Q1 2025 Strawberry Fields REIT Inc Earnings Call
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Holly: Good morning, My name is Holly and I will be your conference operator today.
Speaker Change: I'd like to welcome everyone to the Strawberry fields REIT first quarter 2025 earnings call.
Speaker Change: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
Speaker Change: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I would now like to turn the conference over to Jeff Beitler Chief Investment Officer, Sir. Please go ahead.
Thank you and welcome to Strawberry fields reached Q1 2025 earnings call I am the Chief investment investment Officer, and joining me on the call today are Mike <unk>, our chairman and CEO and Greg <unk>, our CFO earlier today. The company issued its Q1 2025 earnings results, which are available on the company.
Speaker Change: <unk> Investor Relations website participants should be aware that this call is being recorded and listeners are advised that any forward looking statements made on today's call are based on management's current expectations assumptions and beliefs about strawberry fields, <unk> business and the environment in which it operates these statements may.
Speaker Change: I include projections regarding future financial performance dividends acquisitions investments returns financings and may or may not reference other matters affecting the company's business or the businesses of its tenants, including factors that are beyond its control. Additionally, references will be made during this call.
Speaker Change: The non-GAAP financial results investors are encouraged to review these non-GAAP financial measures as well as the explanation and reconciliation of these measures to the.
Speaker Change: The comparable GAAP results included in the non-GAAP measure reconciliation page in our Investor presentation, and now and to discussing strawberry fields, REIT and our Q1 2025 performance.
Speaker Change: I wanted to start by sharing some key highlights during the quarter. The company collected 100% of it's contractual rates.
Speaker Change: January 2nd the company closed the acquisition for the purchase of six health care facilities located in Kansas The purchase price for the facilities was $24 million and released under a new 10 year Master lease agreement.
Speaker Change: Under the master lease the tenants will be on a triple net basis and the tenants had two five year options to extend the lease.
Speaker Change: Facilities are operated as buy skilled nursing facilities and one assisted living facility and are comprised of 354 license bags. We welcome a really Michel <unk> of Athena the nature of the Strawberry field three family and we look forward to growing with that.
Speaker Change: On March 31, the company completed the acquisition for a skilled nursing facility with 100 licensed beds near Oklahoma City.
Speaker Change: Acquisition was for $5 million and the company funded the acquisition utilizing cash from the balance sheet. The facility was leased to an existing tenant to combine this facility with another facility. They acquired in December 2020 forward to create a master lease. This lease included annual base rents of $500000 with 3% annual rent.
Speaker Change: Increases in is for an initial term of 10 years with two five year options to extend the lease a.
A few other items I wanted to point out during the quarter. The company continued to pay its quarterly dividend.
Speaker Change: At March 31st made a payment of 14 cents a share. We also made a couple of new hires during the quarter and asset manager and a lawyer. These hires reflect the company's expanding footprint and they need to grow that team accordingly, the only other higher we anticipate in the near future as another asset manager.
Speaker Change: Subsequent to quarter end the company purchased a 112 bed facility near Houston, Texas comprised of 102 skilled nursing beds and 10 assisted living beds. The acquisition was for $11 $5 million and the company funded the acquisition utilizing cash on the balance sheet that property will be added to an existing master lease in Texas.
Speaker Change: As a result of this acquisition the annual rents for this master lease increased by one point to $7 million to $8 million and this master leases subject to 3% annual rent increases with this acquisition and as you said the company has completed over $40 million in acquisitions to date in 2025, we are working diligently and some deals and.
Speaker Change: That number to be closer to $101 million to a $100 million by the end of Q2.
Speaker Change: I would now like to have Greg Fleming, our chief financial officer discuss the quarter and financials.
Greg Fleming: Thank you, Jeff and welcome to the Strawberry fields, Q1, 2025 earnings call I'd like to start off by looking at our financials for the first quarter of 2025.
Greg Fleming: Total assets increased by $199 million or 31, 5% compared to Q1 2020 for this growth was primarily driven by activity related to our 2024 2025 real estate acquisition as well as the <unk> of the landmark national lease into the Kentucky Master lease.
Greg Fleming: On the liabilities and equity side. We also saw an increase largely attributable to the funding used to finance these acquisitions.
Greg Fleming: Turning to the income statement total revenue for Q1, 2025 was $37 3 million up from $27 8 million in the same period last year, representing a 34, 1% year over year increase.
Greg Fleming: This growth was fueled by the timing of our key acquisitions over the past 12 months, including our the Missouri match lease which closed in December 2024 inch as well as the retention of existing leases, most notably the landmark to Kentucky, Master lease, which transition which started in January 2025.
Greg Fleming: Net income for the quarter was $6 $99 million or 13 cents a share.
Greg Fleming: Compared to $5 $99 million or $12 a share in Q1 2024.
Greg Fleming: This increase reflects higher revenue, partially offset by increases in depreciation amortization and interest expenses.
Greg Fleming: Now moving on to financial highlights <unk> for Q1, 2025 was $16 8 million up from $13 1 million a year ago, representing a 28% increase base.
Greg Fleming: Based on these results we are projecting full year 2025, <unk> of $67 3 million, which would represent a 20% year over year growth. Please note that the projection is based solely on the annualized nation of Q1 results and does not include any contribution from future acquisitions with this projection, we expect our ethical CAGR to.
Greg Fleming: 13 813, 8%.
Greg Fleming: Adjusted EBITDA for Q1 2025 came in at $30 4 million compared to $21 4 million in Q1, 2024, marking a 42% year over year increase.
Greg Fleming: We are projecting our full year 2025, and adjusted EBITDA of $128 8 million again based on annualized Q1 results and excluding the impact of future acquisitions.
Greg Fleming: Based on this forecast, we can expect an adjusted EBITDA CAGR of 12, 2%.
Greg Fleming: Finally, I wanted to touch on our dividend as of March 31, 2025, our dividend yield was four 7% with an <unk> payout ratio of 46, 2%.
Greg Fleming: Both metrics remain below the average appears in our sector, reflecting our commitment to return capital in support of an active and robust acquisition pipeline.
Greg Fleming: Looking ahead, we will continue to evaluate opportunities for dividend growth and remain committed to aligning future increases with the strength of our underlying performance.
Greg Fleming: And now I wish Goodman will continue the presentation with a portfolio highlights.
Goodman: Alright, Thank you, Greg I'm going to continue on slide four I'm going over portfolio.
Greg Fleming: Portfolio highlights.
Speaker Change: As as Jeff said earlier in his comments.
Greg Fleming: Good quarter collected 100% of our rents when we got our facilities up to 130 <unk> facilities in 11 states.
Greg Fleming: More marching towards 15000 beds.
Greg Fleming: $1.0 billion to $1 billion in total asset value add acquisition, which today market value of those same assets were about 1 billion floor.
Greg Fleming: Her up to 16.
Greg Fleming: Master leases, which is about 90% of our portfolio. There is seven years remaining people call Walt.
Greg Fleming: Our weighted average lease term.
Greg Fleming: That is remaining is over seven years, we expect that number to two to improve with the new leases that we entered into a brand new 10 year leases.
Greg Fleming: One of the new leases, we're going to be entering into it should be a 15 year.
Greg Fleming: 15 year lease with two five year renewals.
Greg Fleming: That being said our EBITDAR coverage has improved quarter over quarter. In fact, most of the metrics from our operators first quarter, which is usually the worst quarter of the year for the operators because of February being a short months and beginning of the area of all the payroll taxes and 80% of the costs of our tenants are.
Greg Fleming: Hero and so but with that we had a really nice coverage of almost 1.9 EBITDAR rent coverage.
Greg Fleming: We have a robust pipeline.
Greg Fleming: Jeff Might've mentioned and we expect to end the year, yes to everything to be between $100 million and 200 million and like Jeff said by this by the end of the half of the year, we should break $100 million already so god willing.
Greg Fleming: Continue our March towards growing our company.
Speaker Change: Slide slide five.
Speaker Change: Actually continues with our annual debt at the annual shareholder meeting that we had last week.
Speaker Change: What we were talking at how well, we've grown and how beautiful our balance sheet and income statement look.
Speaker Change: This is actually one of them the <unk> growth from 202019 to 2025 is almost a 14% growth rate.
Speaker Change: Really really a good number we expect this year to break $67 million in <unk>.
Speaker Change: God willing we do even better than that because this is not taking into consideration any of the deals that we expect to.
Speaker Change: To get done this year next slide.
Speaker Change: Slide six.
Speaker Change: As our base rent growth I don't really worry too much about this but it is nice to see that our through our current base rent is $135 million. That's what we expect it to be again that number should be larger the growth rate of being 11% I think is good but it's not it's not it's not such an important factor to me.
Speaker Change: So we're going to gloss over it next slide.
Speaker Change: This slide Fortunately or unfortunately, she was actually a pretty good a pretty good growth to our stock if you'd consider march of 'twenty four being at a box.
And where we ended March 31 close to $11 90.
Speaker Change:
Speaker Change: Unfortunately, the marketplace model Crazy after April 2nd and right now, we're just battling to get to our NAV, which we believe to be higher way higher than where we're trading today.
Speaker Change: Next slide.
Speaker Change: On this slide this slide is something we're really proud of.
Speaker Change: The fact that I mean, so the negative is that we should be trading higher but the positive our key our return versus our peers, we have the highest return.
Speaker Change: 57%, which we just talked about what the stock price on the ASR trading multiples. Unfortunately is below 10 times and.
Speaker Change: And we really we've talked about in previous meetings, we just want to be treated like our peers and get get to an average of <unk>.
Speaker Change: 13 times, which would be a nice increase to our stock price.
Speaker Change: Right.
Speaker Change: This slide is as one of the best slides that we have we're just highlighting the <unk> payout ratio.
Speaker Change: Somewhere in the middle of $46 246 three.
Speaker Change: Percent, which is lower than everybody.
Speaker Change: We have another slide coming out to say, how we unlike like Jeff alluded to.
Speaker Change: We're using the rest of our free cash and using it to buy more more assets and therefore, our <unk> appreciation or accretion.
Speaker Change: Is larger than our peers, our dividend yield today is four 7%.
Speaker Change: Again, we're meeting the REIT standard and we feel that the total return for our shareholders is probably close to 17% next slide.
Speaker Change: Yeah.
Speaker Change: This slide slide 10, just highlights the fact like we've been saying for the last few years already where we believe we're probably.
Speaker Change: The closest pure play sniff.
Speaker Change: <unk> out there and over 90% close to 91% of our portfolio and that will continue to shrink because we specifically don't buy.
Speaker Change: Other assets, they usually come along with deals loan buying a bigger portfolio of nursing homes.
Speaker Change: So that's typical that should shrink it will never be 100%, but it'll shrink.
Speaker Change: As we continue to buy nursing homes throughout the country and.
Speaker Change: And even though like in Houston, you also a so it's one out of 20 deals that we did in a year, where we have an assisted living that went along with the nursing home and that assisted living is 10 beds of other nursing homes out of beds.
Speaker Change: Next slide.
Speaker Change: This slide on Slide 11 is what I was talking about a few minutes ago. If you take a look at the growth rate. The chart on the right. While most of our peers had a negative growth rate <unk>.
Speaker Change: Characterize which is really our <unk>.
Speaker Change: First comp even though they are.
Speaker Change: Two or three times larger than us and.
Speaker Change: They're doing great and they're a good company as well.
Speaker Change: But our our growth rate for our <unk> per share as Brian 10%.
For the last five years.
Speaker Change: Figure you take that and you had your dividend yield to that and Thats. A good 15, 16, 17% return year over year and we're proud of that.
Speaker Change: As far as EBITDAR coverage.
Speaker Change: 189 is a good number were in line with Omega.
Speaker Change: Probably one of the biggest.
Speaker Change: Very good peer also but they're really big and there are international which were not.
Speaker Change: So we're in line with them, which is the company to have we're not out of we're not out of.
Speaker Change: Out of whack here.
Speaker Change: Next slide.
Speaker Change: Well I've talked about already know about the slide. This is just evident here of the $12 one growth rate over the last seven seven years or so take that together with the dividend yield, which I think we said it was four 7%.
Speaker Change: That's a $16 eight when you put those two together that's really the investment what we're what we're trying to tell people to investment you've got 16, eight and then you've got the appreciation of our stock price Thats right now undervalued at below NAV.
Speaker Change: Stock and.
Speaker Change: And then stocks go up and start creating the right way.
Speaker Change: Which is what we're waiting to happen we're doing all the right moves going all the conferences meeting a lot of people look at you know.
Speaker Change: And our family offices doing non deal Roadshows.
Speaker Change: We're running around and we enjoy doing you will meet a lot of good people.
Speaker Change: And we've we've come we've come to realize that really our company belongs can fit into anyone's portfolio. Just a question of what larger percentage in someone's portfolio, we should be.
Speaker Change: Depending on someone's how conservative because we feel it at a relatively low risk basis, three of our business being I wouldn't we're insulated bulletproof from we have headwinds.
Speaker Change: <unk> in the nursing home world from from the Baby Boomers and the fact that you've got long term debt and not so much it does not.
Speaker Change: An economic decision if someone needs to be a nursing home. They go to a nursing home so.
Speaker Change: So you have all those positives.
Speaker Change: And.
Speaker Change: Regardless, we feel we feel that.
Speaker Change: Net debt.
Speaker Change: It's a low risk because of those positives and because of that lower risk to be able to get 16, 17% return on that we feel that that's a really really strong.
Speaker Change: Wrong argument for people to invest in our stock.
Speaker Change: Slide.
Speaker Change: On this slide slide 13, and just been part of our our deck for so long.
Speaker Change: At this point, we used to push the fact that how that was a big percentage of our of our four of our debt at this point.
Speaker Change: HUD is only about 39% of our of our debt load.
Speaker Change: And then the other two parts of our Israeli bond debt and then conventional debt with Banco popular popular bank.
Speaker Change: We think we're in a good spot I talked about at the annual shareholder meeting our next move at some point is to create a line of credit with wells.
Speaker Change: For the bank.
Speaker Change: Unsecured to be able to just use use that cash when we want to buy something and then hopefully backfill it with.
Speaker Change: Using the ATM or our availability and doing the placement of our stock and of course, we need to just share price to go up because we're not going to dilute our shareholders below NAV.
Speaker Change: So at this point, we're going to probably.
Speaker Change: Until the stock goes up we'll probably just increased that a little bit but again our hour that we have so much capacity and we're sitting here at 51% leverage.
Speaker Change: We want to be between $45 55, so we have a little bit of room in our own policy to get to 55 if need be.
Speaker Change: The stock starts trading the right way will sell stock and get that number down.
Speaker Change: That's our current plan.
Speaker Change: And.
Speaker Change: Again.
Speaker Change: Simple thought here is we're going to keep on the way, we buy which is very disciplined and and then and then to fund that is nothing permanent there. So if we if we if the equity market is is not trading well and that and it's not open for us because we're not going to sell we're not going to dilute ourselves like.
Other Reed's do we're not going to do that I'll, just take a little debt.
Speaker Change: And we'll increase our leveraged a little bit and then once the stock is trading.
Speaker Change: We will then issue will issue equity and then pay it down or Alternatively, if we have excess cash and the stock doesn't trade well, we will buy back more stock availability an hour an hour.
Speaker Change:
Speaker Change: Stock repurchase plan that we published whenever it was two years ago.
Speaker Change: Next slide.
Speaker Change: This slide 14 has become one of my favorite slides when we talk about it all the time the people that know our story well know that when our company started Michael and I.
Speaker Change: For those who don't know Michael Bliscoll as my founder cofounder with me.
When we started strawberry and couple of iterations ago.
Speaker Change: We were the only tenants and we were only in two states.
Speaker Change: And now you're looking at we've been partners almost 22 years and now iron Strawberry He runs 50.
Speaker Change: 50% of our tenants are suddenly and Michael runs.
Speaker Change: Just stole my Thunder or is that basically 50% of our of our total tenants are now related party.
Speaker Change: Down from a 100% plus years ago and in these two pie graphs.
Speaker Change: Fact that we've diversified our portfolio to be that there is no single state.
Speaker Change: That has that has more than 27% to 8% of our 20% of our rents and 27% of our.
<unk> by each day, so there's no <unk>.
Speaker Change: Basically basically we've totally diversified our portfolio and in fact.
Speaker Change: Having indiana being the largest percentage.
Speaker Change: That's a good thing because India is a great state.
Speaker Change: Our tenants do real well there.
Speaker Change: God willing God willing we will continue to grow there and and Thats fine.
Speaker Change: At this point, we're going to be adding more in the next.
Speaker Change: The next week or two or three quarters will be adding more to Missouri will be a more too.
Speaker Change: We'll be adding more too.
Speaker Change: Kansas, Missouri, Oklahoma, Texas, and then who knows what comes along we've talked about before we're big into master leases. So if.
Speaker Change: We're able to enter into a new state it will be a big enough portfolio that has a master lease otherwise we'll be staying in the states, where we are and we'll just keep adding to the master leases we have in the states that we have.
Speaker Change: Next slide.
Speaker Change: Slide 15.
Just our maps as you can see the waste bunched up its bunched up on purpose because thats you know.
When we underwrite a deal we're looking at the deal that it makes sense really to me and the folks that work for me that we've taught to be like me in some regard.
Speaker Change: Is that is that we're thinking about that if we're the operator, which were never going to be we don't do we're not doing RIDEA RIDEA. How go on for half of that and we're not we don't plan on ever being an operator, we're going to stay a straight straight landlord.
Speaker Change: We don't even expect most likely to ever go into doing mortgages in our REIT because that's unacceptable.
Speaker Change: We're probably going to stay away from that as well, but that being said I look at each one of these deals and whether it makes logistical sense that the operator should be able to get to these big buildings and be able to run them, well and and and so that's why you look at this map, which is really pretty unique.
Speaker Change: As all bunched up.
Speaker Change: Have guys in each place and and.
Speaker Change: And it gives them a knowledge of the locals and.
Speaker Change: The way the way the way the demographics or the local people that are you know.
Speaker Change: Living in their facilities and gets them to know the local regulators and where things are.
Speaker Change: And thats been a good model for us and that's probably why we're collecting 100 several rounds.
Speaker Change: Now that being said, we will talk about earlier about the pure play.
Speaker Change:
Speaker Change: You can see in the pie graph there that 99.
Speaker Change: That's just that's our sniff versus the smaller little segments there.
Speaker Change: And with that I'll, just thank everybody for joining us today, and we will entertain questions.
Speaker Change: Questions there are out there.
Speaker Change: Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
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Speaker Change: If you are listening through the webcast and would like to ask a question. Please click on the ask a question box on the left side of your screen type in your question and hit submit.
Speaker Change: Please hold while we poll for questions.
Your first question for today is from Rob Stevenson with Janney.
Speaker Change: Yeah.
Rob Stevenson: Hey, good afternoon, guys can.
Can you just dive into the landmark lease and sort of talk about what's going on there and what prompted that.
Rob Stevenson: A little bit detail.
Speaker Change: Thanks, Rob good to hear good to hear your voice.
Rob Stevenson: Yeah.
Speaker Change: I'm, just kind of talk and roundabout numbers.
Speaker Change: And Greg can Gregor, Jeff can can add the actual numbers, but basically what what happened was the facilities, we're doing well.
Speaker Change: And there was an opportunity for us to recast a new lease with a new operator.
Speaker Change: And so what we did was we've struck a deal with our previous tenant.
Speaker Change: Them to surrender their lease.
Speaker Change: We would have the ability to enter into a new 10 year lease with two five year renewals.
Speaker Change: And we've recast it at a one and a quarter coverage.
Speaker Change: To what the what the previous tenant was doing.
Speaker Change: And with that we had a nice increase to our topline and our deal with the predecessor was that we would pay them.
Speaker Change: About a million dollar as the owner of the previous previous gambling pay them that $1 million.
Speaker Change: A month for the next five years, which is right around the increase in rent for the first year.
Speaker Change: And and and at the end that Strawberry would win because we have a brand new lease with a new tenant that we that we can grow with.
Speaker Change: We had before also but this is just diversifies the pool, a little further and and.
And Strawberry gets the benefit of a 3% increases on the higher rent number.
Speaker Change: Meanwhile, the other operator leaves having made you know gotten getting paid out over five years.
Speaker Change: And so we net out to for the first year it nets out to be should be the round. The same number as we were making before with an increase of top line and an increase in inquiry and Ah and an increase in the expenses on the bottom line, but after year one.
Speaker Change: We get the 3% increases have strawberry and then after year five when we get the full benefit of of the higher rent amount. So we felt that was good for us at Strawberry, we ended up in the same position or better.
Speaker Change: The tenant, leaving leaves happy and the tenant incoming starts happy and I think we've already had their first there first month or two months of operation and they actually have a rent coverage and by 1% and three quarters, even though we we built it out at one and a quarter.
Speaker Change: They end up they end up they end up beating that by by a nice number. So that's the general story, if you need exact numbers.
Speaker Change: Hum.
Speaker Change: Greg or Jeff I'm sure are able to walk you through the exact numbers. If you want to just let me know.
Speaker Change: So the so the landmark lease with somewhere call it about 11 million.
Speaker Change: So the new leases twenty-three three and so that's you know.
Speaker Change: Plus or minus a little bit that's essentially what's happening here.
Speaker Change: And create exactly crazy.
Speaker Change: Exactly and then in the long run we make we make out more money with the new with the new operator that is hungry and we're able to grow with them in.
Speaker Change: Sorry.
Speaker Change: It's very positive for us.
Speaker Change: Okay, and then the $1 billion a month is just going to be coming out of the the rental expense number which was like $3 8 million in the first quarter.
Speaker Change: You would think so but under GAAP accounting the way the way. This gets recorded is is actually.
Speaker Change: We created a debt on the books.
Speaker Change: Okay, and then and then as that debt gets paid down.
Speaker Change: The debt goes lower and on the other side we amortize.
Speaker Change: We amortize the payments being made and therefore, you end up netting out so it's not it's not it's not netted in the top what youre thinking is exactly how I would have done it but that doesn't conform to GAAP accounting, Unfortunately, and so basically you're going to see a higher top line number.
Speaker Change: And by the way this is similar to like three or four years ago. When the gap between GAAP rule changed with regards to how to how to record property taxes that are collected from from tenants. So property taxes come out come in and we pay it out for them. It comes in as a top line revenue number and it goes out as a as an expense.
Speaker Change: They net out again to the same.
Speaker Change: To the same rent number that's supposed to be the real rent number.
Speaker Change: But over here so.
Speaker Change: I hope I answered what you said, that's basically how it plays out okay.
Speaker Change: Okay.
Speaker Change: And then I guess the other ones for me.
Speaker Change: Anything nonrecurring in either revenues or expenses in the first quarter income statement that we should be aware of.
Speaker Change: I don't think so Greg is there anything that you could think of that's nonrecurring nothing comes to mind no. It was pretty clean quarter. Okay. And then last one for me did you guys issue any shares under the ATM in the quarter.
Speaker Change: Okay.
Speaker Change: I'm going to defer to Greg to that also I know I know, we haven't been doing anything because the stock prices down because they are a limit at some point was $12 a share Greg did we sell anything under the under the ATM in the first quarter. It would have been January or February yes, we did sell some shares it was about 100 and actually it was 190000 give or take.
Speaker Change: It's about $2 $2 million.
Speaker Change: And why did we issue out there.
Speaker Change: It's $11 75, a share let me say if I shift yes. Thank you.
Speaker Change: So 190000 shares of 11 75 a share.
Speaker Change: Yes, correct.
Speaker Change: $2 million you said.
Speaker Change: Yes, but we also bought back shares when the stock went down but what was our stock repurchase for the quarter that was in Q2 on.
Speaker Change: That already happened in the second quarter, Alright never mind.
Speaker Change: Well I guess the question because I saw that the.
Speaker Change: The $2 5 billion remain the same from the K as of December 31st how much shares have you bought back thus far in the second quarter.
Speaker Change: I don't have exact different crummy unfortunately, but.
Speaker Change: It's about I think about.
Speaker Change: It's about.
Speaker Change: Over around 100000 shares at least.
Speaker Change: Okay bought it at 10.
Speaker Change: We bought around $10, a share say theoretical who made a profit in our own stock.
Speaker Change: Okay.
Speaker Change: Alright, Thanks, guys I appreciate the time and have a great weekend.
Speaker Change: Alright, Thanks, where I'm happy to have a good weekend.
Speaker Change: Your next question for today is from Rich Anderson with Wedbush.
Rich Anderson: Hey, thanks.
Rich Anderson: Good afternoon. Good morning, wherever you are.
Rich Anderson: So.
Speaker Change: Just a question on the map the beautiful map Moshe you referred to with all the nice colors.
Rich Anderson: One color yellow I'd like to ask about the miscellaneous operators I'm just curious if you have a plan there.
Speaker Change: Two are you.
Rich Anderson: You kind of blend them in with other existing operators.
Speaker Change: What that strategy looks like for you going forward.
Rich Anderson: So that's a good question and good hearing your voices all rich.
Rich Anderson: Yes, the way the way so you got to look at it by state So Oklahoma.
Rich Anderson: Oklahoma is just the first one that caught my eye as I opened up the map here to be able to answer your question. So Oklahoma were growing a master lease there and so the short to your question. The short answer to your question is we don't we're not going to consolidate individuals to make the all the yellows to be one guy, but while we are looking to do and.
Rich Anderson: And we are doing is that each one of the little groups of yellows that are that are individuals. We're looking to grow their master leases that could be a standalone color I guess on the map. So Oklahoma, we have a deal for another another facility and then we have another facility after that and that all in to bringing it to I think more with that with that operator <unk>.
Rich Anderson: Yes.
Rich Anderson: We have we have two different master leases and in Texas, one of those master leases, we're actually growing that master lease as well.
Rich Anderson: That one's a little bit AMT and tie to what we typically do because we're bringing them to a whole new state with a bigger a bigger portfolio.
Rich Anderson: But it's going to be still in one big Master lease, which will make that relationship go up to I think 11 facilities.
Rich Anderson: And.
Rich Anderson: And that'll be good and then Illinois.
Rich Anderson: And slowly, but surely taking out the single operated facilities, which are a real a real legacy facilities and we've been slowly transitioning them out of mom and pop and into a new operator.
Rich Anderson: That has a master lease so that's already I think we have I think 333 down where it may be already up four or five facilities with them and they'll be able to grow that so what you should see.
Rich Anderson: Assuming assuming everything happens the way, we expect it to happen in 'twenty five.
Rich Anderson: That at the end of this at the end of the year, we'll see that.
Rich Anderson: You know, Oklahoma will be their own color, because they'll have a bunch of a bunch of properties there.
Rich Anderson: And then and then.
Rich Anderson: You'll get rid of a couple of the Texas and then we'll add another state and that'll be a different color and so will be narrowed down to will be narrowed down to very few.
Rich Anderson: Very few of them.
Rich Anderson: The singles basically is where we want to get rid of we want everything on the master leases like I said earlier I think we're about 90, 90% of our facilities, our master leased and if we could get the last 10%.
Speaker Change: And Tim Master leases at a minimum of four or five facilities. Then then that'll be that'll be getting to where we want to be.
Rich Anderson: Okay.
Rich Anderson: I'm intrigued by the.
Rich Anderson: Expectation to be at a $100 million by the end of the second quarter.
Rich Anderson: And you mentioned you know not not.
Rich Anderson: Using equity at this level.
Rich Anderson: So what is what is the game plan, if everything sort of holds.
Rich Anderson: Constant right now is it just more that cash.
Rich Anderson: Cash how much cash do you have to use right now I'm. Just curious you know what the funding strategy would be to get to that thank you all.
Speaker Change: $60 million.
Speaker Change: So so that deal that's right around 60 million, we are going to take $20 million of cash from our balance sheet and then we're going to take 30 million 30 million in a conventional loan with a with a bank and then the last 10 million, we will most likely just draw on.
Speaker Change: On our bond debt in Israel.
Speaker Change: To be able to just meet meet our cash needs for the second quarter.
Speaker Change: Hey.
Speaker Change: And last for me.
Speaker Change: Are you, having any sort of issues trying to underwrite deals going forward with some questions around Medicaid.
Speaker Change: Congressional budget budgetary process.
Speaker Change: Is that getting in the way at all in your conversations or are you changing your underwriting to kind of protect yourself a little bit I'm just curious what's going on there in your mind.
Speaker Change: No.
Our so two points there first of all our underwriting hasnt changed in many many years and we've talked about that I'm sure of which you've already heard me said or at least three or four times of how how disciplined we are and how we underwrite that hasnt changed the factors that we deemed our tenants to come into the deal you know they are experiencing.
Speaker Change: And send and their financial strength in Iowa, I always talk about their integrity right. Those are the three basically the pillars that hold up our world.
Speaker Change: And so.
Speaker Change: So from that point of view nothing has changed we haven't changed our bogie as far as what return we won and debt service coverage ratio, we want on day, one and rent coverage really want they want that all state stays exactly what it's been for many years and in fact, our boards you know.
Speaker Change: Really really you know adamant.
Speaker Change: And at the same time really strong in pushing and proud that we remain.
Speaker Change: Stable and consistent and you know and you know in over the years they've told me if if we can't find deals that meet our box just don't do deals it's an and.
Speaker Change: And that's not that's not a problem that we've had but nevertheless, that's a philosophy that we have.
Speaker Change: As far as far as the Medicaid conversation I mean, that's that is a very very common conversation that I have both with investors with bankers as well I mean keep in mind, our balance sheet today really our debt and the way our debt is structured.
Speaker Change: You know the tranches that we have we don't talk to HUD about any of this stuff so they're not they're out of the contention conventional conventional lenders are healthcare lenders because that's that's that's.
Speaker Change: That's the space that you have to be you have to find a lender that knows healthcare that and so they all know what's going on and there. It's really just a conversation it's not a acquisition or are any trouble I guess the biggest topic. The watercooler would be the Israelis and the Israeli bond market because they read this stuff and they believe everything they here.
Speaker Change: And it's a little bit it's just it's a little bit of an aggravation because first of all you have to have the same conversation over and over and over we don't ever have groups of call like on this call where you have a group of people calling over there its one by one by one meetings and that's the respect that they want and they deserve a at least.
Speaker Change: In their mind and.
Speaker Change: And so you have to have the same conversation over and over and over but they also don't understand you know really the starting point the starting point culturally in America versus Israel or other countries is that is that other countries people take care of their elderly at home and they're more.
It's more on the stood in the culture to do that in America.
Speaker Change: It's it's it's that's more of a minority of the people most of the time.
Speaker Change: If somebody needs a nursing home they just put them in a nursing home. They don't they don't they don't consider taking care of mom or dad at home, good or bad I'm not judging anybody so culturally the way that works in America. Obviously is that we're not going to turn it back on the elderly.
Speaker Change: And so and so I had the conversations but none of it affects business.
Speaker Change: It just affects just the conversation I have with and it could be turned away and investor when I talk to somebody that they're worried about this or that and but it's as it affected our business and it's not going to change our model of us going out there being transparent and talking to people in and doing what we do.
Speaker Change: And I expect I expect I think doesn't fail to continue as it is and which has been very good and and I don't I don't see where any of this stuff really hurts us.
Speaker Change: It gives me a little bit more work and little aggravation, but other than that it's fine.
Speaker Change: Okay. It sounds good thanks.
Speaker Change: Thank you.
Speaker Change: Your next question is from Gaurav Mehta with Alliance Global partners.
Gaurav Mehta: Thank you good afternoon.
Gaurav Mehta: I wanted to go back to you.
Gaurav Mehta: Comments around $60 million.
Gaurav Mehta: Acquisitions expected until Q and on the funding portion coming from that and provide some color on what's the cost of debt for you guys today to fund that acquisition.
Gaurav Mehta: Yeah, so our our our costs and again its a 10 cap. So you take you take round about.
Gaurav Mehta: 59 million dollar deal right. So our rents will be 5.9, right. So you know that that side of the equation on the other side of equation.
Gaurav Mehta: We have our $20 million of cash we have a $30 million, which should be a 29 million $30 million, which should be so for 300 thereabout.
Gaurav Mehta: And then and then the bond debt and the other $10 million right now that rate is about six six in a quarter.
Gaurav Mehta: And it's kind of probably all in cost of doing an issuance of doing its probably it probably ends up being probably closer to 7% and that should be fixed for I think I think the I think the bank debt is going to be fixed either three to five years I think it's three to five years and on the bond debt, it's going to be I think the what we're going to have is a duration or.
Gaurav Mehta: Probably five years, which might be of which might be a seven year deal on and you guys know how to math to figure out the duration on a seven year money based on our based on our 4% to 6% principal pay down.
Gaurav Mehta: Annually.
Gaurav Mehta: So I guess blended blended cost.
Gaurav Mehta: But if it's 20% of zero, 10%, I'm, sorry, $20 million, which is which is one third 33% of that zero.
Gaurav Mehta: And then the other 40% of that is that is that so for 300 and then the other one at 7% I think probably blended added it's probably somewhere.
Gaurav Mehta: Low sixes altogether, six and a half.
Gaurav Mehta: Second quarter somewhere around there is what our cost.
Gaurav Mehta: Okay.
Gaurav Mehta: Does that makes it in your prepared remarks, you in your prepared remarks, you also talked about looking at a line of credit, but can you maybe provide some color on the timing of such a line of credit and what kind of size are you looking at.
Gaurav Mehta: Yeah.
Gaurav Mehta: Sure that's.
Gaurav Mehta: I'm kind of like.
Gaurav Mehta: Breaking the Jewish wall, or I guess, it's and viable for Christians as well as covering their neighbors stuff. So I'm covering the neighbor of the the reach that are out there that are more mature than we are aware at this point they have a line of credit.
Gaurav Mehta: Out there and so so we've spoken to.
Gaurav Mehta: Basically three banks.
Gaurav Mehta: And in the product that basically that that's coming along is an unsecured line of credit, which basically eats up.
Gaurav Mehta: Our current our current bank debt for the most part not all of it I mean, the current bank debt. We're doing on this deal that $30 million is going to have to sit outstanding because of the prepayment penalty.
Gaurav Mehta: But the rest of our staff.
Gaurav Mehta:
Gaurav Mehta: Would be would be absorbed and and basically our whole balance sheet other than the HUD debt.
Gaurav Mehta: Would only would all be unsecured debt, which is good for business because every part of our our debt today is about 39% so having.
Gaurav Mehta: Having the rest of our debt.
Gaurav Mehta: <unk> be in our portfolio that only 39% is secured and the rest of its unsecured that works for the model.
Gaurav Mehta: And we're looking at anywhere between $200 million had $4 million or 200 million to $500 million.
Gaurav Mehta: And pricing on that is still probably sulfur.
Gaurav Mehta: Two to 300 range, maybe maybe maybe secondly last two definitely will be more than three it'll be somewhere in the middle of that 92, and a half 275.
Gaurav Mehta: And that should give us that should give us the flexibility once we get that done which hopefully that's a.
Gaurav Mehta: 2025 deal as well once we get that done then going forward, we just drawing the line when we need it and then hopefully sell equity to pay it down and and then and then still continue with our original philosophy of taking that and moving it to hide when we can.
Gaurav Mehta: And so you figure you figure if things continue the way the way Theyre going like I said, 39% would be secured debt with HUD long term money.
Gaurav Mehta: Average rate in the threes, and then everything else basically sitting so for 300 or below.
Gaurav Mehta: In mainly unsecured.
Gaurav Mehta: And then and then.
Depending on where the stock trades that will keep us where we can we can keep our total leverage to be between $45 55.
Gaurav Mehta: And narrower our world would be in total AR balance, which is what where we want to be.
Gaurav Mehta: How that how that how that plays out timing, we're working everyday so god willing things things happen.
Gaurav Mehta: And the right time and.
Gaurav Mehta: And so thats why im saying that hopefully this all happens by the end of 2025.
Gaurav Mehta: Okay. Thank you that's all I had.
Barbara B: Alright, Thank you Barbara B well.
Speaker Change: Your next question is from Barry, Oxford with Colliers.
Barry: Great. Thanks, guys.
Speaker Change: When you guys look at acquisitions going forward and you already alluded to the 10% cap rate.
On the current assets are you still seeing deals or you know a fair amount of them.
Speaker Change: At the 10% cap rate, while being able to stick to your rent coverage for the tenants or is that starting to get a little narrow and maybe you have to come into nine five to kind of keep the tenant at the rent coverage, where you'd like to see them.
Speaker Change: No no absolutely not where I guess I guess really if I really wanted to.
Speaker Change: Compare that I would start trending are tracking.
Speaker Change: Quarter over quarter, what our pipeline has between can we drive our pipeline between hot Hot Hot warm and cold basically are a high low medium likelihood to get done.
Speaker Change: And so.
Speaker Change: We haven't changed our standard at all everything begins at a one and a quarter minimum.
Speaker Change: And everything is a 10 cap, we havent bought less net effect on some of these deals we've even gotten a little bit better than matane.
Speaker Change: Hum.
Speaker Change: 10, 10, 10 point, something maybe not up to really 11, but somewhere over there as far as our return.
Speaker Change: And today, our pipeline as you know a couple of easily by $300 million.
Speaker Change: And out of that we probably expect like I said, giving the guidance of between 100 and $200 million, knowing full well that we expect by half a year will have broken 100 already so last half of the year, we have enough in our pipeline at our exact you know.
Speaker Change: Investment protocol to be able to do the rest of you know hopefully that hopefully another 100 million for the second half.
Speaker Change: Okay.
Speaker Change: So we should be able to we should be able to do that we don't have any problem at all and that of the rest of that 300 million, you're probably talking about.
Speaker Change: Low likelihood of an on on maybe 100 something of it and so well keep working and God willing we'll find more deals and we'll keep doing what we're doing.
Would you have to access the equity markets to make the second half goals.
For acquisitions.
Aye.
I would love to be.
Speaker Change: Right right.
Speaker Change: You know, it's it's it's the marketplace I mean, any any one that's willing to make an effort and do the math to figure out what our NAV is.
Speaker Change: In my mind at a 10 at a 10 cap NAV.
Speaker Change: Our stock prices worth your are each share is worth close to $13 a share.
Speaker Change: I think it's fair to my shareholders to sell stock.
Speaker Change: At a number below that because they don't deserve to be diluted we have a great company, making a lot of money doing business the right way.
Speaker Change: And but I'm expecting that the marketplace at some point.
Speaker Change: Makes that little effort and realizes how undervalued, our stock prices and the stock moves and.
Speaker Change: But to answer your question.
Speaker Change: Now if if if I have it my way.
Speaker Change: And the stock gets to where it should be or at least above the Nab number then we would do a raise most likely.
Speaker Change: In the second half of the year.
Speaker Change: $75 million and then we would use all of that money either on new deals or to pay down debt and then we and then we get through 2025.
Speaker Change: If not.
Speaker Change: You know we have availability on our bond debt like I said is somewhere between six and 7% we have availability right now for easily.
Speaker Change: A couple of hundred million dollars in the marketplace wants us there and.
Speaker Change: And it will be easier to get done and and again the problem with the bond debt, which is what I want to avoid is that is that that bond debt is more there's prepayment penalties and the investor wants a coupon long term and so it's not as flexible of of you being able.
Speaker Change: To get in and out of that deal.
Speaker Change: And so I'm trying to avoid it as long as I can but if I have to do I have to do it.
Speaker Change: And you know we just because you know the deals make sense, it's good for our company and our and the price is not not expensive I mean, it just it just it just want to be in for a longer term and so that's something I'd like to avoid but it's something that we'll have to do to be able to close the deal.
Speaker Change: Right Okay.
Speaker Change: That all makes sense.
Speaker Change: When I'm looking you mentioned that you had two more hires and maybe another asset manager by the end of the year when I think about your G&A as a percent of revenue.
Speaker Change: Are you going to be able to keep that fairly constant or will we see that rise.
Speaker Change: Because of the new hires or will the revenue a little ramp in revenue kind of keep G&A as a percent of revenue fairly fairly static.
Speaker Change: No no not hour hour why do you see a full quarter, which will be the second quarter, you'll see our our total our total payroll went up you know.
Speaker Change: Actually first quarter had a one time I think Rob asked if there was a one time and so first quarter of this year unless we accrued it in fourth quarter I gave a bonus I gave a bonus a couple of hundred thousand dollars to our employees.
Speaker Change: And we gave it to them in half stock and half cash I don't know if that was accrued in the fourth quarter if that wasn't it.
Speaker Change: It wasn't good.
Speaker Change: So fine so ignoring that comment than.
Speaker Change: You are talking about a an increase to the G&A.
Speaker Change: And second quarter of maybe maybe Max 100000, a $100000 of border I mean, it's not a big number at all to anybody that tunnel, Paul and then the last hire that we need to bring in is as you know it's not a six figure salary so.
And other than that our core our costs of running our business should remain flat like.
Speaker Change: That said and.
Speaker Change: Unless I'm missing something I don't I don't see we're running real well were timely with timely on producing financial statements more timely and we have good analytics and we have a good knowledge of our tenants' operations through the asset managers and laundry as an asset manager and other asset managers needed because we should end the second quarter.
With 140 over 140 facilities and if you divide that by three people, it's a little bit stretching them then.
Speaker Change: The good news is that you know 50, 50 facilities or so R. R. R. Infinity. So we don't have to worry about that because nobody cares more about these facilities, then Michael and I and so you know, but they still have an asset manager that has a job to do but nevertheless, you have to be as worried then.
Speaker Change: Do you do for like the real outside operators.
Speaker Change: But you take 140 and divided by three that's an awful lot of work to be done and when we have a rule that you got to get to the facility at least twice a year just travel dates alone makes it that there's not enough time to really you know no you're building as well as far as managing the asset so so.
Speaker Change: I feel like we have to do that because I want to stay stay with our model of making sure. We haven't had to build to get closed on US. We haven't had like you guys know our competitor then you know the issues they've all gone through we know they are bigger than us that's true, but we haven't had any of that we collect all of our rents. Our buildings are never been shut down we don't have we don't even.
We have a nurse consultant that actually reviews every single survey I don't know other people do that we do that and we have calls with their operators about about the care and the buildings, even though we don't control them and do anything, but we care about our asset and we want the residents to be taken care of.
Speaker Change: With us going above and beyond because we care about people.
Speaker Change: And so.
Speaker Change: But as far as costs for our company there is no.
Speaker Change: There's no there's no you know nothing coming down the Pike.
Speaker Change: That's that's big.
Speaker Change: One thing that I brought up I think maybe a year ago.
Speaker Change: Which is still out there is as my pay.
Speaker Change: Pay still Hasnt changed in 10 years and there has been conversation in the company to to pay me you know what a normal CEO makes for for for the rights.
Speaker Change: <unk> converted myself, because I don't really care I care about my company more than I care about me and and so it hasnt been an important thing, but at some point down the road somewhere I assume compensation committee will decide something in and there'll be something for me, but but that's.
Speaker Change: That's <unk>.
Speaker Change: Definitely not today.
Speaker Change: I Hope I answered your question Oh, Yes for sure I appreciate all the color on that that's very helpful. Thanks, guys have a good weekend, alright, alright, Barry would be good.
Speaker Change: Okay.
Speaker Change: Your next question for today is from Mark Smith with Lake Street capital.
Speaker Change: Okay.
Mark Smith: Hi, guys. Most of my questions have been hit here, but I did want to ask just big picture with the new administration or foreseeing any changes on kind of regulatory or cap payment from Medicare and Medicaid upfront.
Yeah, Hi, Mark.
Mark Smith: <unk>.
Speaker Change: I only know what I hear from from our tenants and Michael I think it's too early to really gauge.
Speaker Change: Gauge how the environment is going to be if it goes back to the way. It was when it was trumped 1.0, then those were great times for the nursing homes with regards to.
How the regulator as you know.
Speaker Change: The surveyors treated the facilities.
Speaker Change: And what the mandate was from D. C on how to be a support and a help as opposed to you know.
Speaker Change: Wanting to put their thumb on people in and be difficult like it was the last four years.
Speaker Change: Outside of that we've already seen.
Speaker Change: Increases to Medicaid rates and in Illinois, and Kentucky.
Speaker Change: I don't know I don't know if there was any other any other specific states, where there was increases.
Speaker Change: Because a couple of other states are all cost base, where they go up anyway on a regular regular basis from the annual Cross report being filed.
Speaker Change: So I would say that it's.
Speaker Change: I I don't expect there to be a negative I happen to be an optimist to begin with so if you take that we'll take that with a grain of salt.
Speaker Change: But I haven't heard anything bad, but I expect I expect like I said, the regulatory side too to be an improvement and on the financial side.
Speaker Change:
Speaker Change: I also I I I I I expect it to at the end of the day be status quo I don't think I don't think Theres any I guess.
Speaker Change: Touched on earlier right. There is there's a there's a is there a social need for the nursing homes to take care of the elderly here in America and it needs money to take care of it so.
There they have to they have to they have to come through at the end of the day.
Speaker Change: The Congress.
Speaker Change: And the government.
Speaker Change: Yes.
Speaker Change: The other question for me was just just it sounds like a lot of confidence in the acquisitions coming up here in the pipeline, especially near term here kind of Q2.
Speaker Change: Any other commentary you can give just on your confidence in the pipeline and then.
Speaker Change: As we look at acquisitions.
Speaker Change: Are you needing to expand more geographically or do you think here in 25, you can kind of hit your goals still within the states that you currently operate.
Speaker Change: Yeah, we have enough pipeline to hit our goals in the current states, adding to the current master leases, which is great for us.
Speaker Change: So that means we'd be growing in Oklahoma will be growing in Missouri, we'd be growing in Kansas.
Speaker Change: We'd be growing potentially in Texas.
Speaker Change: And so that'll get us to where we want to be we are looking at.
Speaker Change: When you look at a lot of deals like we have been looking at a lot of deals year over year.
Speaker Change: We look at literally.
Speaker Change: In a given year, we closed I don't know 10 deals and you know a lot of good year on a bad year, we closed no deals and we look at hundreds 300 400, the other year, maybe more of your account that all the MLP stuff that I'm always.
Speaker Change: We're looking at even though we never do any of those deals.
Speaker Change: You will see it they go Oh, it's is like a mile down from a nursing home this could be a grade for the nursing home Boon because all the doctors that are there can maybe.
Speaker Change: But being a help to nursing home and we had them not doing any of those but we spend time looking at them anyway.
Speaker Change: Attempted, Indiana Green Greencastle, Indiana as well.
Speaker Change: So we look at that but I think I think if a deal came in.
Speaker Change:
Speaker Change: Wisconsin, Minnesota, Alabama.
Speaker Change: Growing the nucleus.
Speaker Change: To expand but not go that way too far not go this way too far.
Speaker Change: Ohio would be a great state to grow with them to grow more and but we just havent found a deal in Ohio for whatever reason.
Speaker Change: That's been a state that I'd love to have grown for years and we haven't we haven't grown.
Speaker Change: Yeah to answer your question like I said is within our within our portfolio with our current master leases, we have enough volume to be able to hit this year's targets and then some.
Speaker Change: And and and we are looking at stuff Thats outside.
Speaker Change: And if we find something in the deals work, we will be glad to do it again it has to be in a master lease structure. It has to be big enough.
Speaker Change: At least you know.
Speaker Change: 500 beds.
Speaker Change: More than that 700 beds and.
So yeah, that's God willing so 25, I'm not going to disappoint anybody 26, I'm, an optimist, but who knows what happens in 'twenty six.
Speaker Change: Hopefully that answers your question Mark.
Mark Smith: Yeah, absolutely. Thank you.
Mark Smith: I will now hand, the call back to Jeff to answer webcast questions.
Mark Smith: Thank you very much we have a couple of questions from the folks at freed up capital markets. Their first question is are <unk> and rental revenue guidance limited to the current portfolio or do they also include future acquisitions.
Mark Smith: So really you could answer the one question because you are the one that had that model for that because but if authors to answering that.
Mark Smith: Our our numbers our numbers that we present.
Mark Smith: Are based off of current you know Andrew.
Mark Smith: Annualizing first quarter numbers I think our current number we're expecting is 121.
Mark Smith: But we know that we should be debt and <unk> hundred 21, as they have all per share annualized for 25.
Mark Smith: I think well end up beating that anyway.
Speaker Change: Please go ahead.
Mark Smith: And.
Speaker Change: Yeah. So I think that's I think I answered your question, Yes, and the second question is for new acquisitions is the company open to issuing op units or stock in lieu of cash.
Speaker Change: Oh, yeah, 100% I should've Tyson I should add that to my regular comments to begin with.
Speaker Change: I'm glad they ask the question we love that that's that's we did that we did that in the Tennessee deal. We're doing that now on this $59 million I guess I misled, who asked me I don't know if that was guar F. I forgot who asked me that but we haven't at least at minimum 2 million out of the $59 million as Theyre, taking O P units.
Speaker Change: Really ultimately at a.
Speaker Change: Higher than our NAV per share number.
Speaker Change: And and so we're not so we're not going to dilute anybody but.
Speaker Change: Yeah, No we love doing that that would thats and thats actually a value add because we go out there and talk to people and say, hey, listen you could defer capital gain, especially if it's family money nursing home has been in the family for a couple of generations and and you don't want to see a capital gain day. One you can defer the capital gains you could put in a trust you could take it in ethanol.
Speaker Change: Long to to the children's trusts and you could get it to them and until they turn it into tradable shares it's not a taxable event.
Speaker Change: And there is the same dividend that's paid out like as you. All you guys know that are on the call. It's an exchange one for one and it's it's it's a it's a what do you call. It. It's the same dividend yield because the same dividends paid out to comment is paid out to the op units. So we love it we have.
Speaker Change: Had a lot of interest in it which is great.
Speaker Change: And and if they would look at if they would look at where we're trading at a discount to NAV right. Then they have upside of the stock.
Speaker Change: On the stock trading.
Speaker Change: It's a trade it appropriately as a multiple of the if I felt like all the other peers than than even from Nab Theres a premium to be had on that where someone can make 10 20, 30%.
Speaker Change: Getting the stock at NAV versus what the market price should be so the answer is yes.
Speaker Change: The other question a long winded, yes.
Speaker Change: That does it for my end and I believe that does it for questions from the analysts so I want to thank everyone for joining us today, it's been a pleasure as always feel free to reach out to March myself or Greg. We are available to answer any questions. You got about our performance or what our pipeline looks like and we look forward to keeping in touch.
Speaker Change: And hopefully we'll see you all soon and have a great weekend.
Speaker Change: Great weekend take care guys.
Speaker Change: This concludes today's event and you may disconnect. Your lines at this time. Thank you for your participation.