: Okay. That's good.
Speaker Change: Great. Thanks, guys I appreciate the time.
Lance K. Parker: Sure.
Lance K. Parker: Thank you and your next question comes from the line of Conor.
Conor: Mitchell. Please go ahead.
Connor Mitchell: Hey, Thanks for taking my question I.
Connor Mitchell: I guess, just kind of following that line of question and answering.
Connor Mitchell: You guys are looking at some acquisitions, we talked about the development at Maui business can you just speak.
Connor Mitchell: As to how you guys think about your your balance industrial and retail and other lines of revenue other property types as well we've been hearing about maybe some industrial developments going back or slowing down.
Connor Mitchell: Just due to the broader economic outlook and environment.
Connor Mitchell: So yes. If you guys can you just talk about how you see the mix of property types.
Connor Mitchell: Whether it's acquisitions or developments.
Lance K. Parker: Hey, Conor it's Lance.
Lance K. Parker: Maybe from a market perspective, we still view.
Lance K. Parker: All of the existing asset classes that we're in as favorable so whether it's retail whether it's industrial whether its our ground lease portfolio.
Lance K. Parker: We're still seeing market conditions that are very encouraging to us and maybe unlike.
Lance K. Parker: Other domestic industrial markets, we're still at a very very low vacancy rate.
Lance K. Parker: And feel strong about the near term prospects for that so all of that being said.
Lance K. Parker: I would say in terms of this is really kind of a capital allocation question, whether it's internal or external I think we are really more agnostic and whether it's a specific asset class versus another similarly, we're pretty agnostic, it's really more opportunistic in terms of return profile risk adjusted return profile.
Lance K. Parker: And as long as it fits within box that we're comfortable with its certainly something that will take a look at and of course, we've acknowledged that in the past.
Lance K. Parker: Given the fact that we are geographically focused here in Hawaii.
Lance K. Parker: We will get creative in terms of opportunities within the state to invest capital.
Speaker Change: Okay I appreciate that and then maybe going back to the land operations and the sale.
Speaker Change: It sounds like you guys were saying that you are expecting the majority or all of the remaining land operations and sales to take place by the end of 2020, fives, but youre not really baking any.
Speaker Change: Expected transactions in 2024 did I get that correct.
Speaker Change: Maybe I can just sort of reiterate some of the maybe bigger picture more strategic and then.
Clay: Have clay to talk a little bit about specific guidance, yes.
Clay: So its Clayton mentioned.
Speaker Change: We had a great obviously, a great quarter and land ops in Q1.
Speaker Change: It really was opportunistic in terms of.
Clayton: Land transactions, primarily on Maui, and we will continue to pursue those types of transactions. It is difficult for us from a timing perspective to really forecast what that looks like and clearly we sort of blew through our guidance and took advantage of.
Speaker Change: A good buyer relationship that we had.
Speaker Change: On one deal in particular, they were able to move very quickly and we were as well and so to the extent that those types of transactions come up we will definitely be ready to execute on them.
Speaker Change: And then with respect to the guidance portion of your question I think it's important to note that the <unk>.
Speaker Change: Land sale that we were talking about that really move the needle for this segment <unk> for the quarter.
Speaker Change: That was not factored into our 2020 for guidance.
Speaker Change: Because that was assumed to occur.
Speaker Change: Later period, so 2025 timeframe that is not to say that we expect to have everything monetize by 2025 as Lance indicated.
Speaker Change: We're prioritizing the noncore land sales and are going to continue to pursue every opportunity.
Speaker Change: Monetizing simplify the noncore aspects of the business.
Speaker Change: But with respect to that specific question.
Speaker Change: We did not have that factored into our 2020 for guidance.
Speaker Change: Hope that helps.
Speaker Change: Yes, yes, I appreciate the clarification and then maybe one more just on the land sales as well we've talked about in the past the overhead expense attach.
Speaker Change: Attached to the land operations could you just provide an update on maybe how that weighs.
Speaker Change: Effective with this this land sale that took place in the quarter.
Speaker Change: And maybe how much more there is attached to the remaining land operations.
Speaker Change: Yes.
Speaker Change: As we have mentioned in the past is we're able to monetize.
Speaker Change: This non core portion of our business.
Speaker Change: It also provides us an opportunity to simplify our overall and so in the case of this quarter's land sales we are expecting that there will be.
Speaker Change: <unk>.
Speaker Change: $100000 of.
Speaker Change: Carrying costs that will be eliminated as part of the <unk>.
Speaker Change: Simplification that comes along with that sale and so.
Speaker Change: As I said before we're going to continue to Opportunistically.
Speaker Change: Jumped on any other monetization opportunities come.
Speaker Change: Come about.
Speaker Change: <unk>.
Speaker Change: But with respect to that particular transaction you can expect about Florida.
Speaker Change: Few hundred thousand dollars or annualized run rate purposes.
Speaker Change: Okay I appreciate it that's all for me. Thank you.
Speaker Change: Thank you and your next question comes from the line of Mitch Germain from JMP.
Mitchell Bradley Germain: JMP. Please go ahead.
Mitchell Bradley Germain: Hi, Thanks for taking my question.
Mitchell Bradley Germain: Okay.
Mitchell Bradley Germain: It seems like same store.
Mitchell Bradley Germain: It sounds like ground lease and office is going to be a bit of a drag here in the back part of the year.
Mitchell Bradley Germain: Which is why.
Mitchell Bradley Germain: The 4% is going to be closer to it.
Mitchell Bradley Germain: A 2% number or is that the way to think about it here.
Speaker Change: Yes, so what we were indicating in the scripted remarks is that there is a couple of factors in play here with respect to the same store NOI guide.
Speaker Change: Guidance.
Speaker Change: In the case of ground leases.
Speaker Change: You may recall that in the second quarter of last year, we had a large.
Speaker Change: Rent step up with when work City shopping center and so that.
Speaker Change: Mounted to approximately $1 1 million in ABR.
Speaker Change: The increase that came about with that.
Speaker Change: And so we're not expecting any significant.
Speaker Change: Fair market value resets to occur in 2024, and so that is factoring into.
Speaker Change: The guidance and probably what Youre seeing.
Speaker Change: With respect to your question. The other thing that we wanted to point out was.
Speaker Change: On the office side of things, although it's a smaller portion of our overall portfolio.
Speaker Change: We do have some that move outs that are occurring that frankly are allowing us to reposition those assets and so that's also.
Speaker Change: Weighing into our overall guidance for the commercial real estate results.
Speaker Change: Okay.
Speaker Change: That's helpful.
Speaker Change: Just overall balance sheet.
Speaker Change: Okay.
Speaker Change: So excuse me some of the language around your swaps.
Speaker Change: It.
Speaker Change: I didn't fully hear it.
Speaker Change: So maybe if you can just talk about specifically you said around 10 or 15 basis points I believe on the on the credit facility, maybe just talk about that strategy and the recent.
Speaker Change: Notes offering that you did.
Speaker Change: And how that.
Speaker Change: As to your expectations.
Speaker Change: Yes, so we have.
Speaker Change: Mortgage note related to the lull on the village asset that is maturing in may and so what we did during the quarter was we entered into a $60 million.
Speaker Change: Private placement note that has a duration for eight years.
Speaker Change: It comes with with the six point online coupon.
Speaker Change: So.
Speaker Change: What we did in addition to that was utilized one of the two forward starting interest rate swaps that we have and so what we're doing with respect to that is applying it against to our variable rate debt on the revolver.
Speaker Change: The swap itself is $457 million.
Speaker Change: And between the two so the private.
Speaker Change: Private placement as well as the utilization of the swap.
Speaker Change: In total our overall cost of debt for.
Speaker Change: Across the board is going to be impacted by the 10 to 15 basis points.
Speaker Change: Higher that makes sense.
Speaker Change: Hi.
Speaker Change: Okay, that's what I thought.
Speaker Change: And then.
Speaker Change: If I'm not mistaken you have another.
Speaker Change: A slug of debt coming due later on this year correct.
Speaker Change: We do yes.
Speaker Change: That's related to our Pearl Highlands mortgage which is coming due in December.
Speaker Change: Got you. So you don't have a swap.
Speaker Change: Currently in place for that.
Speaker Change: It's correct.
Speaker Change: That mortgages currently fixed rate what we do have though is that's the other forward starting interest rate swap.
Speaker Change: Which is for notional amount of $70 million and so.
Speaker Change: Where we stand right now as we are.
Speaker Change: Considering.
Speaker Change: A number of options we've been in discussions with with banks and so at the end of the day, what we could pursue as either a refinance with the existing lender so effectively havent a form of secured debt we could also pursue.
Speaker Change: On secured debt and so at this point, where we are.
Speaker Change: In discussions and we will provide more additional information as we proceed down this path and are able to do so.
Speaker Change: Got you last question.
Speaker Change: The move out.
Speaker Change: That was referenced in late January.
Speaker Change: Type of spaces that are what type of tenant.
Speaker Change: So I would its more of a mid box top type space. The previous tenant was more of the community type use and so our goal is to reposition that was more of a traditional mid box space.
Speaker Change: Got you I was just curious if it was a restaurant or something like that that's one.
Speaker Change: Appreciate it thank you.
Speaker Change: Thanks Rich.
Speaker Change: Thank you.
Brendan Michael McCarthy: Your last question comes from the line of Brendan Mccarthy from Sidoti. Please go ahead.
Brendan Michael McCarthy: Hey, guys. Congrats on the results and thanks for taking my question.
Brendan Michael McCarthy: I just wanted to start off with the 308, just wanted to start off with the 300 acres sale.
Brendan Michael McCarthy: The owner of NAND I guess are you able to disclose the financial details of that sale and I guess the cost basis.
Brendan Michael McCarthy: We have not disclosed the specifics of the deal for.
Brendan Michael McCarthy: Competitive purposes, but obviously that along with a couple of other land sales you can see the results from an <unk> standpoint.
Brendan Michael McCarthy: My comments earlier in reference to a buyer that we had a strong pre existing relationship.
Brendan Michael McCarthy: They were the buyer of great specific late last year, and so we were able to really parlay that relationship into another opportunity for us.
Speaker Change: Got it and probably fair to assume that relationship is what caused that sale to I guess, maybe get pulled forward a little bit from a timing perspective.
Speaker Change: It was and quite frankly, another driver as to why it happened so quickly.
Speaker Change: Yes, okay.
Speaker Change: And then looking at the balance sheet.
Speaker Change: Nice move down.
Speaker Change: Our net leverage three point in times I believe.
Speaker Change: Can you just talk about you know what Neil leverage number you're comfortable with I think I remember seeing a five to six times range is might be a target but.
Speaker Change: Can you maybe just kind of your outlook there for 2024.
Speaker Change: Yep, Hi, Brendan Clayton.
Speaker Change: So you're going to write that in terms of our long term target. We are shooting for five to six times net debt to EBITDA and so we're in really good shape from a balance sheet perspective, and what this does is provide us the dry powder for.
Speaker Change: Growth opportunities.
Speaker Change: Got it that makes sense that's all for me. Thank you.
Speaker Change: Thanks Brendan.
Speaker Change: Thank you that conclude.
Speaker Change: Just a question and answer session for today I will now hand, the call back to management for closing remarks.
Speaker Change: Thank you operator, and thank you all for joining US today, if you have any follow up questions.
Speaker Change: Please feel free to call us at 808, 5% to $584 75 or E Mail us at Investor Relations at <unk> Dot Com Aloha and have a great day.
Speaker Change: Thank you. This concludes today's call. Thank you all for participating you may all disconnect.
Speaker Change: Yes.