Q3 2024 FrontView REIT Inc Earnings Call
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Speaker Change: Good day, everyone and welcome to this from Vue reached eight 2003 excuse me Q3 2024 earnings conference call getting started today all participants are in a listen only mode. But later you will have the opportunity to ask questions. During the question and answer session. If you would like to register to ask a question at any time by pressing the star in one.
Speaker Change: <unk> on your telephone keypad. Please note. This session may be recorded and I'll be standing by should you need any assistance. It is now my pleasure to turn the conference over to Tim Diefenbach. Please go ahead Sir.
Tim Diefenbach: Good morning, everyone I'm joined today by Steven Preston, Chairman and co CEO and co President and Randy Star Co CEO and co president.
Tim Diefenbach: Before I turn it over to Steve. Please know that we will make certain statements that may be considered to be 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. We may not release revisions to these forward looking statements to reflect changes after the statements were made.
Tim Diefenbach: 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 filings with the SEC and in this morning's press release. Thank you and let me turn it over to Steve to start our presentation.
Steve: Thank you Tim good morning, everyone.
Speaker Change: Welcome to <unk> first earnings call as a public company.
Speaker Change: For those that are new to frontier front view as an internally managed net lease REIT that acquires.
Speaker Change: And manages primarily a parcel properties that are net leased to a diversified group of tenants.
What do you went public in early October to access public capital to fund our growing pipeline of acquisitions that I'll discuss in more detail shortly.
Speaker Change: Broadview is differentiated by an investment approach focused on al personal properties that are on prominent locations with direct frontage on high traffic roads, there are highly visible to consumers.
Speaker Change: As you know we will be talking about our third quarter 24 earnings today.
Speaker Change: So those numbers are reflective of front view as a private company and a relatively unrelated the front view on a go forward basis as a public company.
Before jumping into the portfolio on the top of everyone's mind is probably our ability to source acquisitions and accretively grow the portfolio.
Speaker Change: We have definitely demonstrated that ability since going public in early October.
Speaker Change: We have acquired $22 $5 million, thus far in the fourth quarter of properties.
Speaker Change: In our under PSA you would acquire an additional approximately $81 4 million of properties.
Totaling approximately $103 9 million of properties all at a blended cash cap rate of approximately seven 9%.
Speaker Change: We expect to close in excess of $75 million of acquisitions during Q4.
In addition to these properties. We currently have a very strong pipeline under PSA negotiation and we feel very good about closing on $50 million in the first quarter of 2025.
Speaker Change: Further we anticipate the acquisition pipeline to continue to build from here.
A few additional stats on the $103 9 million of property as noted above.
Speaker Change: One properties with frontage, 100%.
<unk> number of properties 31, three average property price approximately 335 million.
For.
Average remaining lease term over 10 years.
Speaker Change: Five.
Speaker Change: Investment grade percentage approximately 38%.
Speaker Change: Thanks.
Speaker Change: Number of new tenants.
Speaker Change: And finally number seven.
Speaker Change: Number of new states three.
Speaker Change: Bringing our total to 34.
Speaker Change: From an acquisition pricing standpoint, we have been pleased with where it had been transacting at what we believe to be elevated cap rates relative to the market a testament to our buyer approach and our ability to demonstrate surety of close in a fragmented marketplace.
Speaker Change: Using our nationwide relationships and networks, we expect to continue to source attractive acquisition at above market cap rates, all that being said, we can see the market tightening a bit and anticipate that our average cap rate for the first quarter of $2 25.
Slightly come off the high Sevens.
Speaker Change: Move more into a mid sevens number.
Speaker Change: Following the shoe being exercised we were sitting with approximately $93 million of cash on the balance sheet, along with a $250 million revolving line of credit that has zero drawn under the facility is expected to provide us with a healthy supply of liquidity to execute our business plan to continue with accretive acquisition.
We enter 2025.
Shifting to the portfolio highlights our portfolio continues to perform very well as of September 30th our portfolio consisted of 278 freestanding properties with an average remaining lease term of just under seven years.
Speaker Change: We're heavily diversified across 31 states and 96 Metro areas. We are pleased to keep a very diversified portfolio with no overexposure to any one tenant.
Speaker Change: At quarter at our largest tenant exposure was three 4% of ABR and we expect that number will decline several basis points with the upcoming closings in the fourth quarter.
Speaker Change: Occupancy was strong at approximately 99% and Raptor collections on contractual rent were also strong at approximately 99% for the period generally in line with our historical ranges of 98% 99%.
Speaker Change: One of our differentiating qualities as a management team is our ability to successfully repurpose asset and bring them back online as.
Speaker Change: Is that part of the owners, we generally do not sell off our vacant assets, rather we prefer to take the time to re lease or re tenant the assets, which we believe ultimately creates the best long term value for our shareholders. In these situations. There is a little short term pain for long term gain so to speak as we incur some taxes.
Speaker Change: Sure it's cost to carry the assets, while we release.
Speaker Change: As we continue to scale and grow the asset base, we anticipate seeing this current drag decline.
Speaker Change: On our noted watch list, we expect to be taking back one TGI Fridays to Hooters and a small car dealership in Orlando situated at a very busy intersection. We also received notice that our Freddie stake Burger in Jacksonville will be closing there were new leases already being negotiated with a new national tenants.
Speaker Change: In the aggregate. These assets are only account for about 2% of ABR and we fully expect to repurpose these assets, bringing them back online relatively quickly with an improvement to the bottom line.
Speaker Change: These are the assets, we'd like to have assets with frontage, which are sought after by tenants and that can be quickly repurpose to create long term shareholder value.
Speaker Change: During the quarter, we did not sell any assets and we do not anticipate selling any assets during the fourth quarter of 2024, we plan to look at selling an asset or two off in the coming quarters. During 2025 that we believe will generate low cap rates in the marketplace, allowing us to spread quite positively when compared with where we were.
Speaker Change: During today.
Speaker Change: Our balance sheet is very strong and our revolving line of credit at the full capacity of $250 million available. We also do not have any debt maturities in the near term other than our ABS debt, which will be repaid in December of this year through our floating rate delayed draw term loan that we already have in place.
Tim Diefenbach: Thank you and let me turn it over to Tim for more detail on the quarterly numbers and guidance.
Tim Diefenbach: Thanks, Steve and welcome everyone I will start by going through our post IPO capital structure in total we generated $253 million of net proceeds from the offering which we used primarily to repay in total the $166 million of borrowings outstanding on our previous revolver and term loan.
We retained approximately $83 million in cash, which we expect to use to fund acquisitions and for other corporate purposes.
Concurrent with the IPO closing, we entered into a new $250 million revolving credit facility and a $200 million delayed draw term loan.
Tim Diefenbach: Both term loans have an initial duration of three years with two one year extension options and bear interest based on adjusted sulfur plus an applicable margin of one 2%.
Tim Diefenbach: We also retained our $253 million of ABS notes that mature at the end of December and bear interest at a fixed rate of three 4%.
Tim Diefenbach: While ABS facilities are not typically found in public REIT capital stacks in the inflexible nature of the arrangements. We felt that it was prudent to run the ABS facility three maturity beyond our IPO and capture the remaining rate differential afforded to us by the notes double a S&P credit rating.
We plan to fully draw the term loan to repay the ABS notes when they mature at the end of December together with available cash on hand, and borrowings under our new revolving credit facility.
With a post IPO pro forma leverage ratio of three nine times together with full $250 million of capacity available to us on a new revolving credit facility. We believe we have ample liquidity to fund the growing pipeline of accretive acquisitions as Steve highlighted earlier in your call or.
Tim Diefenbach: $93 million of available cash allows us to execute on our growth strategy during the quarter without having to draw on our line until the end of December.
Tim Diefenbach: Turning to guidance for the fourth quarter.
Tim Diefenbach: Please understand that we will not provide guidance for 2025 during this call and on a go forward basis, we will only provide annual guidance beginning with our earnings release in the spring of 2025.
Tim Diefenbach: We expect to report <unk> per share between <unk> 32.
Tim Diefenbach: <unk> 34 per share for the fourth quarter based on a number of key assumptions.
Speaker Change: As Steve highlighted we've been methodically building, our pipeline of accretive acquisitions with over $100 million closed or under contract as of the date of this release.
Speaker Change: The important thing to highlight relative to these properties. We have under contract is that these deals already habit science PSA. So it's not necessarily a question of whether we will close these deals.
Speaker Change: To the extent conditions push certain closings into the early part of 2025, they will still have a significant impact on 2025 growth rates.
Speaker Change: That said based on progress to date, we anticipate closing more than $75 million in acquisitions by the end of the quarter.
Speaker Change: Also as Steve highlighted we don't have any planned dispositions for the quarter.
Speaker Change: We're also guiding cash G&A to approximately $2 $1 million.
Speaker Change: There may be small fluctuations in expenses, including G&A and property operating expenses as we navigate the first quarter as a publicly traded company and determined the carrying costs on a small amount of vacant properties. While we work on finding the best possible outcome that will provide the most long term value for shareholders.
Speaker Change: <unk> for the fourth quarter, we will also benefit from three 4% fixed rate ABS notes that as I mentioned will be replaced with our delayed draw term loan in late December.
Speaker Change: Lastly, at our board meeting earlier this week, our board declared its first quarterly dividend of $21.05 payable.
Speaker Change: Payable to shareholders of record as of December 31, 2024 payable on or before January 15th 2025.
Speaker Change: This dividend represents an <unk> payout ratio of approximately 65% as we look to reinvest as much retained earnings as we can into our growth pipeline.
Speaker Change: We anticipate paying a quarterly dividend prospectively with a targeted <unk> payout ratio between 65 and 75%.
Speaker Change: With that I'll turn it back to Steve to finish off recall.
Steve: Thanks, Tim.
Steve: Let me leave you with the comments on the marketplace as we continue to build this portfolio going forward.
Parcel marketplace remains quite fragmented and has historically lacked institutional buyers and is comprised primarily of smaller individual less sophisticated buyers, including 231 buyers were closing execution can be an issue.
Steve: Having our steady state of capital as a public company allows us to provide that surety of close, thereby separating us from other buyers and giving us the opportunity to purchase assets at above market cap rates.
Steve: We are excited to continue to expand the already strong pipeline by new and repeat purchasing opportunities. We believe that <unk> is well situated to fund our remaining 2024 and 2025 acquisitions.
Speaker Change: With that I will turn it back to the operator for the Q&A portion of our call today. Thank you.
Speaker Change: Gentlemen, thank you and to our audience joining on the phones today at this time, if you would like to ask a question. Please press the star and one on your telephone keypad.
Speaker Change: You may remove yourself from the queue at any time by pressing star and to once again that is star one today to ask a question. We will hear first from Anthony Pallone at J P. Morgan.
Anthony Pallone: Hi, Thanks, good morning.
Speaker Change: I guess my first question revolves around the watch list and some of the credit items you pointed out. So just wanted to clarify the ones. You noted are those done deals that youre getting back or they are just on the watch just wanted to make sure I understood.
Speaker Change: Yes.
Speaker Change: On the watch.
Speaker Change: We believe that we will be getting those assets back we're working through the.
Speaker Change: With the specific tenants at this time, but officially on the watch with the expectation that they are coming back.
Speaker Change: With this.
Speaker Change: Alright, I was just going to say is it.
Speaker Change: Is there anything just more broadly that you're watching beyond those either tenant or category wise.
Speaker Change: Yes, no I think we continue to watch the border we have three on the border assets. They are currently not delinquent in rent, but watching them and then I don't think its a surprise that everyone is watching the pharmacies. So we're watching the walgreens and the.
Speaker Change: Cvs, we have low exposure there and.
Speaker Change: <unk> been reducing our exposure over time and feel good about the remaining pharmacies that we do have.
Speaker Change: Are there remaining Walgreens we have.
Speaker Change: Hey, Tony I ran to start real quick and also to add what Steve said of our 100 plus million under contract.
Speaker Change: Under PSA negotiation now as Steve mentioned, we have zero pharmacy zero fast casual so with both of those will be continued reducing exposure.
Speaker Change: Okay got it.
The second one just on the pipeline can you just talk a bit more about.
Speaker Change: What property types comprise it any notable.
Speaker Change: Tenants.
Speaker Change: Were these all.
Lined up one by one or any sort of smaller groups of assets just a little more color around those items.
Yes, so good question so.
Speaker Change: Continuing our tradition is highly diversified our pipelines and is diversified across a number of sectors that you tend to see the out parcel industry I'll give you. Some examples medical dental automotive education cellular and finance to name a few we also as Steve mentioned have 11, new tenants and it's diverse across diversified across.
Speaker Change: <unk> states and in terms of it most of these were sourced one or two or three at a time, that's really how we source deals up from I would say.
Speaker Change: Our strong brokerage relationships, which we've been cultivating since since we formed that we did 2016 2017, but also repeat sellers. We do have a small portfolio of a really strong and we're very excited about this and urgent care.
Speaker Change: I have a kind of a few properties, but the majority of these are sourced one or two at a time and hand selected.
Okay, and just last item on just that pipeline just any comment on the embedded bumps that come with it.
Speaker Change: I would say sticking with what we look at the.
Speaker Change: I would say, 99% or that have rent bumps either annual or 10% every five years customer our first customer in the industry.
Speaker Change: And I would say, it's probably continuing our average was about one 7% annual bumps in line with the portfolio in line with the portfolio.
Speaker Change: Okay, great. So I got thank you.
Speaker Change: Our next question will come from John Chiller Koski at Wells Fargo. Please go ahead.
Speaker Change: Thank you good morning, and congrats on a successful launch in first publicly reported earnings here.
Speaker Change: I'll start with the fourth quarter guidance could you just give us some color on maybe the low and the high end in terms of what youre contemplating around acquisition volumes and yields.
Speaker Change: And then maybe anything else materially variable in there.
Yes, good morning, John and thank you for the comments.
Speaker Change: So if you think about where we are today, obviously, where we're pretty close perhaps halfway through the fourth quarter. So we feel really good about the guidance range. When it comes to the volume of acquisitions the cap rates on those acquisitions.
Speaker Change: Generally speaking they are not going to move the needle too much just given how far we enter Q we are into Q4.
Speaker Change: It really is I think about the downside risk upside potential is really just thinking about portfolio costs and G&A just trying to get our way through the first quarter as a publicly traded company.
Speaker Change: We think we know a lot of other costs, but there could be some that pop up so I think thats really going to be risk upside or downside is what does the cost profile look like.
Speaker Change: Okay got it and then Steve a comment that you made sort of as you're thinking about cap rates moving from fourth quarter into the early part of 2025 I know, it's early for a full year view.
Speaker Change: But I guess, how does that differ from maybe where we were.
Speaker Change: A couple of months ago, how is your view.
On cap rates changed at all looking out over the next three to six months.
Speaker Change: Yes, I think what we'd like to stay there as well.
Speaker Change: We are actually coming in a little bit higher than we had planned a couple of months ago, certainly in the fourth quarter and we're very happy with a number of the acquisitions that we had acquired and remembering that we're buying these differently.
Bigger institution should be going up against the little Guy in providing surety of close so we found a lot of opportunities to take advantage of that in the fourth quarter, which helped push cap rates up and we think certainly that is going to continue but as you continue to move into Q1, there was a little bit of let's just say.
Speaker Change: A low hanging fruit that we were able to capitalize on and.
Speaker Change: As a result.
Speaker Change: Think that cap rates for the first quarter will come in a little bit we've got a pretty good line of sight right now into the pipeline that we expect will be closing into into Q1, and I think a good bulk of that hopefully closing into the earlier parts of Q1.
So we feel good saying sort of that.
Speaker Change: Mid sevens coming down just a little bit and obviously if we.
Speaker Change: We've got those opportunities to acquire those same assets at elevated cap rates based on the situations, we're going to continue to do so.
Speaker Change: Okay, Great and then last one for me just the term fees could you breakdown what those were those that enabled our embedded into your <unk> guide.
Speaker Change: John could you repeat that question.
Speaker Change: Yes, just on the the term fees in the quarter can you break out what comprised of that sub 47 number and then kind of part two of that would be if there is any term fees that are baked into your <unk> guide.
Got it you are talking about lease lease termination fees, yes sure.
Speaker Change: I'm going to answer it kind of backwards. So so generally speaking we don't forecast lease termination fees, just just given they're not part of our core core business and that's also why we added back for asphalt purposes, we do not take the benefit of lease termination fees, even though they are replacement essentially if loss trends so.
Speaker Change: So we had about 747000 during the quarter.
Speaker Change: Primarily split between two two tenants.
One of them.
Speaker Change: Just just as we've talked about before really good real estate already have a lease in place with them.
Speaker Change: One of our top tenants.
Speaker Change: It's full replacement cost.
Speaker Change: So really happy about that and then the second one related to you.
Speaker Change: Our cellular tenants.
Speaker Change: It was in a multi tenant location that we terminated still still working through re leasing that property, but still have another tenant within that property.
Speaker Change: Thats leased and paying rent right now.
Speaker Change: Got it thanks, and congrats again.
Jonathan: Thanks, Jonathan.
Speaker Change: Joshua <unk> with Bank of America, you have our next question.
Hi. This is now granted on behalf of Justin Your line.
Speaker Change: I wanted to ask of your pipeline I was curious how much of that was either pre or post IPO and the sourcing.
Speaker Change: Hey, Joel I.
I would say, it's a combination I would say.
Speaker Change: When we met you all in August that we were starting to really source the pipeline and kicking it off I would say mid to late August and so we've been able to source sits I would say quite quickly and efficiently and taking advantage of our favorable position in the market. So I would say probably about 50 50 has been pre IPO and then post IPO. We are very excited to have the.
Speaker Change: The ability to now source deals and leverage our position in the market. So.
Speaker Change: As I've mentioned to you all and we met the mortgage transact the more you see and this is a very opportune time now theyre sellers across the country have been holding on hoping that rates would have fallen faster than they have and many are now in a position where they do need to sell and it puts us in a very favorable position.
Speaker Change: Yeah.
Great and I guess, a follow up on that.
Especially in your strategy of sourcing how you're seeing a lot of inbounds of repeat sellers have you seen an uptick.
In that sense since going public.
Speaker Change: Yes. So it's a good good question, we are seeing a number of our transactions are with repeat sellers and that has continued we've been sourcing for repeat sellers literally since we really started because our ability to transact efficiently and close and have a transparent process sellers remember that it's highly efficient for them.
Speaker Change: We expect that to continue so yes, I would say a meaningful percentage of our pipeline are from repeat sellers and we expect that to continue.
And sorry, and have you seen any increase.
Speaker Change: I guess from either inbound inquiries coming towards towards your team Bollinger Your IPO.
Speaker Change: Yes.
Speaker Change: Absolutely we have.
Speaker Change: And especially the more active you are in the market. The more you see so we expect that to continue so the answer is yes.
Speaker Change: Great. Thank you so much.
Speaker Change: We will move forward to Dan Guglielmo at capital one securities.
Speaker Change: Hey, everyone. Thank you for taking my questions.
Speaker Change: The first one on the transaction side I know historically, there have been many domestic private buyers in the out parcel market.
Speaker Change: Have you seen.
Speaker Change: Or are those buyers reenter now that short term rates have started to fall or do they kind of stayed on the sidelines.
Speaker Change: Yes.
Speaker Change: I think the general volume of buyers has remained over the last several several months relatively static we have not seen.
Speaker Change: Uptick or an increase.
Speaker Change: With the recent cuts I think that it takes a little bit of time for these rate cuts to flow into the system and then make them make their way down the food chain to that level and type of smaller buyer that we're seeing so no. There has not been any big uptick with the recent rate cuts.
Speaker Change: And I would add just one thing to that a lot of these smaller buyers rely on the middle market and smaller community banks, which are not aggressive in lending right now so whether I would say there is a lack of liquidity for the smaller buyers and again. This is a very opportune time for us.
Speaker Change: Okay, Great I appreciate that yes, it sounds like a.
Speaker Change: Good environment, and then when thinking through the broker network and then the robust kind of screening process for deals are there certain states or regions that had been showing up more in that screening process, then kind of have you seen historically.
Speaker Change: So it's interesting our pipeline is diversified across 18 states and so we're continuing our tradition of being diversified literally across the country. So I would say we do not have a major presence as you know are really much of a presence at all on the west coast. So I would say the southeast definitely I would say the mid Atlantic and probably the <unk>.
Speaker Change: Midwest I would say if he sees everything southeast, Indiana, Illinois would include Texas with that from Florida to Texas, and then up through Virginia, and Maryland, and then I would say up and in the Midwest as well.
Speaker Change: So a big region of the country.
Speaker Change: Great. Thank you and congrats.
Speaker Change: Once again, ladies and gentlemen that is star one if you would like to ask a question moving forward to Ronald Camden at Morgan Stanley. Please go ahead you have our next question.
Speaker Change: Hey, just two quick ones, starting with the 33 cents and <unk> at the midpoint of guidance. Just wondering if there is any sort of one timers puts and takes anything in there or is that sort of a good annualized the jumping off point.
Speaker Change: As we're thinking about next year.
Speaker Change: Yes. Thanks, Thanks for the question Ron.
Speaker Change: So I would think about it really and as we as we kind of move forward into 2020 fives with the ABS facility that we have in place right now at three 4% as that gets replaced with the delayed draw term loans and borrowings on our revolver at the end of the year. There is certainly going to be some downward pressure just from.
Speaker Change: A rate perspective, obviously with four.
Speaker Change: $4 six today a lot of speculation.
Speaker Change: Where rates are going to go.
Speaker Change: It's certainly putting some drag so I E.
Think that in what I would say to future, obviously, we're still putting together 2025 forecast and what it looks like but.
Speaker Change: I think the way that I would suggest looking at our growth profile is really looking at on a pro forma basis to say had we replaced and refinance that ABS facility at the beginning of the quarter that would probably be the better way to think about prospective growth growth profile.
Speaker Change: What youll see is obviously, a little bit of a dip in Q Q1.
Speaker Change: And then into Q2 and Q3 ratcheting back up so.
Speaker Change: Fortunately the interest rates, putting a little bit of drag on that.
Speaker Change: Great makes sense and then just I wanted to switch gears to sort of the tenant I think you talked about the watch list, which was super helpful. But I guess I'm wondering if you sort of take a step back maybe remind us what.
Speaker Change: The experience has been in terms of bad debt and then when you sort of sum it all up but the swatches and so forth.
Speaker Change: How should we think about sort of that that magnitude versus historical.
And what it could be sort of next year. Thanks, Tim.
Speaker Change: Tim will touch specifically on the bad debt and I'll, just sort of conceptually talk about historically what has happened when we have taken assets back and.
Speaker Change: Net net.
When you look at the asset that we've taken back over the time really since since inception, we're sitting at.
Speaker Change: Net increase in value slash income so.
Speaker Change: Of course.
Speaker Change: Again as I mentioned, it can be a little bit of a short term struggle as youre carrying assets, but at the end of the day when we get these assets back which are well located assets with frontage that are desirable to a lot of tenants as the assets that we have across the portfolio and the assets that we're continuing to acquire when we get something back which obviously is.
Speaker Change: Not now.
And that happens frequently but we can actually repurpose that then again another differentiating factor sort of about our team versus a lot of others is our history. In this space like we are equipped and we are ready and we are able to take advantage of opportunities when we get an asset back and make improvements through re tenant a redevelopment or re leasing.
Speaker Change: So we see those as opportunities I think generally speaking what we've seen I don't I don't think there should be any.
Speaker Change: Major changes to what we're expecting going forward.
Speaker Change: We have a tiny bit of bad luck over the last couple of months with with a few of the tenants and hopefully those will roll back in two.
Speaker Change: To the income statement here coming up in.
Speaker Change: In the next several months or into late 'twenty, five and we feel obviously very good about the pipeline feel great about.
Speaker Change: The quality of those tenants and as you know from our asset asset management standpoint, we are always actively in touch and have a lot of tenant outreach within that space. So we're continuing continually to monitor our asset base and and tenants.
Speaker Change: Just piggybacking off of that so while we obviously have some tenants on the watch list.
Speaker Change: And a little bit of a we're expecting a little bit of an uptick in bad debt for Q4, but if we think about it on a full year basis, we're running at about 91 basis points as a percentage of cash NOI. So right in line with what we've typically expected went around 1%.
Speaker Change: It ebbs and flows so we'll obviously provide some more insights as we get into the beginning of the year and as we start to forecast with 25, but in.
In line with historical run rates on bad debt.
Speaker Change: Alright, thanks, so much.
Brian: Thanks, Brian.
Speaker Change: And that was our final question from our audience today I will turn it back to our management team for any additional or closing remarks.
Speaker Change: Thank you everybody for your time today, we appreciate that and we look forward to continuing to build the company and <unk>.
Speaker Change: Increase the asset base and look forward to reporting again soon.
Speaker Change: Ladies and gentlemen, this does conclude today's conference and we thank you all for your participation you may now disconnect your lines.
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