Camden Property Trust (CPT) Q3 2012 Earnings Report, Transcript and Summary

Good morning and welcome to the Camden Property Trust Third Quarter 2012 Earnings Release Conference Call. All participants will be in listen-only mode. (Operator Instructions). Please note this event is being recorded. I would now like to turn the conference over to Kim Callahan, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining Camden’s third quarter 2012 earnings conference call. Before we begin our prepared remarks, I would like to advise everyone that we will be making forward-looking statements based on our current expectations and beliefs. These statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information about these risks can be found in our filings with the SEC, and we encourage you to review them. As a reminder, Camden’s complete third quarter 2012 earnings release is available in the Investor Relations section of our website at camdenliving.com, and it includes reconciliations to non-GAAP financial measures, which will be discussed on this call. Joining me today are Rick Campo, Camden’s Chairman and Chief Executive Officer; Keith Oden, President; and Dennis Steen, Chief Financial Officer. Our call today is scheduled for one hour. As a result, we ask that you limit your questions to two with one follow-up and rejoin the queue if you have additional questions. If we are unable to speak with everyone in the queue today, we’d be happy to respond to additional questions by phone or email after the call concludes. At this time, I’ll turn the call over to Rick Campo.

Thanks, Kim and good morning. Borrowing from the names sake of our pre-conference music, our steely-eyed Operations and Support teams continue to hit our operating results out of the park. We continue to take advantage of a very good apartment market with operating fundamentals improving. We think the fundamentals will be strong for the foreseeable future. There isn’t much discussion and concern that the uptick in the single family markets will have a negative effect on our business. We think that an improving single-family market is a good thing for the apartment markets and the economy as a whole. Single-family and multifamily markets have done well at the same time during many economic cycles. The economic expansion beginning the 1994 through 2002 is a good case study on the solid coexistence of the single-family-multifamily markets. During 1994 and 2002, eight-year period, the homeownership rate actually increased from 64% to 68% creating 4-plus million new homeowners. During that same timeframe multifamily construction averaged 250,000 apartments per year. Multifamily demographics were actually pretty poor during that time with the 18 to 30-year old cohort declining. During the same period, Camden had 45% NOI growth and our stock price more than doubled. The game changer was 23-million jobs. Single-family market improvements will help expand job growth and will lead to a stronger business environment for all of us. It’s all about job growth and it always has been. I’ll turn the call over to Keith Oden now.

Thanks, Rick. Let me begin by recalling a conversation that Rick and I had roughly 20 years ago as we were preparing for our first quarterly earnings call as a public company. We were fortunate enough to be able to get some advice from the founder of an iconic retail REIT that also happens to be based in Houston. We talked to him for a while about strategic matters and then turned to some very, very tactful topics including this one. How long should our prepared remarks be on our earnings call. This was his advice. If you meet expectations which if you’re both good and lucky will be 90% of the time, your prepared remarks should be 15 to 20 minutes long. If you fail to meet expectations, you should take longer because number one, you have a lot of explaining to do and number two at least less time for those pesky analyst questions. Finally, if you’re fortunate enough to beat expectations, keep it short. Your results will speak for themselves; you know the results were good, your audience knows it and anything beyond brief opening remarks will be viewed as boastful. So, as Stanford Alexander’s advice in mind, I’ll be brief today. For the third quarter in a row our on-site teams have outperformed our original plan and our reforecast, leading to our third straight FFO and same-store guidance upward revisions. Obviously, the market fundamentals are still very good. Less obvious to outside observers is the fact that our on-site and support teams are executing brilliantly. A few highlights from the quarter include, we had the highest quarterly NOI growth in 20 years. We had double-digit NOI growth in nine of our 15 markets. We had the second-best sequential revenue growth in our history, behind only the second quarter of last year. And finally, five markets had better than 3% sequential revenue growth. Those markets were Charlotte at 4.6%. Denver and Atlanta 3.3% and Houston at 3.1%; those four probably come as no surprise to anyone however, Washington DC at 3% and might surprise us both. The strong third quarter trends in leasing and renewals were similar to last year. New leases were up 4.4%, renewals up 7.9% versus 3.9% and 8.5% last year. November and December renewals are up roughly 7% with 43% and 25% completed respectively. Overall our portfolio was 4.4% above prior peak rents from 2008. Our occupancy rates for the third quarter averaged 95.6% and currently stands at 95.3% versus 94.6% in October of last year. Our net turnover rate was 71% for the quarter versus 73% last year, and during the quarter, moveouts to purchased homes actually fell from last quarter’s 12.6% to 11.8%, breaking a string of three quarterly increases. Moveouts to purchased homes is still well below our long-term average of 18%. Being mindful of Stanford’s advice, I’ll turn the call over to Dennis Steen, Camden’s Chief Financial Officer.

Thanks, Keith. I’ll spend my time this morning with a few comments on our third quarter results and our updated 2012 full-year earnings guidance. Last night, we reported funds from operations for the third quarter of $82.1 million or $0.93 per share, representing approximately a $3 million or $0.03 per share improvement from the midpoint of our prior guidance range. The $3 million in FFO outperformance for the third quarter resulted primarily from property net operating income exceeding our forecast by approximately $4 million, offset partially by $1 million and higher than expected Property Management, Fee and Asset Management and G&A expense. The $4 million and better-than-expected property NOI resulted from the following. Property revenues exceeded our forecast by $3 million due to higher than anticipated revenue growth across our same-store, non-same-store, and lease up communities, driven primarily by continued rental rates increases, slightly higher occupancy, higher realization rates on other property income and better than anticipated rental rates and leasing velocity at our six development communities, which are in lease up during the third quarter. Three of those communities stabilized during the third quarter, well ahead of their original stabilization dates. Property expenses came in approximately $1 million, better than our expectations. This favorable variance is primarily the result of lower utilities expense due to a milder and wetter summer than in the prior few years, reducing both electric and water cost and the successful renegotiation of our trash removal contracts reducing our door-to-door trash removal cost combined with lower than anticipated property insurance expense due to the lower levels of self-insured property and general liability insurance claims. A $1 million unfavorable variance in Property Management, Fee and Asset Management and G&A expense was attributable to expensed acquisition cost relating to the three stabilized communities we acquired in the third quarter, higher incentive compensation expense as we adjusted full-year accruals to reflect our actual 2012 outperformance, and slightly higher miscellaneous public company costs. Moving onto earnings guidance, we’ve revised our 2012 full-year FFO guidance from $3.59 to $3.63 per diluted share with the midpoint of $3.61 representing $0.07 per share increase from the midpoint of our prior guidance range. Approximately $0.06 of this increase is a result of higher-than-expected property net operating income over the second half of 2012 due to better-than-expected revenue growth across our same-store non-same-store and lease up communities and slightly lower property expenses primarily due to the reasons I previously discussed. We now expect 2012 same-store revenue growth between 6.2% and 6.7%, expense growth between 2% and 2.5%, and NOI growth between 8.75% and 9.25%. The remaining $0.01 per share increase in our FFO guidance is primarily the net result of the timing of our acquisition disposition activities as acquisitions occurred slightly earlier than forecasted and dispositions slightly later than originally forecasted. This positive was partially offset by higher-than-anticipated expensed acquisition cost and higher incentive compensation expense resulting from our 2012 outperformance. Our revised fourth quarter 2012 guidance assumes $270 million in new on-balance sheet development starts in the fourth quarter and $300 million in additional dispositions spread throughout the quarter with no additional acquisitions. Our FFO guidance for the fourth quarter of 2012 is $0.94 to $0.98 per share with the midpoint of $0.96 per share representing $0.03 per share increase from the $0.93 per share we reported for the third quarter. The expected $0.03 per share increase is primarily result of the following. A $0.02 per share projected increase in FFO due to higher same property net operating income, primarily due to expected seasonal decline in utility, repair and maintenance, unit turnover and personnel expenses. We expect same property revenues to be relatively flat from the third to fourth quarter as continued improvements in rental rates will be offset by an expected slight seasonal decline in occupancy and lower other property income due to lower levels of leasing activity in the fourth quarter. Additionally, we expect a $0.01 per share projected increase in FFO due the additional contribution from the lease up progress achieved by our development communities in the third and fourth quarters. Our acquisition and disposition activities will not have a significant net impact to the fourth quarter FFO, as the contribution from the acquisition of the four communities and the remaining 75% interest in one joint-venture we acquired in the second and third quarters is being offset by the impact of the two communities we sold in October, and dispositions expected to close later this quarter. We currently have approximately $420 million of disposition assets being marketed for sale or under contract, of which our guidance assumes, we will close $300 million during the fourth quarter. At this time, we’ll open the call up to questions.

We will now being the question and answer session. (Operator Instructions). And our first question today is from Alexander Goldfarb of Sandler O’Neill. Alexander Goldfarb – Sandler O’Neill: Hi, good morning.

Hi, Alex. Alexander Goldfarb – Sandler O’Neill: How are you? I should actually say, well, good afternoon up here, good morning down there. First question is, development. Speaking to the private guys and department developers, you still need real equity in deals. Give the reluctance of developers to do that, are you seeing a big inflow of people of MEZZ, people looking to provide MELF to help bridge the gap between the construction loan and the total cost of development or because the MEZZ guy would have to potentially backstop the developer, they’re just not, it’s not really worth to risk or there’re not enough people willing to play in that space?

I think it’s – the answer to that question is both of what you just said. We aren’t seeing much MEZZ business out there now. And what you’re seeing in the sort of merchant-builder space is that the construction financing is plentiful and cheap but what’s really holding back starts today or at least starts in the next round of development is the equity side of the equation. And so, equity investors have sort of made their bets if you will and they are waiting to see what’s – what happens with those existing starts. There is clearly a lot of concern about starts and how fast starts are ramped up. And so I think the – so it’s not really a gap between what an equity investor puts in versus a construction lender. It’s really the equity investors pulling back. We’ve seen projects that were supposed to be getting done by merchant builders, land deals for example that have come back to us and we’re starting to see that sort of across the country. And it really is more the equity investors sort of taking the breath and worrying about what happens in the future. Alexander Goldfarb – Sandler O’Neill: Okay. And then the second question is for Dennis. A lot of talk about property tax and insurance and the cost pressures there, as we look at your numbers year-to-date, the increases are minimal, you’ve posted comment that it was sort of aggregate up 14%. As we think about 2013 I realized you aren’t giving 2013 guidance, but we obviously are refreshing our numbers as we’re updating them. Should we be thinking about greater pressure on these line items or any other cost items or are these sort of the run rates that we should expect.

Let me take insurance first. Over the last couple of years, we had a pretty decent increase in insurance and the favorable variances that we’re seeing – from a premium perspective, we saw some decent increase, as the favorable variances we’re seeing this year is really due to less losses within our property portfolio and that’s why you’ve seen a negative insurance expense for the quarter. So we’ll wait to see what happens post the Hurricane Sandy and what that does to insurance right next year, but I think time will just tell on that, but so far we’re being favorably impacted because of lower losses. On the real estate tax side, our numbers are little out of the ordinary for the first nine months of this year, we’re up 2.3% in real estate taxes. We expect the full year to be up in 3% to 4% range as there were significant downward accrual adjustments in the fourth quarter of 2011. And additionally as we mentioned in the last call, 2012 has benefited from an unusually high amount of settlements of prior year protests and a number of our communities, and if you excluded those from our numbers, we would actually be reporting a real estate tax expense up for 2012 in the 6% to 7% range. Some of the markets that with biggest piece of that were the once you might expect the Texas markets that had a major increase in rental, Austin was up 19, Houston 12, Dallas 11 and then followed by kind of our Florida markets with Orlando up 11 and Tampa up 8. So, we have had some pressure, but it averaged out to our portfolio excluding those settlements to be 6% to 7%. I think we are all sitting here today and expecting that there will still be some pressure as we go into 2013, something in that 4% to 7% range is probably somewhere close to what we might anticipate for 2013. Alexander Goldfarb – Sandler O’Neill: Okay. Thank you.

Our next question is from Eric Wolfe of Citigroup. Eric Wolfe – Citigroup: Hey, good afternoon. You spoke in your remarks that seen the best growth you’ve seen nearly 20 years, so obviously you’re doing pretty fantastic from a growth perspective, and then you think about the debt markets being sort of historically low interest rates. Transaction market obviously cap rates are quite low. So it seemed like your equity is probably the most expensive form of capital for you today. So, I guess, I’m trying to understand on your ATM, obviously been a pretty active issue, can you just help us sort of understanding going forward whether we can expect you to see like $100 million a quarter, and how you’re thinking about that, are you just going to be active as long as in development pipeline or does eventually going to shut it off if your stock price doesn’t match your growth?

Well, we’ve set along during the slough cycle that we’re going to pre-fund our development pipeline and make sure that we kept our debt to EBITDA in the 5.5 to 4.5 times zone. And we’re in that zone now, and obviously the outperformance in the net operating income side of the equation drives your EBITDA up, so that continues to help with keeping us in that zone. After the last call, we really haven’t been as active as on the ATM program, and so we haven’t done a bond deal in a while. So, I think you’ve to look at first of all getting into that zone where we are now with respect to debt to EBITDA targets and then you look at the various sources that we could access., and we evaluate each source independently and then relate them to each other and understand what the highest cost of capital is, generally as your common stock, we have increased our disposition pipeline pretty dramatically from a previous year. So, we will use a combination of ATM debt markets and dispositions to fund the development pipeline going forward. We – given if you just take a sort of the transaction we did at the beginning of the year plus the ATM program year-to-date, I would definitely expect it – our acquisitions to be a lot less than that going forward. Eric Wolfe – Citigroup: Okay, that’s helpful. And then second question earlier in your remarks, you talked about the uptick in single-family housing, I’m just trying to understanding that how great of an uptick that was maybe I know it’s tough to sort of generalize, but how much home prices were up in your markets over the last year versus rents? And just more broadly, how you think about affordability of single-family housing in your markets relative to renting?

Yeah. There is no question that on the last report, on the – on housing prices, it was up pretty much across the board in our markets although most of them were pretty modest increases. Some of the larger increases were in the Texas markets. And that’s not to be unexpected given the collapse and housing prices that almost all of our markets experienced. So, we do expect to see housing prices going up. When it gets to the question of affordability, just because the housing prices are started to pick up, mortgage rates are still very low. The impediment to most of our residents being able to and – willing and able to purchase the home is first of all a change in the philosophy of do you want to own a home other than your life circumstances require that you or dictate that you move out of an apartment into the single-family home, which for the last 30 years that we’ve been in this business, that was what drove – primarily drove the housing versus rent decision. We sort of got away from that in 2003, 2004, 2005, and 2006, and that impetus was replaced to a large extent with more of an investment philosophy. And that was predicated mostly on a lot of experience that folks had about buying a house, so their neighbor bought a house, moved out of an apartment, bought a house, sold it, six months later, flipped it and made a profit. And so there was a very different mentality of the home buying cohort in that period than there historically has been. And I think that’s flipped around and it’ll eventually go back the other direction, but I think you’re looking at years, not quarters for that to happen. So, that’s one continuing impediment that we see at home ownership, the second is just the overall difficulty of getting a mortgage, you actually have to have a down payment, you have to have – show the proof that you have the ability to make a sustained mortgage payment, those clearly were things we were missing in the last go-round. But when you put all that together, the statistic I think is most telling in our portfolio with regard to not only propensity but capacity to purchase homes, it’s the percentage of residents that are moving out buy homes and – but for 30 years of keeping that stacked in our portfolio, it ran around 18%, we hit a high watermark in 2005 of about 24%, and we hit a low watermark of just slightly below 10% about two years ago. We’ve worked our way from that high-9% move outs to purchase homes to the point where we’re about to something below – still below 12%. So and – we did, we have seen a pickup, but the last – we actually saw it tick down in this quarter over the last quarter. So, I don’t – I’m not even prepared to say, yeah that the trend is in place, that we’re on the way back to 18%. Obviously, at some point we expect, we will hit there, but I think you’re talking years and not quarters. Eric Wolfe – Citigroup: Great. That’s very helpful. Thank you.

And the next question is from the Nick Elko of Macquarie. Nick Elko – Macquarie: Hi, thanks. I was hoping a little bit more info on the dispositions, the assets you’re marking for sale right now. If you could just talk about how expected cap rates and other pricing metrics are for that – for those assets today?

Sure. One of the reasons we’ve increased the volume to 450 million in total at this point is because pricing has gotten a lot more aggressive on those kind of assets. What’s happened is, the assets we’re selling have an average year age of 26 years, they have high CapEx, they tend to be in probably our weakest submarkets within the markets that we’re reselling in, and what we’ve seen over the last year is cap rate compression in that product type of at least 100 to 125 basis points. And so what’s happened is core properties have compressed and continue to compress and the markets like Houston and Dallas, core properties that are in sort of best locations are in the 4.5% cap rate range, on the coast obviously, there in the 3.5% range. So, you have a situation where the older assets have compressed down to six and of high fives, and so when we look at dispositions and say (inaudible) we can sell 26-year-old asset for call it a sub-six cap rate. We can then redeploy that capital into development where we’re developing to 7 to 7.5 with un-trended yields of sort of six and some change 6.5. I mean that makes a whole lot of sense from capital allocation perspective to us so. So we are definitely more aggressive on selling assets. We’ll probably add to that pipeline next year and then redeploy both through acquisitions and through new development. Nick Elko – Macquarie: Okay, great. And then on the development pipeline, I mean can you just talk a little bit about where you achieved sort of stabilized yields are on the communities and lease up right now. I mean you’re sort of surpassing targets in, I think the Tampa and Orlando projects, can you just talk about how where sort of current stabilized yields are for some of the assets and where you’re underwriting for today for the under construction portfolio?

Sure. The assets that are under construction today are in lease up today have all come in below original construction cost, leased up faster and at higher rates. The yields are 7.5% to 8% on that book of business. The balance of the portfolio, the $300 plus million we’re starting this year and properties that we have slated for next year are in the 7% to 7.5% range. You’re still – your starting to see construction cost go up and it depends on the market. There is some labor shortages of skilled trades and what have you, contractors are now not willing to work for food, they actually want an operating margin. And so they’re – there is definitely some pressure on cost. So I think the days of cost coming in below budget are probably over, but costs still have not gone up to the point where they’re at or even close to peak levels at this point. So, we still expect to have very robust yields on the pipeline that we’re starting now and that we’ll start next year. Nick Elko – Macquarie: And I think Camden Phase I Atlanta was one of the projects, you’re, I think, saying you would start probably this year, I mean are there any other ones you can tell us about right now on that list.

We’ll start a project in Glendale California. That should start by the end of the year and we’re also planning out starting our Camden Boca project in Boca Raton. And the total of those are about $300 million...

$270 million...

$270 plus or minus. Nick Elko – Macquarie: Okay, great. Thanks, guys.

(Operator Instructions). And our next question comes from Dave Bragg of Zelman & Associates. Dave Bragg – Zelman & Associates: Thanks. Good morning. So, just looking at some of your recent activity here, we see the project you just mentioned and another Southern California development moving up on your pipeline list and the relatively large acquisition in Ontario during the quarter. Is it fair to say that your appetite for incremental investment in Southern California is increasing relative to the opportunities in other markets?

Well, I don’t know that our appetite is increasing. I think that the – on a risk adjusted basis by market, the yields that we’re purchased the Ontario project out relative to yields that we are currently active in end markets like Charlotte, Houston, and Denver, the differential in the yield is probably the narrowest that we’ve seen in the last 10 years. So, on a relative attractiveness – basis of attractiveness, the California stuff is just – it’s certainly more attractive now than it was three or four years ago. So, we’ve been active in Southern California the entire time, that as you know takes long time to bring some of these projects to provision. So, I think you can – with those two, certainly on an invested dollar basis, California is going to be a bigger piece of our book of business in 2013 than it hasn’t been in some time. But, it’s not because we haven’t been interested in expanding in California, but more targets of opportunity have just been fewer and farther between.

The other piece of the equation is, we’re improving our strategic focus on where our properties are located and part of the $430 million worth of acquisition or dispositions that we are doing includes a 40 years old property in Fullerton, California. And we’re in essence trading that, that’s under contract right now. The – we are basically trading that ultimately for the – for the Ontario, so we’re selling four year old asset and buying a six year old asset, improving the sort of lifecycle of the portfolio and we think the Inland Empire which hasn’t had a lot of growth yet is bottomed out, and when Southern California starts hitting on all cylinders in the next couple years the Port of LA and Long Beach, we ship all their products through Ontario, and the area will do really well. Dave Bragg – Zelman & Associates: And just on that point as you think about criteria of the potential dispositions and compare that to where you are developing and acquiring. What else are you focused on besides just the average age and therefore CapEx needs, what else are you looking at, is it submarket positioning, is that increasingly important?

Yeah, it’s two things Dave, it’s we run – we have a model that we are constantly updating it, we look at return on invested capital by everyone of our assets. On a three and a five year rolling basis and that incorporates what has your loan growth been, and obviously what are your CapEx expenditures required to maintain that loan growth. And so the first screen is, if you’re in – if you screen out of our 200 communities, if you screen in the bottom 25, then you’re certainly going to get lot of scrutiny for – are there any insinuating circumstances is to why we should continue to own that asset, so that’s we start with that. And secondly we go to submarket attractiveness and in that regard we’re always looking at five years out, 10 years out as the submarket likely to be better same or worse than it is today. And if you combine those two things together, that drives probably 80% of our decision process, there is always some other qualitative factors in there as well. But that’s basically our methodology for identifying the disposition candidates, and it shouldn’t come as any surprise that tends to be the older assets and they tend to be in submarkets that are weaker. So, I think that would characterize the 14 assets that we have in the marketplace today. Dave Bragg – Zelman & Associates: That’s helpful. And last question is on paces specifically. It looks like you reconfigured your Phase I, took up the unit size, but also the average cost per unit. Could you talk about what’s going on there?

Yeah, exactly. That’s what we did in phases. We have actually three distinct product types and because of its incredible location, Buckhead, we have a townhouse of three-story, direct access quartz townhouse product and then we have a sort of urban wrap product, which should be a traditional urban wrap product and then we have a midrise podium product that where the average square footage is somewhere around 2,000 square feet and 1,800 square feet, something like that, the largest, but the average is probably 16 to 15 something like that. So, the idea is to be able to have three distinct products, one very high-end, another one sort of step down from that high-end, being the townhouses and then the sort of the urban wrap product. And we’re able to improve the density on the project by working those three uses together. Dave Bragg – Zelman & Associates: Okay. So, that’s not reflective of higher construction cost that you talked about earlier?

No, it’s more and more units basically. Dave Bragg – Zelman & Associates: Got it. Thank you.

And next we have a question from Anthony Paolone of JP Morgan. Anthony Paolone – JP Morgan: Thanks. So just curious you have about a 300 basis point spread between some of the developments you’ve got going on in where market cap rates seemed to be, so it implies like I don’t know like 60% type profit on the development. So, is your land basis just that lowered, you think it’s do you think a core buyer will come in accrue and accrue that much value to land or put another way pay that for above replacement cost, just trying to tie that together a bit because it just such a wide spread.

Well, I think there is two things. One is the legacy land cost is probably lower than land cost today, because the land cost definitely has increased. We’re at above sort of peak 07 land prices across all of our markets with exception maybe Las Vegas. But so that’s said land prices are higher and we definitely have lower land prices. I think the other piece of the equation is construction costs are going up and in some markets we’re seeing anywhere from 8% to 10% increases in construction, if we were actually buying the product today and most people are putting in 5% to 8% inflation beyond that. So, I think there is the buyout in the projects that we have completed now or that have been bought out already is significant. So, there’s a lot of value, value just from the cost being much higher than they would be in the future and then the run rates were just obviously substantially higher.

Also, Anthony just where we’re delivering this group of the assets, Orlando, two assets in Orlando and two in Tampa just put that in perspective. In Orlando, this year the Whitten forecast for multifamily completions for 2012 is a total of 1,000 apartments. Of that about 700 were Camden’s. In Tampa, the total forecast for completions in the entire market is 1,600 departments and of that about number about 600 were Camden. So, there are literally is no new product to speak up in this markets. So, you’re sort of the own, because of our footprint and because we had the capital to go into these markets at a time when it was really counter cyclical to most investors, we just – we think that we’ve delivered over the time, that’s very conducive to being able to raise rents. Anthony Paolone – JP Morgan: Got it. Thank you.

And this concludes our question-and-answer session. I would now like to turn the conference back over to Rick Campo for any closing remarks.

Great, well thanks for being on our call. This probably was our record in terms of time on the call because I think with the last, one of the last ones reporting and I know that people in the Northeast also still having trouble, we hope that the gas lines get shorter and recovery comes quicker to the Northeast. We know how that is, having been through it in Florida and Texas. So, with that said, I will see you at (inaudible) REIT and talk to you at the first of year. Thanks.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.